Exhibit 10.3
FORM OF
RESTRICTED STOCK UNIT AGREEMENT
FOR EMPLOYEES AND DIRECTORS UNDER THE
NATIONAL DENTEX CORPORATION
AMENDED AND RESTATED 2001 STOCK PLAN
Name of Participant:
No. of Restricted Stock Units in Incentive Award:
Effective Incentive Award Date:
Pursuant to the National Dentex Corporation Amended and Restated 2001
Stock Plan (the "Plan"), National Dentex Corporation (the "Company") hereby
grants to Participant named above, who is an officer, director or employee of
the Company or any of its Subsidiaries, an incentive award (the "Incentive
Award") of Restricted Stock Units ("RSUs") subject to the terms and conditions
set forth herein and in the Plan.
1. Vesting Schedule. No portion of this Incentive Award may be
received until such portion shall have vested. Except as otherwise set forth in
this Agreement or in the Plan, the RSUs will vest over a one (1) year period on
the following basis, subject to employment with (or, in the case of non-employee
directors, continued service to) the Company on each vesting date:
Number of Restricted Stock Units Vesting Date
-------------------------------- ------------
100% of Incentive Award First anniversary of Incentive Award Date
In the event of a Change of Control as defined in paragraph 9(D) of the
Plan, this Incentive Award shall become immediately vested whether or not this
Incentive Award or any portion thereof is vested at such time.
2. Deferral of Incentive Award.
(a) Each vested RSU entitles Participant to receive one share of
the Company's Common Stock (the "Stock") on the later of (i) the vesting date
for such RSU or (ii) the end of the deferral period specified by Participant.
Any deferral period must be expressed as a number of whole years, not less than
three (3), beginning on the Incentive Award Date. This deferral period will
apply only to deferral elections made on the specific Deferral Election Form. In
addition, any such deferral must apply to receipt of all shares of Stock
underlying the entire Incentive Award; for example, a deferral period of five
(5) years would result in Participant receiving shares of Stock underlying the
entire Incentive Award five (5) years from the Incentive Award Date regardless
of the fact that the RSUs may have vested at differing times. (If no deferral
period is specified on the Deferral Election Form, Stock will be issued as soon
as practicable upon vesting of the RSUs).
(b) Shares of Stock underlying the RSUs shall be issued and
delivered to Participant in accordance with paragraph 2(a) and upon compliance
to the satisfaction of the Committee with all requirements under applicable laws
or regulations in connection with such issuance and with the requirements hereof
and of the Plan. The determination of the Committee as to such compliance shall
be final and binding on Participant.
(c) Until such time as shares of Stock have been issued to
Participant pursuant to paragraph 2(b) above, and except as set forth in
paragraph 2(d) below regarding dividends and dividend equivalents, Participant
shall not have any rights as a holder of the shares of Stock underlying this
Incentive Award including but not limited to voting rights.
(d) In the event of any cash dividends paid to holders of Stock,
the Company shall credit the account of the Participant on the dividend payment
date, with an additional number of RSUs equal to the number of whole RSUs in
such account multiplied by the dollar amount per share of such dividend, divided
by the "fair market value" of the Stock (as determined in accordance with
paragraph 7(D) of the Plan) on such date, rounded to the nearest whole unit.
3. Termination of Employment or Other Business Relationship. If
Participant's employment by or other business relationship with the Company or
any Related Corporation (as defined in the Plan) is terminated for any reason
(whether with or without cause or due to death or disability of Participant),
Participant's right in any RSUs that are not vested shall automatically
terminate upon the effective date of such termination of employment or other
business relationship with the Company and its Subsidiaries and such RSUs shall
be cancelled as provided within the terms of the Plan and shall be of no further
force and effect. In the event of such termination, and except as otherwise set
forth in paragraph 4 below regarding retirement, the Company, as soon as
practicable following the effective date of termination shall issue shares of
Stock to Participant (or Participant's designated beneficiary or estate executor
in the event of Participant's death) with respect to any RSUs which, as of the
effective date of termination, have vested but for which shares of Stock had not
yet been issued to Participant (for example, due to a valid deferral election).
Notwithstanding the foregoing provisions of this paragraph 3 or paragraph
1 above, in the case of a director of the Company who has notified the Company
that he will not be standing for re-election at the Company's next annual
meeting of stockholders or special meeting in lieu thereof, and where such
subsequent meeting date is scheduled to occur later than the vesting date with
respect to this RSU incentive award, then, provided that such director continues
to serve until the date of such subsequent meeting, this RSU incentive award
shall continue to vest from and after the date of such meeting until the vesting
date of such RSU incentive award date.
4. Retirement. In the event that Participant's employment with the
Company has terminated due to Participant's early or normal retirement (as
defined in the Company's Defined Benefit Pension Plan), the provisions of
paragraph 3 above shall apply except that Stock shall not be issued with respect
to any vested RSUs for which valid deferral elections have been made until the
deferral dates set forth in such deferral elections.
5. Incorporation of Plan. Notwithstanding anything herein to the
contrary, this Incentive Award shall be subject to and governed by all the terms
and conditions of the Plan. Capitalized terms in this Agreement shall have the
meaning specified in the Plan, unless a different meaning is specified herein.
2
6. Transferability. This Agreement is personal to Participant, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution. This
Incentive Award is available, during Participant's lifetime, only to
Participant, and thereafter, only to Participant's designated beneficiary.
7. Tax Withholding. Participant shall, not later than the date as of
which the Incentive Award becomes a taxable event for federal income tax
purposes, pay to the Company or make arrangements satisfactory to the Committee
(as defined in paragraph 2(A) of the Plan) for payment of any federal, state,
and local taxes required by law to be withheld on account of such taxable event.
A Participant who is an employee of the Company or any Related Corporation may
elect to have the minimum tax withholding obligation satisfied, in whole or in
part, by (i) authorizing the Company to withhold from shares of Stock to be
issued, or (ii) transferring to the Company, a number of shares of Stock with an
aggregate "fair market value" (as defined in paragraph 7(D) of the Plan) that
would satisfy the minimum required tax withholding amount due.
8. Non-Compete Agreement. The provisions of this paragraph 8 shall
apply to any Participant who is an employee of the Company or any Related
Corporation. Participant is receiving the Incentive Award provided for herein in
part because the Company has determined that Participant is a key contributor to
the continued success of the Company. As such, Participant is privy to certain
proprietary information which the Company considers to be competition sensitive.
The Company, therefore, would be materially harmed were Participant to leave the
Company and perform services on behalf of a competitor. Accordingly, in
consideration of Participant's receipt of the Incentive Award, Participant
covenants and agrees that, for a period of two (2) years following the
termination of Participant's affiliation with the Company or any Related
Corporation (whether as an employee, consultant, or non-employee director),
Participant shall not, anywhere in the world, own, manage, operate, join,
control, promote, invest or participate in or be connected with in any capacity
(either as an employee, employer, trustee, consultant, agent, principal,
partner, corporate officer, director, creditor, owner or shareholder or in any
other individual or representative capacity) with any business individual,
partnership, firm, corporation or other entity which is engaged wholly or partly
in the design, manufacture, development, distribution, marketing or sales of any
product or services which compete with the Company's then current lines of
business. Participant agrees that this provision is reasonable in view of the
relevant market for the Company's products and services and that any breach
hereof would result in continuing and irreparable harm to the Company. The
foregoing, however, shall not prevent Participant from making passive
investments in a competitive enterprise whose shares are publicly traded if such
investment constitutes less than one percent (1%) of such enterprise's
outstanding capital stock. Notwithstanding the provisions of this paragraph 8,
if Participant is an employee or resident of a state in which non-compete
provisions of the type set forth in this paragraph 8 are not enforceable, then
this paragraph 8 shall not apply, and instead, the Participant shall be subject
to the following non-solicitation obligation: Participant, for a period of two
(2) years following the termination of Participant's affiliation with the
Company, shall not directly or indirectly (1) induce, solicit, request or advise
any Customers (as defined below) to patronize any business which competes with
any business of the Company or any Related Corporation for which Participant has
had any management responsibility during his affiliation with Company or such
Related Corporation; or (2) entice, solicit, request or advise any employee of
business of the Company or any Related Corporation for which Participant has had
management responsibility during his affiliation with Company or any Related
Corporation to accept employment (or other affiliation) with any person, firm or
business which competes with any such business of the Company or any Related
Corporation. As used above, "Customers" means all customers of any business of
the Company and any Related Corporations for which the Participant had contact
or management responsibility during the last two (2) years of his affiliation
with Company.
3
9. Effect of Employment Agreement. If Participant is a party to an
employment agreement with the Company and any provisions set forth in such
employment agreement conflict with the provisions set forth in this Restricted
Stock Unit Incentive Award Agreement, the provisions set forth in such
employment agreement shall override such conflicting provisions set forth
herein.
10. Miscellaneous.
(a) Notice hereunder shall be given to the Company at its
principal place of business, and shall be given to Participant at the address
set forth below, or in either case at such other address as one party may
subsequently furnish to the other party in writing.
(b) This Incentive Award does not confer upon Participant any
rights with respect to continuance of employment by the Company or any
Subsidiary.
(c) This Incentive Award shall be subject from time to time to
such adjustments as may be necessary and appropriate under paragraph 14 of the
Plan. Pursuant to paragraph 16 of the Plan, the Board may terminate or amend the
Plan at any time, subject to any required action of the Company's stockholders,
but no such action may be taken which adversely affects Participant's rights
under this Agreement without Participant's consent.
NATIONAL DENTEX CORPORATION
By:
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President, Treasurer,
& Chief Financial Officer
The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.
Date:
-------------------- ------------------------------------
(Signature and print name above)
4
