Exhibit 10.1.9
RESTRICTED STOCK AWARD AGREEMENT
This Agreement is entered into on April 26, 2001 effective as of September
9, 1999 between Xxxx & Xxxxxx, Inc., a Delaware corporation (the "Company"), and
Xxxxxxx Xxxxxxxx ("Recipient").
On September 9, 1999, the Human Resources and Nominating Committee (the
"Committee") of the Company's Board of Directors (the "Board") recommended, and
the Board approved, a contingent restricted stock award to Recipient. On
February 15, 2001, the Committee recommended, and the Board approved, certain
amendments to the terms of the award. The Company and Recipient now desire to
formalize the terms of the award in this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Award. Subject to the terms and conditions of this Agreement, the
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Company shall issue to the Recipient the number of shares of Common Stock of the
Company ("Restricted Shares") determined under this Agreement based on the
achievement of certain target price levels by the Company's Common Stock. The
Restricted Shares shall be issued by the Company from its available treasury
stock. The "Stock Price Targets" for purposes of this Agreement are $14.55 (120%
of $12.125, which was the closing market price of the Company's Common Stock on
September 9, 1999), $17.46 (120% of $14.55) and $20.95 (120% of $17.46). If, at
any time after September 9, 1999 and during the term of Recipient's employment
with the Company, the Company's Common Stock closes at or above a Stock Price
Target for 20 consecutive days, Recipient shall be issued a number of Restricted
Shares determined by dividing $260,000 by the closing price of the Common Stock
on the 20th trading day on which the Stock Price Target is met (the "Issue
Date"). Accordingly, Recipient may receive under this Agreement $260,000 in
value of Restricted Shares for each of the three Stock Price Targets, or a total
of $780,000 in value of Restricted Shares if the Company's Common Stock closes
at or above the highest Stock Price Target for 20 consecutive days.
2. Forfeiture Restriction; Vesting. If the Recipient ceases to be employed
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by the Company for any reason or for no reason, with or without cause, any
unvested Restricted Shares (excluding unvested shares that vest upon such
termination of employment as described below) shall be forfeited to the Company.
Ten percent of each issuance of Restricted Shares shall initially be vested, and
the remaining ninety percent of each issuance of Restricted Shares shall
initially be unvested. Ten percent of each issuance of Restricted Shares shall
vest on each anniversary of the Issue Date for that issuance so that all of each
issuance of Restricted Shares shall be vested by the ninth anniversary of the
applicable Issue Date. All of the Restricted Shares shall immediately vest if
(a) the Recipient ceases to be employed by the Company as a result of an
Involuntary Termination (as defined below) within 18 months after a Change in
Control (as defined below), (b) the Recipient ceases to be employed by the
Company as a result of death or permanent and total disability (within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986), or (c) the
Recipient is employed by the Company on his 65th birthday. Nothing contained in
this Agreement shall confer upon Recipient any right to be employed by the
Company or to continue to provide services to the Company or to interfere in any
way with the right of the Company to terminate Recipient's services at any time
for any reason, with or without cause.
2.1 Involuntary Termination. For purposes of this Agreement, "Involuntary
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Termination" means the termination of Recipient's employment with the Company:
(a) involuntarily upon Recipient's discharge or dismissal (other than
by reason of Recipient having engaged in fraud or in any other intentional
misconduct adversely affecting the business reputation of the Company in a
material manner), or
(b) voluntarily upon Recipient's resignation following (i) a change in
Recipient's position with the Company which materially reduces Recipient's
duties or level of responsibility or which otherwise changes the level of
management to which Recipient reports, (ii) a 20% or more reduction in
Recipient's level of compensation (including base salary, fringe benefits and
target bonus under any incentive performance plan), or (iii) a change in
Recipient's place of employment which is more than fifty (50) miles from
Recipient's place of employment prior to the Change in Control, provided and
only if such change or reduction is effected without Recipient's written
concurrence.
2.2 Change in Control. For purposes of this Agreement, "Change in Control"
means: -----------------
(a) the successful acquisition by a person or a group of related
persons, other than the Company or a person controlling, controlled by or under
common control with the Company, of beneficial ownership (as determined pursuant
to the provisions of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) of securities possessing more than twenty-five percent (25%) of the
total combined voting power of the Company's outstanding securities pursuant to
a transaction or series of related transactions which the Board does not at any
time recommend the Company's shareholders to accept or approve,
(b) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the Board
ceases, by reason of one or more contested elections for Board membership, to be
comprised of individuals who either (i) have been members of the Board
continuously since the beginning of such period or (ii) have been elected or
nominated for election as Board members during such period by at least a
majority of the Board members described in clause (i) who were still in office
at the time such election or nomination was approved by the Board,
(c) the sale, transfer or other disposition of all or substantially
all of the assets of the Company in complete liquidation or dissolution of the
Company, or
(d) any merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the Company's
outstanding securities are transferred to a person or persons different from the
persons holding those securities immediately prior to such transaction.
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3. Restriction on Transfer. The Recipient shall not sell, assign, pledge,
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or in any manner transfer unvested Restricted Shares, or any right or interest
in unvested Restricted Shares, whether voluntarily or by operation of law, or by
gift, bequest or otherwise. Any sale or transfer, or purported sale or transfer,
of unvested Restricted Shares, or any right or interest in unvested Restricted
Shares, in violation of this Section 3 shall be null and void.
4. Tax Withholding. Recipient acknowledges that, at the time any portion of
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the Restricted Shares vests (including the Issue Date for the first 10 percent
of each issuance of Restricted Shares), the Value (as defined below) on that
date of that portion of the Restricted Shares will be treated as ordinary
compensation income for federal and state income and FICA tax purposes, and that
the Company will be required to withhold taxes on these income amounts. For
purposes of this Agreement, the "Value" of a Restricted Share on any date shall
be equal to the closing market price for Company Common Stock on that date.
Promptly following vesting, the Company will notify Recipient of the required
withholding amount. Within 10 days of such notice, Recipient shall pay to the
Company the required withholding amount in cash or, at the election of the
Recipient, by surrendering to the Company for cancellation Restricted Shares or
other shares of Company Common Stock with a Value (as of the later of the
vesting date or the date of Recipient's election to surrender such shares) equal
to the required withholding amount.
5. Stock Certificate. Upon the Issue Date of any Restricted Shares, the
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award of those Restricted Shares shall be completed and the Recipient shall be
the owner of those Restricted Shares with all voting and other rights of a
shareholder, except as limited by this Agreement. To secure the rights of the
Company under Sections 2 and 4, the Company will retain the certificate or
certificates representing the Restricted Shares. Upon any forfeiture of the
Restricted Shares covered by this Agreement, the Company shall have the right to
cancel the Restricted Shares in accordance with this Agreement without any
further action by the Recipient. Upon any failure of the Recipient to pay
required withholding under Section 4, the Company shall have the right to cancel
vested Restricted Shares with a Value (as of the date the Company exercises this
right) equal to the required withholding amount without any further action by
the Recipient. After Restricted Shares have vested and all required withholding
has been paid to the Company in connection with such vesting, the Company shall
deliver a certificate for the vested Restricted Shares to the Recipient.
6. Additional the Company Shares. If, prior to vesting of Restricted
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Shares, the outstanding the Company Common Stock is increased as a result of a
stock dividend or stock split, the restrictions and other provisions of this
Agreement shall apply to any such additional shares of the Company Common Stock
which are issued in respect of the Restricted Shares to the same extent as such
restrictions and other provisions apply to the Restricted Shares.
7. Miscellaneous.
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7.1 Entire Agreement; Amendment. This Agreement constitutes the entire
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agreement of the parties with regard to the subjects hereof and may be amended
only by written agreement between the Company and Recipient.
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7.2 Notices. Any notice required or permitted under this Agreement
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shall be in writing and shall be deemed sufficient when delivered personally to
the party to whom it is addressed or when deposited into the United States Mail
as registered or certified mail, return receipt requested, postage prepaid,
addressed to the Company, Attention: Corporate Secretary, at its principal
executive offices or to Recipient at the address of Recipient in the Company's
records, or at such other address as such party may designate by ten (10) days'
advance written notice to the other party.
7.3 Assignment; Rights and Benefits. Recipient shall not assign this
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Agreement or any rights hereunder to any other party or parties without the
prior written consent of the Company. The rights and benefits of this Agreement
shall inure to the benefit of and be enforceable by the Company's successors and
assigns and, subject to the foregoing restriction on assignment, be binding upon
Recipient's heirs, executors, administrators, successors and assigns.
7.4 Further Action. The parties agree to execute such further
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instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement.
7.5 Applicable Law; Attorneys' Fees. The terms and conditions of this
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Agreement shall be governed by the laws of the State of Oregon. In the event
either party institutes litigation hereunder, the prevailing party shall be
entitled to reasonable attorneys' fees to be set by the trial court and, upon
any appeal, the appellate court.
7.6 Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
XXXX & XXXXXX, INC.
By /s/ Xxxxx X. Xxxx
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Title Director
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RECIPIENT
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
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