EXHIBIT 10.5
GIDDINGS & LEWIS, INC.
1993 STOCK AND INCENTIVE PLAN
RESTRICTED STOCK AWARD AGREEMENT
THIS AGREEMENT is made and entered into as of the date set forth
on the signature page hereof by and between GIDDINGS & LEWIS, INC., a
Wisconsin corporation with its principal offices at Fond du Lac, Wisconsin
(the "Company"), and the employee of the Company whose signature is set
forth on the signature page hereof (the "Key Employee").
W I T N E S S E T H :
WHEREAS, the Company has adopted the 1993 Stock and Incentive
Plan (the "Plan") to permit shares of the Company's common stock, $.10 par
value per share (the "Stock"), to be awarded to certain key employees of
the Company and any affiliates (collectively, "Participating Company");
and
WHEREAS, the Key Employee is a key employee of a Participating
Company, and the Company desires him to remain in such employ and to
further an opportunity for his stock ownership in the Company in order to
increase his proprietary interest in the success of the Company;
NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements herein set forth, the parties hereby mutually
covenant and agree as follows:
1. Award of Restricted Stock. Subject to the terms and conditions set
forth herein, the Company hereby awards the Key Employee the number of
shares of Stock set forth on the signature page hereof (the "Restricted
Stock").
2. Restrictions.
(a) Except as otherwise provided herein, the Restricted Stock
may not be sold, transferred or otherwise alienated or hypothecated until
the date set forth on the signature page hereof (the "Release Date");
provided, however, that the Restricted Stock, or an applicable portion
thereof, shall be forfeited to the Company on the Release Date to the
extent certain Company performance goals, as set forth on the attached
Schedule A, are not met.
3. Escrow. Certificates for shares of Restricted Stock shall be issued
as soon as practicable in the name of the Key Employee but shall be held
in escrow by the Company, as escrow agent. Upon issuance of such
certificates, (i) the Company shall give the Key Employee a receipt for
the Restricted Stock held in escrow which will state that the Company
holds such Stock in escrow for the account of the Key Employee, subject to
the terms of this Agreement, and (ii) the Key Employee shall give the
Company a stock power for such Stock duly endorsed in blank which will be
held in escrow for use in the event such Stock is forfeited in whole or in
part. Unless theretofore forfeited as provided herein, Restricted Stock
shall cease to be held in escrow and certificates for such Stock shall be
delivered to the Key Employee, or in the case of his death, to his
Beneficiary (as hereinafter defined) on the Release Date or upon any other
termination of the restrictions imposed by Paragraph 2 hereof.
4. Transfer After Release Date; Securities Law Restrictions. Except as
otherwise provided herein, Restricted Stock shall become free of the
restrictions of Paragraph 2 and be freely transferable by the Key Employee
on the Release Date subject to applicable limitations under Federal and
State securities laws.
5. Termination of Employment Due to Death, Retirement or Total
Disability.
(a) If the Key Employee's employment with all Participating
Companies is terminated because of death, Retirement or Total Disability
(as such terms are defined below) prior to the Release Date, the
restrictions of Paragraph 2 applicable to that portion of the Restricted
Stock determined in Paragraph 5(b) below shall terminate on the Release
Date without action by the Committee and notwithstanding such death,
Retirement or Total Disability. The shares of Restricted Stock so
released shall be free of the restrictions set forth in Paragraph 2 hereof
and, except as otherwise provided in Paragraph 4 hereof, freely
transferable.
(b) The number of shares of the Restricted Stock for which the
Paragraph 2 restrictions will terminate on the Release Date in accordance
with Paragraph 5(a) hereof shall be the number of shares on which the
restrictions would have terminated on the Release Date pursuant to
Schedule A had the Key Employee remained employed multiplied by a
fraction, the numerator of which is the number of years, including
fractions of a year, in the period from the Grant Date to the date on
which the Key Employee's employment terminates as a result of death,
Retirement, or Total Disability, and the denominator of which is the
number of years, including fractions of a year, if any, in the period from
the Grant Date to the Release Date. For purposes of this computation,
fractions of a year shall be computed by the number of days in the period
divided by 365. No fractional share resulting from such computation shall
be issued and in lieu thereof, a cash payment shall be made equal to such
fractional share (computed to two decimal places) multiplied by the Fair
Market Value on the Release Date. As used herein, "Fair Market Value"
means the per share closing price on the date in question in the principal
market in which the Stock is then traded or, if no sales of Stock have
taken place on such date, the closing price on the most recent date on
which selling prices were quoted.
(c) As used herein, (i) "Retirement" means termination of
employment with all Participating Companies on or after age 62 after
completion of an aggregate of ten years of service with the Company and/or
any Participating Company, except that if the Key Employee's employment is
terminated for Cause (as hereinafter defined) or because of death or Total
Disability, such termination shall not be "Retirement" for purposes
hereof, and (ii) "Total Disability" means the complete and permanent
inability of a Key Employee to perform all of his duties under the terms
of his employment with any Participating Company, as determined by the
Compensation Committee of the Company's Board of Directors or any
successor to such Committee which administers the Plan, or if no such
Committee has been appointed, by the Board of Directors of the Company
(collectively, the "Committee") upon the basis of such evidence, including
independent medical reports and data, as the Committee deems appropriate
or necessary.
6. Termination of Employment for Cause. If the Key Employee's
employment with any Participating Company is terminated for Cause (as
defined below) prior to the Release Date, all Restricted Stock shall be
forfeited to the Company on the date on which such termination of
employment occurs. As used herein, "Cause" means, as determined by the
Committee, the Key Employee's failure to substantially perform the
material duties of the Key Employee's employment.
7. Termination of Employment Other Than for Cause, Death, Retirement,
Total Disability or Change in Control.
(a) If the Key Employee's employment with the Company is
terminated by Key Employee prior to the Release Date, all Restricted Stock
shall be forfeited to the Company on the date of such termination unless
the Committee determines, on such terms and conditions, if any, as the
Committee may impose, that all or a portion of the Restricted Stock shall
be released to the Key Employee and the restrictions of Paragraph 2
applicable thereto shall terminate. Absence of the Key Employee on leave
approved by an executive officer of the Company shall not be considered a
termination of employment by Key Employee during the period of such leave.
(b) If the Key Employee's employment with the Company is
terminated prior to the Release Date for any reason other than Cause,
death, Retirement, Total Disability or as described in Paragraph 7(a)
above, the restrictions of Paragraph 2 applicable to that portion of the
Restricted Stock determined in Paragraph 7(c) below shall terminate on the
Release Date without action by the Committee on the date of such
termination of employment and such Restricted Stock shall be free of such
restrictions and, except as otherwise provided in Paragraph 4 hereof,
freely transferable.
(c) The number of shares of the Restricted Stock for which the
Paragraph 2 restrictions will terminate in accordance with Paragraph 7(b)
hereof shall be the number of shares on which the restrictions would have
terminated on the Release Date pursuant to Schedule A had the Key Employee
remained employed multiplied by a fraction, the numerator of which is the
number of years, including fractions of a year, in the period from the
Grant Date to the date on which the Key Employee's employment terminated
in the manner as contemplated in Paragraph 7(b) hereof, and the
denominator of which is the number of years, including fractions of a
year, if any, in the period from the Grant Date to the Release Date. For
purposes of this computation, fractions of a year shall be computed by the
number of days in the period divided by 365. No fractional share
resulting from such computation shall be issued an in lieu thereof, a cash
payment shall be made equal to such fractional share (computed to two
decimal places) multiplied by the Fair Market Value on the Release Date.
As used herein, "Fair Market Value" means the per share closing price on
the date in question in the principal market in which the Stock is then
traded or, if no sales of Stock have taken place on such date, the closing
price on the most recent date on which selling prices were quoted.
8. Termination for Change of Control of the Company
(a) If there occurs prior to the Release Date a Change in
Control of the Company (as defined below) the restrictions of Paragraph 2
applicable to the number of shares listed opposite the "Target" earnings
per share on Schedule A hereto (except for any such shares which were
previously forfeited to the Company) shall terminate without action by the
Committee on the date of such Change in Control of the Company and such
Restricted Stock shall be free of such restrictions and, except as provided
in Paragraph 4 hereof, freely transferable.
(b) As used herein, "Change in Control of the Company" shall
mean a change in control of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended. Without limiting
inclusiveness of the definition in the preceding sentence, a Change in
Control of the Company shall be deemed to have occurred if:
(i) any person (other than any employee benefit plan of the
Company or any subsidiary of the Company, any entity holding securities of
the Company for or pursuant to the terms of any such plan or any trustee,
administrator or fiduciary of such a plan) is or becomes the beneficial
owner of securities of the Company representing at least 30% of the
combined voting power of the Company's then outstanding securities;
(ii) a Section 11(a) (ii) Event shall have occurred under
that certain "Rights Agreement" dated as of August 23, 1995 between the
Company and Firstar Trust Company as amended (or a similar event shall
have occurred under any successor to such Rights Agreement) at any time
any "Rights" as defined therein are issued and outstanding thereunder;
(iii) one-third or more of the members of the Board are
not Continuing Directors (as defined below);
(iv) there shall be consummated (x) any consolidation or
merger of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which shares of Stock would be
converted into cash, securities or other property, other than a merger of
the Company in which the holders of Stock immediately prior to the merger
have the same proportionate ownership of common stock of the surviving
corporation immediately after the merger, or (y) any sale, lease, exchange
or other transfer (in one transaction or a series of related transactions)
of all, or substantially all, of the assets of the Company; or
(v) the shareholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company.
(c) As used herein, "Continuing Director" means any member of
the Board of Directors of the Company who was a member of such Board on
the Grant Date, and any successor of a Continuing Director who is
recommended to succeed a Continuing Director by a majority of the
Continuing Directors then on such Board.
9. Beneficiary.
(a) The person whose name appears on the signature page hereof
after the caption "Beneficiary" or any successor designated by the Key
Employee in accordance herewith (the person who is the Key Employee's
Beneficiary at the time of his death herein referred to as the
"Beneficiary") shall be entitled to receive such portion, if any, of the
Restricted Stock to be released to the Beneficiary under Paragraphs 3 and
5 as a result of the death of the Key Employee. The Key Employee may from
time to time revoke or change his Beneficiary without the consent of any
prior Beneficiary by filing a new designation with the Committee. The last
such designation received by the Committee shall be controlling; provided,
however, that no designation, or change or revocation thereof, shall be
effective unless received by the Committee prior to the Key Employee's
death, and in no event shall any designation be effective as of a date
prior to such receipt.
(b) If no such Beneficiary designation is in effect at the time
of a Key Employee's death, or if no designated Beneficiary survives the
Key Employee or if such designation conflicts with law, the Key Employee's
estate shall be entitled to receive the portion, if any, of the Restricted
Stock to be released from the restrictions of Paragraph 2 upon the death
of the Key Employee. If the Committee is in doubt as to the right of any
person to receive such Restricted Stock, the Company may retain such
Stock, without liability for any interest thereon, until the Committee
determines the person entitled thereto, or the Company may deliver such
Restricted Stock to any court of appropriate jurisdiction and such
delivery shall be a complete discharge of the liability of the Company
therefor.
10. Certificate Legend. Each certificate for shares of
Restricted Stock shall bear the following legend:
"The sale or other transfer of the shares of stock represented
by this certificate, whether voluntary, or by operation of law, is subject
to certain restrictions set forth in the Giddings & Lewis, Inc. 1993 Stock
and Incentive Plan and a Restricted Stock Award Agreement between Giddings
& Lewis, Inc. and the registered owner hereof. A copy of such Plan and
such Agreement may be obtained from the Secretary of Giddings & Lewis,
Inc."
When the restrictions imposed by Paragraph 2 hereof terminate, the Key
Employee shall be entitled to have the foregoing legend removed from the
certificates representing such Stock.
11. Voting Rights; Dividends and Other Distributions. (a) While
the Restricted Stock is subject to restrictions under Paragraph 2 and
prior to any forfeiture thereof, the Key Employee may exercise full voting
rights for the Restricted Stock registered in his name and held in escrow
hereunder.
(b) While the Restricted Stock is subject to the restrictions
under Paragraph 2 and prior to any forfeiture thereof, the Key Employee
shall be entitled to receive all dividends and other distributions paid
with respect to the Restricted Stock. If any such dividends or
distributions are paid in Stock, such shares shall be subject to the same
restrictions as the share of Restricted Stock with respect to which they
were paid, including the requirement that the Restricted Stock be held in
escrow pursuant to Paragraph 3 hereof.
(c) Subject to the provisions of this Agreement, the Key
Employee shall have, with respect to the Restricted Stock, all other
rights of holders of Stock.
12. Tax Withholding. (a) It shall be a condition of the
obligation of the Company to issue or release from escrow Restricted Stock
to the Key Employee or the Beneficiary, and the Key Employee agrees, that
the Key Employee shall pay to the Company upon its demand, such amount as
may be requested by the Company for the purpose of satisfying its
liability to withhold federal, state, or local income or other taxes
incurred by reason of the award of the Restricted Stock or as a result of
the termination of the restrictions on such Stock hereunder.
(b) If the Key Employee does not make an election under Section
83(b) of the Internal Revenue Code of 1986, as amended, with respect to
the Restricted Stock awarded hereunder, the Key Employee may satisfy the
Company's withholding tax requirements by electing to have the Company
withhold that number of shares of Restricted Stock otherwise deliverable
to the Key Employee from escrow hereunder or to deliver to the Company a
number of shares of Stock, in each case, having a Fair Market Value on the
Tax Date (as defined below) equal to the minimum amount required to be
withheld as a result of the termination of the restrictions on such
Restricted Stock. The election must be made in writing and, if the Key
Employee is an Insider (as defined below), (i) delivered to the Company
either six months or more prior to the Tax Date or during a ten business
day period beginning on the third business day following the release of
the Company's quarterly or annual summary statement of sales and earnings
which occurs prior to the Tax Date and (ii) shall not be effective until
at least six months after the Grant Date, provided, however, that the
restriction in clause (ii) shall not apply in the event death or Total
Disability of the Key Employee occurs prior to the expiration of such six
month period. If the Key Employee is not an Insider, the election must be
delivered to the Company prior to the Tax Date. If the number of shares
so determined shall include a fractional share, the Key Employee shall
deliver cash in lieu of such fractional share. All elections shall be
made in a form approved by the Committee and shall be subject to
disapproval, in whole or in part, by the Committee. As used herein, (i)
"Tax Date" means the date on which the Key Employee must include in his
gross income for federal income tax purposes the fair market value of the
Restricted Stock over the purchase price therefor and (ii) "Insider" means
an executive officer or a director of the Company or a beneficial owner of
more than 10% of the Stock.
13. Adjustments . The number of Shares of Restricted Stock
awarded under this Agreement shall be adjusted to reflect any stock
dividend, stock split or similar transaction affecting the Stock. In the
event that the Company issues additional Stock before the Release Date, an
equitable adjustment will be made to eliminate any dilutive effect that
the issuance of such Stock may have on the Company's earnings per share
and the calculation of the Restricted Stock to be released upon
termination of the restrictions imposed by Paragraph 2 hereof. The
Committee may make other adjustments to this Agreement as it deems
equitable in the event that any corporate transaction or other event
affects the shares of Stock such that an adjustment is appropriate to
confer the benefits intended by the Plan or this Agreement.
14. Powers of Company Not Affected. The existence of the
Restricted Stock shall not affect in any way the right or power of the
Company or its shareholders to make or authorize any combination,
subdivision or reclassification of the Stock or any reorganization,
merger, consolidation, business combination, exchange of shares, or other
change in the Company's capital structure or its business, or any issue of
bonds, debentures or stock having rights or preferences equal, superior or
affecting the Restricted Stock or the rights thereof, or dissolution or
liquidation of the Company, or any sale or transfer of all or any part of
its assets or business, or any other corporate act or proceeding, whether
of a similar character or otherwise. Nothing in this Agreement shall
confer upon the Key Employee any right to continue in the employment of
any Participating Company or interfere with or limit in any way the right
of any Participating Company to terminate the Key Employee's employment at
any time.
15. Interpretation by Committee. The Key Employee agrees that
any dispute or disagreement which may arise in connection with this
Agreement shall be resolved by the Committee, in its sole discretion, and
that any interpretation by the Committee of the terms of this Agreement or
the Plan and any determination made by the Committee under this Agreement
or the Plan may be made in the sole discretion of the Committee and shall
be final, binding, and conclusive. Any such determination need not be
uniform and may be made differently among Key Employees awarded Restricted
Stock.
16. Miscellaneous. (a) This Agreement shall be governed and
construed in accordance with the laws of the State of Wisconsin applicable
to contracts made and to be performed therein between residents thereof.
(b) This Agreement may not be amended or modified except by the
written consent of the parties hereto.
(c) The captions of this Agreement are inserted for convenience
of reference only and shall not be taken into account in construing this
Agreement.
(d) Any notice, filing or delivery hereunder or with respect to
Restricted Stock shall be given to the Key Employee at either his usual
work location or his home address as indicated in the records of the
Company, and shall be given to the Committee or the Company at 142 Doty
Street, Fond du Lac, 54935, Attention: Secretary. All such notices shall
be given by first class mail, postage pre-paid, or by personal delivery.
(e) This Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns and shall be binding
upon and inure to the benefit of the Key Employee, the Beneficiary and the
personal representative(s) and heirs of the Key Employee, except that the
Key Employee may not transfer any interest in any Restricted Stock prior
to the release of the restrictions imposed by Paragraph 2.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer and its corporate seal hereunto
affixed, and the Key Employee has hereunto affixed his hand and seal, all
on the day and year set forth below.
GIDDINGS & LEWIS, INC.
By:
_______________________________________(SEAL)
Key Employee:
No. of Shares of Restricted Stock:
(Performance Based Maximum
as set forth on Schedule A)
Date of Agreement:
Grant Date:
Release Date:
Beneficiary:_______________________________
Address of Beneficiary:
___________________________________________
___________________________________________
Beneficiary Tax Identification No.