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Exhibit 10.4.0
FORM OF
RESTRICTED STOCK
AGREEMENT
(2005 LTIP Version)
Restricted Stock Agreement
(this “ Agreement ”), dated as of
August 31, 2005 (the “ Grant Date ”),
between GrafTech International Ltd. (the “ Corporation
”) and
(the “ Participant ”).
BACKGROUND
Reference is made to the
GrafTech International Ltd. 2005 Equity Incentive Plan (the “
Plan ”). A copy of the Plan has been made available to
the Participant and the terms of the Plan are incorporated herein
by reference.
The Plan allows the
Corporation to provide rewards and incentives to, among others,
employees of the Company by, among other things, granting them
shares of Common Stock. The Board or the Compensation Committee has
determined that it would be in the best interest of the Corporation
and its stockholders to grant the Restricted Shares to the
Participant under the Plan.
In consideration of the
covenants contained herein and other good and valuable
consideration, receipt of which is hereby acknowledged, the parties
agree as follows:
ARTICLE I
DEFINITIONS
Whenever capitalized terms
are used in this Agreement, they shall have the meanings set forth
in this Agreement or, if not defined in this Agreement, as set
forth in the written employment agreement between the Participant
and the Corporation or a Subsidiary or, if not defined in this
Agreement and if not defined in such an employment agreement or
there is no such employment agreement, as set forth in the
Plan.
“ Cause ”
shall mean:
(i) gross neglect
or willful and continuing refusal by the Participant to
substantially perform his or her duties or responsibilities for or
owed to the Company (other than due to death, Disability or
Retirement);
(ii) breach by the
Participant of his or her confidentiality obligations owed to the
Company;
(iii) willful
engagement by the Participant in conduct which is demonstrably
injurious to the Company (including a breach by the Participant of
his or her confidentiality, non-competition or non-solicitation
obligations owed to the Company); or
(iv) conviction or
plea of nolo contendere by the Participant to a
felony or a misdemeanor involving dishonesty or financial or
economic wrongdoing (such as fraud, embezzlement, insider trading,
bribery, theft, price fixing, graft or corrupt payments, perjury or
false certification).
ARTICLE II
GRANT OF RESTRICTED
SHARES
2.1 Grant of
Restricted Shares . The Participant is hereby granted
shares of Common Stock subject to the restrictions and conditions
set forth in this Agreement. References in this Agreement to
“ Restricted Shares ” mean the shares of Common
Stock granted hereby and any cash, securities, rights or property
distributed in respect thereof or issued in exchange therefor
(which shall be subject to the same restrictions and provisions as
such shares).
2.2 Value of
Restricted Shares . The Fair Market Value of the Restricted
Shares at the close of trading on the Grant Date was $
per share.
2.3 Grant
Information . The Restricted Shares have been granted under the
Plan. The Board or the Compensation Committee authorized the grant
of the Restricted Shares on August 31, 2005.
ARTICLE III
VESTING OF RESTRICTED
SHARES
All of the Restricted Shares
are unvested. Subject to Section 6.2, Restricted Shares shall
vest upon, but only upon, the earliest to occur of the events
described in Section 3.1, 3.2 or 3.3, in each case subject to
the limitations set forth in Section 3.4. Subject to
Section 6.2, all unvested Restricted Shares shall be
forfeitable as set forth in Section 3.4 and shall be
non-transferable as set forth in Section 4.3. All vested
Restricted Shares shall become non-forfeitable and transferable at
the time they first vest, although:
(i) transferability may be subject to pre-clearance,
blackout, registration and other restrictions under the
Company’s insider trading and other compliance policies and
procedures;
(ii) transferability
may be restricted under Section 4.4 until all Withholding
Requirements (as defined herein) are satisfied; and
(iii) transfers by
executive officers should be reviewed in advance to determine if
there would be any potential liability for short-swing profits
under Section 16(b) of the Exchange Act.
3.1 Time Vesting
. If not sooner vested and unless previously forfeited pursuant to
Section 3.4, one-third of the Restricted Shares shall vest at
the close of trading on August 31 of each of 2006, 2007 and
2008 if, and only if, the Participant’s employment by the
Company continues through such August 31,
respectively.
3.2 Accelerated
Vesting . If not sooner vested and unless previously forfeited
pursuant to Section 3.4, all of the Restricted Shares shall
vest upon the occurrence of a Change in Control.
3.3 Discretionary
Vesting . The Compensation Committee or the Board may
accelerate the vesting of any or all of the Restricted Shares at
any time and for any reason.
3.4 Effect of
Termination of Employment and Other Events on Vesting; Forfeiture
of Unvested Restricted Shares . Unless otherwise determined by
the Board or the Compensation Committee and subject to
Section 6.2, all unvested Restricted Shares shall cease to
vest and shall be forfeited upon the earliest to occur
of:
(i) the time of
notification of the termination of the Participant’s
employment by the Company for Cause or Detrimental
Conduct;
(ii) the date of
the termination of the Participant’s employment by the
Company for any reason other than Cause or Detrimental Conduct or
the date of the Participant’s resignation from employment
with the Company for any reason; or
(iii) the date on
which the Board or the Compensation Committee takes such action
pursuant to Article V (or such later date as may be specified by
the Board or the Compensation Committee).
3.5 Effective Date
of Termination of Employment or Retirement . For purposes
hereof, except as otherwise set forth in Section 3.4(i), the
date of resignation or termination of employment means the last
date of actual employment, even if a different date is used for
administrative convenience in connection with employee retirement,
benefit or welfare plans.
ARTICLE IV
PROCEDURES AFFECTING RESTRICTED
SHARES
4.1 Reversion to
Treasury . All Restricted Shares which are forfeited shall
automatically (and without need for further action by the
Corporation, the Participant or any other person) revert to the
Corporation and shall thereupon constitute treasury shares subject
to the Plan or some other plan of the Corporation, as may be
provided in the Plan or such other plan.
4.2 Delivery of
Restricted Shares .
(i) The Restricted
Shares will be delivered to the Participant in book entry form by
causing the Restricted Shares to be credited to the
Participant’s account at such brokerage firm as may be
designated from time to time by the Corporation to assist in the
administration of the Plan (the “ Broker
”).
(ii) Restricted
Shares will be delivered on or before the date on which they are
scheduled to vest; provided, however, that, if any Restricted
Shares vest before such date, such Restricted Shares shall be
delivered reasonably promptly (as determined by the Corporation)
thereafter.
(iii) When
Restricted Shares are delivered in book entry form, such delivery
as well as all subsequent transfers and other matters relating to
such Restricted Shares will be subject, in addition to all other
provisions hereof, to the rules and requirements imposed by the
Broker and such administrative rules and requirements as may be
imposed by the Corporation. Prior to vesting, Restricted Shares
will be subject to stop transfer instructions given by the
Corporation to the Broker and the transfer agent for the Common
Stock. Upon vesting of any Restricted Shares, such stop transfer
instructions will be terminated (except as otherwise provided in
connection with the Company’s insider trading and other
compliance policies and procedures and except to the extent that
any Restricted Shares may be sold pursuant to Section 4.4 to
satisfy Withholding Requirements (as defined in Section 4.4)).
Upon forfeiture of any Restricted Shares, the Broker and such
transfer agent will be instructed to debit such Restricted Shares
from such account and return them to the Corporation.
(iv) Each book
entry relating to Restricted Shares may include such restrictive
instructions in such forms as the Corporation may deem convenient,
expedient, necessary or appropriate relating to the restrictions
under this Agreement, applicable securities, tax or other laws or
applicable rules of any securities exchange or market.
4.3 Transfer of
Restricted Shares .
(i) Unvested
Restricted Shares cannot be Transferred to any Person or entity or
for any purpose without the prior written consent of the
Corporation. Any attempt to effect a Transfer of unvested
Restricted Shares without such consent shall be null and
void.
(ii) To the extent
necessary (as determined by the Corporation) to permit resale by
the Participant of vested Restricted Shares, the Corporation will
use reasonable efforts to register the resale of such Restricted
Shares under the Securities Act, so long as the Corporation is
permitted to do so on Form S-3 or S-8 or a similar abbreviated form
and subject to the terms and conditions set forth in the Plan and
such other reasonable or customary terms and conditions as be may
be imposed by the Corporation (including those relating to
indemnification by the Participant for errors or omissions from
information provided by the Participant).
4.4 Withholding of
Taxes .
(i) The Company
shall withhold or deduct from any or all payments or amounts due to
or held for the Participant, whether due from the Company or held
in the Participant’s account at the Broker, an amount (the
“ Withholding Amount ”) equal to all taxes
(including unemployment (including FUTA), social security and
medical (including FICA), and other governmental charges of any
kind as well as income and other taxes) required to be withheld or
deducted with respect to any and all taxable income and other
amounts attributable to the Restricted Shares (the “
Withholding Requirement ”).
(ii) The
Withholding Amount shall be determined by the Company.
(iii) The timing
of withholding or deduction from such payments or amounts shall be
determined by the Company; provided, however, that, if such taxes
are required to be paid to a tax or other governmental authority
before such withholding or deduction is made, then the Company
shall pay such taxes when due as agent for the Participant and
shall be entitled to reimbursement therefor from such payments or
amounts, or otherwise.
(iv) The
Corporation may restrict transfer of any or all vested Restricted
Shares until all Withholding Requirements are satisfied.
(v) Unless the
Participant has made or makes a timely election pursuant to
Section 83(b) of the Code, the Participant authorizes the
Corporation and the Broker to:
(A) sell, on his
or her behalf and for his or her account, from time to time and at
any time as the Corporation or the Broker may deem necessary,
appropriate, convenient or expedient to satisfy each Withholding
Requirement or to reimburse the Company in respect thereof, a
sufficient number of Restricted Shares (as determined by the
Corporation or the Broker) so that the net proceeds from such sale
equal or exceed the applicable Withholding Amount; and
(B) use the net
proceeds to satisfy such Withholding Requirement (with any excess
net proceeds to be paid to or deposited in an account of the
Participant).
(vi) If the
Participant has made or makes an election pursuant to
Section 83(b) of the Code, he or she shall immediately file a
copy thereof with the Company and upon demand by the Company make a
cash payment to the Company equal to any Withholding Amount in
respect thereof.
(vii) In
connection with any sale of Restricted Shares pursuant to this
Section 4.4, the Participant agrees that:
(A) such sale may
be aggregated with sales of restricted stock granted to other
participants under the Plan or other plans of the
Company;
(B) such aggregated
sales may be made from time to time in one or more installments at
any time;
(C) such aggregated
sales may be made over time as the Corporation or the Broker may
deem necessary, appropriate, convenient or expedient with a view
toward avoidance or minimization of disruption of the market for
the Common Stock, administrative convenience, minimization of costs
and expenses or other factors; and
(D) the net proceeds
from such aggregated sales and the sale prices of the shares sold
may be allocated among such Restricted Shares and other shares of
restricted stock and the Participant and such other participants as
the Corporation or the Broker may deem reasonable.
(viii) The
Participant understands that:
(A) different
Withholding Requirements may arise at different times based on time
of delivery or vesting of Restricted Shares, tax elections or other
factors;
(B) different
Withholding Requirements may be based on different values
attributable to the Restricted Shares at such times or otherwise
based on applicable tax laws, changes in the financial performance
or prospects of the Company, changes in market or economic
conditions or other factors;
(C) it may not be
practicable or permissible to sell Restricted Shares to satisfy
each Withholding Requirement at the time due because of rules and
requirements of the Broker, administrative rules and requirements
of the Company, restrictions under the Company’s insider
trading and other compliance policies and procedures, potential
liability for short-swing profits under Section 16(b) of the
Exchange Act, applicable securities, tax or other laws, applicable
rules of any securities exchange or market, or other factors;
and
(D) as a result,
Restricted Shares may be sold at times and values that differ,
potentially significantly, from those applicable to such
Withholding Requirement and that such differences can result in
gains or losses, potentially significant, relative to those values
and capital gains and losses for tax purposes in addition to the
taxes described in Section 4.4(i).
(ix) The
Participant hereby appoints each officer and assistant officer of
the Corporation to be the Participant’s true and lawful
agent, proxy and attorney-in-fact, with full power of substitution
and re-substitution (each, an “ attorney-in-fact
” and, together, the “ attorneys-in-fact
”), to take, cause to be taken and authorize the taking of
any and all actions (including the giving of instructions to sell
and the approval of confirmations), to incur, cause to be incurred
and authorize the incurrence of any and all costs and expenses
(including brokerage commissions), to undertake, cause to be
undertaken and authorize the undertaking of any and all obligations
and to execute, acknowledge, file, publish and deliver, cause to be
executed, acknowledged, filed, published and delivered and
authorize the execution, acknowledgement, filing, publication and
delivery of any and all agreements, instruments and documents
(including stock powers, account agreements and related documents,
and wire transfer instructions) which any such attorney-in-fact may
deem necessary, appropriate, convenient or expedient to sell
Restricted Shares, on behalf and for the account of the
Participant, to generate net proceeds to satisfy any and all
Withholding Requirements, to use net proceeds in satisfaction
thereof and to otherwise give effect to the intent and purposes of
this Section 4.4, all in the name of the Participant, any such
attorney-in-fact, the Corporation or any Subsidiary and all at such
times, in such manners, in such amounts, on such exchanges or
markets, on such terms, through such brokers, dealers and accounts
and otherwise as any such
attorney-in-fact may
determine in his or her sole and absolute discretion, and hereby
grants to each attorney-in-fact the full power and authority to do
any and all things necessary, convenient, expedient or appropriate
in connection therewith. This power of attorney shall not be
affected in any manner by reason of the execution, at any time, of
other powers of attorney by the Participant in favor of persons
other than the attorneys-in-fact named herein and shall not be
affected by the subsequent death, disability or incompetence of the
Participant. This power of attorney is irrevocable and coupled with
an interest and shall remain in effect until all Withholding
Requirements have been fully and unconditionally satisfied. All
persons dealing with any of the attorneys-in-fact may assume that
this power of attorney has not been revoked and may be relied
upon.
(x) The
Participant acknowledges and agrees that neither the Company, the
Broker nor any of their respective affiliates, control persons,
directors, officers, employees, representatives or agents shall
have any liability or obligation for any losses, damages, costs or
expenses of any kind or under any theory arising out of or in
connection with any action taken or omitted to be taken or any
delay in taking any action pursuant to or contemplated by this
Section 4.4 (including the determination of any Withholding
Amount or the time when any Withholding Requirement is required to
be satisfied or any sale of or delay in selling or failure to sell
or the price, terms or conditions of sale of any or all of the
Restricted Shares), including any liability for any claim that the
Participant could have made more or lost less in connection
therewith or for any capital gain or loss due to the difference in
time between the triggering of a Withholding Requirement and the
resale of Restricted Shares in respect thereof or for violations of
insider trading or other laws or for incurrence of liability for
short-swing profits under Section 16(b) of the Exchange Act,
except to the extent that a court of competent jurisdiction
determines by final and nonappealable judgment that any such
losses, damages, costs or expenses resulted from actions taken or
omitted to be taken by them in bad faith or from their gross
negligence or willful misconduct. References in this
Section 4.4 to “ selling ” and correlative
terms include all activities related thereto, including placement
and execution of sell orders, selection of brokers and dealers,
delivery of share certificates, receipt of proceeds and payment of
fees and commissions.
(xi) The
provisions hereof regarding sale of Restricted Shares to satisfy
Withholding Requirements are also intended to constitute a trading
plan within the
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