RESTRICTED STOCK
AGREEMENT
THIS
RESTRICTED STOCK AGREEMENT (this “ Agreement
”) is made as of this ___day of ___(the “ Effective
Date ”), by and between Peerless Mfg. Co. (the “
Company ”), a Texas corporation, and ___(“
Grantee ”).
WHEREAS ,
the Company has implemented its 2001 Stock Option and Restricted
Stock Plan, as amended (the “ Plan ”), which
provides for the grant of shares of common stock of the Company,
$1.00 par value per share (the “ Common Stock
”), to certain selected employees and directors of the
Company or its subsidiaries;
WHEREAS ,
the committee appointed by the Board of Directors of the Company
(the “ Board ”) to administer the Plan (the
“ Committee ”) has selected the Grantee to
participate in the Plan and has awarded the restricted Common Stock
described in this Agreement (the “ Restricted Stock
”) to the Grantee;
WHEREAS,
the restricted stock provided for under the Plan is intended to
comply with the requirements of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended; and
WHEREAS,
the parties hereto desire to evidence in writing the terms and
conditions of the Restricted Stock.
NOW,
THEREFORE , in consideration of the foregoing and of the mutual
covenants and agreements herein contained, and as an inducement to
the Grantee to continue in employment with the Company or its
subsidiaries and to promote the success of the business of the
Company and its subsidiaries, the parties hereby agree as
follows:
1. Grant
of Restricted Stock . The Company hereby grants to the Grantee,
upon the terms and subject to the conditions, limitations and
restrictions set forth in the Plan and in this Agreement, ___shares
of Restricted Stock (the “ Shares ”), effective
as of the date of this Agreement. The Grantee hereby accepts the
Shares from the Company.
2.
Vesting . The Shares shall vest ratably in four equal annual
increments commencing on the first anniversary of the Effective
Date. Notwithstanding the preceding sentence, the Shares shall
immediately vest in full upon any “Sale of the
Corporation.” A “ Sale of the Corporation
” shall occur if the Corporation shall engage in a merger,
consolidation, recapitalization, reorganization or sale, lease or
transfer of all or substantially all of the Corporation’s
assets and the Corporation or its stockholders or affiliates
immediately before such transaction shall beneficially own,
immediately after or as a result of such transaction, equity
securities of the surviving or acquiring corporation or such
corporation’s parent corporation possessing less than
fifty-one percent (51%) of the voting power of the surviving or
acquiring corporation or such corporation’s parent
corporation, provided that, a Sale of the Corporation
1
shall not be
deemed to occur upon any public offering or series of such
offerings of securities of the Corporation or its affiliates that
results in any such change in beneficial ownership.
3.
Ownership of Restricted Stock . From and after the Effective
Date and prior to forfeiture, Grantee will be entitled to all the
rights of absolute ownership of the Shares, including the right to
vote those Shares and to receive dividends thereon if, as, and when
declared by the Board, which dividends will be paid to the Grantee
no later than the end of the calendar year in which such dividends
are paid to the other holders of Common Stock, or if later, the
15 th
day of the third month following the
date such dividends are paid to the other holders of Common
Stock.
4.
Forfeiture of Shares . Upon termination of the
Grantee’s employment with the Company or its subsidiaries for
any reason, any Shares that have not vested will be immediately
forfeited, without any further action by the Company. The right of
the Grantee to receive any benefits from the Company or its
subsidiaries after termination of employment or service to the
Company or its subsidiaries by reason of employment contract,
severance arrangement or otherwise shall not affect the
determination that the Grantee’s employment or service has
been terminated with the Company or its subsidiaries for purposes
of this Agreement.
5. Tax
Withholding . Any provision of this Agreement to the contrary
notwithstanding, the Company may take such steps as it deems
necessary or desirable for the withholding of any taxes that it is
required by law or regulation of any governmental authority,
federal, state or local, domestic or foreign, to withhold in
connection with the grant or vesting of any of the Shares subject
hereto.
6.
Transfer of Shares . The Grantee shall not, directly or
indirectly, sell, transfer, pledge, encumber or hypothecate
(“ Transfer ”) any unvested Shares. Any such
Transfer will be void and of no force or effect, and will result in
the immediate forfeiture of all Shares, whether vested or not. The
Company may elect to hold any certificates representing the Shares
until after the Shares have vested. If the Company elects to hold
certificates representing unvested Shares, then once the Shares
vest, upon the request of the Grantee, the Company will deliver to
the Grantee a stock certificate representing the Shares that have
vested. If a certificate representing Shares has been issued, the
certificate will be affixed with a legend setting forth the
restrictions applicable to the Transfer of such Shares. The Shares
will not be liable for or subject to, in whole or in part, the
debts, contracts, liabilities or torts of the Grantee, nor shall
they be subject to garnishment, attachment, execution, levy or
other legal or equitable process. To the extent Shares have vested,
su
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