Exhibit 10.3
Note: Mr. Ruhlman’s restricted stock agreement does not include the three year
time-based cliff vesting provision because the entire award is subject to
vesting based upon the Company’s performance.)
PREFORMED LINE PRODUCTS COMPANY
LONG TERM INCENTIVE PLAN OF 2008
RESTRICTED STOCK AWARD AGREEMENT
THIS RESTRICTED STOCK AWARD AGREEMENT (“Agreement”) is dated as of  _____,
20_____, (being the grant date of this restricted stock award), between
Preformed Line Products Company, an Ohio corporation (“Company”), and  _____ 
(“Participant”).
WHEREAS, the Company maintains the Preformed Line Products Company Long Term
Incentive Plan of 2008 (the “Plan”) for the purpose of (i) motivating key
personnel by means of incentive compensation, (ii) furthering the alignment of
interests of participants with those of the stockholders of the Company through
ownership and performance of the common stock of the Company, and
(iii) permitting the Company to attract and retain key personnel and directors
whose judgment is important to the successful conduct of the business of the
Company; and
WHEREAS, pursuant to the terms of the Plan, the Compensation Committee may grant
restricted stock awards to key personnel of the Company and its subsidiaries and
non-employee directors of the Company; and
WHEREAS, pursuant to the terms of the Plan, the Compensation Committee may grant
awards that are not intended to be Qualified Performance-Based Awards, as
defined under the Plan, by expressing such intention in this Agreement; and
WHEREAS, pursuant to the terms of the Plan, the terms, conditions and
restrictions of each restricted stock award are to be set forth in an award
agreement; and
WHEREAS, the Compensation Committee has determined that it is appropriate to
grant Participant a restricted stock award of  _____  shares of the common stock
of the Company (as comprised of two separate mutually exclusive parts, Award I
and Award II, as set forth below; the “Restricted Stock”) under the Plan on the
terms, conditions and restrictions provided in this Agreement.
NOW, THEREFORE, the Company and the Participant agree as follows:
1. Agreement and Plan Govern Restricted Stock.
The Restricted Stock is in all respects subject to the terms, conditions and
provisions of this Agreement and the Plan.

 

 

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2. Vesting.
Until no longer subject to substantial risk of forfeiture (vested) (the “Vesting
Date”) in accordance with the schedule and/or performance criteria set forth
below, the Restricted Stock may not be sold, exchanged, transferred, pledged,
hypothecated, assigned, disposed of or otherwise encumbered, whether
voluntarily, involuntarily or by operation of law, and will be forfeited to the
Company if the Participant voluntarily terminates his employment with the
Company; provided, however, the Compensation Committee of the Board of Directors
(the “Committee”), in its sole discretion, may modify the terms of this grant at
any time. Any attempted sale, exchange, transfer, pledge, hypothecation,
assignment, disposition or encumbrance of such Restricted Stock in violation of
this Agreement shall be void and of no effect and the Company shall have the
right to disregard the same on its books and records. The certificate or
certificates representing the Restricted Stock will bear a legend evidencing the
restrictions contained herein. The period between the grant date under this
Agreement and the Vesting Date shall be referred to as the “Restriction Period.”
The Restricted Stock shall vest (become no longer subject to a substantial risk
of forfeiture) in the amounts and on the dates set forth below:

      Award I — Time-Based Vesting
 
   
Vesting Date
  Number of Shares Vesting
 
   
[insert date]
                      
 
    Award II — Performance and Time-Based Vesting
 
   
Vesting Date
  Maximum Number of Shares that May Vest
 
   
[insert date]
                      

Subject to the achievement of the performance goals of at least five percent
(5%) Growth in Pretax Income (Compounded Annually) and three percent (3%) Sales
Growth Percentage (Compounded Annually), Award II shall vest in a percentage
determined under the following formula:
X = Sales Growth Percentage (Compounded Annually)
Y = Percentage Growth in Pretax Income (Compounded Annually)
Z = Applicable Vesting Percentage for Restricted Stock under Award II

      For Values of X and Y in Ranges Indicated   Applicable Vesting Formula
 
   
X < 3 OR Y < 5
  Z = 0
 
   
3 < X < 5 AND 5 < Y < 7
  Z = 25 + 6.25(X – 3) + 6.25(Y – 5)
 
   
3 < X < 5 AND 7 < Y < 10
  Z = 37.5 + 6.25(X – 3) + 8.333(Y – 7)
 
   
3 < X < 5 AND Y > 10
  Z = 37.5 + 6.25(X – 3) + 25
 
   
5 < X < 10 AND 5 < Y < 7
  Z = 37.5 + 5(X – 5) + 6.25(Y – 5)
 
   
5 < X < 10 AND 7 < Y < 10
  Z = 50 + 5(X – 5) + 8.333(Y – 7)
 
   
5 < X < 10 AND Y > 10
  Z = 50 + 5(X – 5) + 25
 
   
X > 10 AND 5 < Y < 7
  Z = 37.5 + 25 + 6.25(Y – 5)
 
   
X > 10 AND 7 < Y < 10
  Z = 50 + 25 + 8.333(Y – 7)
 
   
X > 10 AND Y > 10
  Z = 100

Following the application of the formula described above, all remaining unvested
Restricted Stock shall be forfeited.

 

 

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3. Rights Relating to Restricted Stock.
The Restricted Stock shall constitute issued and outstanding shares of common
stock of the Company and will be issued in the name of the Participant. The
Company’s transfer agent and/or share transfer records will show the Participant
as the owner of record of the Restricted Shares. Except as otherwise provided in
this Agreement, the Participant will have all the rights of a shareholder of the
Company, including the right to vote. In the event that dividends are paid by
the Company with respect to its common stock prior to such time as the
Restricted Stock has vested in accordance with this Agreement, unless otherwise
determined by the Committee to avoid adverse taxation under Section 409A of the
Internal Revenue Code (the “Code”), (A) cash dividends on the class or series of
common stock of the Restricted Stock shall be reinvested in additional
Restricted Stock and held subject to the same vesting requirements applicable to
the underlying Restricted Stock, and (B) subject to any adjustment pursuant to
Section 3(c) of the Plan, dividends payable in common stock shall be paid in the
form of Restricted Stock of the same class as the common stock with which such
dividend was paid and held subject to the same vesting requirements applicable
to the underlying Restricted Stock. In the event that there is a Corporate
Transaction (as defined in the Plan), such shares or securities received by the
Participant shall be subject to the substitutions or adjustments in accordance
with Section 3(c) of the Plan.
4. Issuance of Stock Certificate.
Shares of Restricted Stock are actual Shares issued to a Participant, subject to
stated restrictions on transferability and subject to forfeiture, and shall be
evidenced in such manner as the Committee may deem appropriate, including
book-entry registration or issuance of one or more stock certificates. Any
certificate issued in respect of Restricted Stock shall be registered in the
name of the applicable Participant and shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such Award,
substantially in the following form (or such other form as the Committee may
prescribe):
The transferability of this certificate and the shares of stock represented
hereby are subject to the terms and conditions (including forfeiture) of the
Preformed Line Products Company Long Term Incentive Plan of 2008 and a related
Award Agreement. Copies of such Plan and Agreement are on file at the offices of
Preformed Line Products Company, 660 Beta Drive, Mayfield Village, Ohio 44143.
Such stock certificate shall be held by the Company (or its designated agent) on
behalf of the Participant, along with a related stock power signed in blank,
until such time as the Restricted Stock has vested or is forfeited, in whole or
in part, in accordance with this Agreement. Upon the satisfaction of any
applicable Performance Goals, and/or at the Vesting Date, assuming that the
Restriction Period expires without a prior forfeiture of the shares of
Restricted Stock for which legended certificates have been issued, unlegended
certificates (i.e., bearing only those legends which may appear on Common Stock
certificates) for such vested shares shall be delivered to the Participant upon
surrender of the legended certificates.

 

 

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5. Accelerated Vesting Upon Change in Control, Retirement, Death, Disability.
Notwithstanding anything to the contrary in this Agreement, the Restricted Stock
awarded to the Participant hereunder shall no longer be subject to a substantial
risk of forfeiture and shall immediately vest in the Participant and unlegended
certificates representing the Restricted Stock shall be delivered to the
Participant or the Participant’s estate, as the case may be, upon the occurrence
of the following:

  (a)  
Retirement, Death, Disability.
       
In the event that the Participant ceases to be employed by the Company or any of
its subsidiaries or ceases to be a non-employee director of the Company, in
either case due to Retirement (as defined in the Plan), death or Disability (as
defined in the Plan) prior to the end of the Restriction Period, a pro rata
number of shares of the Restricted Stock shall remain eligible for vesting at
the end of the Restriction Period, such pro rata number to be measured by the
number of days in the period commencing with the date of this grant and ending
on the date of Retirement, death or Disability as compared to the number of days
in the period commencing with the date of this grant and ending on the last day
of the Restriction Period, with any fractional share rounded down to the nearest
whole number. The provisions of this Agreement, including those provisions
relating to vesting only upon attainment of the Performance Targets at the end
of the Restriction Period, shall continue to apply to such pro rata number of
shares. The balance of Restricted Stock granted pursuant to this Agreement and
not subject to pro rata eligibility pursuant to this Section 5 shall be
forfeited without compensation or other consideration.
    (b)  
Change in Control.
       
Upon a Change in Control (as defined in the Plan) of the Company prior to the
end of the Restriction Period, vesting of the Restricted Stock subject to this
Agreement shall be accelerated in accordance with the provisions of Section 8 of
the Plan, assuming the Participant is employed by the Company or any of its
subsidiaries or is a non-employee director of the Company at the time of such
Change in Control.

Notwithstanding the foregoing to the contrary, Award II shall only vest at the
conclusion of the Performance Period. Upon a Participant’s Termination of
Employment (as defined in the Plan) for reasons other than for Retirement (as
defined in the Plan), death or Disability (as defined in the Plan), the
Participant shall forfeit to the Company, without compensation or any other
consideration, all Restricted Stock that is granted pursuant to this Agreement.
6. Adjustment of Restricted Stock.
On any change in the number or kind of outstanding common shares of the Company
by reason of a recapitalization, merger, consolidation, reorganization,
separation, liquidation, share split, share dividend, combination of shares or
any other change in the corporate structure or Common Shares of the Company, the
Company, by action of the Committee, is empowered to make such adjustment, if
any, in the number and kind of shares of Restricted Stock subject to this
Agreement as it considers appropriate for the protection of the Company and of
the Participant.

 

 

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7. Tax Provision.
No later than the date as of which an amount first becomes includible in the
gross income of a Participant for federal, state, local or foreign income or
employment or other tax purposes with respect to the Restricted Stock, such
Participant shall pay to the Company, or make arrangements satisfactory to the
Company regarding the payment of, any federal, state, local or foreign taxes of
any kind required by law to be withheld with respect to such amount. Unless
otherwise determined by the Company, withholding obligations may be settled with
Common Stock, including Common Stock that is part of the Restricted Stock that
gives rise to the withholding requirement, having a Fair Market Value (as
defined in the Plan) on the date of withholding equal to the minimum amount (and
not any greater amount) required to be withheld for tax purposes, all in
accordance with such procedures as the Committee establishes. The obligations of
the Company shall be conditional on such payment or arrangements, and the
Company shall, to the extent permitted by law, have the right to deduct any such
taxes from any payment otherwise due to such Participant. The Committee may
establish such procedures as it deems appropriate, including making irrevocable
elections, for the settlement of withholding obligations with Common Stock.
8. Special Incentive Compensation.
The Participant agrees that the award of the Restricted Stock under the
Agreement is special incentive compensation and that it, as well as any
dividends paid thereon (even if treated as compensation for tax purposes) and
any other property received on account of such Restricted Stock will not be
taken into account as “salary” or “compensation” or “bonus” in determining the
amount of any payment under any pension, retirement or profit-sharing plan of
the Company or any life insurance, disability or other benefit plan of the
Company.
9. Compensation Committee Certification.
Notwithstanding any other provision of this Agreement to the contrary, no
portion of Award II shall vest or be paid until the Committee has certified that
the respective Performance Goals as well as any other material terms of the Plan
and this Agreement have been satisfied. To the extent that the foregoing
requirement is not satisfied, no portion of Award II shall vest or be paid.
Notwithstanding the foregoing to the contrary, the Committee does not intend
this Agreement and the award of Restricted Stock hereby to constitute a
Qualified Performance-Based Award (as such term is defined under the Plan).
10. Relationship to the Plan.
This Agreement is subject to the terms of the Plan and any related
administrative policies or procedures adopted by the Company. If there is any
inconsistency between this Agreement and the Plan or any such administrative
policies or procedures, the Plan and the policies or procedures, in that order,
shall govern.

 

 

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11. No Effect on Employment Relationship.
Neither this Agreement, nor the Plan, shall constitute a contract of employment,
and shall not confer upon any employee any right to continued employment or
service, nor shall it interfere in any way with the right of the Company or any
Subsidiary to terminate the employment of any employee or service of any
independent contractor, at any time.
12. Transferability; Binding Effect.
The rights of the Participant under this Agreement shall not be transferable
except, in the event of death, by will or by the laws of descent and
distribution. Subject to the provisions of the Plan, this Agreement shall inure
to the benefit of and be binding upon the Participant and the Company and their
respective heirs, legal representatives, successors and assigns.
13. Amendment.
No amendment, modification, waiver or release of or under this Agreement will be
effective unless evidenced by an instrument in writing signed by each of the
Company and the Participant.
14. Governing Law.
The Plan, this Agreement and all awards made and actions taken hereunder shall
be governed by and construed in accordance with federal law and the laws of the
State of Ohio, without reference to principles of conflict of laws. The captions
herein are not part of the provisions hereof and shall have no force or effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

             
Preformed Line Products Company
      Participant    
 
           
 
By:
     
 
By:    
 
           
 
     
 
   
Title:
      Date:    
 
           
 
Date: