EXHIBIT 10.4.3
RESTRICTED STOCK AGREEMENT
KAYDON CORPORATION
1999 Long Term Stock Incentive Plan

       
Grantee: JAMES O’LEARY
  Grant Date: March 23, 2007
 
    Address: 
315 E. Eisenhower Pkwy, Ste 300
  Number of Shares: 10,000  
Ann Arbor, MI 48108
   
 
     

     This Restricted Stock Agreement (the “Agreement”) is made as of March 23,
2007 (the “Grant Date”), between KAYDON CORPORATION, a Delaware corporation (the
“Company”), and JAMES O’LEARY (“Grantee”).
     The Company and Grantee have entered into an Employment Agreement, dated
March 23, 2007 (the “Employment Agreement”), which provides for the granting of
restricted stock to Grantee pursuant to the Kaydon Corporation 1999 Long Term
Stock Incentive Plan (the “Plan”). The Plan is administered by the Compensation
Committee of the Company’s Board of Directors (the “Committee”). Grantee
acknowledges receipt of a copy of the Prospectus for the Plan and accepts these
shares of restricted stock subject to all of the terms, conditions, and
provisions of this Agreement and the Plan.
     1. Grant of Restricted Stock. On March 23, 2007, the Committee granted
restricted stock to Grantee, and Grantee hereby accepts, 10,000 shares of $0.10
par value Common Stock of the Company (the “Restricted Stock”), subject to the
terms and conditions of this Agreement, the Plan and the Employment Agreement.
     2. Conditions. The Company awards the Restricted Stock to Grantee subject
to the conditions described below and to a vesting schedule. Those conditions
must be met or otherwise lapse, and vesting must occur, before Grantee will
receive any stock under this Agreement. If Grantee breaches the terms of this
Agreement or ceases to be employed by the Company for certain reasons as
described in this Agreement, if the applicable restrictions are not satisfied or
do not lapse, or if Grantee does not vest in some or all of the Restricted
Stock, Grantee will promptly surrender to the Company those shares of Restricted
Stock as to which the restrictions have not lapsed or in which Grantee’s
interest has not vested pursuant to this Agreement as set forth below.
     3. Restrictions On and Vesting of Restricted Stock. If Grantee is then
employed by the Company and has not breached the terms of this Agreement, the
restrictions on all shares of Restricted Stock will lapse and the Grantee will
vest in those shares on March 23, 2008. In addition to the accelerated vesting
provided under the Employment Agreement, the Committee

 

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may, in its sole discretion, accelerate the lapsing of restrictions and the
vesting of the Restricted Stock at any time before the restrictions would
otherwise lapse or before full vesting. When the restrictions lapse and vesting
occurs, a certificate for the shares of Restricted Stock will be delivered to
the Grantee.
     4. Transferability. Unless the Committee otherwise consents or the Plan
otherwise explicitly provides, Grantee will not sell, exchange, transfer,
pledge, or otherwise dispose of the Restricted Stock at any time, whether
voluntarily or involuntarily, by operation of law or otherwise. The provisions
of this paragraph will not apply to Restricted Stock that has vested pursuant to
this Agreement. If Grantee violates the restrictions in this Section, Grantee’s
right to shares of Restricted Stock remaining subject to restrictions or which
have not yet vested will immediately cease and terminate and Grantee will
immediately forfeit and surrender all shares of Restricted Stock that are still
subject to restrictions or which have not yet vested to the Company.
     5. Rights as a Shareholder. Grantee will have certain rights as a
shareholder with respect to the Restricted Stock, including but not limited to
the right to vote the Restricted Stock at shareholders’ meetings, the right to
receive, without restriction, all cash dividends paid with respect to the
Restricted Stock, and the right to participate with respect to the Restricted
Stock in any stock dividend, stock split, recapitalization, or other adjustment
in the capital stock of the Company, or any merger, consolidation, or other
reorganization involving an increase, decrease, or adjustment in the capital
stock of the Company.
     (a) Substitute Shares. Any shares or other security received as a result of
any stock dividend, stock split, or reorganization will be subject to the same
terms, conditions, and restrictions as those relating to the Restricted Stock
granted under this Agreement.
     (b) Registration. Certificates for the shares of stock evidencing the
Restricted Stock will not be issued but the shares will be registered in
Grantee’s name in book entry form as soon as administratively feasible after
Grantee’s acceptance of this Agreement.
     6. Termination of Employee Status. If Grantee ceases to be an employee of
the Company:
     (a) Due to Disability or Death. By reason of Permanent and Total Disability
(as defined in the Plan) (“Disability”) or death, all shares of Restricted Stock
will vest on the date of death or Disability.
     (b) Due to Retirement. By reason of retirement at or after age 65, the
shares of Restricted Stock will continue to vest in the same manner as though
employment had not terminated. If unforfeited Restricted Stock remains unvested
at Grantee’s death following retirement from employment at or after attainment
of age 65, all shares of Restricted Stock will vest on the date of death.
     (c) Due to Reasons Other Than Retirement, Disability or Death. For any
reason other than death, Disability, or retirement at or after age 65, any other
termination of Grantee’s employment, with or without cause, or upon a Change in
Control, the

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provision of the Employment Agreement shall govern the vesting of Restricted
Stock held by Grantee at the time of termination. Any shares of Restricted Stock
that do not vest pursuant to the Employment Agreement will automatically be
forfeited and returned to the Company. As used herein, “Change in Control” shall
have the meaning given to it in the Employment Agreement (and not the Plan).
     Notwithstanding the foregoing, if at any time following termination of
employment Grantee engages in an activity which, in the sole judgment of the
Committee, is detrimental to the interests of the Company, all shares of
Restricted Stock for which restrictions have not lapsed or which have not yet
vested will be forfeited to the Company.
     7. Employment by the Company. Nothing in this Agreement imposes upon the
Company any obligation to retain Grantee in the employ of the Company for any
given period or upon any specific terms of employment.
     8. Tax Withholding. Grantee authorizes the Company to:
     (a) Withhold. Withhold and deduct from future wages of Grantee (or from
other amounts that may be due and owing to Grantee from the Company, or make
other arrangements for the collection of, all amounts deemed necessary to
satisfy any and all federal, state, and local withholding and employment-related
tax requirements attributable to an award of Restricted Stock; or
     (b) Remit. Require Grantee promptly to remit the amount of such withholding
to the Company before taking any action with respect to the Restricted Stock.
     9. Acknowledgment. By signing this Agreement and accepting the Restricted
Stock, Grantee:
     (a) Representation. Acknowledges acceptance of the Restricted Stock and
receipt of the documents referred to in this Agreement, represents that Grantee
is familiar with the provisions of the Plan and agrees to its incorporation in
this Agreement, agrees to all of the other terms and conditions of this
Agreement and agrees to promptly provide any information with respect to the
Restricted Stock reasonably requested by the Company;
     (b) Taxes. Agrees to comply with the requirements of applicable federal and
other laws with respect to withholding or providing for the payment of required
taxes;
     (c) Limitation of Rights. Acknowledges that all of Grantee’s rights to the
Restricted Stock are embodied in this Agreement, the Plan and the Employment
Agreement;
     (d) Employment. Agrees that while Grantee is employed by the Company, the
Grantee will devote full business time and energies to the business and affairs
of the Company and will not, without the Company’s written consent, accept other
employment

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or permit any personal business interests to interfere with the performance of
Grantee’s duties; and
     (e) Duties. Agrees to use Grantee’s best efforts, skill and abilities to
promote the interests of the Company, to work with other employees of the
Company in a competent and professional manner and generally to promote the
interests of the Company and to perform such other duties of a management or
professional nature as may be assigned to Grantee.
     10. Commitments of Grantee. Notwithstanding any other provisions of this
Agreement, the Plan or the Employment Agreement, in consideration of the grant
of Restricted Stock to Grantee and the benefits conferred by the Employment
Agreement, in recognition of the highly competitive nature of the industries in
which the Company conducts its business and to further protect the goodwill of
the Company and to promote and preserve its legitimate business interests,
Grantee will not:
     (a) Confidentiality. Disclose the contents of any Proprietary Information
of the Company. Proprietary Information means information or material of the
Company which is not generally available to or used by others or the utility or
value of which is not generally known or recognized as standard practice,
whether or not the underlying details are in the public domain. Proprietary
Information includes, without limitation:
     (i) Information or materials which relate to the Company’s trade secrets,
manufacturing, methods, machines, articles of manufacture, compositions,
inventions, engineering services, technological developments, know-how,
purchasing, accounting, merchandising or licensing;
     (ii) Software in various stages of development (source code, object code,
documentation, diagrams, flow charts), designs, drawings, specifications,
models, data and customer information; and
     (iii) Any information of the type described above which the Company
obtained from another party and which the Company treats as proprietary or
designates as confidential, whether or not owned or developed by the Company.
     (b) Cooperation. Fail to furnish such information and render such
assistance and cooperation as may reasonably be requested in connection with any
litigation or legal proceedings concerning the Company (other than any legal
proceedings concerning Grantee’s employment) provided the Company agrees to pay
or reimburse Grantee for all reasonable expenses incurred in cooperating with
such requests.
     (c) Non-Disparagement. Disparage the Company or their respective officers,
directors or employees.
     The Grantee and the Company consider the commitments contained above to be
reasonable for the purpose of preserving the Company’s goodwill, proprietary
rights, trade secrets, valuable confidential business interests, relationships
with specific prospective and existing customers and going concern value, and to
protect the Company’s business

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opportunities, markets and trade areas. If a final judicial determination is
made by a court having jurisdiction that the time or territory or scope of
restricted activities or any other commitment contained in this Section 10 is an
unenforceable restriction on the activities of Grantee, the provisions of this
Agreement will not be rendered void but will be deemed amended to apply as to
such maximum time, restricted activities and territory and to such other extent
as the court may determine or indicate to be reasonable.
     Alternatively, if the court finds that any commitment contained in this
Section 10 is unenforceable, and the commitment cannot be amended so as to make
it enforceable, that finding shall not affect the enforceability of any of the
other commitments contained here. In addition, without limiting the generality
of the preceding or the Company’s remedies for Grantee’s breach of any of these
commitments, upon Grantee’s material breach of any of these commitments, all
shares of Restricted Stock which have not at the time of breach been freed from
restrictions and vested will automatically be forfeited and returned to the
Company.
     11. Change in Control. In the event of a Change in Control as defined in
the Employment Agreement, the Restricted Stock will no longer be subject to any
restrictions and will vest. In addition, in that circumstance, the Committee as
constituted before the Change in Control may, in its sole discretion:
     (a) Purchase. Provide for the purchase of the shares of Restricted Stock by
the Company, at the Grantee’s request, for an amount of cash equal to the value
of the shares immediately prior to the Change in Control; or
     (b) Adjust. Adjust the shares, at the Grantee’s request, as the Committee
deems appropriate to reflect the Change in Control.
     12. Arbitration. Grantee and the Company agree that, except with respect to
the enforcement of the Company’s rights under Section 10 of this Agreement, any
disagreement dispute, controversy, or claim arising out of or relating to this
Agreement, its interpretation, or validity, or the terms and conditions of
Grantee’s employment (including but not limited to the termination of that
employment), will be settled exclusively and finally by arbitration irrespective
of its magnitude, the amount in controversy, or the nature of the relief sought.
     (a) Rules. The arbitration shall be conducted in accordance with the
Employment Arbitration Rules (the “Arbitration Rules”) of the American
Arbitration Association (the “AAA”) (the terms of which then in effect are
incorporated here).
     (b) Arbitrator. The arbitral tribunal shall consist of one arbitrator
skilled in arbitration of executive employment matters. The parties to the
arbitration shall jointly directly appoint the arbitrator within thirty
(30) days of initiation of the arbitration. If the parties fail to appoint the
arbitrator as provided above, the arbitrator shall be appointed by the AAA as
provided in the Arbitration Rules and shall be a person who has had substantial
experience in executive employment matters. The Company shall pay all of the
fees, if any, and expenses of the arbitrator and the arbitration.

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     (c) Location. The arbitration shall be conducted in the Southeastern
Michigan area or in such other city in the United States of America as the
parties to the dispute may designate by mutual written consent.
     (d) Procedure. At any oral hearing of evidence in connection with the
arbitration, each party or its legal counsel shall have the right to examine its
witnesses and to cross-examine the witnesses of any opposing party. No evidence
of any witness may be presented in any form unless the opposing party or parties
has the opportunity to cross-examine the witness, except under extraordinary
circumstances where the arbitrator determines that the interests of justice
require a different procedure.
     (e) Decision. Any decision or award of the arbitrator shall be final and
binding upon the parties to the arbitration proceeding. The parties agree that
the arbitral award may be enforced against the parties to the arbitration
proceeding or their assets wherever they may be found and that a judgment upon
the arbitral award may be entered in any court having jurisdiction.
     (f) Power. Nothing contained here shall be deemed to give the arbitral
tribunal any authority, power, or right to alter, change, amend, modify, add to,
or subtract from any of the provisions of this Agreement.
     The provisions of this Section shall survive the termination or expiration
of this Agreement, shall be binding upon the Company’s and Grantee’s respective
successors, heirs, personal representatives, designated beneficiaries and any
other person asserting a claim described above, and may not be modified without
the consent of the Company. To the extent arbitration is required, no person
asserting a claim has the right to resort to any federal, state or local court
or administrative agency concerning the claim unless expressly provided by
federal statute, and the decision of the arbitrator shall be a complete defense
to any action or proceeding instituted in any tribunal or agency with respect to
any dispute, unless precluded by federal statute.
     13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan.
     14. Binding Effect and Amendment. This Agreement is the entire agreement
between the parties and will be binding upon, and will inure to the benefit of,
the parties to this Agreement and their respective heirs, successors, and
assigns, and may be modified only by a writing signed by the parties.
     15. Remedies. Grantee acknowledges that any breach of the promises in
Section 10 of this Agreement would cause the Company irreparable damage and
therefore agrees that, in the event of a breach of one or more of those
commitments, the Company shall be entitled to preliminary and permanent
injunctive relief in addition to any direct, incidental, and consequential
damages, including lost profits, arising from that breach.
     16. Effective Date. The grant of the Restricted Stock under this Agreement
will be effective as of the Grant Date set forth above.

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     17. Agreement Controls. The Plan is incorporated by reference into this
Agreement. Capitalized terms not defined in this Agreement have those meanings
provided in the Plan or in the Employment Agreement. In the event of any
conflict between the terms of this Agreement and the terms of the Plan, the
provisions of this Agreement control as long as such provisions do not violate
any law, change the character or effect of the Plan or the Restricted Stock
under federal or state, tax or securities law, or exceed the Committee’s
authority under the Plan. In that case, the terms of the Plan shall control. In
the event of any conflict between the terms of this Agreement and the Employment
Agreement, the provisions of the Employment Agreement control as long as such
provisions do not violate any law, change the character or effect of the Plan or
the Restricted Stock under federal or state, tax or securities law, or exceed
the Committee’s authority under the Plan

          KAYDON CORPORATION
      By:   /s/ John F. Brocci       Its:  V.P. Administration              

          GRANTEE
      /s/ James O’Leary       JAMES O’LEARY             

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