Exhibit 10.10
RESTRICTED STOCK AGREEMENT
KAYDON CORPORATION
1999 Long Term Stock Incentive Plan

                     
Grantee:
          Grant Date:        
 
 
 
         
 
   
Address:
          Number of Shares:        
 
 
 
         
 
   
 
                   
 
 
 
               

This Restricted Stock Agreement (the “Agreement”) is made as of the Grant Date
between KAYDON CORPORATION, a Delaware corporation (the “Company”), and  _____ 
(“Grantee”).
The Kaydon Corporation 1999 Long Term Stock Incentive Plan (the “Plan”) is
administered by the Compensation Committee of the Company’s Board of Directors
(the “Committee”). The Committee has determined that Grantee is eligible to
participate in the Plan.
The Committee has granted restricted stock to Grantee, subject to the terms and
conditions contained in this Agreement and in the Plan.
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. The Company grants to Grantee, effective as of the
Grant Date set forth above, and Grantee accepts, the shares of $0.10 par value
Common Stock of the Company set forth above, subject to the terms and conditions
of this Agreement (the “Restricted Stock”).
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 Restricted Stock. If Grantee is then employed by the Company
and has not breached the terms of this Agreement, the restrictions on twenty
percent (20%) of the initial number of shares of Restricted Stock will lapse and
the Grantee will vest in those shares on each January 5 following the Grant
Date, commencing with January 5,                     . Vesting under this
provision will continue until all of the shares are vested, the Grantee is no
longer employed by the Company, or another provision of this Agreement
supersedes this section, whichever occurs first. The Committee 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. As restrictions lapse and vesting occurs, a certificate for
the number of shares of Restricted Stock as to which restrictions have lapsed
will be forwarded 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 to the Company all shares of Restricted Stock
that are still subject to restrictions or which have not yet vested.
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, except as otherwise provided in any Employment Agreement or Change in
Control Compensation Agreement that may exist between Grantee and the Company
from time to time (an “Other Agreement”):
(a) Termination Due to Disability or Death. By reason of disability (as defined
in the Plan or in any Other Agreement to which Grantee is a party)
(“Disability”) or death, the shares of Restricted Stock will vest on the date of
death or Disability.
(b) 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, the shares of Restricted Stock will vest on the date of death.

 

2

--------------------------------------------------------------------------------

 

(c) Termination for Reason Other Than Retirement, Disability or Death. For any
reason other than death, Disability, or retirement at or after age 65, with or
without cause, no further vesting of Restricted Stock will occur and any shares
of Restricted Stock still subject to restrictions or which have not yet vested
as of the date of termination of employment will automatically be forfeited and
returned to the Company.
Any provision regarding vesting of restricted stock upon termination of
employment set forth in an Other Agreement shall govern the vesting of the
Restricted Stock under this Agreement. Further, notwithstanding the foregoing,
if at any time upon or following termination of employment the Committee
determines that reason to terminate the Grantee for cause, as defined in the
Plan, exists at the time of termination or existed at such time, 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. Grantee acknowledges that,
except as otherwise agreed by the Company in a signed written agreement,
Grantee’s employment is at will and terminable by Grantee or the Company at any
time and for any reason.
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, including arrangements for the surrender of shares of the Company
Common Stock previously owned by Grantee or surrender of shares of then vesting
Restricted Stock in each case with a fair market value equal to the amount to be
withheld, 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 (including any taxes
arising under Sections 409A or 4999 of the Code); 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 the
Agreement, agrees to all of the other terms and conditions of the Agreement and
agrees to promptly provide any information with respect to the Restricted Stock
reasonably requested by the Company;

 

3

--------------------------------------------------------------------------------

 

(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 (including any taxes arising under Sections 409A of the Code);
(c) Limitation of Rights. Acknowledges that all of Grantee’s rights to the
Restricted Stock are embodied in the Agreement and in the Plan, except as set
forth in an Other 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 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 or the Plan, in consideration of the grant of Restricted Stock to
Grantee, 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 agrees that during the period commencing on the Grant Date and ending
two years after the date of termination of the Grantee’s employment by the
Company, Grantee will not:
(a) Compete. Engage in any business activities engaged in by the Company at any
time (“Business Activities”) (other than on behalf of the Company) whether such
engagement is as an officer, director, proprietor, employee, partner, investor
(other than as a holder of less than 1% of the outstanding capital stock of a
publicly traded corporation), consultant, advisor, agent or otherwise, in any
geographic area in which the products or services of the Company have been
distributed or provided during the period commencing two years prior to the
Grant Date.
(b) Customers. Other than on behalf of the Company supply products or provide
services (but only to the extent such restricted activities constitute Business
Activities) to any customer with whom the Company has done any business during
the period commencing two years prior to the Grant Date, whether as an officer,
director, proprietor, employee, partner, investor (other than as a holder of
less than 1% of the outstanding capital stock of a publicly traded corporation),
consultant, advisor, agent or otherwise.

 

4

--------------------------------------------------------------------------------

 

(c) Assist. Assist others in engaging in any of the Business Activities in the
manner prohibited to the Grantee.
(d) Employee Solicitation. Induce or attempt to induce employees of the Company
to engage in any activities prohibited to the Grantee or to terminate their
employment.
(e) 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.
(f) 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.
(g) 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 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.

 

5

--------------------------------------------------------------------------------

 

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. Income Taxes and Deferred Compensation. Neither the Company nor any of its
employees, officers, directors, or service providers shall have any obligation
whatsoever to pay any federal or state income taxes, to prevent the Grantee from
incurring them, or to mitigate or protect the Grantee from any such tax
liabilities, except as otherwise expressly set forth in a written agreement
between the Company and the Grantee. Nevertheless, if the Company reasonably
determines that the Grantee’s receipt of payments or benefits pursuant to
Section 6 of the Plan as a result of the Grantee’s cessation of employment with
the Company constitutes “nonqualified deferred compensation” within the meaning
of Section 409A, payment of such amounts shall not commence until the Grantee
incur a “separation from service” within the meaning of Treasury Regulation §
1.409A-1(h) (“Separation from Service”). If, at the time of the Grantee’s
Separation from Service, the Grantee is a “specified employee” (under Internal
Revenue Code Section 409A), any amount that constitutes “nonqualified deferred
compensation” within the meaning of Code Section 409A that becomes payable to
the Grantee on account of the Grantee’s Separation from Service (including any
amounts payable pursuant to the preceding sentence) will not be paid until after
the end of the sixth calendar month beginning after the Grantee’s Separation
from Service (the “409A Suspension Period”). Within 14 calendar days after the
end of the 409A Suspension Period, the Grantee shall be paid a lump sum payment
in cash equal to any payments delayed because of the preceding sentence, without
interest. Thereafter, the Grantee shall receive any remaining benefits as if
there had not been an earlier delay.
12. Change in Control. Notwithstanding the restrictions and vesting rules of
this Agreement, in the event of a Change in Control as defined in the Plan, 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 for an amount of cash equal to the value of the shares immediately prior
to the Change in Control; and
(b) Adjust. Adjust the shares as the Committee deems appropriate to reflect the
Change in Control.

 

6

--------------------------------------------------------------------------------

 

13. 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 except as required by any Other
Agreement, 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.
(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.

 

7

--------------------------------------------------------------------------------

 

14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. 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.
16. 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.
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. 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 the applicable provision does 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.
Executed this  _____  day of  _____.

                      KAYDON CORPORATION       GRANTEE    
 
                   
By: 
                                   

Its:         DATE:         
 
           
 
   

 

8