Exhibit 10.2


 


RESTRICTED
STOCK AGREEMENT


 


THIS
RESTRICTED STOCK AGREEMENT (the “Agreement”) is made and entered into as
of this 14th day of March, 2005, by and between Cornell Companies, Inc., a
Delaware corporation (the “Company”) and James E. Hyman (the “Employee”).


 


WHEREAS,
pursuant to the Employment Agreement between the Company and the Employee dated
as of the date hereof (“Employment Agreement”), the Employee has become
the Chief Executive Officer and Chairman of the Board of Directors of the
Company;


 


WHEREAS, as
an inducement for the Employee to accept such employment, the Board of
Directors of the Company has approved and authorized the issuance of certain
shares of common stock of the Company to the Employee, subject to the terms and
conditions of this Agreement; and


 


WHEREAS,
capitalized terms not defined herein shall have the definitions set forth in
the Employment Agreement.


 


NOW,
THEREFORE, in consideration of the mutual terms, conditions and covenants, the
parties hereto agree as follows:


 


1.                                       Award of
Restricted Stock.  The Company hereby awards to the Employee,
effective as of the date hereof, eighty-five thousand (85,000) shares of common
stock, par value $0.001 per share, of the Company (the “Restricted Stock”).


 


2.                                       Vesting Schedule. 
Subject to the further provisions of this Agreement, the shares of
Restricted Stock shall vest as follows:


 


(a)                                  25,000 shares of Restricted
Stock shall vest on January 24, 2008; provided that the Employee has
remained continuously employed by the Company from the date hereof through January 24,
2008.


 


(b)                                 30,000 shares of Restricted
Stock shall vest upon the Company achieving a certain stock price within a
certain time period as established by the Compensation Committee of the Board
of Directors.


 


(c)                                  30,000 shares of Restricted
Stock shall vest upon the Company achieving a certain earnings per share within
a certain time period as established by the Compensation Committee of the Board
of Directors.


 


Subject to Sections 3 and 4 hereof, the period beginning on the date
hereof through and including the vesting date for any particular shares of
Restricted Stock shall be referred to herein as the “Restricted Period”
with respect to such shares of Restricted Stock.


 





















 


3.                                       Acceleration of Vesting. 
Section 2 notwithstanding, in the event that the Company
terminates the Employee’s employment without Cause, or the Employee terminates
his employment for Good Reason (not including a deemed termination for Good
Reason following a Change in Control pursuant to Section 7(g) of the
Employment Agreement), all shares of Restricted Stock, to the extent not
already vested, granted hereunder which are then subject to the restrictions
set forth above shall immediately vest and cease to be subject to the
restrictions imposed hereby.


 


4.                                       Forfeiture. 
All unvested shares of Restricted Stock shall automatically expire and
be forfeited by the Employee upon the occurrence of the following events: (i)
the Company terminates the Employee’s employment for Cause, (ii) the Employee
voluntarily resigns without Good Reason, (iii) the Employee’s employment is
terminated by reason of death or Disability, or (iv) the Company fails to meet
the milestones specified in Sections 2(b) and 2(c) within the time
periods established by the Compensation Committee.


 


5.                                       Transferability.  During the Restricted Period, the unvested
shares of Restricted Stock may not be sold, assigned, transferred, pledged, or
otherwise disposed of under any circumstances. 
The unvested shares of Restricted Stock shall not be subject to
execution, attachment or similar process. 
Upon any attempt to transfer, assign, pledge, or otherwise dispose of
any unvested shares of Restricted Stock or any of such rights contrary to the
provisions hereof, or upon the levy of any attachment or similar process upon
any unvested shares of Restricted Stock or such rights, such unvested shares of
Restricted Stock and such rights shall immediately become null and void.  Vested shares of Restricted Stock may not be
sold, assigned, transferred, pledged, or otherwise disposed of, other than in
accordance all applicable requirements of federal and state securities laws and
with all applicable requirements of any stock exchange on which the Common
Stock may be listed at the time of such sale, assignment, transfer, pledge or
other disposition.


 


6.                                       Stock
Certificate.  Upon
the grant of Restricted Stock hereunder, one or more stock certificates issued
in respect of such shares of Restricted Stock shall be registered in the name
of the Employee and shall be deposited by the Employee with the Company
together with a stock power endorsed in blank. 
The Company shall provide the Employee with a receipt for such stock
certificate acknowledging that the Company is holding such certificate pursuant
to the terms of this Agreement.  All
stock certificates for shares of Restricted Stock during the Restricted Period
shall bear the following legend:


 


“The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the agreement entered into between the registered
owner and Cornell Companies, Inc..  A
copy of such agreement is on file at the principal place of business of Cornell
Companies, Inc.”


 


With regard to
any shares of Restricted Stock which vest pursuant to Sections 2 or 3,
the Company shall, within 60 days of the date such shares cease to be subject
to restrictions, transfer 


 


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such shares
free of all restrictions set forth in this Agreement to the Employee (or his
legal representative, beneficiary or heir); provided,
however, that such shares shall continue to be subject to the
restrictions on transfer imposed under applicable requirements of federal and
state securities laws and any stock exchange on which the Common Stock may be
listed at the time of such transfer.


 


7.                                       Stockholder’s
Rights.  Subject to the terms of this
Agreement, during the Restricted Period, the Employee shall have, with respect
to the Restricted Stock, all rights of a stockholder of the Company, including
the right to vote such shares and the right to receive all dividends paid with
respect to the shares of Restricted Stock; provided,
that the right to vote and receive dividends shall terminate immediately with
respect to any shares of Restricted Stock upon forfeiture of those shares
pursuant to Sections 4 hereof.


 


8.                                       Withholding Tax.  The Employee hereby
agrees that (i) he shall pay to the Company the amount of taxes which the
Company is required to withhold with respect to any benefit under the Plan or
this Agreement and (ii) in the event he fails to make such payment, the Company
may, in its sole discretion, withhold from any payment or consideration to be
paid to the Employee by the Company any such tax which the Company believes is
required to be withheld, or retain or sell without notice a sufficient number
of shares of Restricted Stock awarded hereunder to cover the amount to be
withheld.


 


9.                                       Representations. 
The Employee hereby represents and warrants to the Company that all
shares of Restricted Stock acquired upon the grant of Restricted Stock
hereunder have been acquired for his own account for investment purposes only
and not with a view toward the sale or distribution of any of the shares of
Restricted Stock.  The Employee
acknowledges that he has been afforded full opportunity to request any and all
relevant information and ask questions concerning the purposes and business of
the Company, has been provided all information and copies of all documents he
or she has requested, and has received answers to such questions to his full
satisfaction.  The Employee acknowledges
that the Company is under no obligation to register any shares of Restricted
Stock under any securities laws, and the Company has no present intention to do
so.


 


10.                                 Successors.


 


(a)                                  This Agreement is personal to
the Employee and without the prior written consent of the Company shall not be
assignable by the Employee otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Employee’s legal representatives.


 


(b)                                 This Agreement shall inure to
the benefit of and be binding upon the Company and its successors and assigns.


 


(c)                                  The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. As used in this Agreement, “Company”


 


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shall
mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement
by operation of law, or otherwise. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company to
assume expressly and agree to perform the Company’s obligations hereunder in
the same manner and to the same extent that the Company would be required to
perform them if no such succession had taken place.  Employee expressly agrees and consents to
Employer’s assignment of this Agreement.


 


11.                                 Miscellaneous.


 


(a)                                  This Agreement supersedes all
previous agreements and discussions relating to the same or similar subject
matters between Employee and the Company and shall be governed by and construed
in accordance with the laws of the State of Texas, without reference to
principles of conflict of laws.  Each of
the parties hereto agrees that any action or proceeding brought to enforce the
rights or obligations of any party hereto under this Agreement may be commenced
and maintained in any court of competent jurisdiction located in Harris County,
Texas, and that any Texas State court or federal court sitting in Harris
County, Texas shall have exclusive jurisdiction over any such action or
proceeding brought by any of the parties hereto.  The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect. This Agreement may
not be amended, modified, repealed, waived, extended or discharged except by an
agreement in writing signed by the party against whom enforcement of such
amendment, modification, repeal, waiver, extension or discharge is sought. No
person, other than pursuant to a resolution of the Board or a duly authorized
committee thereof, shall have authority on behalf of the Company to agree to
amend, modify, repeal, waive, extend or discharge any provision of this
Agreement or anything in reference thereto.


 


(b)                                 All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:


 


If to the Employee:


 


James E. Hyman


755 Westover Road


Stamford, CT 06902


Telephone: (203) 316-8228


Telecopy: (203) 351-0949


 


With a copy to:


 


Alan L. Sklover


Sklover & Associates, LLC


10 Rockefeller Plaza


New York, New York 10020


Telephone: (212) 757-5000


 


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Telecopy: (212) 757-5002


 


If to the Company:


 


Cornell Companies, Inc.


1700 West Loop South, Suite 1500


Houston, Texas 77027


Attention: Human Resources


Telephone: (713) 623-0790


Telecopy: (713) 623-2797


 


or to such
other address as either party shall have furnished to the other in writing in
accordance herewith. Notice and communications shall be effective when actually
received by the addressee.


 


(c)                                  The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.


 


(d)                                 The Company may withhold from
any amounts payable under this Agreement such federal, state or local taxes as
shall be required to be withheld pursuant to any applicable law or regulation.


 


(e)                                  The Employee’s or the Company’s
failure to insist upon strict compliance with any provision hereof or any other
provision of this Agreement or the failure to assert any right the Employee or
the Company may have hereunder, including, without limitation, the right of the
Employee to terminate employment for Good Reason, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.


 


(f)                                    The parties hereby acknowledge
that the right to trial by jury is a constitutional one, but that it may be
waived.  Each of the parties, after
consulting or having the opportunity to consult, with counsel of their choice,
knowingly, voluntarily and intentionally waives any right any of them may have
to a trial by jury in any litigation based upon or arising out of this
Agreement or any of the transactions contemplated hereby or any course of
conduct, dealing, statements (whether oral or written), or action of any of
them.


 


[Signature page follows.]


 


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IN WITNESS WHEREOF, the Employee and, pursuant to due authorization
from the Board, the Company have caused this Agreement to be executed this 14th
day of March, 2005.


 


 


	
   

  	
  Employee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ James E. Hyman

  	
   

  
	
   

  	
  James E.
  Hyman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick
  N. Perrin

  	
   

  
	
   

  	
  Name:

  	
  Patrick N.
  Perrin

  	
   

  
	
   

  	
  Its:

  	
  Senior Vice
  President

  and Secretary

  	
   

  
					



 


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