Exhibit 10.02


 


KMG AMERICA CORPORATION

2004 EQUITY INCENTIVE PLAN


 


Stock Award Agreement


 


No. of shares covered by


Stock Award: 
                            


 


THIS STOCK AWARD AGREEMENT (this “Agreement”) dated as of the         
day of                           ,
20    , between KMG America Corporation, a Virginia
corporation (the “Company”), and                                                                     
(the “Participant”), is made pursuant and subject to the provisions of the
Company’s 2004 Equity Incentive Plan (the “Plan”), a copy of which is attached
hereto.  All terms used herein that are
defined in the Plan have the same meaning given them in the Plan.


 


1.                                       Grant of
Stock Award. 
Pursuant to the Plan, the Company, on                           ,
20     (the “Date of Grant”), granted to the Participant,
subject to the terms and conditions of the Plan and subject further to the
terms and conditions set forth herein, an award of                                   
shares of the common stock of the Company (the “Common Stock”), hereinafter
described as the “Stock Award.”


 


2.                                       Restrictions.  Except as otherwise provided in this
Agreement, the shares of Common Stock covered by the Stock Award are
nontransferable and are subject to a substantial risk of forfeiture.


 


3.                                       Limited
Shareholder Rights. 
Prior to forfeiture as described in paragraph 5 below, and before the
shares of Common Stock covered by the Stock Award become nonforfeitable and
transferable (“Vested”), the Participant will have all rights of a shareholder
in such shares as provided under the Articles of Incorporation of the Company
and applicable law for holders of Common Stock, including without limitation,
the right to vote the shares of Common Stock and to receive dividends thereon;
provided, however, that during such period (i) the Participant may not
sell, transfer, pledge, exchange, hypothecate or otherwise dispose of such
shares, which shall remain subject to a substantial risk of forfeiture and
nontransferable as described in this Agreement and (ii) the Company shall
retain custody of the certificates evidencing such shares until they become
Vested.


 


4.                                       Vesting.  Except as provided in Section 5 below,
the Participant’s interest in the shares of Common Stock covered by this Stock
Award shall become Vested at the time or times set forth on Schedule A
attached hereto.


 


5.                                       Forfeiture.  [Except as set forth in Schedule A,]  If the Participant ceases to be employed by
or provide services to the Company or any Affiliate for any reason, all shares
of Common Stock that are covered by this Stock Award that are not then Vested
shall be forfeited without any payment whatsoever to the Participant.


 





















 


6.                                       Stock Power.  With respect to any shares of Common Stock
covered by this Stock Award that are forfeited under this Agreement, the
Participant does hereby irrevocably constitute and appoint                             
or any successor Secretary of the Company (the “Secretary”) as his attorney to
transfer the forfeited shares on the books of the Company with full power of
substitution in the premises.  The
Secretary shall use the authority granted in this paragraph to cancel any such
shares of Common Stock that are forfeited under this Agreement.


 


7.                                       Additional
Restrictions. 
The Participant can only become Vested in the shares of Common Stock
covered by this Stock Award during the Participant’s lifetime.  Neither this Stock Award nor the Participant’s
right or interest in any shares of Common Stock covered by this Stock Award
shall be liable for, or subject to, any lien, obligation or liability of the
Participant.


 


8.                                       Custody of
Certificates. 
The Company shall retain custody of stock certificates evidencing the
shares of Common Stock covered by this Stock Award.  The Company shall deliver to the Participant
the stock certificates evidencing such shares of Common Stock that become
Vested.


 


9.                                       Representations
and Warranties of Participant. 
The Participant represents and warrants to the Company that:


 


(a)          Agrees to
Terms of the Plan and Agreement. 
The Participant has received a copy of the Plan, has read and
understands the terms of the Plan and this Agreement, and agrees to be bound by
their terms and conditions.  The
Participant acknowledges that there may be adverse tax consequences upon
acquisition or disposition of the shares of Common Stock covered by this Stock
Award, and that Participant should consult a tax adviser prior to such
acquisition or disposition.


 


(b)         Purchase for
Own Account for Investment. 
The shares of Common Stock covered by this Stock Award will be acquired
for the Participant’s own account for investment purposes only and not with a
view to, or for sale in connection with, a distribution of such shares within
the meaning of the Securities Act of 1933, as amended (the “Securities Act”).  The Participant has no present intention of
selling or otherwise disposing of all or any portion of such shares.


 


(c)          Access to
Information. 
The Participant has had access to all information regarding the Company
and its present and prospective business, assets, liabilities and financial
condition that the Participant reasonably considers important in making a
decision to acquire the shares of Common Stock and the Participant has had
ample opportunity to ask questions of the Company’s representatives concerning
such matters and this investment.


 


(d)         Understanding
of Risks.  The Participant is
fully aware of: (i) the highly speculative nature of the investment in the
Common Stock; (ii) the financial hazards involved in an investment in the
Common Stock; (iii) the lack of


 


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liquidity
of the Common Stock and the restrictions on transferability of the Common Stock
(e.g., that the Participant may not be able to sell or dispose of the
Common Stock or use it as collateral for loans); (iv) the qualifications
and backgrounds of the management of the Company; and (v) the tax
consequences of investment in the Common Stock. 
The Participant is capable of evaluating the merits and risks of this
investment, has the ability to protect his own interests in this transaction
and is financially capable of bearing a total loss
of this investment.


 


(e)          No General
Solicitation. 
At no time was the Participant presented with or solicited by any
publicly issued or circulated newspaper, mail, radio, television or other form
of general advertising or solicitation in connection with the offer, sale and
purchase of the shares of Common Stock.


 


(f)            Compliance
with Securities Laws. 
The shares of Common Stock covered by this Stock Award have been
registered with the Securities and Exchange Commission (“SEC”) under the
Securities Act and, notwithstanding any other provision of this Agreement or
the Plan to the contrary, the right to acquire any such shares is expressly
conditioned upon compliance with the Securities Act and all applicable state
securities laws.  The Participant agrees to
cooperate with the Company to ensure compliance with such laws.


 


(g)         No Transfer
Unless Registered or Exempt. 
The Participant understands that he may not transfer any shares of
Common Stock covered by this Stock Award unless such shares are registered
under the Securities Act or qualified under applicable state securities laws or
unless, in the opinion of counsel to the Company, exemptions from such registration
and qualification requirements are available. 
The Participant understands that only the Company may file a
registration statement with the SEC and that the Company is under no obligation
to do so with respect to the shares.  The
Participant has also been advised that exemptions from registration and
qualification may not be available or may not permit the Participant to
transfer all or any of the shares of Common Stock in the amounts or at the
times proposed by him.


 


10.                                 Notice.  Any notice or other communication given
pursuant to this Agreement, or in any way with respect to this Stock Award,
shall be in writing and shall be personally delivered or mailed by United
States registered or certified mail, postage prepaid, return receipt requested,
to the following addresses:


 


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  If to the Company:

  	
  KMG America Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  If to the Participant:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


11.                                 Fractional
Shares.  Fractional shares
shall not be issuable hereunder, and when any provision hereof may entitle the
Participant to a fractional share, such fractional share shall be disregarded.


 


12.                                 No Right to
Continued Employment or Service. 
This Stock Award does not confer upon the Participant any right with
respect to continued employment by or service with the Company or any
Affiliate, nor shall it interfere in any way with the right of the Company or
any Affiliate to terminate the Participant’s employment or service at any time
without assigning a reason therefor.


 


13.                                 Change in
Capital Structure. 
The terms of this Stock Award shall be adjusted in accordance with the
terms and conditions of the Plan as the Committee determines is equitably
required in the event the Company effects one or more stock dividends, stock
splits, subdivisions or consolidations of shares or other similar changes in
capitalization.


 


14.                                 Participant
Bound by Plan. 
The Participant hereby acknowledges receipt of a copy of the Plan and
agrees to be bound by all its terms and provisions.


 


15.                                 Conflicts.  In the event of any conflict between the
provisions of the Plan and the provisions of this Agreement, the provisions of
the Plan shall govern.  All references
herein to the Plan shall mean the Plan as in effect on the date hereof.


 


16.                                 Binding
Effect.  Subject to the limitations
stated above and in the Plan, this Agreement shall be binding upon and inure to
the benefit of the legatees, distributees, transferees and personal
representatives of the Participant and the successors of the Company.


 


17.                                 Withholding
Taxes.  At the applicable
time, the Participant shall remit to the Company amounts sufficient to satisfy
any federal, state or local withholding tax requirements by making payment (i) in
cash, (ii) by certified check, (iii) by tendering shares of Common
Stock (which, if acquired from the Company, have been held by the Participant
for at least six months and which do not exceed the Company’s minimum
withholding obligation), (iii) by a broker-assisted cashless exercise or (iv) by
any combination of the aforementioned methods of payment.


 


18.                                 Governing
Law.  This Agreement
shall be governed by the laws of the Commonwealth of Virginia, except to the
extent federal law governs.


 


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IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by a duly authorized officer, and the Participant has affixed his or her
signature hereto.


 


	
   

  	
  KMG America Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  



 


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SCHEDULE A


Vesting Schedule


 


This Stock
Award shall become Vested with respect to one-fourth (1/4) of the shares of
Common Stock covered by the Stock Award on each of the first, second, third and
fourth anniversaries of the Date of Grant, provided that the Participant has
been continuously employed by the Company or any Affiliate through each such
time.  Additionally, the Stock Award
shall become Vested with respect to one hundred percent (100%) of the shares of
Common Stock covered by the grant upon (i) involuntary termination of the
Participant’s employment or service by the Company or an Affiliate other than
for Cause, (ii) voluntary termination of a Participant’s employment or
service with the Company or an Affiliate by the Participant, (iii) the
Participant’s death or (iv) the Participant’s Disability.


 


Notwithstanding
the preceding paragraph, in the event of a Change in Control or at the time
this Stock Award would otherwise be forfeited in connection with a Change in
Control, the remaining shares of Common Stock covered by the Stock Award that
have not yet become Vested will become Vested at such time to the extent not
previously exercisable, provided the Participant has been continuously employed
by the Company or an Affiliate until such time.


 


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