**EXHIBIT 10.43**

 

**KEYSTONE AUTOMOTIVE INDUSTRIES, INC.**

 

**1996 EMPLOYEE STOCK INCENTIVE PLAN, AS AMENDED**

 

**RESTRICTED STOCK AGREEMENT**

 

THIS RESTRICTED STOCK AGREEMENT (this “*Agreement*”) made effective as of June 1, 2004 between Keystone Automotive Industries, Inc., aCalifornia corporation (the “*Company*”), and Richard L. Keister, an employee of the Company (as such term is defined below), hereinafter referred to as the “*Restricted**Stockholder*.” 

 

WHEREAS, the Company has established the 1996 Employee Stock Incentive Plan,as amended (the “*Plan*”); 

 

WHEREAS, the Companywishes to carry out the Plan (the terms of which are hereby incorporated by reference and made a part of this Agreement); 

 

WHEREAS, the Plan provides for, among other things, the issuance of shares of the Company’s common stock the “*Common**Stock*”),subject to certain restrictions thereon (hereinafter referred to as “*Restricted**Stock*”); 

 

WHEREAS, the Company’s Board of Directors (the “Board”) appointed to administer the Plan, has determined that it is to the advantage andbest interest of the Company and its stockholders to grant an award of 30,000 shares of Restricted Stock to the Restricted Stockholder in consideration for his joining the Company and as an incentive for his efforts during future service; and

 

WHEREAS, the Compensation Committee (the“Committee”) has also approved the issuance by the Company of the Award of Restricted Stock and has so advised the Board. 

 

NOW, THEREFORE, in consideration of the mutual covenants in this Agreement and other good and valuable consideration, receipt of which is herebyacknowledged, the Company and the Restricted Stockholder agree as follows: 

 

**ARTICLE I.**

 

**DEFINITIONS**

 

Whenever the followingterms are used in this Agreement they shall have the meaning specified below unless the context clearly indicates to the contrary. The masculine pronoun shall include the feminine and neuter, and the singular the plural, where the context soindicates. All capitalized terms used in this Agreement without definition shall have the meaning given to such terms in the Plan. 

 

“*Board*” shall mean the Board of Directors of the Company. 

 

“*Cause*” shall mean a determination, by at least a majority of the members of the Board at a meeting of theBoard called and held for such purpose (after reasonable notice is provided to the Executive of such meeting, the purpose thereof and the Executive is given an opportunity to be heard before the Board), that Executive (i) has committed fraud, grossnegligence or gross misconduct that results in material harm to the Company or (ii) has been convicted of, or entered a plea of guilty or “*nolo contendre*” to, a felony or (iii) is in material breach of the terms of his unsignedEmployment Memorandum of Understanding (the “Understanding”), to have been effective as of June 1, 2004, after receiving written notice specifying the breach and failing to cure the breach within thirty days of the date notice is given, asif the Understanding had been signed and was binding upon the parties. 

“*Exchange**Act*” shall mean the Securities Exchange Act of 1934, as amended.

 

“*Fair Market Value*” of a share of CommonStock as of a given date shall be (i) the closing price of a share of Common Stock on the principal exchange on which shares of Common Stock are then trading, if any (or as reported on any composite index which includes such principal exchange), onthe trading day previous to such date, or if shares were not traded on the trading day previous to such date, then on the next preceding date on which a trade occurred, or (ii) if Common Stock is not traded on an exchange but is quoted on NASDAQ ora successor quotation system, the mean between the closing representative bid and asked prices for the Common Stock on the trading day previous to such date as reported by NASDAQ or such successor quotation system or if the Common Stock is traded onthe NASDAQ National Market, the closing price on such date; or (iii) if Common Stock is not publicly traded on an exchange and not quoted on NASDAQ or a successor quotation system, the Fair Market Value of a share of Common Stock as established bythe Board or the Board acting in good faith. 

 

“*Performance Failure*” shall mean (i) the continued failure by Executive to follow the reasonable directions of the Board or (ii) the Executive’s continual and material variances from objectives listed in any annualPerformance Planning and Evaluation model for the Executive that may be approved by the Board, after review with Executive on a semi-annual basis; provided, however, that a failure to achieve sales, revenues or earnings targets due toreasons or circumstances external to the Company, which are not in the reasonable control of Executive, shall not be considered a Performance Failure. 

 

“*Good Reason*” shall mean (i) the assignment to the Executive of any duties inconsistent with the Executive’s position as Presidentand Chief Executive Officer of the Company, (ii) a diminishment in the nature or status of the Executive’s responsibilities without the consent of the Executive, (iii) without the consent of the Executive, a relocation of the Company’sprincipal place of business outside a twenty five (25) mile radius of its current headquarters in Pomona, California**,**or (iv) a material breach by the Company of any of the terms of Executive’s employment as set forth in theUnderstanding, whether compensation, benefit related or otherwise, after the Company is given written notice by the Executive specifying the breach and failing to cure such breach within thirty days of the date notice is given. 

 

“*Notice of Termination*” shall mean a notice of terminationsent by the Company or the Executive notifying the other of the termination of the employment relationship, which Notice of Termination must be delivered, except in the event of the death of the Executive, for such termination to be effective.

 

“*Restricted**Stock*” shall mean CommonStock of the Company issued under this Agreement and subject to the Restrictions imposed under this Agreement and under the Plan. 

 

“*Restrictions*” shall mean the restrictions on sale or other transfer set forth in Section 3.4 of this Agreement and the exposure toforfeiture as set forth in Section 3.1 of this Agreement. 

 

“*Rule 16b-3*” shall mean Rule 16b-3 under the Exchange Act, as such Rule may be amended from time to time. 

 

“*Secretary*” shall mean the Secretary of the Company. 

 

“*Securities**Act*” shall mean the Securities Act of 1933, as amended. 

 

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**ARTICLE II.**

 

**ISSUANCE OF RESTRICTED STOCK**

 

Section 2.1 Issuance of Restricted Stock

 

In consideration of the Restricted Stockholder’s agreement to remain as an employee of the Company and to serve as its President and Chief ExecutiveOfficer if elected to those positions, and for other good and valuable consideration, on the date of this Agreement the Company issues to the Restricted Stockholder 30,000 shares of Restricted Stock upon the terms and conditions set forth in thisAgreement. 

 

Section 2.2 Purchase Price

 

The purchase price of the Restricted Stock shall be $0 per share.

 

Section 2.3 Consideration to Company

 

In consideration for the issuance of Restricted Stock by the Company, theRestricted Stockholder agrees to render faithful and efficient services to the Company with such duties and responsibilities as the Company shall from time to time prescribe consistent with the Understanding. Nothing in this Agreement or in the Planshall confer upon the Restricted Stockholder any right to continue in the employ of the Company or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to discharge the Restricted Stockholder atany time for any reason whatsoever, with or without cause. 

 

Section 2.4Adjustments in Restricted Stock

 

In the event that theoutstanding shares of Common Stock are changed into or exchanged for a different number or kind of capital stock or other securities of the Company by reason of merger, consolidation, recapitalization, reclassification, stock split-up, stockdividend or combination of shares, the Committee, subject to the provisions of the Plan and this Agreement, shall make an appropriate and equitable adjustment in accordance with the provisions of the Plan in the number and kind of shares ofRestricted Stock, to the end that after such event the Restricted Stockholder’s proportionate interest shall be maintained as before the occurrence of such event. Any such adjustment made by the Committee or the Board shall be final and bindingupon the Restricted Stockholder, the Company and all other interested persons. 

 

**ARTICLE III.**

 

**RESTRICTIONS**

 

Section 3.1 Forfeiture of RestrictedStock

 

Since no cash consideration was paid by theRestricted Stockholder for the Restricted Stock, immediately upon a termination of employment, subject to the provisions of Section 3.3, the Restricted Stockholder’s rights in the Restricted Stock then still subject to Restrictions shall lapseand be terminated. 

 

Section 3.2 Legend

 

Certificates representing shares of Restricted Stock issued pursuant to thisAgreement shall, until all Restrictions lapse and new certificates are issued pursuant to Section 3.3 of this Agreement, bear the following legend: 

 

“The shares represented by this certificate are subject to reacquisition by Keystone Automotive Industries, Inc., and such shares may not be sold orotherwise transferred except pursuant to the provisions of the Restricted Stock Agreement by and between Keystone Automotive Industries, Inc. and the registered owner of such shares.” 

 

 

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Section 3.3 Lapse of Restrictions

 

(a) All Restrictions on transfer or sale shall lapse as to 7,500 shares on each anniversary of this Agreement until allrestrictions have lapsed. In the event of the termination of the employment of the Restricted Stockholder before the restrictions have lapsed with respect to all of the shares of Restricted Stock, the remaining restrictions shall lapse in accordancewith the following provisions: 

 

(i) In theevent of a termination by the Company for Cause or a termination by the Executive other than for Good Reason, the provisions of Section 3.1 shall apply immediately upon such termination. 

 

(ii) In the event of a termination for Performance Failure, the death of the Executive or as a result of adisability event as defined below, any shares of Restricted Stock whose restrictions would have lapsed during the 12-month period following the termination shall be deemed to have lapsed as of the date of termination. Any shares which are subject torestrictions which lapse after said 12-month period shall be subject to the provisions of Section 3.1 immediately upon the termination. 

 

(iii) In the event of a termination by the Company other than for Cause or Performance Failure, or if the Executive shall terminate hisemployment for Good Reason, any and all restrictions applicable to shares of the Restricted Stock shall lapse immediately upon such termination. 

 

(b) Upon the lapse of the Restrictions, the Company shall cause new certificates to be issued with respect to such shares and delivered to RestrictedStockholder or his legal representative, free from the legend provided for in Section 3.2 of this Agreement and any of the other Restrictions. Notwithstanding the foregoing, no such new certificate shall be delivered to Restricted Stockholder or hislegal representative unless and until Restricted Stockholder or his legal representative shall have paid to the Company in cash the full amount of all federal and state withholding or other employment taxes applicable to the taxable income of theRestricted Stockholder resulting from the grant of Restricted Stock or the lapse of the Restrictions, or the Restricted Stockholder or his legal representative otherwise satisfy such tax obligations by having the Company withhold shares of CommonStock, as provided in Section 4.9 of this Agreement. 

 

(c) Adisability event shall be defined as the Executive’s inability to perform the services required under the Understanding as a result of Executive’s physical or mental disability for an aggregate of 180 days out of any 365 day period. TheCompany may terminate the Executive’s employment upon the occurrence of a disability event. 

 

Section 3.4 Restricted Stock Not Transferable

 

Until the Restrictions under this Agreement lapse, neither the Restricted Stock (including any shares issued with respect to shares of Restricted Stock as a result of stock dividends, stock splits or any other form ofrecapitalization) nor any interest or right in the Restricted Stock or part of the Restricted Stock shall be liable for the debts, contracts, or engagements of the Restricted Stockholder or his successors in interest or shall be subject todisposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal orequitable proceedings (including bankruptcy) and any attempted disposition of the Restricted Stock shall be null and void and of no effect; *provided, however*, that, this Section 3.4 shall not prevent transfers by will or by the applicablelaws of descent and distribution. 

 

Section 3.5 Restrictions on NewShares

 

In the event of an adjustment in the number orkind of shares of Restricted Stock under Section 2.4 above, such new or additional or different shares or securities which are attributable to the Restricted Stockholder in his capacity as the owner of the Restricted Stock then subject toRestrictions, shall be considered to be Restricted Stock and shall be subject to all of the Restrictions. 

 

 

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**ARTICLE IV.**

 

**MISCELLANEOUS**

 

Section 4.1 Administration

 

The Board shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application ofthe Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Board in good faith shall be final and binding upon the Restricted Stockholder, theCompany and all other interested persons. No member of the Board shall be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan or the Restricted Stock. In its absolute discretion, the Boardmay at any time and from time to time exercise any and all rights and duties of the Committee under the Plan and this Agreement except with respect to matters which under Rule 16b-3 are required to be determined in the sole discretion of theCommittee. 

 

Section 4.2 Escrow

 

The Secretary of the Company or such other escrow holder as the Committee orthe Board may appoint shall retain physical custody of the certificates representing the Restricted Stock, including shares of Restricted Stock issued pursuant to Section 3.5 of this Agreement, until all of the Restrictions with respect to thoseshares expire or shall have been removed; *provided, however*, that in no event shall the Restricted Stockholder retain physical custody of any certificates representing Restricted Stock issued to him. 

 

Section 4.3 Notices

 

Any notice to be given by the Restricted Stockholder under the terms of this Agreement shall be addressed to the Secretaryof the Company or his office. Any notice to be given to the Restricted Stockholder shall be addressed to him at the address given beneath his signature to this Agreement. By a notice given pursuant to this Section, either party may hereafterdesignate a different address for notices to be given to him. Any notice which is required to be given to the Restricted Stockholder shall, if Restricted Stockholder is then deceased, be given to the Restricted Stockholder’s personalrepresentative if such representative has previously informed the Company of his status and address by written notice under this Section. Any notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed asaforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. 

 

Section 4.4 Rights as Stockholder

 

Except as otherwise provided in this Agreement, the holder of the Restricted Stock shall have all the rights of a stockholder with respect to theRestricted Stock, including the right to vote the Restricted Stock and the right to receive all dividends or other distributions paid or made with respect to the Restricted Stock; *provided, however*, that in the discretion of the Board, anyextraordinary distributions with respect to shares of Common Stock that are subject to the Restrictions may also be subject to the Restrictions. 

 

Section 4.5 Titles

 

Titles are provided in this Agreement for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

Section 4.6 Governing Law

 

This Agreement shall be administered, interpreted and enforced under theinternal laws of the state of California. 

 

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Section 4.7 Conformity to Securities Laws

 

The Restricted Stockholder acknowledges that the Plan and this Agreement are intended to conform to the extent necessarywith all provisions of all applicable federal and state laws, rules and regulations (including, but not limited to the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commissionthereunder, including without limitation the applicable exemptive conditions of Rule 16b-3) and to such approvals by any listing, regulatory or other governmental authority as may, in the opinion of counsel for the Company, be necessary or advisablein connection with such laws, rules and regulations. Notwithstanding anything in this Agreement to the contrary, the Plan shall be administered, and the Restricted Stock is granted, only in such a manner as to conform to such laws, rules andregulations. To the extent permitted by applicable law, the Plan, this Agreement and the Restricted Stock shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. 

 

Section 4.8 Amendments

 

This Agreement and the Plan may be amended without the consent of the Restricted Stockholder provided that such amendmentwould not impair any rights of the Restricted Stockholder under this Agreement. No amendment of this Agreement shall, without the consent of the Restricted Stockholder, impair any rights of the Restricted Stockholder under this Agreement.

 

Section 4.9 Tax Withholding

 

The Company shall be entitled to require payment in cash or deduction fromother compensation payable to the Restricted Stockholder of any sums required by federal, state or local tax law to be withheld with respect to the issuance, vesting, exercise or payment of the Restricted Stock. In satisfaction of the foregoingrequirement, the Restricted Stockholder may elect to have the Company withhold shares of Common Stock otherwise issuable under such award (or allow the return of shares of Common Stock) having a Fair Market Value equal to the sums required to bewithheld. 

 

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IN WITNESS WHEREOF, this Agreement has been executed and delivered by each of the Company and theRestricted Stockholder. 

 
KEYSTONE AUTOMOTIVE INDUSTRIES, INC.By: /s/    John M. Palumbo  Name: John M. Palumbo  Title:   Vice President and CFO
 
RESTRICTED STOCKHOLDER
/s/    Richard L. Keister

 
Name: Richard L. KeisterRestricted Stockholder’s Address  
 

Restricted Stockholder’s SocialSecurityNumber:                                                                                                                          

 

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