Exhibit 10.1


 


ALDILA, INC.


RESTRICTED STOCK
AWARD AGREEMENT


This Restricted
Stock Award Agreement (“Award Agreement”) dated as of                           
(the “Award Date”), is entered into by and between Aldila, Inc., a Delaware
corporation, (the “Company”) and                                             
(“Grantee”). All capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to them in the Aldila, Inc., 1994 Stock Incentive
Plan, as amended from time to time (the “Plan”).


1.             General.
The shares of Restricted Stock granted under this Award Agreement are granted
as of the Award Date pursuant to and subject to all of the provisions of the
Plan applicable to Restricted Stock granted pursuant to Section 9 of the Plan,
which provisions are, unless otherwise provided herein, incorporated by
reference and made a part hereof to the same extent as if set forth in their
entirety herein, and to such other terms necessary or appropriate to the grant
hereof having been made. A copy of the Plan is on file in the offices of the
Company.


2.             Grant.
The Company hereby grants to Grantee a total of                 
shares of Restricted Stock (the “Restricted Shares”), subject to the
restrictions set forth in Section 3 hereof and the Plan.


3.             Restrictions.


(a)           None of the Restricted Shares may be
sold, transferred, pledged, hypothecated or otherwise encumbered or disposed of
until they have vested in accordance with Section 6 of this Award Agreement.


(b)           Subject to Section 6(c), any
Restricted Shares that are not vested shall be forfeit to the Company
immediately upon termination of the Grantee’s employment with the Company and
all if its Subsidiaries, or as provided in Section 6(d) .


4.             Stock
Certificates.


(a)           Effective upon the Award Date the Company
shall cause the Restricted Shares to be issued. The Restricted Shares shall be
held in the form of a stock certificate or in book entry form, at the option of
the Company. The Restricted Shares shall be subject to the terms and conditions
of this Award Agreement, legends and stock transfer instructions or limitations
as may be determined or authorized by the Committee in its sole discretion, and
such forfeiture and cancellation rights as set forth herein.


(b)           Upon vesting of the Restricted Shares
(and any other assets or securities attributable thereto) pursuant to Section 6,
the Company shall cause the vested portion of the Restricted Shares (and any
other assets or securities attributable thereto) to be transferred to a
brokerage account established by the Grantee at a brokerage firm acceptable to
the Company. Promptly following such transfer of such vested Restricted Shares,
a portion of the vested Restricted Shares shall be sold and the proceeds paid
to the Company in an amount necessary to permit the Company to pay required
withholdings pursuant to Section 13(b)(ii). The balance of









 



 


the vested Restricted Shares may be
withdrawn, sold or otherwise transferred as the Grantee may instruct the
brokerage firm.


(c)           The Grantee shall execute and deliver
to the Secretary of the Company an Assignment Separate from Certificate in the
form attached hereto as Exhibit “A.”


(d)           As the interest of the Grantee in the
Restricted Shares (or any other assets or securities attributable thereto)
vests in accordance with the provisions of Section 6, the vested Restricted
Shares (as well as all other vested assets and securities attributable thereto)
shall be released from escrow and promptly delivered to the Grantee. Upon
request of the Grantee the Secretary of the Company shall cause a new
certificate to be issued for the vested portion of the Restricted Shares,
subject to such legends and stock transfer instructions as may be appropriate
for vested


5.             Rights
as Stockholder.


(a)           The Grantee shall have no rights as a
stockholder with respect to any Restricted Shares until the Restricted Shares are
issued in Grantee’s name, either in the form of a physical stock certificate or
in uncertificated form, but in either event subject to the restrictions of
Sections 3 and 4.


(b)           Once the Restricted Shares are issued
in Grantee’s name, the Grantee shall be entitled to all rights associated with
ownership of the Restricted Shares, except that the Restricted Shares will
remain subject to the restrictions set forth in Sections 3 and 4. If any
additional shares of Common Stock become issuable on the basis of such
Restricted Shares (e.g., a stock split or stock dividend), any such additional shares
shall be subject to the same restrictions as the shares of Restricted Shares to
which they relate and shall be subject to the conditions set forth in Sections 3
and 4.


(c)           Grantee shall be entitled to receive
all cash dividends paid on Restricted Shares without regard to whether Grantee
is vested or unvested in such Restricted Shares.


6.             Vesting.


(a)           The Restricted Shares granted
hereunder shall become vested in accordance with the following cumulative vesting
schedule if the Grantee continues to be employed by the Company (or a
Subsidiary thereof) on indicated date:


	
  One Year from the Award Date

  	
   

  	
  One Third of Restricted Shares granted hereunder

  
	
   

  	
   

  	
   

  
	
  Two Years from
  the Award Date

  	
   

  	
  One Third of Restricted Shares granted hereunder

  
	
   

  	
   

  	
   

  
	
  Three Years from
  the Award Date

  	
   

  	
  One Third of Restricted Shares granted hereunder

  



 



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(b)           Subject to any contractual rights
governing Grantee’s employment with the Company, Grantee’s employment with the
Company may be terminated by the Grantee’s resignation or by Company with or
without cause, as a result of the Death, Disability, or Retirement of the
Grantee. Grantee shall be vested in the Restricted Shares in which Grantee is
vested upon the date of any of the foregoing events causing the termination of
Grantee’s employment with Company (and all of Company’s Subsidiaries).


(c)           Notwithstanding the foregoing, the
Grantee shall become immediately and fully vested in all Restricted Shares upon
the occurrence of a Change of Control, provided Grantee is an employee of the
Company (or a Subsidiary) on the date of the Change of Control.


(d)           In addition to the forfeiture rights
provided in Section 3(b), if at any time the Grantee engages in any “Contrary
Activities” (as defined below), then the unvested Restricted Shares shall be
forfeited to the Company effective as of the date on which the Grantee entered
into the Contrary Activities, unless terminated sooner by operation of another
term or condition of this Award Agreement or the Plan.


(e)           “Contrary Activities” shall include
any activities adverse, contrary or harmful to the interests of the Company,
including but not limited to:


(i)            Conduct related to the Grantee’s
employment for which either criminal or civil penalties against the Grantee may
be sought;


(ii)           While employed by the Company or any
Subsidiary, serving as a consultant, advisor or in any other capacity to an
entity that is, or proposes to be, in competition with or acting against the
interests of the Company;


(iii)          Employing or recruiting any present,
former or future employee of the Company, whether individually or on behalf of
another person or entity, that is, or proposes to be, in competition with or
acting against the interests of the Company;


(iv)          Disclosing or misusing any
confidential information or material concerning the Company; or


(v)           Participating in a hostile takeover
attempt against the Company.


(f)            The Committee may release Grantee
from the obligations under Sections 6(d) and 6(e) above if the Committee
determines in its sole discretion that such action is in the best interests of
the Company.


7.             Other
Terms and Conditions. The Committee shall have the discretion to determine
such other terms and provisions hereof as stated in the Plan.


8.             No
Right to Continued Employment. Nothing in this Agreement or the Plan shall
be interpreted or construed to confer upon the Grantee any right with respect
to continuance of



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employment by the
Company, nor shall this Agreement or the Plan interfere in any way with the
right of the Company to terminate the Grantee’s employment at any time.


9.             Adjustments.


(a)           In the event of a Change in
Capitalization, the Committee may make appropriate adjustments to the number
and class of Restricted Shares or other stock or securities subject to the
Award Agreement and the purchase price for such Shares or other stock or
securities. The Committee’s adjustment shall be made in accordance with the
provisions of Section 12 of the Plan and shall be effective and final, binding
and conclusive for all purposes of the Plan and this Agreement, which shall be
subject to the same restrictions as the shares of Restricted Shares to which
they relate and shall be subject to the conditions set forth in Sections 3 and 4.


10.           Effective
on a Merger, Consolidation or Liquidation.


(a)           Subject to Section 6 hereof, upon the
effective date of (i) the liquidation or dissolution of the Company or (ii) a
merger or consolidation of the Company (a “Transaction”), the Award Agreement
shall continue in effect in accordance with its terms and the Grantee shall be
entitled to receive in respect of all Restricted Shares subject to this Award
Agreement, the same number and kind of stock, securities, cash, property or
other consideration that each holder of shares was entitled to receive in the
Transaction, which shall be subject to the same restrictions as the shares of
Restricted Shares to which they relate and shall be subject to the conditions
set forth in Sections 3 and 4.


11.           Grantee
Bound by the Plan. The Grantee hereby acknowledges receipt of a copy of the
Plan and agrees to be bound by all the terms and provisions thereof.


12.           Special
Tax Election. Grantee understands and represents to Company as follows:


(a)           Under Section 83 of the Internal
Revenue Code of 1986, as amended, (the “Code”), the fair market value of the
Restricted Shares on the date any forfeiture restrictions applicable to such
shares lapse will be reportable as ordinary income on such lapse date. For this
purpose, “forfeiture restrictions” means the vesting of the Restricted Shares.


(b)           Grantee may
elect under Section 83(b) of the Code to be taxed at the fair market value of
the Restricted Shares as of the Award Date rather than when such Restricted
Shares cease to be subject to forfeiture restrictions. Such election must be
filed with the Internal Revenue Service within thirty (30) days after the Award
Date. THE FORM FOR MAKING THIS ELECTION IS
ATTACHED AS EXHIBIT “B.”  GRANTEE
UNDERSTANDS THAT FAILURE TO MAKE THIS FILING WITHIN THE THIRTY (30) DAY PERIOD
WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME BY THE GRANTEE AS THE
FORFEITURE RESTRICTIONS LAPSE.


(c)           GRANTEE
ACKNOWLEDGES THAT IT IS GRANTEE’S SOLE RESPONSIBILITY, AND NOT THE COMPANY’S,
TO FILE A TIMELY ELECTION UNDER SECTION 83(B), EVEN IF GRANTEE REQUESTS THE
COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON GRANTEE’S BEHALF.
This filing should be made by registered or certified mail, return receipt
requested, and the Grantee must



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retain two (2) copies of the completed form
for filing with Grantee’s state and Federal tax returns for the current year
and an additional copy for Grantee’s records.


13.           Tax
Withholding Obligations. Grantee understands and represents to Company as
follows:


(a)           The Restricted Shares awarded to
Grantee constitute taxable income. The Company is required to withhold from
taxable income and pay to tax authorities certain amounts, as required by
applicable laws and regulations.


(b)           Grantee shall pay to Company an
amount equal to the Company’s withholding obligations to tax authorities (for
income and employment taxes, but not including the employer’s share of the
same) attributable to the grant of Restricted Shares.


(i)            Grantee shall make such payment to
Company within three (3) business days following the Award Date if Grantee
elects to make a timely election under Section 83(b).


(ii)           If Grantee does not make a timely
election under Section 83(b), a portion of the unvested Restricted Shares shall
be sold following vesting, as provided in Section 4(b). 


14.           Modification
of Agreement. This Award Agreement may be modified, amended, suspended or
terminated, and any terms or conditions may be waived, but only by a written
instrument executed by the parties hereto.


15.           Severability.
Should any provision of this Award Agreement be held by a court of competent
jurisdiction to be unenforceable or invalid for any reason, the remaining
provisions of this Award Agreement shall not be affected by such holding and
shall continue in full force in accordance with their terms.


16.           Governing
Law. The validity, interpretation, construction and performance of this
Award Agreement shall be governed by the laws of the State of Delaware without
giving effect to the conflicts of laws principles thereof.


17.           Successors
in Interest. This Award Agreement shall inure to the benefit of and be
binding upon each successor of Company. This Award Agreement shall inure to the
benefit of the Grantee’s legal representatives. All obligations imposed upon
the Grantee and all rights granted to the Company under this Award Agreement
shall be final, binding and conclusive upon the Grantee’s heirs, executors,
administrators and successors.


18.           Resolution
of Disputes. Any dispute or disagreement which may arise under, or as a
result of, or in any way relate to, the interpretation, construction or
application of this Award Agreement shall be determined by the Committee in
good faith. Any determination made hereunder shall be final, binding and
conclusive on the Grantee and Company for all purposes.



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  ALDILA, INC.

  
	
   

  	
   

  
	
   

  	
  BY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  
	
   

  
	
   

  	
   

  
	
  Secretary

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name of Grantee:

  
						



 



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Exhibit “A”


Assignment
Separate From Certificate


FOR VALUABLE
RECEIVED,                                                                   
hereby sell(s), assign(s) and transfer(s) unto ALDILA, INC., a Delaware
corporation (the “Company”),                                                     
(                      )
shares of the Common Stock of the Company standing in his/her/its name on the
books of the Corporation, represented by Certificate #             ,
and do hereby irrevocably constitute and appoint                                               
as attorney to transfer the said stock on the books of the Company with full
power of substitution in the premises.


	
  

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
					



 


 


[Do not fill in
any blanks other then the signature line. The purpose of this assignment is to
enable the Company to exercise its rights under the Award Agreement without
requiring additional signatures on the part of the Grantee.]









 



 


Exhibit “B”


Section 83(b) Tax
Election


This statement is
being made under Section 83(b) of the Internal Revenue Code (the “Code),
pursuant to T. Reg. § 1.83-2.


1.               The taxpayer who
performed the services is:


Name:


Address:


Taxpayer Identification
No.:


2.               The property with
respect to which the election is being made is                         
shares of Common Stock (the “Restricted Shares”) of Aldila, Inc., a Delaware
corporation (the “Company”).


3.               The property was
issued on                                 ,
20    .


4.               The taxable year in
which the election is being made is the calendar year 20      .


5.               The property is
subject to vesting and forfeiture if for any reason taxperyer’s employment with
the Company is terminated. The Company’s rights will lapse in three equal,
annual increments upon the anniversary of the grant of the Restricted Shares.


6.               The fair market
value at the time of the transfer (determined without regard to any
restrictions other then a restriction which by its terms will never lapse) is $                
per share.


7.               The amount paid for
such property was zero dollars ($0.00).


8.               A copy of this
statement was furnished to the Company for whom taxpayer rendered the services underlying
the transfer of property.


9.               This statement is
executed as of                                   ,
20        .


	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Taxpayer

  	
  Taxpayer’s Spouse

  	
   

  



 


[This form must be
filed with the Internal Revenue Service Center with which taxpayer files
his/her Federal income tax returns. The filing must be made within 30 days
after the award of the Restricted Stock.]