Document:

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                                                                    EXHIBIT 10.1

                             NEWPARK RESOURCES, INC.
                   2003 EXECUTIVE INCENTIVE COMPENSATION PLAN

1.    PURPOSE

      The purpose of the Newpark Resources, Inc. 2003 Executive Incentive
Compensation Plan (the "PLAN") is to advance the interests of Newpark Resources,
Inc. ("NEWPARK") and its subsidiaries by providing an annual incentive bonus
opportunity to certain executive officers of Newpark based on the achievement of
pre-established quantitative performance goals.

2.    ADMINISTRATION

      2.1 The Plan shall be administered by the Compensation Committee (the
"COMMITTEE") of the Board of Directors of Newpark (the "BOARD"). Each member of
the Committee shall be (a) a "Non-Employee Director" as that term is defined in
Rule 16b-3 promulgated by the Securities and Exchange Commission pursuant to the
Securities and Exchange Act of 1934 (the "EXCHANGE ACT"), and (b) an
"independent director" as defined under the rules of the New York Stock
Exchange, as they may be amended from time to time, except as may otherwise be
permitted by such rules, but no action of the Committee shall be invalid if this
requirement is not met.

      2.2 The Committee shall have full power, discretion and authority to
administer, interpret and construe the Plan and any award or agreement made
pursuant to the Plan, and to prescribe and rescind rules, regulations and
policies for administration of the Plan. The Committee's actions,
interpretations and constructions with regard to the Plan shall be final,
conclusive and binding on all persons for all purposes.

      2.3 No member of the Committee or the Board shall be liable for any action
or determination made in good faith with respect to the Plan or any award
pursuant to it. Newpark shall indemnify and hold harmless each member of the
Committee and the Board, and the estate and heirs of each such member, against
all claims, liabilities, expenses, penalties, damages or other pecuniary losses,
including legal fees, which such Committee member or Board member or his or her
estate or heirs may suffer as a result of any act or omission to act in
connection with the Plan, to the extent that insurance, if any, does not cover
the payment of such items.

3.    ELIGIBILITY

      This Plan is applicable to the Chief Executive Officer and to other
executive officers and division presidents of Newpark (each a "PARTICIPANT")
upon recommendation by the Chief Executive Officer of Newpark and approval by
the Committee. In the discretion of the Committee, an employee who becomes
eligible to be a Participant after the commencement of a "Performance Period"
(as defined below) may receive a pro-rated "Performance Award" (as defined
below).

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4.    PERFORMANCE AWARDS

      4.1 AWARD CRITERIA. As promptly as practicable after the beginning of each
calendar year (each a "PERFORMANCE PERIOD") for which an award (a "PERFORMANCE
AWARD") is payable hereunder, and, in any event, before April 1 of such
Performance Period (except as provided in Paragraph 3) the Committee shall
establish the performance factors ("PERFORMANCE MEASURES") to be taken into
account and the performance levels ("PERFORMANCE TARGETS") to be reached by each
Participant in order to receive a Performance Award for that Performance Period.
Unless otherwise determined by the Committee, each Performance Award shall
include a minimum Performance Target that must be attained in order for a
minimum Performance Award to be payable, with the Participant being eligible to
receive a greater Performance Award if the minimum Performance Target is
exceeded. The Committee shall have sole discretion to determine the amount of
each Performance Award, the Performance Measures and Performance Targets
applicable to the Performance Awards and the method of determining whether the
Performance Targets have been met. The amount of each Performance Award, the
Performance Measures and the Performance Targets may vary among Participants and
may be determined based on the Participant's ability to directly impact
Newpark's performance or on an assessment of the Participant's overall
contributions to Newpark's success. The amount of the Performance Awards, the
Performance Measures and the Performance Targets may change from Performance
Period to Performance Period. Performance Measures may include any of the
following factors, alone or in combination, as determined by the Committee: (i)
earnings per share; (ii) return on equity; (iii) return on assets; (iv) business
unit profit; (v) business unit return on capital; (vi) business unit safety; and
(vii) such other criteria as the Committee shall from time to time determine.

      Once established, Performance Targets and Performance Measures shall not
be changed during the applicable Performance Period , except for adjustments
contemplated by Paragraph 4.2 below. Each Performance Award granted under the
Plan shall be evidenced by a written agreement ("AWARD AGREEMENT"), in a form
approved by the Committee and executed by Newpark. Each Award Agreement shall
set forth the amount of the Performance Award, the Participant's Performance
Measures and Performance Targets and their relative weights.

      4.2 CERTIFICATION AND PAYMENT. As soon as practicable after Newpark's
audited financial statements are available for a Performance Period in which the
Performance Awards will be paid, the Committee will certify the attainment of
the Performance Targets and the Performance Awards to be paid to each
Participant. In performing such evaluation, the Committee is authorized to make
adjustments in the method of calculating attainment of Performance Targets as
follows:

            (a) to adjust or exclude the dilutive or anti-dilutive effects of
acquisitions or joint ventures;

            (b) to adjust the impact of the disposition of any businesses
divested by the Company during a Performance Period;

            (c) to exclude, in whole or in part, restructuring and/or other
nonrecurring charges;

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            (d) to exclude, in whole or in part, exchange rate effects, as
applicable, for non-U.S. dollar denominated net sales and operating earnings;

            (e) to exclude, in whole or in part, the effects of changes to
generally accepted accounting standards ("GAAP") made by the relevant accounting
authority;

            (f) to exclude, in whole or in part, the effects of any statutory
adjustments to corporate taxes;

            (g) to exclude, in whole or in part, the impact of any
"extraordinary items" as determined under GAAP;

            (h) to exclude, in whole or in part, the effect of any change in the
outstanding shares of common stock of the Company by reason of any stock
dividend or split, stock repurchase, reorganization, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or other similar
corporate change, or any distributions to common stockholders other than regular
cash dividends;

            (i) to give effect, in whole or in part, to any other unusual,
non-recurring gain or loss or other extraordinary item; and

            (j) to include or exclude, in whole or in part, any other
extenuating circumstances deemed appropriate by the Committee.

      Performance Awards for a Performance Period will be accrued and charged as
an expense in determining Newpark's financial performance under the Plan for
that Performance Period. Performance Awards for any Performance Period shall be
paid in cash no later than April 1 of the following calendar year, or as soon as
practicable thereafter.

      4.3 TERMINATION OF EMPLOYMENT. A Participant whose employment is
terminated for any reason other than death, "disability" (as defined below) or
normal retirement at or after the age of 65 prior to the end of a Performance
Period will not be eligible to receive a Performance Award for that Performance
Period. If a Participant's employment is terminated prior to the end of a
Performance Period by reason of death, disability or normal retirement, the
Participant or the Participant's heir or legal representative may, upon the
Committee's approval, be eligible for a prorated Performance Award for that
Performance Period, to be determined and paid as set forth in Section 4.2. As
used herein, the term "disability" shall mean the Participant's full-time
absence from his or her duties with Newpark, as a result of incapacity due to
physical or mental illness.

5.    CHANGE OF CONTROL

      Unless the Committee shall otherwise provide in an Award Agreement, upon
the occurrence of a Change of Control, all Performance Awards for a Performance
Period not completed at the time of the Change of Control shall be payable in an
amount equal to the product of the maximum award opportunity for the Performance
Award and a fraction, the numerator of which is the number of months that have
elapsed since the beginning of the Performance Period through the later of (a)
the date of the Change of Control or (b) the date the participant terminates
employment, and the denominator of which is twelve. A "CHANGE OF CONTROL" shall
be deemed to occur if:

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      (i) a "Takeover Transaction" (as defined below) occurs;

      (ii) any election of directors of Newpark takes place (whether by the
directors then in office or by the stockholders at a meeting or by written
consent) and a majority of the directors in office following such election are
individuals who were not nominated by a vote of two-thirds of the members of the
Board of Directors, or, if Newpark had a nominating committee at such time, its
nominating committee, immediately preceding such election; or

      (iii) Newpark effectuates a complete liquidation or a sale or disposition
of all or substantially all of its assets.

      A "TAKEOVER TRANSACTION" means (a) a merger or consolidation of Newpark
with, or an acquisition of Newpark or all or substantially all of its assets by,
any other corporation or entity, other than a merger, consolidation or
acquisition in which the individuals who were members of the Board of Directors
of Newpark immediately prior to such transaction continue to constitute a
majority of the Board of Directors or other governing body of the surviving
corporation or entity (or, in the case of an acquisition involving a holding
company, constitute a majority of the Board of Directors or other governing body
of the holding company) for a period of not less than twelve (12) months
following the closing of such transaction; or (b) one or more occurrences or
events as a result of which any "person" (as such term is used in Sections13(d)
and 14(d)(2) of the Exchange Act) becomes the "beneficial owner" (as such term
is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
thirty percent (30%) or more of the combined voting power of Newpark's then
outstanding securities.

6.    WITHHOLDING TAXES

      Newpark shall have the right, at the time of payment of a Performance
Award, to make adequate provision for any federal, state, local or foreign taxes
which it believes are or may be required by law to be withheld with respect to
an award under the Plan ("TAX LIABILITY"), to ensure the payment of any such Tax
Liability. Newpark may provide for the payment of any Tax Liability by
withholding from the amount of the Performance Award or by any other method
deemed appropriate by the Committee.

7.    AMENDMENT AND TERMINATION

      The Board may at any time suspend, amend or terminate the Plan. No such
action shall adversely affect any outstanding Award Agreement without the
Participant's written consent. The Committee may amend the Plan without
stockholder approval, unless such approval is necessary to comply with
applicable laws, including provisions of the Exchange Act or the Code.

8.    SECTION 162(M) COMPLIANCE

      Nothing herein precludes Newpark from granting Performance Awards under
the Plan that are not considered "performance-based compensation" under Section
162(m) or from making additional payments or special awards to Eligible
Participants outside of the Plan that may or may not qualify as
"performance-based compensation" under Section 162(m). Newpark, in its
discretion, may take any steps necessary to have Performance Awards qualify as
"performance-based compensation" satisfying the requirements of Section 162(m),
including obtaining stockholder approval of the Plan.

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9.    TERM

      The effective date of the Plan is January 1, 2003, and the Plan will
terminate on December 31, 2007, unless previously terminated by the Board .

10.   MISCELLANEOUS

      10.1 Nothing in this Plan or any award granted hereunder shall confer upon
any employee any right to continue in the employ of Newpark or interfere in any
way with the right of Newpark to terminate his or her employment at any time.

      10.2 No award granted under the Plan shall be deemed salary or
compensation for the purpose of computing benefits under any employee benefit
plan or other arrangement of Newpark for the benefit of its employees.

      10.3 The Plan and the grant of awards under it shall be subject to all
applicable federal and state laws, rules and regulations and to such approvals
by any governmental or regulatory agency as may be required.

      10.4 The Plan shall be construed in accordance with and governed by the
laws of the State of Delaware.

      10.5 Each Award Agreement shall inure to the benefit of the Participant
and the Participant's heirs, representatives and successors and shall be binding
on Newpark and each successor (direct or indirect, whether by purchase, merger,
consolidation or otherwise).

      10.6 No right or interest of a Participant in any Performance Award may be
pledged, encumbered, or hypothecated to or in favor of any party other than
Newpark or an affiliate of Newpark, or shall be subject to any lien, obligation,
or liability of such Participant to any other party other than Newpark or an
affiliate of Newpark. No Performance Award shall be assignable or transferable
by a Participant.

      10.7 Notwithstanding any other provision of this Plan, if a Participant
commits fraud or dishonesty toward Newpark, wrongfully uses or discloses any
trade secret, confidential data or other information proprietary to Newpark or
intentionally takes any other action materially inimical to the best interests
of Newpark, as determined by the Committee in its sole and absolute discretion,
such Participant shall forfeit all Performance Awards under the Plan.

                                       5exv10w1

 

	 	 	 	 	 

	   	Exhibit 10.1

RESTRICTED STOCK AGREEMENT

          THIS RESTRICTED STOCK AGREEMENT (the “Agreement”) dated as of April 27, 2005 (the “Award
Date”), is made by and between UNITED DEFENSE INDUSTRIES, INC., a Delaware corporation (the
“Company”), and ___, an employee of the Company or one or more of its Subsidiaries as
defined herein (the “Participant”):

          WHEREAS, the Company established the Incentive Award Plan, as amended (the “Plan”);

          WHEREAS, the Company wishes 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 the issuance of shares of the Company’s Common Stock (as
defined herein), subject to certain restrictions thereon (hereinafter referred to as “Restricted
Stock”);

          WHEREAS, the Company’s Board of Directors has determined that it would be to the advantage and
best interest of the Company and its stockholders to issue the shares of Restricted Stock provided
for herein to the Participant as an inducement to enter into or remain in the service of the
Company (and/or one of its Subsidiaries) and as an incentive for increased efforts during such
service, and has approved the issuance of such shares of Restricted Stock to the Participant upon
the terms and conditions set forth herein; and

          NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties
hereto do hereby agree as follows:

ARTICLE I.

DEFINITIONS

          Whenever the following terms are used below in this Agreement, they shall have the meaning
specified below unless the context clearly indicates to the contrary. Capitalized terms not
otherwise defined herein shall have the meanings set forth in the Plan. The masculine pronoun
shall include the feminine and neuter, and the singular the plural, where the context so indicates.

          Section 1.1 Committee. “Committee” shall mean the Compensation Committee of the Board
of Directors of the Company, as authorized to implement, administer, and interpret the Plan.

          Section 1.2 Corporate Transaction. “Corporate Transaction” shall mean the occurrence
of any of the following events:

 

 

           (a) The acquisition, directly or indirectly, by any “person” or “group” (as those terms are
defined in Sections 3(a)(9), 13(d), and 14(d) of the Securities Exchange Act of 1934 (the “Exchange
Act”) and the rules thereunder) of “beneficial ownership” (as determined pursuant to Rule 13d-3
under the Exchange Act) of securities entitled to vote generally in the election of directors
(“voting securities”) of the Company that represent 50% or more of the combined voting power of the
Company’s then outstanding voting securities, other than

(i) an acquisition by a trustee or other fiduciary holding securities under any
employee benefit plan (or related trust) sponsored or maintained by the Company or
any person controlled by the Company or by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any person controlled by the
Company; or

(ii) an acquisition of voting securities by the Company or a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of the stock of the Company; or

(iii) an acquisition of voting securities pursuant to a transaction described in
clause (b) below that would not be a Corporate Transaction under such clause (b).

           Notwithstanding the foregoing, an acquisition of the Company’s securities by the Company which
causes the Company’s voting securities beneficially owned by a person or group to represent 50% or
more of the combined voting power of the Company’s then outstanding voting securities shall not
constitute an “acquisition” by any person or group for purposes of this clause (a).

           (b) The consummation by the Company (whether directly involving the Company or indirectly
involving the Company through one or more intermediaries) of (i) a merger, consolidation,
reorganization, or business combination or (ii) a sale or other disposition of all or substantially
all of the Company’s assets, or (iii) the acquisition of assets or stock of another entity, in each
case, other than a transaction

(i) which results in the Company’s voting securities outstanding immediately before
the transaction continuing to represent (either by remaining outstanding or by being
converted into voting securities of the Company or the person that, as a result of
the transaction, controls, directly or indirectly, the Company or owns, directly or
indirectly, all or substantially all of the Company’s assets or otherwise succeeds
to the business of the Company (the Company or such person, the “Successor Entity”))
directly or indirectly, at least 50% of the combined voting power of the Successor
Entity’s outstanding voting securities immediately after the transaction, and

(ii) after which no person or group beneficially owns voting securities representing
50% or more of the combined voting power of the Successor Entity; provided, however,
that no person or group shall be treated for purposes of this clause (B) as
beneficially owning 50% or more of combined voting power of the

 

 

 Successor Entity solely as a result of the voting power held in the Company prior to
the consummation of the transaction; or

 (iii) the a liquidation or dissolution of the Company.

          Section 1.3 Exchange Act. “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended.

          Section 1.4 Disability. “Disability” shall have the meaning assigned to it in Section
22(3)(3) of the Code.

          Section 1.5 Restrictions. “Restrictions” shall mean the forfeiture and
transferability restrictions imposed upon Restricted Stock under this Agreement.

          Section 1.6 Restricted Stock. “Restricted Stock” shall mean Common Stock of the
Company issued under this Agreement and subject to the Restrictions imposed hereunder.

          Section 1.7 Retirement. “Retirement” shall mean the voluntary termination of
employment with the Company (and/or any Subsidiary or Subsidiaries by which the employee may
theretofore have been employed) on or after the earlier of (a) the attainment of age 62 and
completion of ten or more years of service with the Company or any Subsidiary (including
predecessor entities) or (b) the attainment of age 65.

          Section 1.8 Rule 16b-3. “Rule 16b-3” shall mean that certain Rule 16b-3 under the
Exchange Act, as such Rule may be amended from time to time.

          Section 1.9 Secretary. “Secretary” shall mean the Secretary of the Company.

          Section 1.10 Securities Act. “Securities Act” shall mean the Securities Act of 1933,
as amended.

          Section 1.11 Subsidiary. “Subsidiary” of any entity shall mean any corporation or
other entity in an unbroken chain of corporations beginning with such entity if each of the
corporations other than the last corporation in the unbroken chain then owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of the other corporations
or entities in such chain.

          Section 1.12 Termination of Employment. “Termination of Employment” shall mean the
time when the employee-employer relationship between the Participant and the Company and/or one or
more of its Subsidiaries is terminated for any reason with or without cause, including, but not by
way of limitation, a termination by resignation, discharge, death, Disability, or Retirement, but
excluding a termination where the Participant is simultaneously reemployed by, or remains employed
by, the Company and/or one or more of its Subsidiaries or a successor entity thereto. (The
treatment of Disability in this Agreement as a type of “Termination of Employment” is solely for
purposes of this Agreement, and shall in no way affect whether Disability is or is not similarly
treated or characterized in other programs of the Company pertaining to employment or employee
benefits.)

 

 

          Section 1.13 Vested Shares. “Vested Shares” shall mean the shares of Restricted Stock
which are no longer subject to the Restrictions by reason of Sections 3.1, 3.2, or 3.5.

          Section 1.14 EBIT. “EBIT” shall mean the Company’s earnings before interest, taxes,
and LIFO charges for the Company fiscal (which are calendar) years 2005 through 2007, as may be
adjusted by the Committee in its discretion to take into account non-recurring items or unusual
events, such as acquisitions or dispositions.

ARTICLE II.

ISSUANCE OF RESTRICTED STOCK

          Section 2.1 Issuance of Restricted Stock. For good and valuable consideration which
the Board of Directors has determined to be in excess of the par value of its Common Stock, on the
date hereof the Company issues to the Participant (___) shares of its Common Stock upon the
terms and conditions set forth in this Agreement. Fifty percent (50%) of the Restricted Stock shall
vest and the Restrictions thereon shall lapse as provided in Section 3.1 (the “Time Vesting
Shares”) and fifty percent (50% of the Restricted Stock Shall vest and the Restrictions thereon
shall lapse as provided in Section 3.2 (the “EBIT Vesting Shares”).

          Section 2.2 Consideration to the Company. As consideration for the release of the
Restrictions on the Restricted Stock set forth herein, the Participant agrees to render faithful
and efficient services as an Employee, for a period of not less than one year from the Award Date.
Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in
the employ of the Company, any Parent, or any Subsidiary or shall interfere with or restrict in any
way the rights of the Company, any Parent, or any Subsidiary, which are hereby expressly reserved,
to discharge the Participant at any time for any reason whatsoever, with or without cause.

ARTICLE III.

RESTRICTIONS

          Section 3.1 Time-based Restrictions. The Time Vesting Shares of Restricted Stock
issued to Participant under Section 2.1, shall vest as specified in this Section 3.1. The
Restrictions upon transfer of the Time Vesting Shares and the forfeiture provisions of Section 4.5
shall terminate and lapse, and such shares shall vest in the Participant and become Vested Shares
on December 31, 2007 (the “Time Vesting Date”), provided that the Participant has continued to
serve as an Employee from the Award Date to and including the Time Vesting Date. Notwithstanding
the foregoing, in the event that the Participant experiences a Termination of Employment by reason
of Disability or Retirement at least twelve (12) months after the Award Date, then the Restrictions
upon transfer of the Time Vesting Shares pursuant to Section 4.2 and the forfeiture provisions of
Section 4.5 shall terminate and lapse as follows:

          (a) If the Participant’s Disability or Retirement occurs at least twelve months after the
Award Date, but prior to the second anniversary of the Award Date, then fifty percent

 

 

(50%) of the Time Vesting Shares shall vest and become Vested Shares on the Participant’s date
of Disability or Retirement; or

          (b) If the Participant’s Disability or Retirement occurs on or after the second anniversary of
the Award Date, but prior to the Vesting Date, then all of the Time Vesting Shares shall vest and
become Vested Shares on the Participant’s date of Disability or Retirement.

          Additionally, vesting of the Time Vesting Shares may be accelerated pursuant to Section 3.5
below.

          Section 3.2 EBIT-based Restrictions.

          (a) The EBIT Vesting Shares of Restricted Stock issued to Participant under Section 2.1 shall
vest as specified in this Section 3.2. The Restrictions upon transfer of such shares and the
forfeiture provisions of Section 4.5 shall terminate and lapse, and EBIT Vesting Shares shall vest
in the Participant and become Vested Shares on January 31, 2008 (the “EBIT Vesting Date”), provided
that the Participant has continued to serve as an Employee from the Award Date to and including
December 31, 2007, in which case the EBIT Vesting Shares shall vest to the extent that the
following EBIT-based objective(s) have been met:

(i) If EBIT is below $ million, none of such shares shall vest;

(ii) If EBIT is not less than $ million, fifty percent (50%) of such shares shall
vest;

(iii) If EBIT is not less that $ million, all such shares shall vest; and

(iv) If EBIT is more than $ million but less than $ million, then the number
of such shares which shall vest shall be the sum of (x) fifty percent of such shares
plus (y) fifty percent of such shares multiplied by a fraction whose numerator is
the amount by which EBIT exceeded $ million but did not exceed $ million, and
whose denominator is $ million.

Not later than the EBIT Vesting Date, the Company shall provide to the Participant in writing a
statement which sets forth the EBIT amount and the vesting calculation in accordance with the
provisions of this Section 3.2. Notwithstanding the foregoing, the Committee in its discretion may
adjust the forgoing EBIT objectives to reflect any extraordinary or unusual events involving
dispositions or acquisitions out of the ordinary course of business.

          (b) In the event that the Participant experiences a Termination of Employment by reason of
Disability or Retirement at least twelve (12) months after the Award Date, then the restrictions
upon transfer of the EBIT Vesting Shares pursuant to Section 4.2 and the forfeiture provisions of
Section 4.5 shall terminate and lapse as follows:

(i) If the Participant’s Disability or Retirement occurs at least twelve months
after the Award Date, but prior to the second anniversary of the Award Date, then
fifty percent (50%) of the EBIT Vesting Shares that would otherwise have vested

 

 

 pursuant to Subsection 3.2(a) shall vest and become Vested Shares on the EBIT
Vesting Date; or

(ii) If the Participant’s Disability or Retirement occurs on or after the second
anniversary of the Award Date, but prior to the EBIT Vesting Date, then all of the
EBIT Vesting Shares that would otherwise have vested pursuant to Subsection 3.2(a)
shall vest and become Vested Shares on the EBIT Vesting Date.

Additionally, vesting of the EBIT Vesting Shares Stock may be accelerated pursuant to Section 3.5
below.

           Section 3.3 Legend. Certificates representing shares of Restricted Stock issued
pursuant to this Agreement shall, until all restrictions lapse and new certificates are issued
pursuant to Section 3.4, bear the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN VESTING REQUIREMENTS AND MAY BE SUBJECT TO FORFEITURE UNDER
THE TERMS OF THAT CERTAIN RESTRICTED STOCK AGREEMENT DATED APRIL 27,
2005 BY AND BETWEEN UNITED DEFENSE INDUSTRIES, INC. AND THE HOLDER
OF THE SECURITIES. PRIOR TO VESTING OF OWNERSHIP IN THE SECURITIES,
THEY MAY NOT BE, DIRECTLY OR INDIRECTLY, OFFERED, TRANSFERRED, SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER ANY
CIRCUMSTANCES. COPIES OF SUCH AGREEMENT ARE ON FILE AT THE OFFICES
OF THE CORPORATION AT 1525 WILSON BOULEVARD, SUITE 700, ARLINGTON,
VA 22209.

           Section 3.4 Lapse of Restrictions. Upon the vesting of the shares of Restricted Stock
as provided in Sections 3.1 and 3.2, the Company shall cause new certificates to be issued with
respect to such Vested Shares and delivered to the Participant or his legal representative, free
from the legend provided for in Section 3.3 and any of the other Restrictions. Such Vested Shares
shall cease to be considered Restricted Stock subject to the terms and conditions of this
Agreement. Notwithstanding the foregoing, no such new certificate shall be delivered to the
Participant or his legal representative unless and until the Participant or his legal
representative shall have paid to the Company in cash or by check the full amount of all federal,
state and local withholding or other employment taxes applicable to the taxable income of the
Participant resulting from the lapse of the Restrictions.

           Section 3.5 Corporate Transaction. All shares of Restricted Stock shall automatically
vest on the date of a Corporate Transaction and all Restrictions with respect to such shares of
Restricted Stock shall immediately lapse.

 

 

ARTICLE IV.

MISCELLANEOUS

          Section 4.1 Administration. The Committee shall have the power to interpret the Plan,
this Agreement, and all other documents relating to Restricted Stock and to adopt such rules for
the administration, interpretation and application of the 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 Committee in good faith shall be final and binding upon the Participant,
the Company, and all other interested persons. No member of the Committee shall be personally
liable for any action, determination or interpretation made in good faith with respect to the Plan
or Restricted Stock and all members of the Committee shall be fully protected by the Company in
respect to any such action, determination or interpretation.

          Section 4.2 Restricted Stock Not Transferable. No Restricted Stock or any interest or
right therein or part thereof shall be liable for the debts, contracts or engagements of the
Participant or his successors in interest or shall be subject to disposition 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 or equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect; provided, however, that this Section
4.2 shall not prevent transfers by will or by applicable laws of descent and distribution.

          Section 4.3 Conditions to Issuance of Stock Certificates. The Company shall not be
required to issue or deliver any certificate or certificates for Vested Shares pursuant to this
Agreement prior to fulfillment of all of the following conditions:

          (a) The admission of such shares to listing on all stock exchanges on which such class of
stock is then listed;

          (b) The completion of any registration or other qualification of such shares under any state
or Federal law or under rulings or regulations of the Securities and Exchange Commission or of any
other governmental regulatory body, which the Board of Directors shall, in its absolute discretion,
deem necessary or advisable;

          (c) The obtaining of any approval or other clearance from any state or Federal governmental
agency which the Board of Directors shall, in its absolute discretion, determine to be necessary or
advisable;

          (d) The payment by the Participant of all amounts required to be withheld, under federal,
state and local tax laws, with respect to the issuance of Restricted Stock and/or the lapse or
removal of any of the Restrictions; and

          (e) The lapse of such reasonable period of time as the Board of Directors may from time to
time establish for reasons of administrative convenience.

          Section 4.4 Escrow. The Secretary or such other escrow holder as the Board of
Directors may appoint shall retain physical custody of the certificates representing Restricted
Stock, until all of the Restrictions expire or shall have been removed; provided, however, that in

 

 

no event shall the Participant retain physical custody of any certificates representing
Restricted Stock issued to him.

          Section 4.5 Forfeiture. A Participant’s rights in Restricted Stock that has not yet
vested pursuant to Section 3.1, 3.2 or 3.5 shall lapse, and such Restricted Stock shall be
surrendered to the Company without consideration, immediately following the date of such
Participant’s Termination of Employment.

          Section 4.6 Notices. Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of the Secretary, and any notice to be given to
the Participant shall be addressed to him at the address given beneath his signature hereto. By a
notice given pursuant to this Section 4.6, either party may hereafter designate a different address
for notices to be given to it or him. Any notice which is required to be given to the Participant
shall, if the Participant is then deceased, be given to the Participant’s personal representative
if such representative has previously informed the Company of his status and address by written
notice under this Section 4.6. Any notice shall have been deemed duly given when enclosed in a
properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a
post office or branch post office regularly maintained by the United States Postal Service.

          Section 4.7 Rights as Stockholder. Except as otherwise provided herein, the
Participant, upon the issuance of a new share certificate pursuant to Sections 3.3 and 4.3, shall
have all the rights of a stockholder with respect to his Vested Shares, including the right to vote
the Vested Shares and the right to receive all dividends or other distributions paid or made with
respect to the Vested Shares and the right to transfer any Vested Shares. The Participant shall
have all of the rights as a stockholder with respect to any shares of Restricted Stock which have
not vested, including rights to receive dividends or other distributions paid or made with respect
to such Shares of Restricted Stock, except that the Participant shall not have the right to vote or
transfer shares of Restricted Stock which have not vested.

          Section 4.8 Titles. Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.

          Section 4.9 Conformity to Securities Laws. This Agreement is intended to conform to
the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all
regulations and rules promulgated by the Securities and Exchange Commission thereunder, including
without limitation Rule 16b-3. Notwithstanding anything herein to the contrary, this Agreement
shall be administered, and the Restricted Stock shall be issued, only in such a manner as to
conform to such laws, rules and regulations. To the extent permitted by applicable law, this
Agreement and the Restricted Stock issued hereunder shall be deemed amended to the extent necessary
to conform to such laws, rules and regulations.

          Section 4.10 Amendment and Waiver. This Agreement may be amended only by a writing
executed by the parties hereto which specifically states that it is amending this Agreement. No
provision of this Agreement, or right or power hereunder, shall be waived except in writing by the
party thereby to be charged.

 

 

          Section 4.11 Governing Law. The laws of the State of Delaware shall govern the
interpretation, validity, administration, enforcement, and performance of the terms of this
Agreement, regardless of the law that might be applied under principles of conflicts of laws.

          Section 4.12 Sole Agreement. This Agreement, subject to the provisions of the Plan,
constitutes the sole and entire agreement between the parties regarding its subject matter and
supersedes any prior or contemporaneous agreement or understanding, written or oral, between the
parties regarding such subject matter.

          IN WITNESS HEREOF, this Agreement has been executed and delivered by the parties hereto.

	 	 	 	 	 
	 	UNITED DEFENSE INDUSTRIES, INC. 

 	 
	 	By	 

	 	 	 	 	 
	 	Its
 	 
	 	 	 
	 	 	 
	 

	 
	THE PARTICIPANT

	 

	
 Name

	 

	
 Address

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