Attached files
Exhibit 10.9
DRESSER-RAND GROUP INC.
STANDARD TERMS AND CONDITIONS FOR
RESTRICTED STOCK
STANDARD TERMS AND CONDITIONS FOR
RESTRICTED STOCK
These Standard Terms and Conditions apply to any Award of restricted Common Shares (the Restricted
Shares) granted to an employee of the Company under the Dresser-Rand Group Inc. 2008 Stock
Incentive Plan, as amended (the Plan), on or after January 1, 2010, which are evidenced by a
Grant Notice or an action of the Committee that specifically refers to these Standard Terms and
Conditions.
1. | TERMS OF RESTRICTED SHARES |
Dresser-Rand Group Inc., a Delaware corporation (the Company) has granted to the Grantee
named in the Grant Notice provided to said Grantee herewith (the Grant Notice) an award
of a number of Restricted Shares (the Award) of the Companys common stock, $0.01 par
value per share specified in the Grant Notice. The Award is the terms and subject to the
conditions set forth in the Grant Notice, these Standard Terms and Conditions, and the
Plan, each as amended from time to time. For purposes of these Standard Terms and
Conditions and the Grant Notice, any reference to the Company shall, unless the context
requires otherwise, include a reference to any Affiliate, as such term is defined in the
Plan. Capitalized terms not defined in this document have the meaning given to them in Plan
or Grant Notice.
2. | VESTING OF RESTRICTED STOCK |
The Restricted Shares are subject to forfeiture and may not be sold, assigned, transferred,
pledged or otherwise directly or indirectly encumbered or disposed of (collectively,
Transferred) until the expiration of a Period of Restriction specified in the Grant
Notice. Except as otherwise provided herein, the Period of Restriction shall expire on each
of the dates set forth in the Grant Notice as long as the Grantee remains an employee of
the Company or other service provider to the Company on the applicable vesting date.
Notwithstanding anything contained in these Standard Terms and Conditions to the contrary:
A. | If the Grantees employment terminates by reason of death or Disability
during the Period of Restriction, a pro rata portion of the Restricted Shares subject
to the next vesting date shall become nonforfeitable, and unless otherwise determined
by the Committee, the remaining Restricted Shares shall be forfeited as of the date of
such termination. For this purpose, pro-rata portion means a percentage, where the
numerator is the number of days between (a) the later of the grant date or last
vesting date and (b) the Grantees termination, and the denominator is the number of
days between (y) the later of the grant date or the last vesting date and (z) the
final vesting date. |
B. | Subject to Section 8, if the Grantees employment terminates due to the
Grantees Retirement (as defined in Section 16.F below), the Restricted Shares shall
continue to vest and become nonforfeitable under the schedule described in the Grant
Notice; provided, however, that if the Grantees Retirement is less than twelve (12)
months after the Grant Date, only the following portion of the Restricted Shares shall
continue to vest under the schedule described in the Grant Notice: (x) the number of
Restricted Shares granted hereunder, (y) multiplied by a fraction, (I) the numerator
of which is the number of full days from the Grant Date through the date of
Retirement, and (II) the denominator of which is 365. The remaining Restricted Shares
shall be forfeited as of the date of such Retirement. |
C. | If the Grantees employment terminates for any reason other than death,
Disability or Retirement, any Restricted Shares held by the Grantee for which the
Period of Restriction has not then expired shall be forfeited as of the date of such
termination. |
3. | RIGHTS AS STOCKHOLDER/LEGEND |
The Grantee shall have the right to vote the Restricted Shares, but shall otherwise enjoy
none of the rights of a stockholder (including the right to receive dividends or equivalent
payments) during the Period of Restriction.
The Restricted Shares shall be registered in the Grantees name on the Grant Date through a
book entry credit in the records of the Companys transfer agent, but shall be recorded as
restricted non-dividend paying shares of Common Shares until the expiration of the Period
of Restriction. Upon the expiration of the Period of Restriction with respect to any
Restricted Shares, the Company shall instruct its transfer agent to record such shares as
unrestricted. In the event any stock certificates are issued in respect of the Restricted
Shares during the Period of Restriction, such certificates shall bear a restrictive legend
determined by the Committee until the expiration of the Period of Restriction with respect
to such shares.
4. | CHANGE IN CONTROL |
Unless otherwise provided in an employment, severance or other agreement between the
Company and the Grantee, the Committee shall determine the effect of a Change in Control on
the Restricted Shares. Without limitation, the Committee may provide for the acceleration
of vesting of, or the lapse of transfer or other similar restrictions on, any unvested
Restricted Shares or for the assumption or substitution of Restricted Shares by the
Grantees employer (or the parent or an Affiliate of such employer) or other service
recipient that engages the Grantee immediately following the Change in Control.
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5. | RESTRICTIONS ON RESALES OF SHARES |
The Company may impose such restrictions, conditions or limitations as it determines
appropriate as to the timing and manner of any resales by the Grantee or other subsequent
transfers by the Grantee of any Restricted Shares, including without limitation (a)
restrictions under an insider trading policy, (b) restrictions designed to delay and/or
coordinate the timing and manner of sales by the Grantee and other holders and (c)
restrictions as to the use of a specified brokerage firm for such resales or other
transfers.
6. | INCOME TAXES |
The Company shall not instruct the transfer agent to remove the restrictions applicable to
any Restricted Shares at the expiration of the Period of Restriction unless and until the
Grantee has made arrangements satisfactory to the Committee to satisfy applicable
withholding tax obligations. Unless otherwise permitted by the Committee, withholding
shall be effected by withholding Common Shares that vest on the applicable vesting date.
The Grantee acknowledges that the Company shall have the right to deduct any taxes required
to be withheld by law in connection with the vesting of the Restricted Shares from any
amounts payable by it to the Grantee (including, without limitation, future cash wages).
7. | NON-TRANSFERABILITY OF AWARD |
The Grantee represents and warrants that the Restricted Shares are being acquired by the
Grantee solely for the Grantees own account for investment and not with a view to or for
sale in connection with any distribution thereof. The Grantee further understands,
acknowledges and agrees that, except as otherwise provided in the Plan, prior to their
vesting, the Restricted Shares may not be sold, assigned, transferred, pledged or otherwise
directly or indirectly encumbered or disposed of except to the extent expressly permitted
hereby and at all times in compliance with the U.S. Securities Act of 1933, as amended, and
the rules and regulations of the Securities Exchange Commission thereunder, and in
compliance with applicable state securities or blue sky laws and non-U.S. securities
laws. Unless permitted by the Committee, prior to their vesting, the Restricted Shares may
not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated by the
Grantee other than by will or the laws of descent and distribution.
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8. | RESTRICTED ACTIVITIES |
A. | By accepting the Restricted Shares, the Grantee acknowledges and agrees that
(i) the Company is engaged in a highly competitive business; (ii) the Company has
expended considerable time and resources to develop goodwill with its customers,
vendors, and others, and to create, protect, and exploit its Confidential Information
(as defined in Section 16.B below); (iii) the Company must continue to prevent the
dilution of its goodwill and unauthorized use or disclosure of its Confidential
Information to avoid irreparable harm to its legitimate business interests; (iv)
the Grantees participation in or direction of the Companys day-to-day operations
and strategic planning are an integral part of the Companys continued success and
goodwill; (v) in the period between the Grantees notice to the Committee of the
Grantees Retirement and the date of the Grantees Retirement (the Transition
Period), the Grantee will participate in identifying a successor, transitioning
his or her responsibilities to and training a successor, and engaging in other
transition activities (the Transition Process); (vi) given the Grantees position
and responsibilities, including during the Transition Period, he or she necessarily
will be relying on and/or creating Confidential Information that belongs to the
Company and enhances the Companys goodwill; during the Transition Process will be
transmitting Confidential Information to his or her successor; and in carrying out
his or her responsibilities, including during the Transition Process, the Grantee
in turn will be relying on the Companys goodwill and the disclosure by the Company
to him or her of Confidential Information; (vii) the Grantee will have access to
Confidential Information, including concerning the Transition Process, that could
be used by any competitor of the Company in a manner that would irreparably harm
the Companys competitive position in the marketplace and dilute its goodwill;
(viii) the Grantees engaging in any of the Restricted Activities during the
Restriction Period would result in the inevitable disclosure or use of Confidential
Information for the Competitors benefit or to the detriment of the Company; (ix)
the Grantee will return to the Company upon Retirement all the Confidential
Information, in whatever form or media and all copies thereof, in his or her
possession, custody, or control; (x) by giving advance notice of his or her
Retirement, the Grantee represents that he or she will not engage in the Restricted
Activities; (xi) the Company is relying on such representation in providing the
Grantee continuing access to Confidential Information and authorizing him or her to
engage in the Transition Process and other activities that will create new and
additional Confidential Information during the Transition Period; and (xi) absent
the Grantees agreement to this Section 8, the Company would not authorize the
Grantee to participate in the Transition Process and engage in other activities
that provide access to or create new and additional Confidential Information in an
unfettered fashion; and would not provide for the continued vesting of the
Restricted Shares upon Retirement as provided for in Section 2. |
B. | The Company, by granting the Restricted Shares, and the Grantee, by accepting
the Restricted Shares, thus acknowledge and agree that during the remaining term of
the Grantees employment with the Company, including the Transition Period, the
Grantee (i) will receive Confidential Information that is unique, proprietary, and
valuable to the Company; (ii) will rely on and/or create Confidential Information that
is unique, proprietary, and valuable to the Company; and (iii) will benefit, including
without limitation by way of increased earnings and earning capacity,
from the goodwill the Company has generated and from the Confidential Information. |
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C. | Accordingly, in consideration of the promises of the Company set out in
Section 8.B, the Restricted Shares, and the extended vesting of the Restricted Shares
upon Retirement as provided for in Section 2, the Grantee agrees that: |
1. | He or she will not engage in any of the Restricted Activities
(as defined in Section 16.D below) during the Restriction Period (as defined
in Section 16.E below); |
2. | If he or she engages in, or threatens to engage in, any of
the Restricted Activities during the Restriction Period or otherwise violates
his or her obligations under this Section 8, then (x) the Restricted Shares
held by the Grantee shall immediately be forfeited and canceled (regardless of
whether then vested or unvested) and (y) with respect to any Restricted Shares
that have been Transferred, the Grantee shall, at the Companys option,
immediately pay to the Company the fair market value of the Restricted Shares
at the time of vesting; |
3. | If he or she engages in, or threatens to engage in, any of
the Restricted Activities during the Restriction Period or otherwise violates
his or her obligations under this Section 8, the Company would not have an
adequate remedy at law and would be irreparably harmed and, accordingly, that
the Company shall be entitled to equitable relief, including preliminary and
permanent injunctions and specific performance, in the event the Grantee
engages or threatens to engage in any of the Restricted Activities during the
Restriction Period or otherwise violates his or her obligations under this
Section 8, without the necessity of posting any bond or proving special
damages or irreparable injury; and |
4. | Neither Section 8.C.2 nor Section 8.C.3 constitute the
Companys exclusive remedy for a breach or threatened breach of the Grantees
obligations under this Section 8, but shall be in addition to all other
remedies available to the Company at law or equity. |
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D. | By accepting the Restricted Shares, the Grantee acknowledges and agrees that
(i) the restrictions contained in this Section 8 are ancillary to an otherwise
enforceable agreement, including without limitation the mutual promises and
undertakings set out in Section 8.A and B, the Restricted Shares, and the continued
vesting of all or a portion of the Restricted Shares upon Retirement as provided for
in Section 2; (ii) the Companys promises and undertakings set out in these Standard
Terms and Conditions, and in particular Section 8.B, the Grant Notice, and the Plan,
and the Grantees position and responsibilities with the Company and his or her
promises and undertakings set out in Section 8.A, give rise to the Companys
interest in restricting the Grantees post-Retirement activities; (iii) such
restrictions are designed to enforce the Grantees promises and undertakings set
out in Section 8.A and his or her common-law obligations and duties owed to the
Company; (iv) the restrictions are reasonable and necessary, are valid and
enforceable, and do not impose a greater restraint than necessary to protect the
Companys goodwill, Confidential Information, and other legitimate business
interests; (v) he or she will immediately notify the Company in writing should he
or she believe or be advised that the provisions of this Section 8 are not, or
likely are not, valid and enforceable; (vi) he or she will not challenge the
enforceability of this Section 8; (vii) absent the Grantees agreement to this
Section 8, the Company would not authorize the Grantee to participate in the
Transition Process and engage in other activities that provide access to or create
new and additional Confidential Information in an unfettered fashion; and would not
provide for the continued vesting of all or a portion of the Restricted Shares upon
Retirement as provided for in Section 2. |
E. | The provisions of Section 2 providing for the continued vesting of all or a
portion of the Restricted Shares upon Retirement and this Section 8 are mutually
dependent and not severable, and the Grantee acknowledges and agrees that the Company
would not provide for the continued vesting of all or a portion of the Restricted
Shares upon Retirement as provided for in Section 2 but for the Grantees promises set
out in and the enforceability of this Section 8. Accordingly, if Section 8 or any
part of it is ever declared to be illegal, invalid, or otherwise unenforceable in any
respect by a court of competent jurisdiction, then the Grantee agrees that (x) the
Restricted Shares held by the Grantee shall immediately be forfeited and canceled
(regardless of whether then vested or unvested) and (y) with respect to any Restricted
Shares that have been Transferred, the Grantee shall, at the Companys option,
immediately pay to the Company the fair market value of the Restricted Shares at the
time of vesting; provided that if the scope of the restrictions in this Section 8 as
to time, geography, or scope of activities are deemed by court of competent
jurisdiction to exceed the limitations permitted by applicable law, the Grantee and
the Company agree that the restrictions so deemed shall be, and are, automatically
reformed to the maximum limitation permitted by such law. |
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9. | THE PLAN AND OTHER AGREEMENTS |
In addition to these Terms and Conditions, the Award shall be subject to the terms of the
Plan, which are incorporated into these Standard Terms and Conditions by this reference.
Certain capitalized terms not otherwise defined herein are defined in the Plan. In the
event of a conflict between the terms and conditions of these Standard Terms and Condition
and the Plan, the Plan controls.
Subject to the next paragraph, the Grant Notice, these Standard Terms and Conditions and
the Plan constitute the entire understanding between the Grantee and the Company regarding
the Award, and any prior agreements, commitments or negotiations concerning the Award are
superseded.
The Award (including the terms described herein) are subject to the provisions of the Plan
and, if the Grantee is outside the U.S., there may be an addendum containing special terms
and conditions applicable to grants in the Grantees country. The grant of the Restricted
Shares to any such Grantee is contingent upon the Grantee executing and returning any such
addendum in the manner directed by the Company.
10. | NOT A CONTRACT FOR EMPLOYMENT. |
Nothing in the Plan, in the Grant Notice, these Standard Terms and Conditions or any other
instrument executed pursuant to the Plan shall confer upon the Grantee any right to
continue in the Companys employ or service nor limit in any way the Companys right to
terminate the Grantees employment or other service at any time for any reason.
11. | SEVERABILITY. |
Except as provided for in Section 8.E, in the event that any provision of these Standard
Terms and Conditions is declared to be illegal, invalid or otherwise unenforceable by a
court of competent jurisdiction, such provision shall be reformed, if possible, to the
extent necessary to render it legal, valid and enforceable, or otherwise deleted, and the
remainder of these Standard Terms and Conditions shall not be affected except to the extent
necessary to reform or delete such illegal, invalid or unenforceable provision.
12. | HEADINGS. |
The headings preceding the text of the sections hereof are inserted solely for convenience
of reference, and shall not constitute a part of these Standard Terms and Conditions, nor
shall they affect its meaning, construction or effect.
13. | FURTHER ASSURANCES. |
Each party shall cooperate and take such action as may be reasonably requested by another
party in order to carry out the provisions and purposes of these Standard Terms and
Conditions.
14. | BINDING EFFECT. |
These Standard Terms and Conditions shall inure to the benefit of and be binding upon the
parties hereto and their respective permitted heirs, beneficiaries, successors and assigns.
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15. | ELECTRONIC DELIVERY |
By executing the Grant Notice, the Grantee hereby consents to the delivery of information
(including, without limitation, information required to be delivered to the Grantee
pursuant to applicable securities laws) regarding the Company and the Affiliates the Plan,
and the Restricted Shares via Company web site or other electronic delivery.
16. | DEFINITIONS |
For purposes hereof, the following terms shall have the following meanings:
A. | Competitor shall mean any person or entity that carries on business
activities in competition with the activities of the Company, including but not
limited to (i) suppliers of rotating equipment, services and solutions for
applications in the oil, gas, petrochemical and process industries including for oil
and gas production; high-pressure gas injection, gas lift and other applications for
enhanced oil recovery; natural gas production and processing; gas liquefaction; gas
gathering, transmission and storage; hydrogen, wet and coker gas, synthesis gas,
carbon dioxide and other applications for the refining, fertilizer and petrochemical
markets; (ii) several applications for the armed forces; (iii) applications for
general industrial markets such as paper, steel, sugar, and distributed and
independent power generation; (iv) competing environmental solutions such as
compressed air energy storage, combined heat and power, air separations, bio fuels,
and wave or wind energy; or (v) servicing the Companys installed base of equipment,
and the installed base of the Companys class of equipment of other suppliers through
the provision of parts, repairs, overhauls, operation and maintenance, upgrades,
revamps, applied technology solutions, coatings, field services, technical support and
other extended services. The term Competitor specifically includes but is not
limited to the centrifugal turbo and reciprocating compressor, steam turbine, rotating
machinery, related aftermarket parts and services (including repairs, revamps,
re-rates, upgrades, applied technology, overhauls, remanufacturing, installation and
start-up) and other competing businesses of (x) GE Oil & Gas/Nuovo Pignone, Siemens
(including TurboCare), Solar Turbines, Inc., Rolls-Royce Group plc, Elliott Company,
General Electric, Alstom, Mitsubishi Heavy Industries, Hitachi, MAN Turbo, Hickham
USA, Sulzer Turbo Services, Wood Group, Burckhardt Compression, Neuman & Esser Group,
Ariel Corp., Thomassen Mitsui & Co., Ltd., Ebara, Shin Nippon Machinery Co. Ltd.,
Caterpillar Inc., Solar, Hoerbiger, or, if those corporate names are not formally
correct, the businesses commonly referred to by those names; and (y) the successors
to, assigns of, and affiliates of the persons or entities described in clause (x). |
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B. | Confidential Information shall mean, without limitation, all documents or
information, in whatever form or medium, or consisting of knowledge or know-how
whether or not recorded in any medium, concerning or evidencing sales; costs; pricing;
strategies; forecasts and long range plans; financial and tax information; personnel
information (including without limitation compensation, other terms of employment, or
performance other than as concerns solely the Grantee); business, marketing and
operational projections, plans, and opportunities; and customer, vendor, and supplier
information; but excluding any such information that is or becomes generally available
to the public other than as a result of any unauthorized disclosure or breach of duty
by the Grantee. |
C. | Noncompetition Area shall mean the following geographic areas to the extent
the Grantees duties and responsibilities for the Company take or took place anywhere
in or are or were directed at any part of: (i) any foreign country in which the
Company has provided, sold, or installed its services, products, or systems or has
definitive plans to provide, sell, or install its services, products, or systems
during the Grantees employment by the Company; and (ii) any state or territory of the
United States of America. |
D. | Restricted Activities means: |
1. | The Grantee, whether on his or her own behalf or on behalf of
any other individual, partnership, firm, corporation, or business
organization, either directly or indirectly soliciting, inducing, persuading,
or enticing, or assisting another to solicit, induce, persuade, or entice, any
person who is then employed by or otherwise engaged to perform services for
the Company, or any person who at the time of the Grantees conduct had been
employed by the Company within the previous 12 months, to leave that
employment or cease performing those services; |
2. | The Grantee, whether on his or her own behalf or on behalf of
any other individual, partnership, firm, corporation, or business
organization, either directly or indirectly soliciting, inducing, persuading,
or enticing, or assisting another to solicit, induce, persuade, or entice, any
person or entity who is then a customer, supplier, or vendor of the Company to
cease being a customer, supplier, or vendor of the Company or to divert all or
any part of such persons or entitys business from the Company; and |
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3. | The Grantee, whether on his or her own behalf or on behalf of
any other individual, partnership, firm, corporation, or business
organization, either directly or indirectly soliciting, inducing, persuading,
or enticing, or assisting another to solicit, induce, persuade, or entice, any
person or entity who is a potential
customer, supplier, or vendor of the Company, or at the time of the
Grantees conduct was a potential customer, supplier, or vendor of the
Company within the previous 12 months, not to become a customer,
supplier, or vendor of the Company or to divert all or any part of such
persons or entitys business from the Company; and |
4. | The Grantees association directly or indirectly, as an
employee, officer, director, agent, partner, stockholder, owner, member,
representative, financial contributor, or consultant, with any Competitor. |
With respect to the post-Retirement Restriction Period, the Restricted Activities
in D.2 and D.3 extend only to a customer, supplier, or vendor or prospective
customer, supplier, or vendor with respect to whom or whose business the Grantee
has or had Confidential Information (including without limitation knowledge of or
participation in a bid, proposal, or offer); and the Restricted Activities in D.4
extend only to a (x) the performance by the Grantee, directly or indirectly, of the
same or similar activities the Grantee performed for the Company prior to
Retirement or such other activities that by their nature are likely to lead to the
disclosure of Confidential Information; and (y) that take place anywhere in, or are
directed at any part of, the Noncompetition Area. The Restricted Activities do
not extend to the Grantees investment in stock or other securities of a Competitor
listed on a national securities exchange or actively traded in the over-the-counter
market if he or she and the members of his or her immediate family do not, directly
or indirectly, hold more than a total of 5% of all such shares of stock or other
securities issued and outstanding.
E. | Restriction Period shall mean the period of the Grantees employment by the
Company and continuing through the date that is three years after the Grantees
Retirement. |
F. | Retirement shall mean the Grantees voluntary termination of employment or
other service from the Company after the Grantee has attained age sixty and completed
at least ten years of continuous service with the Company as of the date of
termination or has attained age sixty-five and completed at least five years of
continuous service and in either event with the express intent not to engage in any of
the Restricted Activities after termination, provided that the Grantee has provided
the Committee at least one years advance notice of such retirement. |
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