Perrigo Company and David T. Gibbons Restricted Stock Agreement (August 14, 2001)

Summary

Perrigo Company has awarded 25,000 shares of restricted common stock to David T. Gibbons in recognition of his exemplary service. The shares are subject to a two-year vesting period, during which they cannot be sold or transferred and may be forfeited if Mr. Gibbons leaves the company, except in cases of death, disability, involuntary termination without cause, voluntary termination for good reason, or a change in control. Mr. Gibbons has shareholder rights during the restricted period, and the agreement includes provisions for tax withholding and compliance with applicable laws.

EX-10.(J) 3 c64897ex10-j.txt RESTRICTED STOCK AGREEMENT 1 EXHIBIT 10(j) RESTRICTED STOCK AGREEMENT THIS AGREEMENT entered into as of this 14th day of August, 2001 (the "Award Date") by and between PERRIGO COMPANY, a Michigan corporation (the "Company"), and DAVID T. GIBBONS (the "Executive"). WITNESSETH THAT: WHEREAS, the Executive has performed exemplary services for the Company during the current fiscal year resulting in a significant contribution to shareholder value; and WHEREAS, based upon the recommendation of the Compensation Committee, the Board of Directors of the Company has agreed to award the Executive shares of common stock of the Company, $.10 par value ("Common Stock"), subject to the restrictions and provisions of this Agreement as a reward to Executive for his services during fiscal 2001. NOW, THEREFORE, the parties hereto agree as follows: 1. Grant. Subject to the terms of this Agreement, the Executive is hereby awarded 25,000 shares of Common Stock ("Restricted Stock"). 2. Vesting. Except as provided in Section 3 below, the Restricted Stock awarded hereunder shall be permanently forfeited if the Executive's date of termination of employment occurs prior to the second anniversary date of this Agreement (the "Restricted Period"). 3. Accelerated Vesting. Notwithstanding Section 2 above, if the Executive's Date of Termination occurs because of death, Disability, involuntary termination by the Company without Cause or voluntary termination by the Executive for Good Reason, or in the event of a Change in Control of the Company (as this is defined in the Perrigo Company Incentive Stock Option Plan in effect on the date to this Agreement), the Restricted Period and the restrictions imposed hereunder shall end with respect to all of the shares of Restricted Stock awarded hereunder. 4. Terms and Conditions of Restricted Stock. The Restricted Stock granted under this Agreement shall be subject to the following additional terms and conditions: (i) Shares of Restricted Stock may not be sold, assigned, pledged or otherwise encumbered prior to the end of the Restricted Period. 2 (ii) Except as otherwise provided in this Agreement, the Executive shall have all of the rights of a stockholder, including, but not limited to, the right to vote such shares and the right to receive dividends paid on such shares. (iii) Each certificate issued with respect to the Restricted Stock granted under Section 1 shall be registered in the name of the Executive and shall bear the following legend: "The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions, including forfeiture, of an agreement entered into between the registered owner and Perrigo Company. A copy of such agreement is on file in the office of the Secretary of Perrigo Company, 515 Eastern Avenue, Allegan, Michigan 49010." (iv) The Company may require a written statement that the Executive is acquiring the shares of Restricted Stock for investment and not for the purpose or with the intention of distributing the shares, except for a sale to a purchaser who makes the same representation in writing, and that the holder of the shares of Restricted Stock, either before or after the end of the Restricted Period, will not dispose of them in violation of the registration requirements of the Securities Act of 1933 or any other applicable law. 5. Adjustment to Shares. In the event of any stock dividend, stock split, recapitalization or other change affecting the Common Stock as a class without receipt of consideration, then any new, substituted or additional securities or other property (including money paid other than as a regular cash dividend), which is by reason of any such transaction distributed to the Executive with respect to the shares of Restricted Stock, shall be immediately subject to a similar Restricted Period. Appropriate adjustments to reflect the distribution of such securities or property shall also be made to the number of shares of Restricted Stock. 6. Withholding. This award is subject to the withholding of all applicable taxes. The Company may withhold, or permit the Executive to remit to the Company, any Federal, state or local taxes applicable to the grant, vesting or other event giving rise to tax liability with respect to this award. The Executive may elect to surrender previously acquired Common Stock or to have the Company withhold Common Stock relating to this award in an amount sufficient to satisfy all or a portion of such tax liability. 7. Compliance with Applicable Law. Notwithstanding any other provision of this Agreement, the Company shall have no obligation to issue any shares of Restricted Stock or Common Stock under this Agreement if such issuance would -2- 3 violate any applicable law or any applicable regulation or requirement of any securities exchange or similar entity. 8. Successors and Assigns. This Agreement shall be binding upon any or all successors and assigns of the Company. 9. Definitions. The following terms shall have the meaning ascribed to such terms below: (i) Cause. A termination for "Cause" means in the reasonable judgment of the Board of Directors of the Company (i) gross negligence or willful and continued failure by the Executive to substantially perform his duties as an employee of the Company (other than any such failure resulting from incapacity due to physical or mental illness), (ii) willful misconduct by the Executive which is demonstrably and materially injurious to the company, monetarily or otherwise, (iii) the engaging by the Executive in egregious misconduct involving serious moral turpitude to the extent that his credibility and reputation no longer conforms to the standard of senior executives of the company, or (iv) the commission by the Executive of a material act of dishonesty or breach of trust resulting or intending to result in personal benefit or enrichment to the Executive at the expense of the Company. For purposes of this provision, no act or failure to act shall be deemed "willful" unless done or omitted to be done not in good faith and without reasonable belief that such action or omission was in the best interest of the Company. (ii) Disability means that (i) the Executive is eligible for disability benefits under the Company's long-term disability plan, or (ii) he has a physical or mental disability which renders him incapable, after reasonable accommodation, of performing substantially all of his duties hereunder for a period of 180 days (which need not be consecutive) in any 12-month period. In the event of a dispute as to whether the Executive is Disabled, the Company may, at its expense, refer him to a licensed practicing physician of the Company's choice and the Executive agrees to submit to such tests and examination as such physician shall deem appropriate. The determination of such physician shall be final and binding on the Company and Executive. (iii) Good Reason. A termination for "Good Reason" means, without the Executive's consent, (i) assigning duties to the Executive that are inconsistent in any substantial respect with the position, authority, or responsibilities associated with the office of President and Chief Executive Officer, (ii) the failure by the Company to pay the Executive any portion of his current compensation within ten (10) business days of the date such compensation is due, (iii) the failure by the Company to continue any -3- 4 incentive compensation plan in which the Executive participates which is material to his compensation, unless an equitable substitute plan or alternative plan is made available to the Executive, and (iv) the failure by the Company to obtain a satisfactory agreement from any successor to the business of the Company to assume and agree to perform this Agreement. In the case of clause (iv) next above, notice of termination for Good Reason shall be given, if at all, within 30 days following the occurrence of the event giving rise to the right to terminate for Good Reason. 10. Applicable Law. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the state of Michigan without regard to principals of conflict of laws. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed effective as of the day and year first above written. PERRIGO COMPANY By -------------------------------- Michael J. Jandernoa Its: Chairman of the Board ATTEST: - ------------------------------- John R. Nichols, Secretary EXECUTIVE ----------------------------------- David T. Gibbons -4-