SOLOMON TECHNOLOGIES, INC. STOCK RESTRICTION AGREEMENT
SOLOMON
TECHNOLOGIES, INC.
This
Stock Restriction Agreement (“Agreement”)
is
made and entered into as of February 5, 2007 (“Employment
Date”),
by
and between Solomon Technologies, Inc., a Delaware corporation (the
“Company”),
and
the undersigned individual, who is or is to become an employee, consultant,
officer and/or director of the Company (the “Employee”).
In
consideration of the mutual promises and covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the parties hereto agree as follows:
1.
Issuance
of Shares.
Upon
the execution of this Agreement, the Company shall issue to Employee, subject
to
the terms and conditions set forth in this Agreement and of the Company’s
Amended and Restated 2003 Stock Option Plan, one hundred ten thousand shares
(the “Shares”)
of
common stock, $0.001 par value per share, of the Company (“Common
Stock”).
The
Shares shall be subject to the Purchase Option set forth in Section 3 hereof
and
the restrictions on transfer set forth in Section 5 hereof.
2.
Vesting
of Shares.
Except
as provided herein, the Shares shall become vested as follows: 50% on the first
anniversary of the Employment Date, 30% on the second anniversary of Employment
Date, and 20% on the third anniversary of Employment Date. Notwithstanding
the
foregoing, (a) if Employee is terminated by the Company without cause, 50%
of
the Shares (including for this purpose any Shares that have previously vested)
shall vest upon such termination if the termination occurs before Employee’s
family relocates from Xxxxxxx, Xxxxxxx, Xxxxxx to the location of the Company’s
headquarters in the United States as such location shall be determined by the
Company in its discretion (“Relocation”);
(b)
if Employee is terminated by the Company without cause after the Relocation
has
occurred, all Shares shall immediately vest; (c) if the Company undergoes a
change of control, all Shares shall immediately vest; and (d) if after the
first
anniversary of the Employment Date, the Employee dies, all Shares shall
immediately vest. For purposes of this Agreement, “cause”,
“change
of control”
and
“good
reason”
shall
have the same meanings they have in the employment agreement between the Company
and Employee dated January 31, 2007 (the “Employment
Agreement”).
3. Purchase
Option.
In
the
event that Employee is terminated by the Company for any reason or voluntarily
terminates his employment with the Company other than for “good reason”
(hereinafter, “Termination”),
the
Company shall have the right and option (the “Purchase
Option”)
to
purchase from Employee, for $0.001 per share (the “Option
Price”),
all
of the Shares that have not become vested in accordance with Section 2 hereof
(“Unvested
Shares”).
4. Exercise
of Purchase Option and Closing.
(a) The
Company may exercise the Purchase Option by delivering or mailing or written
notice of such exercise to Employee, in accordance with Section 10(e) hereof;
provided,
however,
that
unless the Company provides written notice to Employee of non-exercise of the
Purchase Option within sixty (60) days after the date of Termination, the
Company shall be deemed to have exercised the Purchase Option with respect
to
all of the Unvested Shares on the sixtieth (60th)
day
after the date of Termination (the Unvested Shares with respect to which the
Purchase Option applies, the “Purchased
Shares”).
(b) Within
five (5) days after (i) his receipt of an exercise notice pursuant to Section
3(a), or (ii) the sixtieth (60th)
day
after the date of Termination, whichever
occurs first,
Employee shall tender to the Company at its principal offices the certificate
or
certificates representing the Purchased Shares, duly endorsed in blank by
Employee or with duly endorsed stock powers attached thereto, all in form
suitable for the transfer of the Purchased Shares to the Company. As soon as
practicable after its receipt of such certificate or certificates, the Company
shall deliver or mail to Employee the aggregate Option Price for the Purchased
Shares.
(c) From
and
after the time at which the Purchased Shares are required to be delivered to
the
Company for transfer to the Company pursuant to Section 4(b) hereof, the Company
shall not pay any dividend to Employee on account of such Purchased Shares
or
permit Employee to exercise any of the privileges or rights as a stockholder
with respect to such Shares, but shall, in so far as permitted by law, treat
the
Company as the owner of such Purchased Shares.
(d) The
Option Price for the Purchased Shares may be payable, at the option of the
Company, in cancellation of all or a portion of any outstanding indebtedness
of
Employee to the Company or in cash (by check) or both.
5.
Restrictions
on Transfer.
(a) Employee
shall not sell, assign, transfer, pledge, hypothecate or otherwise dispose
of,
by operation of law or otherwise (collectively “transfer”),
any
Shares, or any interest therein, prior to the date such Shares have become
vested as provided herein, except that Employee may transfer such Shares to
or
for the benefit, of any spouse, child or grandchild, or to a trust for their
benefit or Employee’s benefit, provided,
however,
that
such Shares shall remain subject to this Agreement (including, without
limitation, the restrictions on transfer set forth in this Section 5 and the
Purchase Option set forth in Section 3 hereof) and such permitted transferee
shall, as a condition to such transfer, deliver to the Company a written
instrument pursuant to which such transferee agrees to be bound by all of the
terms and conditions of this Agreement.
(b) Employee
may not use any Unvested Shares to exercise a “reload” option as may be provided
in any agreement pertaining to options issued to Employee by the
Company.
6. Effect
of Prohibited Transfer.
The
Company shall not be required (a) to transfer on its books any of the
Shares that shall have been sold or transferred in violation of any of the
provisions set forth in this Agreement, or (b) to treat as owner of such
Shares or to pay dividends to any transferee to whom any such Shares shall
have
been so sold or transferred.
7. Restrictive
Legend.
All
certificates representing Shares shall have affixed thereto a legend in
substantially the following form, in addition to any other legends that may
be
required under federal or state securities laws:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER PURSUANT TO AN AGREEMENT BETWEEN THE HOLDER AND SOLOMON TECHNOLOGIES,
INC. A COPY OF THE AGREEMENT MAY BE OBTAINED FROM THE SECRETARY OF SOLOMON
TECHNOLOGIES, INC.
2
8. Investment
Representations.
Employee represents, warrants and covenants as follows:
(a) Employee
is acquiring the Shares for his own account for investment only, and not with
a
view to, or for sale in connection with, any distribution of the Shares in
violation of the Securities Act of 1933, as amended (the “Securities
Act”),
or
any rule or regulation under the Securities Act.
(b) Employee
has had such opportunity as he has deemed adequate to obtain from
representatives of the Company such information as is necessary to permit him
to
evaluate the merits and risks of his investment in the Company.
(c) Employee
has sufficient experience in business, financial and investment matters to
be
able to evaluate the risks involved in the purchase of the Shares and to make
an
informed investment decision with respect to such purchase.
(d) Employee
can afford a complete loss of the value of the Shares and is able to bear the
economic risk of holding such Shares for an indefinite period.
(e) Employee
understands that (i) the Shares have not been registered under the
Securities Act and are “restricted securities” within the meaning of
Rule 144 under the Securities Act, (ii) the Shares cannot be sold,
transferred or otherwise disposed of unless they are subsequently registered
under the Securities Act or an exemption from registration is then available;
and (iii) in any event, the exemption from registration under Rule 144
will not be available for at least one year and even then will not be available
unless a public market then exists for the Common Stock, adequate information
concerning the Company is then available to the public, and other terms and
conditions of Rule 144 are complied with.
(f) A
legend
substantially in the following form will be placed on the certificate
representing the Shares:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT
REQUIRED PURSUANT TO A VALID EXEMPTION THEREFROM UNDER THE ACT.
9. Adjustments
for Stock Splits, Stock Dividends, etc.
(a) If
from
time to time during the term of the Purchase Option there is any stock split-up,
stock dividend, stock distribution or other reclassification of the Common
Stock
of the Company, any and all new, substituted or additional securities to which
Employee is entitled by reason of his ownership of the Shares shall be
immediately subject to the Purchase Option, the restrictions on transfer and
other provisions of this Agreement in the same manner and to the same extent
as
the Shares, and the Option Price shall be appropriately adjusted.
3
(b) If
the
Shares are converted into or exchanged for, or stockholders of the Company
receive by reason of any distribution in total or partial liquidation,
securities of another corporation, or other property (including cash), pursuant
to any merger of the Company or acquisition of its assets, then the rights
of
the Company under this Agreement shall inure to the benefit of the Company’s
successor and this Agreement shall apply to the securities or other property
received upon such conversion, exchange or distribution in the same manner
and
to the same extent as the Shares.
10. Miscellaneous.
(a) Severability.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
and each other provision of this Agreement shall be severable and enforceable
to
the extent permitted by law.
(b) Waiver.
Any
provision contained in this Agreement may be waived by the Company, either
generally or in any particular instance, by action of the Board of Directors
of
the Company.
(c) Binding
Effect.
This
Agreement shall be binding and inure to the benefit of the Company and Employee
and their respective heirs, executors, administrators, legal representatives,
successors and assigns, subject to the restrictions on transfer set forth in
Section 5 of this Agreement.
(d) No
Rights To Employment.
Nothing
contained in this Agreement shall be construed as giving Employee any right
to
be retained, in any position, as an employee of the Company.
(e) Notice.
All
notices, requests, consents, and other communications under this Agreement
shall
be in writing and shall be delivered by hand, sent via a reputable nationwide
overnight courier service with tracking capabilities (such as FedEx or UPS)
or
mailed by first class certified or registered mail, return receipt requested,
postage prepaid, to the Company at its principal place of business and to
Employee at the address of record on file with the Company. Notices provided
in
accordance with this Section 10(e) shall be deemed delivered upon personal
delivery, one business day after being sent via a reputable nationwide overnight
courier service, or three business days after deposit in the mail.
(f) Pronouns.
Whenever
the context may require, any pronouns used in this Agreement shall include
the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural, and vice versa.
(g) Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties, and supersedes
all prior agreements and understandings relating to the subject matter of this
Agreement.
(h) Amendment.
This
Agreement may be amended or modified only by a written instrument executed
by
both the Company and Employee.
(i) Governing
Law.
This
Agreement shall be construed, interpreted and enforced in accordance with the
laws of the State of Delaware.
(j) SECTION
83(b)
ELECTION.
EMPLOYEE SHALL HAVE THE OBLIGATION TO DETERMINE WHETHER HE WISHES TO FILE AN
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE AND, IF SO, TO FILE IT AND TAKE SUCH OTHER ACTIONS
AS ARE PRESCRIBED BY THE INTERNAL REVENUE SERVICE FOR SUCH ELECTIONS.
NOTE:
AN ELECTION UNDER SECTION 83(b)
MUST BE FILED WITHIN THIRTY (30) DAYS AFTER THE ACQUISITION OF THE
SHARES.
4
IN
WITNESS WHEREOF, the parties hereto have executed this Stock Restriction
Agreement as of the Employment Date.
| SOLOMON TECHNOLOGIES, INC. | |||
| By: | /s/ Xxxx X. Xxxxxxxxx | ||
| Name: | Xxxx X. Xxxxxxxxx | ||
| Title: | Chairman | ||
| EMPLOYEE | |||
| /s/ Xxxx X. Xxxxxx | |||
| Xxxx X. Xxxxxx | |||
| Address: | 0000 Xxxx Xxxxxx Xxxx. ‘B’ | ||
| Xxxx Xxxxxx, XX 00000 | |||
| Social Security No:_____________________ | |||
5
