Workhorse Group Inc. 2019 Incentive Stock Plan RESTRICTED STOCK AWARD AGREEMENT
Workhorse Group Inc. 2019 Incentive Stock Plan
1.Grant of Time-Based Restricted Stock Award. In accordance with and subject to the terms and conditions of (a) the Workhorse Group Inc. 2019 Incentive Stock Plan, as it may be amended from time to time (the “Plan”) and (b) this Restricted Stock Award Agreement (the “Agreement”), Workhorse Group Inc. (the “Company”) grants to the Participant identified on Schedule 1 attached hereto (the “Grantee”) the number of shares (“Shares”) of common stock of the Company (“Stock”) set forth on Schedule 1, which Shares shall be subject to the terms, conditions, restrictions and limitations set forth in this Agreement (“Restricted Stock”). The Restricted Stock awarded under this Agreement shall be deemed to have been granted on the date set forth on Schedule 1 (the “Grant Date”). The grant of this Restricted Stock award is made in satisfaction of the portion of the Company’s obligation under Section _____ of the Employment Agreement by and between the Grantee and the Company dated as of July 25, 2021 (the “Employment Agreement”) to grant restricted stock subject to time-based vesting. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in the Plan.
2.Acceptance by Xxxxxxx. This award of the Restricted Stock is conditioned upon acceptance by the Grantee of the terms, conditions, restrictions and limitations of this Agreement, including the condition that the Grantee enter into that certain Employee Non-Compete Agreement (the “Non-Compete Agreement”) described in Section 9 hereof, as evidenced by the Grantee’s execution of Schedule 1 to this Agreement and the Non-Compete Agreement, and the delivery of an executed copy of such instruments to the Company. The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understands the provisions hereof, and accepts the Restricted Stock subject to all of the terms, conditions, restrictions and limitations of the Plan and this Agreement.
3.Issuance of Shares: Terms, Conditions, Restrictions and Limitations. Upon acceptance of this Agreement, the Company shall issue a stock certificate registered in the name of the Grantee representing the Restricted Stock granted pursuant to this Agreement or enter such Shares on the Company’s book entry system as described in Section 3(f) hereof. Except as hereinafter set forth, the stock certificate shall not be delivered to the Grantee but shall be held by the Company as escrow agent in accordance with Section 8 hereof at the principal office of the Company. Subject to the Plan and this Agreement, the Grantee shall enjoy all rights of ownership of the Restricted Stock, including the right to vote and receive dividends or other distributions with respect to the Shares as hereinafter set forth, during the period any such Restricted Stock is subject to forfeiture in accordance with this Agreement (the “Restricted Period”) with the exception that:
(a) Except as otherwise provided herein, the Grantee shall not be entitled to delivery of the stock certificates for the Restricted Stock until the Restricted Period applicable to such Shares shall have expired. In addition, and except as otherwise provided in this Agreement, no stock certificates will be delivered to the Grantee unless Grantee, on the lapse of the
applicable Restricted Period, remains in continuous employment with the Company as an employee of the Company (“Continuous Service”) and has remained in Continuous Service with the Company since the Grant Date.
(b) The Company will issue the Restricted Stock subject to a restrictive legend substantially in the form attached hereto as Exhibit A and, as escrow agent, will provide for retention of custody of the Restricted Stock during the Restricted Period, as set forth in this Agreement.
(c) During the applicable Restricted Period, the Grantee shall not transfer, deliver, assign, sell, or dispose of the Restricted Stock in any manner other than by will or by the laws of descent and distribution, nor pledge or otherwise hypothecate the Restricted Stock.
(d) A breach of the terms, conditions, restrictions or limitations contained herein shall cause the Restricted Stock to be forfeited to the Company.
(e) Any cash or stock dividends declared on the Restricted Stock will be paid directly to the Grantee on the dividend payment date (or shortly thereafter to process any required withholding of taxes).
(f) In lieu of the issuance of a share certificate evidencing Shares, the Company may use a “book entry” system in which a computerized or manual entry is made in the records of the Company to evidence the issuance of such Shares. Such Company records are, absent manifest error, binding on all parties.
4.Delivery of Share Certificates. If Grantee remains in Continuous Service with the Company from the Grant Date to one or more of the vesting dates described in Schedule 1 and has met all the other terms, conditions, restrictions and limitations contained herein and in the Plan, the Company shall deliver to the Grantee pursuant to Section 8 of this Agreement, certificates for the vested Shares without the legend referenced in Section 3(b) hereof or enter such vested Shares on the Company’s book entry system as described in Section 3(f) hereof.
5.Forfeiture of Restricted Stock. Subject to the provisions of Section 6(e) of the Plan (relating to discretionary actions that may, but are not required, be taken by the Board of Directors of the Company (the "Board," which term shall include the Compensation Committee of the Board of Directors or such other authorized committee of the Board of Directors) with respect to the Restricted Stock upon the occurrence of Grantee’s retirement, resignation, death or disability), if Xxxxxxx’s Continuous Service with the Company terminates at any time for any reason during an applicable Restricted Period, the portion of the Restricted Stock not vested in accordance with Section 4 of this Agreement shall be forfeited on the date of such termination and the Company shall not have any further obligations to the Grantee under this Agreement. Upon such forfeiture, the Company shall become the legal and beneficial owner of the unvested portion of the Restricted Stock and all rights and interests therein and related thereto, without the payment of any consideration by the Company to the Grantee.
6.Payment of Taxes. The Grantee understands that he will have to pay income and employment taxes on the fair market value of the Restricted Stock when the restrictions lapse unless he elects, no later than thirty (30) days after the Grant Date, under Section 83(b) of the
Internal Revenue Code of 1986, as amended, and the corresponding regulations promulgated thereunder (the “Code”), to pay income and employment tax in the year the grant is made on the fair market value of the Restricted Stock on the Grant Date. In either case, the Company’s obligation to deliver the unrestricted Shares as a result of the vesting of the Restricted Stock shall be subject to the Grantee’s satisfaction of all applicable federal, state, and local income and employment tax withholding obligations. If tax withholding attributable to the Restricted Stock is required by the Company, then, at the Board’s discretion, the Company may satisfy such tax obligations by reducing the number of Shares otherwise deliverable or by accepting the delivery to the Company of Shares previously owned and unencumbered by the Grantee. The Company shall also have the right to withhold from any salary, bonus or other payments due Grantee the amount necessary to satisfy any tax withholding obligations related to the Restricted Stock. The Grantee acknowledges that if the Grantee makes the Section 83(b) election and later forfeits all or a portion of the Restricted Stock, certain adverse tax consequences may result in that the Grantee may not be able to fully utilize the capital losses realized as a result of such forfeiture. The Grantee understands that Grantee should seek tax advice before deciding whether or not to make the Section 83(b) election.
7.Nonassignability. Except as otherwise provided herein and in the Plan, the right of the Grantee to the Restricted Stock shall not be assignable or transferable by the Grantee other than to a designated beneficiary upon the Grantee’s death pursuant to his will or by the laws of descent and distribution. Any such assignment or transfer shall be null and void and without effect upon any attempted assignment or transfer, except as provided herein or in the Plan, including, without limitation, any purported assignment, whether voluntary or by operation of law, pledge, hypothecation, or other disposition contrary to the provisions hereof, or levy of execution, attachment, trustee process, or similar process, whether legal or equitable, upon the Restricted Stock.
8.Escrow. Stock certificates issued or Shares entered on the Company’s book entry system pursuant to Section 3 of this Agreement shall be held in escrow, together with stock powers duly executed in blank by Grantee in the form of that which is attached hereto as Exhibit B, with the chief financial officer of the Company to be held in accordance with the provisions hereof. Shares of Restricted Stock shall be: (a) released to the Company upon forfeiture as described in Section 5 of this Agreement, or (b) released and delivered to Grantee to the extent such Shares of Restricted Stock become vested pursuant to Section 4 of this Agreement.
9.Conditions of Granting Award.
(a) Execution of the Non-Compete Agreement. Xxxxxxx understands and agrees that, as a condition to the Company granting the Restricted Stock under this Agreement, he must execute and deliver the Non-Compete Agreement. Grantee further understands that the Non-Compete Agreement shall become effective upon Xxxxxxx’s execution and delivery thereof and that it shall remain in effect for the period described therein, which period would include a period following Xxxxxxx’s termination of employment with the Company irrespective of the whether or not Grantee becomes vested in the Restricted Stock in accordance with this Agreement.
10.Compliance with Law. The issuance and delivery of Shares shall be subject to compliance by the Company and the Grantee with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s Shares may be listed. No Shares shall be issued pursuant to this Agreement unless and until any then applicable requirements of state or federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Grantee understands that the Company is under no obligation to register the Shares with the Securities and Exchange Commission, any state securities commission, or any stock exchange to effect such compliance.
11.Adjustments. The Shares of Restricted Stock may be adjusted or terminated in any manner as contemplated by Section 8 of the Plan.
12.No Right to Continued Employment. Nothing contained in the Plan or in this Agreement, nor any action taken by the Board, shall confer upon Grantee any right with respect to continuation of employment by the Company as an employee or service as an officer or director nor interfere in any way with the right of the Company to terminate Grantee’s employment or other service as an employee, officer or director at any time with or without Cause, including during the Restricted Period.
13.Governing Law; Venue; Dispute. This Agreement has been granted, executed and delivered in the State of Ohio, and the interpretation and enforcement shall be governed by the laws thereof without regard to conflict of laws principles, and subject to the exclusive jurisdiction of the courts therein. Any dispute regarding the interpretation of this Agreement shall be submitted by Grantee or the Company to the Board for review. The resolution of such dispute by the Board shall be final, binding and conclusive on the Grantee and the Company.
14.Notices. Any notice required to be given pursuant to this Agreement or the Plan shall be in writing and shall be deemed to be delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Grantee at the address last provided by Grantee for Xxxxxxx’s service provider records. Any notice to the Company shall be addressed to the chief financial officer or to the chief executive officer of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.
15.Agreement Subject to Plan. This Agreement is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of the Plan is available to Grantee, at no charge, at the principal office of the Company. The provisions of the Plan, as they may be amended from time to time, are hereby incorporated herein by reference. In the event of a conflict between any provision contained herein and a provision of the Plan, the applicable provisions of the Plan will govern and prevail.
16.Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on assignment and transfer set forth herein, this Agreement will be binding upon the Grantee and the Grantee’s beneficiaries, executors,
administrators and the person(s) to whom the Restricted Stock may be transferred by will or the laws of descent or distribution.
17.Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.
18. Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Board at any time, in its discretion. The grant of the Restricted Stock pursuant to this Agreement does not create any contractual right or other right to receive any Restricted Stock or other Grants in the future. Future Grants, if any, will be at the sole discretion of the Board. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Grantee’s employment or other service with the Company.
19.Amendment. The Board has the right to amend, alter, suspend, discontinue or cancel the Plan, prospectively or retroactively; provided, that, no such amendment shall alter or impair the Grantee’s material rights and obligations under this Agreement without the Grantee’s written consent.
20.No Effect on Other Benefits. The value of the Grantee’s Restricted Stock is not part of Grantee’s normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit, unless the express provisions of a written service provider benefit provides otherwise.
21.Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.
IN WITNESS WHEREOF, the parties hereto have caused this Restricted Stock Award Agreement to be executed as of the date set forth on Schedule 1 to this Agreement.
[Schedule 1 follows]
Schedule 1
Name of Xxxxxxx: Xxxxxxx Xxxxx
Number of Shares: _________ Shares
Date of Grant: __________, 2021
Vesting Dates: Subject to forfeiture in accordance with Section 5 of the Restricted Stock Award Agreement, the following number of Shares of Restricted Stock shall vest on the following dates:
Number of Shares Vesting Date
Notwithstanding the foregoing vesting schedule:
(a) If the Grantee’s employment is terminated due to an Involuntary Termination (as defined in the Employment Agreement), the unvested Shares of Restricted Stock shall vest but only to the extent the number of unvested Shares would have vested if the Grantee’s employment with the Company had continued and ended on the 12-month anniversary following the date of his Involuntary Termination.
(b) If the Grantee’s employment is terminated due to a Termination Upon Change of Control (as defined in the Employment Agreement), all of the unvested Shares of Restricted Stock shall vested as of the date of such Termination Upon Change of Control (or, if later, the date of the Change of Control).
The undersigned agrees to the terms and conditions of the Plan and Restricted Stock Award Agreement of which this Schedule 1 is a part.
| COMPANY: | WORKHORSE GROUP INC., a Nevada corporation | ||||
| By: | |||||
| Name: | |||||
| Title: | |||||
| Date: | |||||
| GRANTEE: | XXXXXXX XXXXX | ||||
| By: | |||||
| (signature) | |||||
| Date: | |||||
Exhibit A
LEGEND TO BE PLACED ON STOCK CERTIFICATE
The shares represented by this certificate are subject to the terms, conditions, restrictions and limitations of the Workhorse Group Inc. 2019 Incentive Stock Plan (the “Plan”) and a Restricted Stock Award Agreement (the “Agreement”) between the holder hereof and Workhorse Group Inc. dated as of ______________, 2021, and may not be sold or transferred except in accordance therewith. Copies of the Plan and Agreement are kept on file by the chief financial officer of Workhorse Group Inc.
Exhibit B
STOCK POWER
FOR VALUE RECEIVED, the undersigned, Xxxxxxx Xxxxx, hereby sells, assigns, transfers, and conveys unto Workhorse Group Inc., a Nevada corporation (the “Company”), or its successors, ___________ shares of common stock of the Company standing in my name on the books of the Company, which if represented by a share certificate is represented by Certificate No. ___________, and hereby irrevocably constitutes and appoints each officer of the Company as my attorney-in-fact to transfer said stock on the books of the Company with full power of substitution in the premises.
Dated:
Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
WITNESS:
