METROPOLITAN HEALTH NETWORKS, INC. Restricted Stock Award Agreement for Executive Officers
Grant
No.: ____
DRAFT
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SUBJECT
TO COMPLETION
STANDARD
FORM-
RESTRICTED
STOCK AWARD
FOR
EXECUTIVE OFFICERS
METROPOLITAN
HEALTH NETWORKS, INC.
Restricted
Stock Award Agreement for Executive Officers
_________
Shares of Restricted Stock
THIS
AGREEMENT
(this
“Agreement”) dated as of the ______ day of __________, 2006, between
METROPOLITAN
HEALTH NETWORKS, INC.,
a
Florida corporation (the “Company”) and _________________________________
(“Participant”) is made pursuant and subject to the provisions of the Company’s
Omnibus Equity Compensation Plan (the “Plan”), a copy of which has been made
available to Participant. All terms used herein that are defined in the Plan
have the same meaning given them in the Plan.
1. Award
of Stock.
Pursuant to the Plan, the Company, on [___________] (the “Date of Grant”)
granted to Participant, subject to the terms and conditions of the Plan and
subject further to the terms and conditions herein set forth, an Award of ______
shares of Restricted Stock.
2. Restrictions.
The
shares of Restricted Stock are nontransferable and are subject to forfeiture
until vested.
3. Vesting.
Subject
to paragraph 6 and except as provided in paragraphs 4 and 7 below, Participant’s
interest in the shares of Restricted Stock shall become transferable and
nonforfeitable (“Vested”) as follows:
(a) Twenty-five
percent (25%) of the shares of Restricted Stock shall become Vested on the
first
anniversary of the Date of Grant;
(b) An
additional twenty-five percent (25%) of the shares of Restricted Stock shall
become Vested on the second anniversary of the Date of Grant;
(c) An
additional twenty-five percent (25%) of the shares of Restricted Stock shall
become Vested on the third anniversary of the Date of Grant; and
(d) The
remaining twenty-five percent (25%) of the shares of Restricted Stock shall
become Vested on the fourth anniversary of the Date of Grant.
4. Death
or Disability.
In the
event of Participant’s death or Disability (as defined in the Plan) while
employed by the Company and prior to the forfeiture of the shares of Restricted
Stock under paragraph 7, all shares of Restricted Stock that are not then Vested
shall become Vested as of the date of Participant’s termination from the employ
of the Company on account of death or Disability.
5. Termination
Without Cause and Resignation for Good Reason.
In the
event Participant is terminated from the employ of the Company without Cause
(“Termination Without Cause) or resigns from the employ of the Company for Good
Reason (“Resignation for Good Reason”), all shares of Restricted Stock that are
not then Vested shall become Vested as of the date of Participant’s termination
from the employ of the Company on account of Termination Without Cause or
Resignation for Good Reason, as applicable. For purposes of this Agreement,
the
term “Cause” shall mean (i) an action or omission of the Participant which
constitutes a willful and material breach of, or failure or refusal (other
than
by reason of his disability) to perform his duties under, an employment or
other
agreement which is not cured within fifteen (15) days after receipt by the
Participant of written notice of same, (ii) fraud, embezzlement,
misappropriation of funds or breach of trust in connection with Participant’s
services under an employment or any other agreement, (iii) conviction of a
felony or any other crime which involves dishonesty or a breach of trust, or
(iv) gross negligence in connection with the performance of the Participant’s
duties under an employment or other agreement, which is not cured within fifteen
(15) days after written receipt by the Participant of written notice of same.
For purposes of this Agreement, the term “Good Reason” shall mean (i) the
assignment to the Participant of any duties or responsibilities inconsistent
in
any respect with the Participant’s position or a similar position in the Company
or one of its subsidiaries, as contemplated by an employment or other agreement,
or any other action by the Company which results in a substantial and compelling
diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken
in
bad faith and which is remedied by the Company within fifteen (15) days after
receipt of notice thereof given by the Participant; (ii) any failure by the
Company to comply with any of the provisions regarding compensation or benefit
programs under an employment or other agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which
is
remedied by the Company promptly after receipt of notice thereof given by the
Participant; (iii) the Company’s requiring the Participant to be based at any
office or location outside of the area for which Participant was originally
hired to work except for travel reasonably required in the performance of the
Participant’s responsibilities. For purposes of this Section 5, any good faith
determination of “Good Reason” made by the Board of Directors of the Company
shall be conclusive.
6. Change
in Control.
Notwithstanding any other provision of this Agreement, all shares of Restricted
Stock not previously forfeited shall become Vested upon a Change in Control
(as
such term is defined in Section 13.2 of the Plan).
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7. Forfeiture.
Upon
the Participant’s termination of employment with the Company (and all
affiliates) for any reason (other than on account of the Participant’s death or
becoming Permanently and Totally Disabled or the Participant’s Termination
Without Cause or Resignation for Good Reason.), all non-Vested shares of
Restricted Stock granted under this Agreement shall be forfeited as of the
date
of termination and the escrow shall be terminated.
8. Escrow
for Restricted Shares.
(a) Until
the
Restricted Stock is Vested, the underlying shares shall be held by the Company
in escrow. Upon becoming vested, a share certificate for the newly vested shares
shall be delivered to the Participant as soon as administratively feasible
after
the date of vesting.
(b) Subject
to the requirements of Paragraph 9, the Participant shall have all the rights
of
a shareholder with respect to the shares held in escrow, including the right
to
vote the shares and to receive all dividends and other distributions paid with
respect to the shares.
(c) Any
shares held in escrow under this Agreement shall be held, and a certificate
shall be issued, in the name of the Participant. The Participant does hereby
irrevocably constitute and appoint the Company’s Chief Financial Officer and
Controller as Participant’s attorney to transfer any forfeited shares on the
books of the Company with full power of substitution in the premises. The Chief
Financial Officer and/or the Controller shall use the authority granted in
this
paragraph 8 to cancel any shares of Restricted Stock that are
forfeited.
9. Share
Distributions and Dividends.
If a
dividend or other distribution declared with respect to Company shares is
payable in shares, any shares distributed with respect to the shares of
Restricted Stock held in escrow hereunder also shall be held in escrow subject
to the same terms and restrictions applicable to the escrowed shares to which
such distribution relates. If the Shares held in escrow shall be changed into
or
exchangeable for a different number or kind of stock or other securities of
the
Company or other corporation (whether through reorganization, reclassification,
recapitalization, stock split-up, merger or otherwise), such substituted stock
or other securities shall be held in escrow subject to the same terms and
restrictions as were applicable to the replaced shares of Restricted
Stock.
10. Confidentiality
and Non-Competition.
Notwithstanding any other provision of this Agreement, any Restricted Stock
granted pursuant to this Agreement or the proceeds from the sale of any shares
of Vested Restricted Stock shall be forfeited by you if you engage in any
conduct that violates any non-competition, confidentiality or non-solicitation
provisions (a) under your employment or other agreement with the Company
(or any of its affiliates or subsidiaries) or (b) that are otherwise
applicable to your employment with the Company (or any of its affiliates or
subsidiaries). You acknowledge that this grant constitutes good, valuable and
sufficient consideration for your performance of those provisions.
11. Fractional
Shares.
A
fractional share shall not be issued hereunder, and when any provision hereof
may cause a fractional share to be issued, any such fractional share shall
be
disregarded.
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12. No
Right to Continued Employment.
Neither
the Plan nor this Agreement shall confer upon you any right to continue in
the
employ of (or any other relationship with) the Company or any subsidiary,
affiliate, or parent thereof, or limit in any respect the right of the Company
or any subsidiary, affiliate, or parent thereof to terminate your employment
or
other relationship with the Company or any subsidiary, affiliate, or parent
thereof, as the case may be, at any time.
13. Adjustments.
In the
event that, after the date hereof, the outstanding shares of the Company's
common stock shall be increased or decreased or changed into or exchanged for
a
different number or kind of shares of stock or other securities of the Company
or of another corporation through reorganization, merger or consolidation,
recapitalization, reclassification, stock split, split-up, combination or
exchange of shares or declaration of any dividends payable in common stock,
the
Committee shall appropriately adjust the number of shares of Restricted Stock
(to the nearest possible full share), and such adjustment shall be effective
and
binding for all purposes of this Agreement and the Plan.
14. Governing
Law.
Except
as otherwise required by applicable law, this Agreement shall be governed by
and
construed in accordance with the laws of the State of Florida, but without
regard to the principle of conflict of laws thereof. If any one or more
provisions of this Agreement shall be found to be illegal or unenforceable
in
any respect, the validity and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
15. Plan
Documents.
This
Agreement is qualified in its entirety by reference to the provisions of the
Plan, as amended from time to time, which are hereby incorporated herein by
reference. Capitalized terms not defined herein shall have the meaning ascribed
to them in the Plan. However, notwithstanding the above, no Plan amendment
may
deprive you of any Restricted Stock theretofore granted under the Plan without
your consent, and no Plan amendment requiring shareholder approval (if any)
may
be made without such shareholder approval. The interpretation and construction
by the Committee of the Plan, this Agreement, the Restricted Stock granted
hereunder, and such rules and regulations as may be adopted by the Committee
for
the purpose of administering the Plan, shall be final and binding upon you.
Until the Restricted Stock shall expire, terminate, or Vest in full, the Company
shall, upon written request therefor, send a copy of the Plan, in its
then-current form, to you or any other person or entity then entitled to the
Restricted Stock.
16. Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of the successors
and
assigns of the Company and upon the legal representatives, executors,
administrators, heirs, legatees and any permitted assignee of the
Participant.
17. Section
83(b) Election.
The
Participant may make a Section 83(b) election to treat the shares of Restricted
Stock granted to him under Paragraph 1 as taxable income at the time of transfer
under this Agreement. A section 83(b) election form (with accompanying
instructions) which may be used for this purpose is attached to this Agreement
as Exhibit A.
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18. Tax
Withholding.
Participant shall make arrangements, satisfactory to the Company, for the
satisfaction of income and employment tax withholding requirements related
to
the Restricted Stock. In accordance with such procedures as may be established
by the Committee, Participant may surrender shares of common stock, including
shares of Vested Restricted Stock, in satisfaction of the tax withholding
requirement; provided, however, that the number of shares to be surrendered
or
withheld shall be determined using the minimum rate at which income and
employment taxes must be withheld and the Fair Market Value of common stock
as
of the date of withholding.
19. Notices.
All
notices and other communications required or permitted hereunder shall be in
writing and deemed to have been received on the date of delivery if delivered
by
hand or overnight express, or three days after the date of posting if mailed
by
registered or certified mail, postage prepaid, addressed to the Company, c/o
General Counsel, at 000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx Xxxxx,
Xxxxxxx 00000, and to Participant at Participant’s address as set forth on the
signature page hereto (or such other address to which the Company or you hereby
notify the other party hereto to send such notices and communications). Such
notices and other communications shall not be considered delivered until
actually received or deemed received pursuant to this
Section 19.
20. Further
Assurances.
The
parties agree to execute such further instruments and to take such further
action as may reasonably be necessary to carry out the intent of this
Agreement.
21. Entire
Agreement.
This
Agreement constitutes the entire agreement between the Company and Participant
and supersedes any prior agreements and understandings, oral or written, between
the Company and you concerning the subject matter of this
Agreement.
22. Construction.
The
section headings contained in this Agreement are for reference only and shall
have no effect on the interpretation of any of the provisions of this
Agreement.
23. Amendment.
This
Agreement may (except as provided in the Plan) only be amended, altered or
modified by a written instrument signed by the parties hereto, or their
respective successors, and it may not be terminated (except as provided herein
or in the Plan).
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IN
WITNESS WHEREOF,
the
Company has caused this Agreement to be signed by a duly authorized officer,
and
Participant has affixed his signature hereto.
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METROPOLITAN
HEALTH NETWORKS, INC.
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By:
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Xxxxxxx X. Xxxxxx, Chairman
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EMPLOYEE
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Address:
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Social
Security Number:
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Grant
No.: ____
EXHIBIT
A
ELECTION
TO INCLUDE VALUE OF RESTRICTED PROPERTY
IN
GROSS INCOME IN YEAR OF TRANSFER UNDER SECTION 83(b)
Pursuant
to Section 83(b) of the Internal Revenue Code of 1986, as amended, I hereby
elect to include in my gross income at the time of transfer the amount
includible under Section 83(b) with respect to the restricted property described
below, in accordance with applicable regulations:
1.
The
name, address and taxpayer information number of the undersigned
are:
Name:
______________________________________________
Address:
____________________________________________
Taxpayer
Identification Number: __________________________
2. Description
of property with respect to which the election is being
made:
__________________________
shares of common stock, $.001 par value, of Metropolitan Health Networks,
Inc.
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3.
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Date
on which the property was transferred and taxable year for which
the
election is made:
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Date
of
transfer: ________________
Taxable
year for which election made: Calendar year ______
4. The
nature of the restriction(s) to which the property is
subject:
Forfeiture
in the event that the undersigned terminates employment before the restricted
shares becomes vested in accordance with the terms of the Restricted Stock
Award
Agreement.
5. Fair
market value at time of transfer:
The
fair
market value at the time of transfer (determined without regard to any
restrictions other than restrictions which by their terms will never lapse)
of
the property with respect to which this election is being made is ______ per
share, for an aggregate fair market value of $_____________.
6. Amount
paid for the property:
No
amount
has been paid by the undersigned for said property.
7. Furnishing
statement to company:
A
copy of
this statement has been furnished to Metropolitan Health Networks,
Inc.
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Dated:
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Signature:
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Name:
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INSTRUCTIONS
FOR SECTION 83(b) ELECTION FORM:
1. Review
and complete all items on this form, including:
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§
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Address
and taxpayer identification number (i.e., Social Security number)
(Item
1)
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§
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Date
of transfer (Item 3)
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§
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Fair
market value per share and in the aggregate (Item
5)
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§
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Signature
and date (bottom)
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2. Provide
a
copy of this form within 30 days of the date of the agreement to:
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§
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the
CFO or Controller for Metropolitan Health Networks,
Inc.
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§
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Director,
Internal Revenue Service Center, of the Service Center where you
expect to
file your income tax return
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3. Attach
a
copy of this form to your Federal income tax return for the calendar year
involved.
