RAE SYSTEMS INC. RESTRICTED STOCK AWARD AGREEMENT
EXHIBIT 4.3
THIS RESTRICTED STOCK AWARD AGREEMENT (the “Agreement”) is made as of the day of
, 2006 (the “Date of Grant”), by and between RAE Systems Inc., a Delaware
corporation (the “Company”) and
(the “Participant”).
1. Number of Shares.
On
the Date of Grant, the Participant is hereby awarded ___ shares of the common stock of
the Company (the “Shares”) subject to the terms and conditions contained herein.
2. Vesting Schedule.
The “Initial Vesting Date” is July 11, 2007. Except as provided in this Agreement and
provided that the Participant’s Service with the Company has not terminated prior to the relevant
date, the number of Shares that have vested (“Vested Shares”) (disregarding any resulting
fractional shares) as of any date is determined by multiplying the number of Shares by the “Vested
Ratio” determined as of such date as follows:
Vested
Ratio |
||||
Prior to Initial Vesting Date
|
0 | |||
On Initial Vesting Date, provided the Participant’s
Service has not terminated prior to such date
|
1/4 | |||
Plus |
||||
For
each additional three full months of the Participant’s continuous Service from Initial Vesting Date until the Vested Ratio equals 1/1, an additional
|
3/48 | |||
For purposes of determining the number of Vested Shares following an Ownership Change Event,
credited Service shall include all Service with any corporation which is a Participating Company at
the time the Service is rendered, whether or not such corporation is a Participating Company both
before and after the Ownership Change Event.
3. Definitions and Construction.
3.1 Definitions. Whenever used herein, the following terms shall have their respective
meanings set forth below:
(a) “Board” means the Board of Directors of the Company. If one or more Committees have been
appointed by the Board to administer this Agreement, “Board” also means such Committee(s).
(b) “Cause” means any of the following: (i) the Participant’s theft, dishonesty, willful
misconduct, breach of fiduciary duty for personal profit, or falsification of any Participating
Company documents or records; (ii) the Participant’s material failure to abide by a Participating
Company’s code of conduct or other policies (including, without limitation, policies relating to
confidentiality and reasonable workplace conduct); (iii) the Participant’s unauthorized use,
misappropriation, destruction or diversion of any tangible or intangible asset or corporate
opportunity of a Participating Company (including, without limitation, the Participant’s improper
use or disclosure of a Participating Company’s confidential or proprietary information); (iv) any
intentional act by the Participant which has a material detrimental effect on a Participating
Company’s reputation or business; (v) the Participant’s repeated failure or inability to perform
any reasonable assigned duties after written notice from a Participating Company of, and a
reasonable opportunity to cure, such failure or inability; (vi) any material breach by the
Participant of any employment or service agreement between the Participant and a Participating
Company, which breach is not cured pursuant to the terms of such agreement; or (vii) the
Participant’s conviction (including any plea of guilty or nolo contendere) of any criminal act
involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs the
Participant’s ability to perform his or her duties with a Participating Company.
(c) A “Change in Control” shall mean an Ownership Change Event or a series of related
Ownership Change Events (collectively, a “Transaction”) wherein the stockholders of the Company
immediately before the Transaction do not retain immediately after the Transaction, in
substantially the same proportions as their ownership of shares of the Company’s voting stock
immediately before the Transaction, direct or indirect beneficial ownership of more than fifty
percent (50%) of the total combined voting power of the outstanding voting securities of the
Company or, in the case of a Transaction described in Section 3.1(l)(iii), the corporation or other
business entity to which the assets of the Company were transferred (the “Transferee”), as the case
may be. For purposes of the preceding sentence, indirect beneficial ownership shall include,
without limitation, an interest resulting from ownership of the voting securities of one or more
corporations or other business entities which own the Company or the Transferee, as the case may
be, either directly or through one or more subsidiary corporations or other business entities. The
Board shall have the right to determine whether multiple sales or exchanges of the voting
securities of the Company or multiple Ownership Change Events are related, and its determination
shall be final, binding and conclusive.
(d) “Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations
promulgated thereunder.
(e) “Committee” means the Compensation Committee or other committee of the Board.
(f) “Company” means RAE Systems Inc., a Delaware corporation, or any successor corporation
thereto.
(g) “Consultant” means a person engaged to provide consulting or advisory services (other than
as an Employee or a Director) to a Participating Company.
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(h) “Director” means a member of the Board or of the board of directors of any other
Participating Company.
(i) “Employee” means any person treated as an employee (including an Officer or a Director who
is also treated as an employee) in the records of a Participating Company. The Company shall
determine in good faith and in the exercise of its discretion whether an individual has become or
has ceased to be an Employee and the effective date of such individual’s employment or termination
of employment, as the case may be. For purposes of an individual’s rights, if any, under this
Agreement as of the time of the Company’s determination, all such determinations by the Company
shall be final, binding and conclusive, notwithstanding that the Company or any court of law or
governmental agency subsequently makes a contrary determination.
(j) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(k) “Officer” means any person designated by the Board as an officer of the Company.
(l) An “Ownership Change Event” shall be deemed to have occurred if any of the following
occurs with respect to the Company: (i) the direct or indirect sale or exchange in a single or
series of related transactions by the stockholders of the Company of more than fifty percent (50%)
of the voting stock of the Company; (ii) a merger or consolidation in which the Company is a party;
(iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or
(iv) a liquidation or dissolution of the Company.
(m) “Parent Corporation” means any present or future “parent corporation” of the Company, as
defined in Section 424(e) of the Code.
(n) “Participating Company” means the Company or any Parent Corporation or Subsidiary
Corporation.
(o) “Participating Company Group” means, at any point in time, all corporations collectively
which are then Participating Companies.
(p) “Securities Act” means the Securities Act of 1933, as amended.
(q) “Service” means the Participant’s employment or service with the Participating Company
Group, whether in the capacity of an Employee, a Director or a Consultant. The Participant’s
Service shall not be deemed to have terminated merely because of a change in the capacity in which
the Participant renders Service to the Participating Company Group or a change in the Participating
Company for which the Participant renders such Service, provided that there is no interruption or
termination of the Participant’s Service. Furthermore, a Participant’s Service with the
Participating Company Group shall not be deemed to have terminated if the Participant takes any
military leave, sick leave, or other bona fide leave of absence approved by the Company; provided,
however, that if any such leave exceeds ninety (90) days, on the ninety-first (91st) day of such
leave the Participant’s Service shall be deemed to
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have terminated unless the Participant’s right to return to Service with the Participating
Company Group is guaranteed by statute or contract. Notwithstanding the foregoing, unless
otherwise designated by the Company or required by law, a leave of absence shall not be treated as
Service for purposes of determining vesting under this Agreement. The Participant’s Service shall
be deemed to have terminated either upon an actual termination of Service or upon the corporation
for which the Participant performs Service ceasing to be a Participating Company. Subject to the
foregoing, the Company, in its discretion, shall determine whether the Participant’s Service has
terminated and the effective date of such termination.
(r) “Stock” means the common stock of the Company, as adjusted from time to time in accordance
with Section 9.
(s) “Subsidiary Corporation” means any present or future “subsidiary corporation” of the
Company, as defined in Section 424(f) of the Code.
3.2 Construction. Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement. Except when otherwise
indicated by the context, the singular shall include the plural and the plural shall include the
singular. Use of the term “or” is not intended to be exclusive, unless the context clearly
requires otherwise.
4. Administration.
All questions of interpretation concerning this Agreement shall be determined by the
Committee. All determinations by the Committee shall be final and binding upon all persons having
an interest in the Shares. Any Officer shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, or election which is the responsibility of or which
is allocated to the Company herein, provided the Officer has apparent authority with respect to
such matter, right, obligation, or election.
5. The Award.
5.1 Grant and Issuance of Shares. On the Date of Grant, the Participant shall acquire and the
Company shall issue the Shares subject to the provisions of this Agreement. As a condition to the
issuance of the Shares, the Participant shall execute and deliver to the Company, along with this
Agreement, the Assignment Separate from Certificate duly endorsed (with date and number of shares
blank) in the form attached to this Agreement.
5.2 No Monetary Payment Required. The Participant is not required to make any monetary
payment (other than applicable tax withholding, if any) as a condition to receiving the Shares, the
consideration for which shall be past Services actually rendered and/or future Services to be
rendered to a Participating Company or for its benefit. Notwithstanding the foregoing, if required
by applicable state corporate law, the Participant shall furnish consideration in the form of cash
or past Services rendered to a Participating Company or for its benefit having a value not less
than the par value of the Shares.
5.3 Beneficial Ownership of Shares; Certificate Registration. The Participant hereby
authorizes the Company, in its sole discretion, to deposit the Shares with the
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Company’s transfer agent, including any successor transfer agent, to be held in book entry
form during the term of the Escrow pursuant to Section 7. Furthermore, the Participant hereby
authorizes the Company, in its sole discretion, to deposit, following the term of such Escrow, for
the benefit of the Participant with any broker with which the Participant has an account
relationship of which the Company has notice any or all Shares which are no longer subject to such
Escrow. Except as provided by the foregoing, a certificate for the Shares shall be registered in
the name of the Participant, or, if applicable, in the names of the heirs of the Participant.
5.4 Issuance of Shares in Compliance with Law. The issuance of the Shares shall be subject to
compliance with all applicable requirements of federal, state or foreign law with respect to such
securities. No Shares shall be issued hereunder if their issuance would constitute a violation of
any applicable federal, state or foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the Stock may then be listed. The
inability of the Company to obtain from any regulatory body having jurisdiction the authority, if
any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any Shares
shall relieve the Company of any liability in respect of the failure to issue such Shares as to
which such requisite authority shall not have been obtained. As a condition to the issuance of the
Shares, the Company may require the Participant to satisfy any qualifications that may be necessary
or appropriate, to evidence compliance with any applicable law or regulation and to make any
representation or warranty with respect thereto as may be requested by the Company.
6. Company Reacquisition Right.
6.1 Grant of Company Reacquisition Right. In the event that (a) the Participant’s Service is
terminated voluntarily by the Participant or is terminated by the Company for Cause, or (b) the
Participant, the Participant’s legal representative, or other holder of the Shares, attempts to
sell, exchange, transfer, pledge, or otherwise dispose of (other than pursuant to an Ownership
Change Event), including, without limitation, any transfer to a nominee or agent of the
Participant, any Shares which are not Vested Shares (“Unvested Shares”), the Company shall
automatically reacquire the Unvested Shares, and the Participant shall not be entitled to any
payment therefor (the “Company Reacquisition Right”). The Company shall have no Company
Reacquisition Right if the Participant’s Service is terminated involuntarily by the Company for any
reason other than for Cause. For purposes of clarity, if the Participant’s Service is terminated
by the Company for any reason other than for Cause, she or he will be entitled to the full number
Shares listed under Section 1 above.
6.2 Ownership Change Event. Upon the occurrence of an Ownership Change Event, any and all
new, substituted or additional securities or other property to which the Participant is entitled by
reason of the Participant’s ownership of Unvested Shares shall be immediately subject to the
Company Reacquisition Right and included in the terms “Shares,” “Stock” and “Unvested Shares” for
all purposes of the Company Reacquisition Right with the same force and effect as the Unvested
Shares immediately prior to the Ownership Change Event. For purposes of determining the number of
Vested Shares following an Ownership Change Event, credited Service shall include all Service with
any corporation which is a Participating Company at the time the Service is rendered, whether or
not such corporation is a Participating Company both before and after the Ownership Change Event.
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7. Escrow.
7.1 Appointment of Agent. To ensure that Shares subject to the Company Reacquisition Right
will be available for reacquisition, the Participant and the Company hereby appoint the secretary
of the Company, or any other person designated by the Company, as their agent and as
attorney-in-fact for the Participant (the “Agent”) to hold any and all Unvested Shares and to sell,
assign and transfer to the Company any such Unvested Shares reacquired by the Company pursuant to
the Company Reacquisition Right. The Participant understands that appointment of the Agent is a
material inducement to make this Agreement and that such appointment is coupled with an interest
and is irrevocable. The Agent shall not be personally liable for any act the Agent may do or omit
to do hereunder as Escrow agent, agent for the Company, or attorney in fact for the Participant
while acting in good faith and in the exercise of the Agent’s own good judgment, and any act done
or omitted by the Agent pursuant to the advice of the Agent’s own attorneys shall be conclusive
evidence of such good faith. The Agent may rely upon any letter, notice or other document executed
by any signature purporting to be genuine and may resign at any time.
7.2 Establishment of Escrow. The Participant authorizes the Company to deposit the Unvested
Shares with the Company’s transfer agent to be held in book entry form, as provided in Section 5.3,
and the Participant agrees to deliver to and deposit with the Agent each certificate, if any,
evidencing the Shares and an Assignment Separate from Certificate with respect to such book entry
shares and each such certificate duly endorsed (with date and number of Shares blank) in the form
attached to the Grant Notice, to be held by the Agent under the terms and conditions of this
Section 7 (the “Escrow”). Upon the occurrence of an Ownership Change Event or a change, as
described in Section 9, in the character or amount of any outstanding stock of the corporation the
stock of which is subject to the provisions of this Agreement, any and all new, substituted or
additional securities or other property to which the Participant is entitled by reason of his or
her ownership of the Shares that remain, following such Ownership Change Event or change described
in Section 9, subject to the Company Reacquisition Right shall be immediately subject to the Escrow
to the same extent as the Shares immediately before such event. The Company shall bear the
expenses of the Escrow.
7.3 Delivery of Shares to Participant. The Escrow shall continue with respect to any Shares
for so long as such Shares remain subject to the Company Reacquisition Right. Upon termination of
the Reacquisition Right with respect to Shares, the Company shall so notify the Agent and direct
the Agent to deliver such number of Shares to the Participant. As soon as practicable after
receipt of such notice, the Agent shall cause to be delivered to the Participant the Shares
specified by such notice, and the Escrow shall terminate with respect to such Shares.
8. Tax Matters.
8.1 Tax Withholding.
(a) In General. At the time the Agreement is executed, or at any time thereafter as requested
by a Participating Company, the Participant hereby authorizes withholding from payroll and any
other amounts payable to the Participant, and otherwise agrees to make adequate provision for, any
sums required to satisfy the federal, state, local and foreign
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tax withholding obligations of the Participating Company, if any, which arise in connection
with the Award, including, without limitation, obligations arising upon (a) the transfer of Shares
to the Participant, (b) the lapsing of any restriction with respect to any Shares, (c) the filing
of an election to recognize tax liability, or (d) the transfer by the Participant of any Shares.
The Company shall have no obligation to deliver the Shares or to release any Shares from the Escrow
established pursuant to Section 7 until the tax withholding obligations of the Participating
Company have been satisfied by the Participant.
(b) Assignment of Sale Proceeds; Payment of Tax Withholding by Check. Subject to compliance
with applicable law and the Company’s xxxxxxx xxxxxxx policy, the Participant shall satisfy the
Participating Company’s tax withholding obligations in accordance with procedures established by
the Company providing for delivery by the Participant to the Company or a broker approved by the
Company of properly executed instructions, in a form approved by the Company, providing for the
assignment to the Company of the proceeds of a sale with respect to some or all of the shares
becoming Vested Shares on a vesting date as provided above. Notwithstanding the foregoing, the
Participant may elect to pay by check the amount of the Participating Company’s tax withholding
obligations arising on any vesting date by delivering written notice of such election to the
Company on a form specified by the Company for this purpose at least thirty (30) days (or such
other period established by the Company) prior to such vesting date. By making such election, the
Participant agrees to deliver a check for the full amount of the required tax withholding to the
applicable Participating Company on or before the third business day following the vesting date.
If the Participant elects to pay the required tax withholding by check but fails to make such
payment as required by the preceding sentence, the Company is hereby authorized at its discretion,
to satisfy the tax withholding obligations through any other means authorized by this Section 8,
including by effecting a sale of some or all of the shares becoming Vested Shares on the vesting
date, withholding from payroll and any other amounts payable to the Participant or by withholding
shares in accordance with Section 8.1(c).
(c) Withholding in Shares. The Company may, in its discretion, permit or require the
Participant to satisfy all or any portion of a Participating Company’s tax withholding obligations
by deducting a number of whole, Vested Shares otherwise deliverable to the Participant or by the
Participant’s tender to the Company of a number of whole, Vested Shares or vested shares acquired
otherwise than pursuant to the Award having, in any such case, a fair market value, as determined
by the Company as of the date on which the tax withholding obligations arise, not in excess of the
amount of such tax withholding obligations determined by the applicable minimum statutory
withholding rates. Any adverse consequences to the Participant resulting from the procedure
permitted under this Section, including, without limitation, tax consequences, shall be the sole
responsibility of the Participant.
8.2 Election Under Section 83(b) of the Code.
(a) The Participant understands that Section 83 of the Code taxes as ordinary income the
difference between the amount paid for the Shares, if anything, and the fair market value of the
Shares as of the date on which the Shares are “substantially vested,” within the meaning of Section
83. In this context, “substantially vested” means that the right of the Company to reacquire the
Shares pursuant to the Company Reacquisition Right has lapsed. The
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Participant understands that he or she may elect to have his or her taxable income determined
at the time he or she acquires the Shares rather than when and as the Company Reacquisition Right
lapses by filing an election under Section 83(b) of the Code with the Internal Revenue Service no
later than thirty (30) days after the date of acquisition of the Shares. The Participant
understands that failure to make a timely filing under Section 83(b) will result in his or her
recognition of ordinary income, as the Company Reacquisition Right lapses, on the difference
between the purchase price, if anything, and the fair market value of the Shares at the time such
restrictions lapse. The Participant further understands, however, that if Shares with respect to
which an election under Section 83(b) has been made are forfeited to the Company pursuant to its
Company Reacquisition Right, such forfeiture will be treated as a sale on which there is realized a
loss equal to the excess (if any) of the amount paid (if any) by the Participant for the forfeited
Shares over the amount realized (if any) upon their forfeiture. If the Participant has paid
nothing for the forfeited Shares and has received no payment upon their forfeiture, the Participant
understands that he or she will be unable to recognize any loss on the forfeiture of the Shares
even though the Participant incurred a tax liability by making an election under Section 83(b).
(b) The Participant understands that he or she should consult with his or her tax advisor
regarding the advisability of filing with the Internal Revenue Service an election under Section
83(b) of the Code, which must be filed no later than thirty (30) days after the date of the
acquisition of the Shares pursuant to this Agreement. Failure to file an election under Section
83(b), if appropriate, may result in adverse tax consequences to the Participant. The Participant
acknowledges that he or she has been advised to consult with a tax advisor regarding the tax
consequences to the Participant of the acquisition of Shares hereunder. ANY ELECTION UNDER SECTION
83(b) THE PARTICIPANT WISHES TO MAKE MUST BE FILED NO LATER THAN 30 DAYS AFTER THE DATE ON WHICH
THE PARTICIPANT ACQUIRES THE SHARES. THIS TIME PERIOD CANNOT BE EXTENDED. THE PARTICIPANT
ACKNOWLEDGES THAT TIMELY FILING OF A SECTION 83(b) ELECTION IS THE PARTICIPANT’S SOLE
RESPONSIBILITY, EVEN IF THE PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO FILE SUCH
ELECTION ON HIS OR HER BEHALF.
(c) The Participant will notify the Company in writing if the Participant files an election
pursuant to Section 83(b) of the Code. The Company intends, in the event it does not receive from
the Participant evidence of such filing, to claim a tax deduction for any amount which would
otherwise be taxable to the Participant in the absence of such an election.
9. Adjustments for Changes in Capital Structure.
Subject to any required action by the stockholders of the Company, in the event of any change
in the Stock effected without receipt of consideration by the Company, whether through merger,
consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend,
stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of
shares, or similar change in the capital structure of the Company, or in the event of payment of a
dividend or distribution to the stockholders of the Company in a form other than Stock (excepting
normal cash dividends) that has a material effect on the fair market value of shares of Stock,
appropriate adjustments shall be made in the number and kind of shares subject
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to this Agreement, in order to prevent dilution or enlargement of the Participant’s rights
under this Agreement. For purposes of the foregoing, conversion of any convertible securities of
the Company shall not be treated as “effected without receipt of consideration by the Company.”
Any fractional share resulting from an adjustment pursuant to this Section shall be rounded down to
the nearest whole number. Such adjustments shall be determined by the Committee, and its
determination shall be final, binding and conclusive.
10. Rights as a Stockholder, Director, Employee or Consultant.
The Participant shall have no rights as a stockholder with respect to any Shares subject to
this Agreement until the date of the issuance of the Shares (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment
shall be made for dividends, distributions or other rights for which the record date is prior to
the date the Shares are issued, except as provided in Section 9. Subject the provisions of this
Agreement, the Participant shall exercise all rights and privileges of a stockholder of the Company
with respect to Shares deposited in the Escrow pursuant to Section 7. If the Participant is an
Employee, the Participant understands and acknowledges that, except as otherwise provided in a
separate, written employment agreement between a Participating Company and the Participant, the
Participant’s employment is “at will” and is for no specified term. Nothing in this Agreement
shall confer upon the Participant any right to continue in the Service of a Participating Company
or interfere in any way with any right of the Participating Company Group to terminate the
Participant’s Service at any time.
11. Legends.
The Company may at any time place legends referencing the Company Reacquisition Right and any
applicable federal, state or foreign securities law restrictions on all certificates representing
the Shares. The Participant shall, at the request of the Company, promptly present to the Company
any and all certificates representing the Shares in the possession of the Participant in order to
carry out the provisions of this Section. Unless otherwise specified by the Company, legends
placed on such certificates may include, but shall not be limited to, the following:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET FORTH IN AN
AGREEMENT BETWEEN THIS CORPORATION AND THE REGISTERED HOLDER, OR HIS PREDECESSOR IN
INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION.”
12. Transfers in Violation of Agreement.
No Shares may be sold, exchanged, transferred, assigned, pledged, hypothecated or otherwise
disposed of, including by operation of law, in any manner which violates any of the provisions of
this Agreement and, except pursuant to an Ownership Change Event, until the date on which such
shares become Vested Shares, and any such attempted disposition shall be void. The Company shall
not be required (a) to transfer on its books any Shares which will have been transferred in
violation of any of the provisions set forth in this Agreement or (b) to treat as
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owner of such Shares or to accord the right to vote as such owner or to pay dividends to any
transferee to whom such Shares will have been so transferred. In order to enforce its rights under
this Section, the Company shall be authorized to give a stop transfer instruction with respect to
the Shares to the Company’s transfer agent.
13. Miscellaneous Provisions.
13.1 Termination or Amendment. The Committee may terminate or amend this Agreement at any
time; provided, however, that no such termination or amendment may adversely affect the
Participant’s rights under this Agreement without the consent of the Participant unless such
termination or amendment is necessary to comply with applicable law or government regulation. No
amendment or addition to this Agreement shall be effective unless in writing.
13.2 Nontransferability. The right to acquire Shares pursuant to this Agreement shall not be
subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and distribution. All rights with respect to the
Shares shall be exercisable during the Participant’s lifetime only by the Participant or the
Participant’s guardian or legal representative.
13.3 Further Instruments. The parties hereto 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.
13.4 Binding Effect. This Agreement shall inure to the benefit of the successors and assigns
of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the
Participant and the Participant’s heirs, executors, administrators, successors and assigns.
13.5 Notices. Any notice required or permitted hereunder shall be given in writing and shall
be deemed effectively given (except to the extent that this Agreement provides for effectiveness
only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail
address, if any, provided for the Participant by a Participating Company, or upon deposit in the
U.S. Post Office or foreign postal Service, by registered or certified mail, or with a nationally
recognized overnight courier Service, with postage and fees prepaid, addressed to the other party
at the address shown below that party’s signature to the Grant Notice or at such other address as
such party may designate in writing from time to time to the other party.
(a) Description of Electronic Delivery. The parties may deliver electronically any notices
called for in connection with the Escrow. Such means of electronic delivery may include but do not
necessarily include the delivery of a link to a Company intranet or the internet site of a third
party involved in administering the Plan, the delivery of the document via e-mail or such other
means of electronic delivery specified by the Company.
(b) Consent to Electronic Delivery. The Participant acknowledges that the Participant has
read Section 13.5(a) of this Agreement and consents to the electronic delivery of notices in
connection with the Escrow, as described in Section 13.5(a). The Participant acknowledges that he
or she may receive from the Company a paper copy of any
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documents delivered electronically at no cost to the Participant by contacting the Company by
telephone or in writing. The Participant further acknowledges that the Participant will be
provided with a paper copy of any documents if the attempted electronic delivery of such documents
fails. Similarly, the Participant understands that the Participant must provide the Company or any
designated third party administrator with a paper copy of any documents if the attempted electronic
delivery of such documents fails. The Participant may revoke his or her consent to the electronic
delivery of documents described in Section 13.5(a) or may change the electronic mail address to
which such documents are to be delivered (if Participant has provided an electronic mail address)
at any time by notifying the Company of such revoked consent or revised e-mail address by
telephone, postal Service or electronic mail. Finally, the Participant understands that he or she
is not required to consent to electronic delivery of documents described in Section 13.5(a).
13.6 Integrated Agreement. This Agreement shall constitute the entire understanding and
agreement of the Participant and the Participating Company Group with respect to the subject matter
contained herein or therein and supersedes any prior agreements, understandings, restrictions,
representations, or warranties among the Participant and the Participating Company Group with
respect to such subject matter other than those as set forth or provided for herein or therein. To
the extent contemplated herein or therein, the provisions of the Grant Notice and the Agreement
shall survive any settlement of the Award and shall remain in full force and effect.
13.7 Applicable Law. This Agreement shall be governed by the laws of the State of California
as such laws are applied to agreements between California residents entered into and to be
performed entirely within the State of California.
13.8 Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.
By signing this Agreement, the Participant: (a) acknowledges receipt of and represents that
the Participant has read and is familiar with this Agreement and a prospectus for the Shares in the
form most recently registered with the Securities and Exchange Commission (the “Prospectus”), (b)
accepts the Shares subject to all of the terms and conditions of this Agreement and (c) agrees to
accept as binding, conclusive and final all decisions or interpretations of the Committee upon any
questions arising under this Agreement.
| RAE SYSTEMS INC. | PARTICIPANT | |||
By: |
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Its:
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Signature |
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| Date | ||||
Address:
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0000 Xxxxx Xxxxx Xxxxxx | |||
| Xxx Xxxx, XX 000000 | Address | |||
11
ATTACHMENTS: Assignment Separate from Certificate and Prospectus
12
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED the undersigned does hereby sell, assign and transfer unto
(
) shares of the Capital Stock
of RAE SYSTEMS INC. standing in the undersigned’s name on the books of said corporation represented
by Certificate No. herewith and does hereby irrevocably constitute and appoint
Attorney to transfer the said stock on the books of said
corporation with full power of substitution in the premises.
Dated: |
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| Signature | ||||
| Print Name |
Instructions: Please do not fill in any blanks other than the signature line. The purpose
of this assignment is to enable the Company to exercise its Company Reacquisition Right and/or
share withholding rights set forth in the Restricted Stock Agreement without requiring additional
signatures on the part of the Participant.
1
