VERITEC, INC. RESTRICTED STOCK AGREEMENT
Exhibit 10.7
VERITEC, INC.
RESTRICTED STOCK AGREEMENT
RESTRICTED STOCK AGREEMENT
Parties:
|
Veritec, Inc. (the “Company”) | |
| [EMPLOYEE] (“Employee”) | ||
Effective Date:
|
[DATE] |
RECITALS
On [DATE], the Board of Directors of the Company (the “Board”) authorized the grant of an
aggregate of
_____
shares of the Company’s $.01 par value common stock (the “Restricted
Stock”) to Employee, which shares shall be restricted pursuant to the terms and conditions set
forth herein. The parties desire to enter into this Restricted Stock Agreement (“Agreement”) to
memorialize the terms and conditions of the grant of the Restricted Stock to the Employee.
AGREEMENT
1. Terms of Restricted Stock.
Subject to the terms and conditions contained herein, the Company grants to Employee the
Restricted Stock in accordance with the terms and conditions set forth herein. During the period
set forth in Section 2 hereof (the “Restriction Period”), Employee shall not sell, transfer, pledge
or otherwise encumber any of the Restricted Stock, whether voluntarily or involuntarily or by
operation of law. Except as set forth in Section 2, all shares of Restricted Stock for which the
Restriction Period has not lapsed shall be forfeited to the Company, without payment therefore, if
during the Restriction Period the employment of the Employee with the Company shall terminate for
any reason.
2. Lapse of Restrictions. The restrictions described in this Agreement applicable to
the Restricted Stock shall apply for the Restriction Period, which shall commence on the Effective
Date and shall lapse as follows:
(a) On
_____
, if the Employee is employed by the Company on that date, with respect to
50% of the Restricted Stock; or
(b) On
_____
, if the Employee is employed by the Company on that date, with respect to
the remaining 50% of the Restricted Stock.
Upon the occurrence of the events described in subsections (a) and (b) above, the Restricted Stock
shall become non-forfeitable under Section 1.
3. Deposit of Certificates. The certificate or certificates representing the shares
of Restricted Stock, together with stock powers or other instruments of transfer appropriately
endorsed in blank by the Employee, will be held on deposit with the Company until the Restriction
Period lapses with respect to such shares of Restricted Stock pursuant to Section 2 of this
Agreement. If the shares of Restricted Stock are maintained in uncertificated form, the Company
shall denote such shares as being subject to restrictions as set forth in this Agreement as part of
the book entry of the shares on the Company’s stock records. After the Restriction Period described
in Section 2 lapses, the Company shall promptly cause the certificate or certificates for the shares of Restricted Stock and the stock
powers relating thereto, to be delivered to the Employee, or shall xxxx its records that the
Employee is the owner of such shares.
4. Rights of Employee.
Employee shall only have the rights of a shareholder with respect to the shares of Restricted
Stock for which the restrictions on such shares pursuant to Section 2 have lapsed. Any dividends
or distributions (including regular, periodic cash dividends) paid with respect to Restricted Stock
for which the restrictions described in Section 2 hereof have not lapsed will be subject to the
same restrictions on transferability and the possibility of forfeiture to the Company as the
Restricted Stock to which the dividends or distributions relate. To facilitate the enforcement of
this provision, any such dividends or distributions paid with respect to Restricted Stock still
subject to the restrictions described herein will be held by the Company or its agent designated
for the purpose until such time as the Restricted Stock to which the dividends or distributions
relate are no longer restricted or are forfeited. If such shares are no longer restricted, the
dividends or distributions with respect thereto will be paid or transferred to the Employee at the
time the certificate representing such shares is provided to the Employee. If such shares of
Restricted Stock are forfeited, all of the Employee’s right, title and interest in and to such
dividends and distributions will automatically be transferred to the Company, and the Employee
agrees to execute any documents evidencing such transfer as may be requested by the Company, either
at the time of such transfer or in anticipation of such transfer becoming necessary.
5. Employment of Employee.
Nothing in this Agreement shall be construed to confer upon Employee any right to continue in
the employ of the Company or to interfere in any way with the right of the Company to terminate
Employee’s employment at any time, nor to derogate from the terms of any written employment
agreement between the Company and Employee.
6. Further Restrictions on Shares.
(a) Securities Laws. Employee hereby agrees that the acquisition of the Restricted
Stock is for purposes of investment and not for resale or public distribution of the shares, and
Employee will not sell, pledge, transfer or otherwise dispose of any such shares except pursuant to
registration under the Securities Act of 1933, as amended, or unless, in the opinion of counsel for
the Company, registration is not required. Such restrictions shall be binding upon Employee, and
upon the heirs, personal representatives, and administrators of Employee. Any stock certificate
for shares of Restricted Stock issued shall be endorsed so as to refer to the restrictions on
transfer imposed by this Agreement and by applicable securities laws and Employee shall, at the
request of the Company, execute and deliver a letter of investment intent prior to acquiring any
shares of Restricted Stock.
(b) Certificate Legends. The share certificates shall include legends evidencing the
above restrictions until such restrictions lapse.
7. Possible Tax Consequences. Employee understands that he (and not the Company)
shall be responsible for his own federal, state, local or foreign tax liability and any of his
other tax consequences that may arise as a result of the transactions contemplated by this
Agreement. Employee shall rely solely on the determinations of his tax advisors or his own
determinations, and not on any statements or representations by the Company or any of its agents,
with regard to all such tax matters. Employee understands that Section 83 of the Code taxes as
ordinary income the difference between the amount paid for the Restricted Stock, if any, and the
fair market value of the shares as of the date any
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restrictions on the shares lapse. In this context, “restriction” includes without limitation
the vesting restrictions set forth in Section 2 hereof. Employee understands that Employee may
elect to be taxed at the time the shares of Restricted Stock are received rather than when and as
the restrictions on the shares lapse or expire by filing an election under Section 83(b) of the
Internal Revenue Code of 1986 (the “Code”) with the Internal Revenue Service within 30 days from
the date of the acquisition. In the event Employee files an election under Section 83(b) of the
Code, such election shall contain all information required under the applicable Treasury
regulation(s) and Employee shall deliver a copy of such election to the Company contemporaneously
with filing such election with the Internal Revenue Service.
8. Tax Withholding.
To the extent that the receipt of the shares of Restricted Stock or the lapse of any
restrictions thereon results in compensation income to Employee for federal or state income tax
purposes, Employee shall deliver to the Company at the time of such receipt or lapse, as the case
may be, such amount of money or shares of unrestricted stock as the Company may require to meet its
withholding obligation under applicable tax laws or regulations. If Employee does not deliver such
money, the Company is authorized to withhold, from any cash remuneration then or thereafter payable
to Employee, any tax required to be withheld by reason of such resulting compensation income.
9. Entire Agreement.
This Agreement constitutes the entire agreement between the Company and Employee with respect
to the subject matter hereof and supersedes all other prior agreements and understandings, both
written and oral, between the Company and Employee with respect to the subject matter hereof.
| VERITEC, INC. | ||||||
| By | ||||||
| Its: | Chief Executive Officer | |||||
| ACCEPTED: | ||||||
| [EMPLOYEE] | ||||||
| Dated: | ||||||
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