IRVINE SENSORS CORPORATION STOCK AWARD AGREEMENT
Exhibit 10.62
IRVINE SENSORS CORPORATION
STOCK AWARD AGREEMENT
STOCK AWARD AGREEMENT
This STOCK AWARD AGREEMENT (this “Agreement”), dated as of ___, ___(the
“Effective Date”), is between Irvine Sensors Corporation, a Delaware corporation (the “Company”)
and ___, an individual resident of ___(“Participant”). This Stock Award
is granted under the Irvine Sensors Corporation 2006 Omnibus Incentive Plan (the “Plan”) and is
subject to the terms of that Plan. This Agreement represents the Company’s unfunded and unsecured
promise to issue common stock of the Company, $0.01 par value (“Common Stock”) at a future date,
subject to the terms of this Agreement and the Plan.
1. Award. The Company hereby grants Participant, subject to the terms and conditions
of this Agreement and the Plan, a stock award (the “Stock Award”) with respect to ___shares (the
“Shares”) of Common Stock. The Stock Award represents the right to receive the Shares only when,
and with respect to the number of Shares to which, the Stock Award has vested (the “Vested
Shares”). The Stock Award is subject to the terms and conditions set forth in this Agreement and
in the Plan. A copy of the Plan will be furnished upon request of Participant.
2. Vesting. Subject to the terms and conditions of this Agreement and the Plan, the
Stock Award shall vest and be converted into an equivalent number of shares that will be
distributed to the Participant as follows:
| On or after Each of the Following Dates | Percentage of Shares that Vest | |
3. Termination of Stock Award.
(a) Except as provided in subsections (b) below, a Participant’s rights under this
Agreement with respect to the Stock Award shall terminate at the earlier of (i) the time
such Stock Awards are converted into Vested Shares, or (ii) the termination of Participant’s
employment with or Service to the Company. Upon termination of this Agreement in accordance
with clause (ii) above, the Participant’s rights to all of the Shares subject to the Stock
Award not vested on the date that Participant ceases to be an
employee or to provide Service shall be immediately and irrevocably forfeited and the
Participant will retain no rights with respect to the forfeited Shares.
(b) Notwithstanding the provisions of clause (ii) of Section 3(a) above, (i)
in the event of termination of Participant’s employment with or Service to the Company as a
result of Participant’s death or Permanent Disability while in the employ or Service of the
Company, the next vesting date for the Stock Award, as set out in Section 2 above, shall
accelerate by twelve (12) months as of such date of termination; and (ii) if, after the
initial vesting date set forth in Section 2 above, Participant ceases to be an employee or
provide Service by reason of Ordinary Retirement prior to the vesting of the Stock Award
under Sections 2, 3 or 6 hereof, then the vesting of the Stock Award, as set out in Section
2 above, shall
accelerate in full as of such date of Ordinary Retirement. For purposes of
this Agreement, “Ordinary Retirement” shall mean the retirement of the Participant on a date
upon which, if the Participant is an employee, the sum of the Participant’s age and number
of years of employment with the Company equals or exceeds eighty-five (85) years or, if the
Participant is a non-employee director, the number of years of Service to the Company
exceeds five (5) years. The Participant’s rights in any unvested shares subject to this
Stock Award shall terminate at the time Participant ceases to be an employee or provide
Service .
4. Additional Restrictions on Transfer of Stock Award. During the lifetime of
Participant, this Stock Award cannot be sold, assigned, transferred, gifted, pledged, hypothecated
or in any manner encumbered or disposed of at any time prior to delivery of the Vested Shares,
other than by will or the laws of descent and distribution.
5. Conversion of Stock Award to Shares; Responsibility for Taxes.
(a) Provided Participant has satisfied the requirements of Section 5(b) below, after the
vesting of the Stock Award with respect to Vested Shares, the Vested Shares will be distributed to
Participant or, in the event of Participant’s death, to Participant’s legal representative, as soon
as practicable. The distribution to the Participant, or in the case of the Participant’s death, to
the Participant’s legal representative, of Vested Shares shall be evidenced by a stock certificate,
appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company, or other appropriate means as determined by the Company. No fractional share of stock
shall be issued.
(b) By signing this Agreement, Participant agrees that the Company may withhold from the
Vested Shares to be distributed to Participant in accordance with Section 5(a), and cancel and not
issue such withheld Vested Shares in satisfaction of all income tax (including federal, state and
local taxes), social insurance, payroll tax or other tax-related withholding (“Tax Related Items”),
a number of Vested Shares as is equal to the quotient of (i) the Fair Market Value of the Shares on
the date of vesting, (i) divided by the amount of Tax Related Items; provided that the Company
shall withhold only the amount of Vested Shares necessary to satisfy
the minimum withholding amount. To the extent that the Company determines that it is not
feasible, or not permissible under applicable law, to withhold in Shares, then prior to the
issuance of Vested Shares as provided in Section 5(a) above, Participant shall pay, or make
adequate arrangements satisfactory to the Company or to the Participant’s actual employer (in their
sole discretion) to satisfy all withholding obligations of the Company and/or the Participant’s
actual employer. In this regard, Participant authorizes the Company or the Participant’s actual
employer to withhold all applicable Tax Related Items legally payable by Participant from
Participant’s wages or other cash compensation payable to Participant by the Company or the
Participant’s actual employer. Participant shall pay to the Company or to the Participant’s actual
employer any amount of Tax Related Items that the Company or the Participant’s actual employer may
be required to withhold as a result of Participant’s receipt of the Stock Award, the
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vesting of the
Stock Award, or the conversion of vested Stock Award to Shares that cannot be satisfied by the
means previously described. The Company may refuse to deliver Vested Shares to Participant if
Participant fails to comply with Participant’s obligation in connection with the Tax Related Items
as described herein.
Regardless of any action the Company or the subsidiary of the Company that is Participant’s
actual employer takes with respect to any or all Tax Related Items, Participant acknowledges that
the ultimate liability for all Tax Related Items legally due by Participant is and remains
Participant’s responsibility and that the Company and/or the Participant’s actual employer (i) make
no representations or undertakings regarding the treatment of any Tax Related Items in connection
with any aspect of the Stock Award, including the grant of the Stock Award, the vesting of Stock
Award with respect to Shares, the conversion of the Stock Award into Shares, the subsequent sale of
any Shares acquired at vesting and the receipt of any dividends; and (ii) do not commit to
structure the terms of the grant or any aspect of the Stock Award to reduce or eliminate the
Participant’s liability for Tax Related Items.
6. Change in Control.
(a) Immediately prior to the effective date of a “Change in Control” (as defined in Section
6(e)), this Stock Award shall vest with respect to all of the Shares. However, this Stock Award
shall not vest on an accelerated basis if and to the extent: (i) this Stock Award is to be assumed
by the successor corporation (or parent thereof) or is otherwise to be continued in full force and
effect pursuant to the terms of the Change in Control transaction or (ii) this Stock Award is to be
replaced with a cash incentive program of the successor corporation which preserves the economic
value existing at the time of the Change in Control of the Shares for which this Stock Award is not
otherwise at that time vested and provides for subsequent payout of that economic value no later
than the time this Stock Award would have vested for those Shares.
(b) Immediately following the consummation of the Change in Control, this Stock Award shall
terminate, except to the extent assumed by the successor corporation (or parent thereof) or
otherwise continued in effect pursuant to the terms of the Change in Control transaction.
(c) If this Stock Award is assumed or otherwise continued in effect in connection with a
Change in Control, then this Stock Award shall be appropriately adjusted, upon such Change in
Control, to apply to the number and class of securities which would have been issuable to
Participant in consummation of such Change in Control had this Stock Award been vested immediately
prior to such Change in Control. To the extent that the holders of Common Stock receive cash
consideration for their Common Stock in consummation of the Change in Control, the successor
corporation (or its parent) may, in connection with the assumption of this Stock Award, substitute
one or more shares of its own common stock with a fair market value equivalent to the cash
consideration paid per share of Common Stock in such Change in Control.
(d) This Agreement shall not in any way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or assets.
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(e) For purposes of this Agreement, “Change in Control” shall mean a change in ownership or
control of the Company effected through any of the following transactions: (i) a merger,
consolidation or other reorganization unless securities representing more than 50% of the total
combined voting power of the voting securities of the successor corporation are immediately
thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by
the persons who beneficially owned the Company’s outstanding voting securities immediately prior to
such transaction; (ii) the sale, transfer or other disposition of all or substantially all of the
Company’s assets; or (iii) the acquisition, directly or indirectly by any person or related group
of persons (other than the Company or a person that directly or indirectly controls, is controlled
by, or is under common control with, the Company), of beneficial ownership (within the meaning of
Rule 13d-3 of the Exchange Act) of securities possessing more than 50% of the total combined voting
power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly
to the Company’s stockholders.
7. Capital Adjustments and Reorganization. Should any change be made to the Common
Stock by reason of any stock split, reverse stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the outstanding Common Stock as
a class without the Company’s receipt of consideration, appropriate adjustments shall be made to
the number and/or class of securities subject to this Stock Award in order to reflect such change
and thereby preclude a dilution or enlargement of benefits hereunder.
8. Miscellaneous.
(a) Entire Agreement; Plan Provisions Control. This Agreement (and any addendum
hereto) and the Plan constitute the entire agreement between the parties hereto with regard to the
subject matter hereof. In the event that any provision of the Agreement conflicts with or is
inconsistent in any respect with the terms of the Plan, the terms of the Plan shall control. All
decisions of the Committee with respect to any question or issue arising under the Plan or this
Agreement shall be and binding on all persons having an interest in this Stock Award. All
capitalized terms used in this Agreement and not otherwise defined in this Agreement shall
have the meaning assigned to them in the Plan.
(b) Rights of Stockholders. Prior to the vesting of the Stock Award, and prior to the
receipt by the Participant, Participant’s legal representative, or a permissible assignee, of the
Vested Shares as provided in this Agreement, neither Participant, Participant’s legal
representative nor a permissible assignee of the Stock Award shall be or have any of the rights and
privileges of a stockholder of the Company with respect to the Shares issuable to Participant
pursuant to the terms of this Agreement. Participant shall not be entitled to receive dividend
equivalents on the Stock Award.
(c) No Right to Employment. The grant of this Stock Award shall not be construed as
giving Participant the right to be retained in the employ of, or if Participant is a director of
the Company or an Affiliate as giving the Participant the right to continue as a director of, the
Company or an Affiliate, nor will it affect in any way the right of the Company or an Affiliate to
terminate such employment or position at any time, with or without cause. In addition, the Company
or an Affiliate may at any time dismiss Participant from employment, or terminate the term of a
director of the Company or an Affiliate, free from any liability or any claim under the
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Plan or
this Agreement. Nothing in this Agreement shall confer on any person any legal or equitable right
against the Company or any Affiliate, directly or indirectly, or give rise to any cause of action
at law or in equity against the Company or an Affiliate. This Stock Award shall not form any part
of the wages or salary of Participant for purposes of severance pay or termination indemnities,
irrespective of the reason for termination of employment. Under no circumstances shall any person
ceasing to be an employee of the Company or any Affiliate be entitled to any compensation for any
loss of any right or benefit under this Agreement or the Plan which such employee might otherwise
have enjoyed but for termination of employment, whether such compensation is claimed by way of
damages for wrongful or unfair dismissal, breach of contract or otherwise. By participating in the
Plan, Participant shall be deemed to have accepted all the terms and conditions of the Plan and
this Agreement and the terms and conditions of any rules and regulations adopted by the Committee
and shall be fully bound thereby.
(d) Governing Law. The validity, construction and effect of the Plan and this
Agreement, and any rules and regulations relating to the Plan and this Agreement, shall be
determined in accordance with the internal laws, and not the law of conflicts, of the State of
Delaware.
(e) Severability. If any provision of the Agreement is or becomes or is deemed to be
invalid, illegal or unenforceable in any jurisdiction or would disqualify the Agreement under any
law deemed applicable by the Committee, such provision shall be construed or deemed amended to
conform to applicable laws, or if it cannot be so construed or deemed amended without, in the
determination of the Committee, materially altering the purpose or intent of the Plan or the
Agreement, such provision shall be stricken as to such jurisdiction or the Agreement, and the
remainder of the Agreement shall remain in full force and effect.
(f) No Trust or Fund Created. Neither the Plan nor this Agreement shall create or be
construed to create a trust or separate fund of any kind or a fiduciary relationship between the
Company or any Affiliate and Participant or any other person. To the extent that any Person
acquires a right to receive payments from the Company or any Affiliate pursuant to a Stock
Award, such right shall be no greater than the right of any unsecured creditor of the Company
or any Affiliate.
(g) Headings. Headings are given to the Sections and subsections of this Agreement
solely as a convenience to facilitate reference. Such headings shall not be deemed in any way
material or relevant to the construction or interpretation of this Agreement or any provision
thereof.
(h) Notices. Any notice required to be given or delivered to the Company under the
terms of this Agreement shall be addressed to the Company at its principal corporate offices. Any
notice required to be given or delivered to Participant shall be addressed to Participant at the
address indicated below Participant’s signature line at the end of this Agreement or at such other
address as Participant may designate by ten (10) days’ advance written notice to the Company. Any
notice required to be given under this Agreement shall be in writing and shall be deemed effective
upon personal delivery or upon the third (3rd) day following deposit in the U.S. mail, registered
or certified, postage prepaid and properly addressed to the party entitled to such notice.
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(i) Conditions Precedent to Issuance of Vested Shares. Vested Shares shall not be
issued pursuant to the Stock Award unless such issuance and delivery of the applicable Vested
Shares pursuant hereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act of 1934, as amended, the rules
and regulations promulgated thereunder, state blue sky laws, the requirements of any applicable
Stock Exchange or the Nasdaq Stock Market and the Delaware General Corporation Law. As a condition
to the issuance of the Vested Shares, the Company may require that the person receiving such Vested
Shares represent and warrant that the Vested Shares are being acquired only for investment and
without any present intention to sell or distribute such Vested Shares if, in the opinion of
counsel for the Company, such a representation and warranty is required by law.
(j) Withholding. In order to provide the Company with the opportunity to claim the
benefit of any income tax deduction which may be available to it in connection with the Stock
Award, and in order to comply with all applicable federal or state tax laws or regulations, the
Company may take such action as it deems appropriate to insure that, if necessary, all applicable
federal or state payroll, withholding, income or other taxes are withheld or collected from
Participant.
(k) Consultation With Professional Tax and Investment Advisors. Participant
acknowledges that the grant and vesting with respect to this Stock Award, and the sale or other
taxable disposition of the Vested Shares, may have tax consequences pursuant to the Internal
Revenue Code of 1986, as amended, or under local, state or international tax laws. Participant
further acknowledges that Participant is relying solely and exclusively on Participant’s own
professional tax and investment advisors with respect to any and all such matters (and is not
relying, in any manner, on the Company or any of its employees or representatives). Participant
understands and agrees that any and all tax consequences resulting from the Stock Award and its
grant and vesting, and the sale or other taxable disposition of the Vested Shares, is solely and
exclusively the responsibility of Participant without any expectation or understanding that the
Company or any of its employees or representatives will pay or reimburse Participant for such
taxes or other items.
IN WITNESS WHEREOF, the Company and Participant have executed this Agreement on the date set
forth in the first paragraph.
| IRVINE SENSORS CORPORATION | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| PARTICIPANT: | ||||
| Name: | ||||
| Address: | ||||
| Facsimile: | ||||
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