Exhibit 10.8
AMENDED AND RESTATED
RESTRICTED STOCK GRANT AGREEMENT
This Agreement, dated as of the 2nd day of November, 1999,
between THCG, Inc. (the "Company") and Xxxx Xxxxx (the "Participant"), entered
into pursuant to the 1999 Walnut Financial Services, Inc. Stock Incentive Plan,
as the same may be amended from time to time (the "Plan"). Unless otherwise
defined herein, capitalized terms used herein shall have the meanings given to
them under the Plan.
W I T N E S S E T H
WHEREAS, as memorialized in a letter to the Participant from Xxx
Xxxxx of Tower Hill Securities, Inc. ("Tower Hill"), dated February 26, 1999,
the Participant accepted the position of Managing Director and Chief Operating
Officer of Tower Hill, the terms of which employment included, among other
things, the granting of options to purchase up to 10% of the outstanding equity
of Tower Hill in two installments of 5% each;
WHEREAS, the Participant executed an Agreement for Options
Grant, dated as of April 21, 1999 (the "Option Agreement"), pursuant to which he
was granted an option to purchase 5% of the equity of Tower Hill, at a strike
price of $0.01, to vest in monthly installments pro rata over 24 months starting
on March 1, 1999 and ending February 1, 2001, and a second option to purchase an
additional 5% of such equity, at a strike price of $0.01, to vest in monthly
installments pro rata over 60 months starting on March 1, 1999 and ending
February 1, 2004;
WHEREAS, Tower Hill entered into that certain Amended and
Restated Agreement and Plan of Merger by and among Walnut Financial Services,
Inc., Tower Hill Acquisition Corp., and Tower Hill, dated as of August 5, 1999
(the "Merger Agreement"), whereby outstanding shares of Tower Hill would be
converted into shares of Company;
WHEREAS, Section 2.1(c) of the Merger Agreement provides for the
cancellation of any options to acquire shares of Tower Hill held by the
Participant, including those pursuant to the Option Agreement or any other
agreement, and for the issuance of Restricted Stock of the Company to the
Participant;
WHEREAS, the Participant agreed to the cancellation of the
Option Agreement and each option granted thereunder or pursuant to any other
agreement in exchange for a grant of shares of Restricted Stock pursuant to the
Plan;
WHEREAS, effective as of November 1, 1999, the Participant
received such a grant pursuant to the Plan (the "November 1st Grant");
WHEREAS, the Committee and the Participant have agreed to amend
and restate certain terms of the November 1st Grant;
WHEREAS, the Plan requires that such grant be evidenced by a
written agreement, executed by the Company and the Participant, containing such
restrictions, terms and conditions as may be required by the Plan and the
Committee; and
WHEREAS, this Amended and Restated Agreement (this "Agreement")
has been approved by the Committee to evidence the grant made to the
Participant;
NOW, THEREFORE, in consideration of the premises and mutual
agreements hereinafter set forth, the Participant and the Company hereby amend
and restate the November 1st Grant in its entirety and agree as follows:
1. The Company, effective as of the Date of the Grant, hereby
grants to the Participant 372,281 shares of Restricted Stock (the "Grant"), in
two classes of 204,755 and 167,526 shares (respectively, the "First Class" and
the "Second Class") which shall be subject to the restrictions, terms and
conditions set forth below and in the Plan. The Grant is issued in replacement
of the options granted pursuant to the Option Agreement or any other agreement,
which are hereby cancelled and without further force or effect.
2. The Issue Date for each of the First Class and the Second
Class of the Grant is November 1, 1999.
3. (a) The vesting dates (each, a "Vesting Date") with respect
to each class are as follows:
(i) That number of shares of Restricted Stock pursuant to the
First Class that equals the total number of First Class shares
multiplied by a fraction the numerator of which is the total
number of whole months from March 1, 1999 to the Issue Date and
the denominator of which is 24 shall be vested on the Issue
Date; the balance of the First Class shares of Restricted Stock
shall vest in four equal three-month ("quarterly") installments,
commencing on the first quarterly anniversary of the Issue Date
(February 1, 2000) and ending on the one-year anniversary of the
Issue Date.
(ii) That number of shares of Restricted Stock pursuant to the
Second Class that equals the total number of Second Class shares
multiplied by a fraction the numerator of which is the total
number of whole months from March 1, 1999 to the Issue Date and
the denominator of which is 60 shall be vested on the Issue
Date; the balance of the Second Class shares of Restricted Stock
shall vest in equal quarterly installments, commencing on first
quarterly anniversary of the Issue Date and ending on the
three-year anniversary of the Issue Date.
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(b) Until a share of Restricted Stock vests, the Participant
acknowledges that the Participant may not, and the Participant agrees that the
Participant shall not, transfer the Participant's rights to such share of
Restricted Stock or to any cash payment related thereto. Until a share of
Restricted Stock vests, no attempt to transfer such shares or the right to any
cash payment related thereto, whether by transfer, pledge, hypothecation or
otherwise and whether voluntary or involuntary, by operation of law or
otherwise, shall vest the transferee with any interest or right in or with
respect to such share of Restricted Stock or such cash payment, but immediately
upon any such attempt, the portion of the Grant represented by such share of
Restricted Stock and any related cash payment shall be canceled, and the
transfer shall be of no force or effect.
(c) Upon a Termination of Employment for any reason, other than
for Cause, during the six-month period following the occurrence of a Change in
Control at any time after the Effective Time, all such shares of Restricted
Stock which have not theretofore vested, or been canceled and forfeited pursuant
to any provision hereof, immediately shall vest.
(d) Except as provided in Section 3(c) hereof, the Participant
must be employed by the Company on each subsequent quarterly anniversary of the
Issue Date for the next installment of shares of Restricted Stock to vest on
such Vesting Date; provided, however, if the Participant's Employment is
Terminated at any time prior to the next Vesting Date his shares of Restricted
Stock shall vest ratably with respect to that Vesting Date, such that the total
number of shares of Restricted Stock that would have vested on such date shall
be multiplied by a fraction the numerator of which is the total number of days
on which he was employed during the quarter in which the Participant's
Termination of Employment occurred and the denominator of which is the total
number of days in such quarter and the resulting number shall be the number of
shares of Restricted Stock that vest as of such Termination of Employment.
(e) Except as provided in Section 3(c) hereof, the Participant's
Termination of Employment with the Company (other than on account of death or
Disability) shall cause the immediate forfeiture of all shares of Restricted
Stock that have not vested as of the date of such Termination of Employment.
(f) Upon the Participant's Termination of Employment with the
Company on account of death or Disability, all such shares of Restricted Stock
which have not theretofore vested, or been canceled and forfeited pursuant to
any provision hereof, immediately shall vest.
4. (a) Reasonably promptly after the Issue Date, with respect to
any shares of Restricted Stock that have not theretofore vested or been
forfeited, the Company shall issue stock certificates, registered in the name of
the Participant, evidencing such shares of Restricted Stock; provided, that the
Company shall not cause to be issued such a stock certificate unless it has
received a stock power endorsed by the Participant in blank with respect to such
shares of Restricted Stock. Each such certificate, in addition to bearing such
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legends as the Company deems necessary or appropriate to comply with federal and
applicable state securities laws, shall bear the following legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the restrictions, terms and conditions
(including forfeiture and restrictions against transfer) contained in
the 1999 Walnut Financial Services, Inc. Stock Incentive Plan and an
Agreement entered into between the registered owner of such shares and
THCG, Inc. A copy of the Plan and Agreement is on file in the office of
the Secretary of THCG, Inc., 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000."
Such legend shall not be removed from the certificates evidencing such shares of
Restricted Stock until the shares vest.
(b) Each certificate issued pursuant to Section 4(a) hereof,
together with the stock powers relating to such shares of Restricted Stock,
shall be deposited by the Company with a custodian designated by the Company.
The Company may designate itself as custodian hereunder. The Company shall cause
such custodian to issue to the Participant a receipt evidencing the certificates
held by it which are registered in the name of the Participant.
(c) Reasonably promptly after any such shares of Restricted
Stock vest pursuant to Section 3 hereof, the Company shall cause to be issued
certificates evidencing such shares of Restricted Stock, free of the legend
provided in Section 4(a) hereof, but including such legends as the Company deems
necessary or appropriate to comply with federal and applicable state securities
laws, and shall cause such certificates to be delivered to the Participant (or
such Participant's legal representative, beneficiary or heir), together with any
other property directly related to such vested shares of Restricted Stock of the
Participant held by the custodian pursuant to Section 9 hereof.
(d) No adjustments shall be made for dividends or distributions
or other rights for which the record date is prior to the date such stock
certificate is issued in respect of the Grant.
5. The Participant acknowledges that: (a) this Agreement shall
neither require the Committee to make a grant to the Participant at any other
time nor preclude the Committee from making subsequent grants to the
Participant; (b) the Plan and this Agreement are not a contract of employment
and the terms of the Participant's employment shall not be affected in any way
by the Plan, this Agreement or related instruments; (c) the establishment of the
Plan and the grant made by this Agreement shall not be construed as conferring
any legal rights upon the Participant for continuation of employment or as
interfering with or limiting the right of the Company or the Subsidiary by whom
the Participant is employed to terminate the Participant's employment at any
time, for any reason, for or without Cause, and without regard to the effect
that such termination might have upon the Participant as a Participant; (d) any
grant, determination, construction, prescription or other act of the Committee
shall be finally and conclusively binding upon the Participant and all other
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persons; (e) no member of the Committee or the Board of Directors shall be
liable for any action or determination made in good faith with respect to the
Plan or the grant made by this Agreement; (f) the Board of Directors may amend,
suspend or terminate the Plan or any part thereof at any time provided that,
except as otherwise provided in the Plan, no amendment, suspension or
termination shall be made or effected which would adversely affect any right of
the Participant with respect to the grant made by this Agreement without the
written consent of the Participant and (g) the Participant has read the Plan and
agrees to be bound by all the provisions thereof. In the event that any
provision herein is inconsistent with the Plan, the terms of the Plan shall
govern.
6. (a) Notwithstanding anything herein to the contrary, the
Company shall not be obligated to issue or deliver or cause to be issued or
delivered any certificates evidencing shares of Restricted Stock awarded by this
Agreement unless and until the Company is advised by its counsel that the
issuance and delivery of such certificates are in compliance with all applicable
laws, regulations of governmental authority and the requirements of any exchange
or automated quotation system upon which shares of Company Stock are traded.
(b) The Company shall not be obligated to register any
securities pursuant to the Securities Act of 1933 (as now in effect or as
hereafter amended) (the "Securities Act") or to take any other affirmative
action in order to cause the issuance and delivery of such certificates or the
making of such payment to comply with any such law, regulation or requirement.
7. (a) The Company agrees to make or cause to be made cash loans
to the Participant (the "Cash Loans") as necessary to satisfy, and equal to the
amount of, (i)(A) the federal, state and local taxes that the Company or an
Affiliate is required by law to withhold with respect to the Grant of shares of
Restricted Stock, or the vesting thereof, in accordance with the terms of this
Agreement minus (B) an amount equal to the sum of the after-tax proceeds of any
Cash Bonus or any other cash payment paid to the Participant by the Company
expressly for the purpose of satisfying all or a portion of the tax (including
estimated tax) liability to which such withholding relates and (ii)(A) the
income tax liability incurred by the Participant as a result of the Grant of
shares of Restricted Stock, or the vesting thereof, in accordance with the terms
of this Agreement, including the tax liability resulting from the Participant
making an election pursuant to Section 83(b) of the Internal Revenue Code of
1986, as amended, minus (B) an amount equal to the sum of (1) the after-tax
proceeds of any Cash Bonus, (2) the after-tax proceeds of any other cash payment
paid to the Participant by the Company and (3) any previous Cash Loan, where
such Cash Bonus, cash payment or Cash Loan is expressly for the purpose of
satisfying all or a portion of such tax liability. Cash Loans pursuant to clause
(a)(i) of this Section 7 shall be made immediately prior to the date such tax
withholding obligation must be satisfied. Cash Loans made pursuant to clause
(a)(ii) of this Section 7 shall be made no later than 5 days prior to the date
such tax liability is due (without regard to extensions). The term of each such
Cash Loan shall be three years and the Cash Loan shall bear interest to be paid
at maturity at a rate equal to the prime rate in effect at the time such loan is
issued to the Participant. Each such Cash Loan shall be secured by the shares of
Restricted Stock to which such Cash Loan relates, and in the event of default
the Company shall be entitled to receive from the Participant such shares of
Company Stock. The number of shares of Company Stock that the Company shall be
entitled to receive from the
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Participant in the event of default shall equal the quotient of the total amount
due and payable in respect of the defaulted Cash Loan over the Fair Market Value
of one share of Company Stock. Other terms of the Cash Loan shall be determined
by the Committee in its discretion as memorialized in a Promissory Note and
Pledge Agreement the execution of which by the Participant shall be a condition
precedent to the issuance of the Cash Loan, provided that the terms of such
Promissory Note and Pledge Agreement be reasonable and customary. In the event
of the Participant's Termination of Employment without cause prior to the
maturity date of any Cash Loans, the Company agrees that it will discharge the
Participant's obligations to repay to the Company any such Cash Loans that have
not so matured. The Participant and the Company agree that any such discharge
shall be treated as additional compensation income to the Participant for tax
purposes at the time of such discharge.
(b) The Participant agrees to pay to the Company or an Affiliate
of the Company, as the case may be, the amount of any taxes that the Company or
such Affiliate is required by law to withhold with respect to the Grant of
shares of Restricted Stock, or the vesting thereof, in accordance with the terms
of this Agreement. Such payment shall be due on the date the Company or such
Subsidiary is required by law to withhold such taxes. In the event that such
payment is not made when due, the Company or such Subsidiary shall have the
right (i) to retain, or sell with 10 days notice or such longer notice as may be
required by applicable law, a sufficient number of the shares of Restricted
Stock subject to any Grant made to the Participant in order to cover all or part
of the amount required to be withheld; (ii) to deduct, to the extent permitted
by law, from any cash payment due under the Grant made by this Agreement or from
any payment of any kind otherwise due to such person from the Company or any
Affiliate thereof all or a part of the amount required to be withheld; or (iii)
to pursue any other remedy at law or in equity. The Participant agrees that,
with respect to Cash Loans to be made pursuant to clause (a)(i) of this Section
7, the Company may directly apply such Cash Loans towards payment of the
withholding tax liability.
(c) The Participant hereby indemnifies the Company and any
officers or directors thereof with respect to any liability of the Company for
taxes, including withholding taxes, and including interest and penalties
thereon, arising with respect to the Grant of shares of Restricted Stock, or the
vesting or exercise thereof, other than (i) any such liability as to which a
Cash Loan is made, which Cash Loan is subject to the repayment terms set forth
in subsection (a) of this Section 7 and in the Promissory Note and Pledge
Agreement (ii) any such liability that arises if the Company determines, or that
would have arisen had the Company determined, its withholding liability by
reference to the vesting date of the Restricted Shares and (iii) any such
liability in excess of $150,000.
8. In addition to the remedies of the Company elsewhere provided
for herein, failure by the Participant (or beneficiary or permitted transferee)
to comply with any of the terms and conditions of the Plan or this Agreement,
unless such failure is remedied by the Participant (or beneficiary or permitted
transferee) within 30 days after having been notified of such failure by the
Committee, shall be grounds for the cancellation of the Grant, in whole or in
part, as the Committee, in its sole discretion, determines. Upon such
cancellation, the shares of Restricted Stock relating to that portion of the
Grant canceled shall be irrevocably forfeited.
9. (a) The Committee shall adjust any Grant as of the date of
the occurrence of any of the following events to reflect any dividend, stock
split, recapitalization, merger, consolidation, exchange of shares or similar
corporate change as the Committee may deem appropriate to prevent the
enlargement or dilution of the Participant's rights under the Grant. The
Participant will be notified of any adjustment made pursuant to this Section and
any such adjustment, or the failure to make such adjustment, shall be binding on
the Participant.
(b) Unless the Committee otherwise determines, where any
securities and other property, including cash dividends, result from any
dividend, stock split, recapitalization, merger, consolidation, combination,
exchange of shares or otherwise with respect to a share of Restricted Stock
which occurs after such share's Issue Date but prior to its Vesting Date, such
securities and other property will not vest until such share of Restricted Stock
vests and shall be promptly deposited with the custodian designated by the
Company to be held in custody in accordance with Section 4(b) hereof as though
such securities and other property were part of such share.
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10. Any notice that either party hereto or the Committee may be
required or permitted to give to the other with respect to the Plan or this
Agreement shall be in writing, and may be delivered personally or by mail,
postage prepaid, addressed as follows:
(a) if to the Company:
THCG, Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Co-Chief Executive Officer or General Counsel
(b) if to the Committee:
Compensation Committee of the Board of Directors
THCG, Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Committee Secretary
(c) if to the Participant:
Xx. Xxxx Xxxxx
c/o THCG, Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as the person to whom the notice is directed shall have
designated in writing to others.
11. This Agreement is made and accepted in the State of New
York. The laws of the State of New York (without reference to the principles of
conflict of laws) shall control the interpretation and performance of the terms
of the Plan and of this Agreement.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officers under its corporate seal, and the
Participant has set hereunto his hand and seal, all as of the day and year first
above written.
/s/ Xxxx Xxxxx
------------------------------------
Participant
THCG, Inc.
By: /s/ Xxxxxx X. Xxxx
---------------------------------
Name: Xxxxxx X. Xxxx
Title: Co-Chief Executive Officer
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