EXHIBIT 10.20
XXX.XXX INC.
FORM OF RESTRICTED SHARES AGREEMENT
WHEREAS, Xxxxxxx X. Xxxxxx (the "Grantee") is an employee of XXX.XXX
INC., a Delaware corporation (the "Company"); and
WHEREAS, the grant of the Restricted Shares (as defined in the
Company's 1999 Equity Incentive Plan (the "Plan")) has been authorized by a
resolution of the I.R.C. Section 162(m) Subcommittee of the Compensation
Committee of the Board of Directors of the Company (the "Board") that was
duly adopted on May 17, 2000;
NOW, THEREFORE, pursuant to the Plan, the Company hereby grants to the
Grantee 650,000 Restricted Shares (such 650,000 Restricted Shares being
hereinafter referred to as the "Restricted Shares"), effective as of May 17,
2000 (the "Date of Grant"), and subject to the terms and conditions of the
Plan and the terms and conditions of this Agreement.
1. DEFINITIONS. All capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Plan.
2. ISSUANCE OF SHARES. The Restricted Shares shall be issued to the
Grantee, shall be fully paid and nonassessable and shall be represented by a
certificate or certificates issued in the name of the Grantee and endorsed with
an appropriate legend referring to the restrictions hereinafter set forth.
3. RESTRICTIONS ON TRANSFER OF SHARES. The Restricted Shares may not
be sold, assigned, transferred, conveyed, pledged, exchanged or otherwise
encumbered or disposed of by the Grantee, except to the Company, until they
have become nonforfeitable as provided in Section 4. Any purported
encumbrance or disposition in violation of the provisions of this Section 3
shall be void AB INITIO, and the other party to any such purported
transaction shall not obtain any rights to or interest in the Restricted
Shares. As and when permitted by the Plan, the Company may in its sole
discretion waive the restrictions on transferability with respect to all or a
portion of the Restricted Shares.
4. VESTING OF SHARES. (a) The Restricted Shares shall become
nonforfeitable if the Grantee remains in the continuous employment of the
Company or a Subsidiary through (i) May 17, 2001, with respect to 216,667 of
the Restricted Shares, (ii) May 17, 2002, with respect to 216,667 of the
Restricted Shares, and (iii) May 17, 2003, with respect to 216,666 of the
Restricted Shares.
(b) Notwithstanding the provisions of Section 4(a), (i) 60% of any
forfeitable Restricted Shares shall become nonforfeitable upon a Change in
Control if such Change in Control occurs prior to the second anniversary of the
Date of Grant and (ii) 100% of any
forfeitable Restricted Shares shall become nonforfeitable upon a Change in
Control if such Change in Control occurs following the second anniversary of the
Date of Grant and prior to the third anniversary of the Date of Grant.
5. FORFEITURE OF SHARES. Except as and to the extent the Restricted
Shares have become nonforfeitable pursuant to Section 4, the Restricted Shares
shall be forfeited by the Grantee, if the Grantee ceases to be employed by the
Company or a Subsidiary prior to the third anniversary of the Date of Grant, and
the certificate(s) representing Restricted Shares so forfeited shall be
canceled.
6. CERTAIN SALES UPON TERMINATION OF EMPLOYMENT. (a) If the Grantee's
employment with the Company is terminated (i) by the Company for any reason
other than for Cause (as defined in Section 6(c) below), (ii) by the Grantee for
any reason or (iii) by reason of the Grantee's death or Disability, the Company
shall have the right to repurchase Restricted Shares held by the Grantee that
have theretofore been released from the restrictions set forth in Section 3 of
this Agreement at the Fair Market Value (as defined in Section 6(d) below)
thereof as of the effective date of such termination. If the Grantee's
employment with the Company is terminated by the Company for Cause, (x) the
Company shall have the right to repurchase Restricted Shares held by the Grantee
that have theretofore been released from the restrictions set forth in Section 3
of this Agreement at (1) the Fair Market Value thereof as of the effective date
of such termination or (2) the Grantee's cost of obtaining such shares,
whichever is lower, and (y) any profit realized from the sale of any Restricted
Shares that have theretofore been released from the restrictions set forth in
Section 3 of this Agreement shall inure to and be recoverable by the Company.
"Disability" shall mean as a result of the Grantee's incapacity due to physical
or mental illness (as determined in good faith by a physician acceptable to the
Company), the Grantee shall have been absent from full-time performance of his
duties with the Company for 135 consecutive days during any 12-month period.
(b) Provided that the rights described in Section 6(a) above have not
previously been triggered by termination of the Grantee's employment with the
Company, such rights shall terminate upon a Change in Control. The rights
specified in Section 6(a), once triggered, may be exercised at any time during
the 90-day period following the effective date of termination of the Grantee's
employment.
(c) For purposes of this Agreement, "Cause" means any of the following
events that the Company or the Board has determined, in good faith, has
occurred: (i) the Grantee's continual or deliberate neglect of the performance
of his material duties; (ii) the Grantee's failure to devote substantially all
of his working time to the business of the Company and its Subsidiaries or
affiliated companies; (iii) the Grantee's engaging willfully in misconduct in
connection with the performance of any of his duties, including, without
limitation, the misappropriation of funds or securing or attempting to secure
personally any profit in connection with any transaction entered into on behalf
of the Company or its Subsidiaries or affiliated companies; (iv) the Grantee's
willful breach of any confidentiality or nondisclosure agreements with the
Company or the Grantee's violation, in any material respect, of any code or
standard of behavior generally applicable to employees or executive employees of
the Company; (v) the Grantee's active disloyalty to the Company, including,
without limitation, willfully aiding a competitor or improperly disclosing
confidential information; or (vi) the Grantee's engaging in
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conduct that may reasonably result in material injury to the reputation of the
Company, including conviction or entry of a plea of nolo contendre for a felony
or any crime involving fraud under Federal, state or local laws, embezzlement,
bankruptcy, insolvency or general assignment for the benefit of creditors.
(d) "Fair Market Value" shall mean:
(i) if the Common Shares are listed for trading on any national
stock exchange or admitted for trading on the Nasdaq National Market or
other principal national automated quotation system, the Fair Market
Value per Common Share shall be the average of (i) the closing sale price
per Common Share on such national stock exchange or (ii) the final
reported bid side price per Common Share on such principal automated
quotation system, in each case for the ten most recent days on which
trades occurred immediately preceding the effective date of the
termination of Grantee's employment; or
(ii) if the Common Shares are not listed for trading on any
national stock exchange or admitted for trading on the Nasdaq National
Market or other principal national automated quotation system, then the
Fair Market Value per Common Share shall be determined in good faith by
the Board, based upon, among other factors that the Board deems relevant,
the financial performance and prospects of the Company in the light of
market conditions generally.
7. DIVIDEND, VOTING AND OTHER RIGHTS. (a) Except as otherwise provided in
this Agreement, from and after the Date of Grant, the Grantee shall have all of
the rights of a stockholder with respect to the Restricted Shares, including the
right to vote the Restricted Shares and receive any dividends that may be paid
thereon; PROVIDED, HOWEVER, that any additional Common Shares or other
securities that the Grantee may become entitled to receive pursuant to a stock
dividend, stock split, recapitalization, combination of shares, merger,
consolidation, separation or reorganization or any other change in the capital
structure of the Company shall be subject to the same risk of forfeiture and
restrictions on transfer as the forfeitable Restricted Shares in respect of
which they are issued or transferred and shall become Restricted Shares for the
purposes of this Agreement.
(b) Cash dividends on the Restricted Shares shall be sequestered by the
Company from and after the Date of Grant until such time as any of such
Restricted Shares become nonforfeitable in accordance with Section 4, whereupon
such dividends shall be paid to the Grantee in cash to the extent such dividends
are attributable to Restricted Shares that have become nonforfeitable. To the
extent that Restricted Shares are forfeited pursuant to Section 5, all dividends
sequestered with respect to such Restricted Shares shall also be forfeited. No
interest shall be payable with respect to any such dividends.
8. RETENTION OF STOCK CERTIFICATE(S) BY THE COMPANY. The certificate(s)
representing the Restricted Shares shall be held in custody by the Company,
together with a stock power endorsed in blank by the Grantee with respect
thereto, until such shares have become nonforfeitable in accordance with Section
4.
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9. COMPLIANCE WITH LAW. The Company shall make reasonable efforts to
comply with all applicable federal and state securities laws; PROVIDED, HOWEVER,
notwithstanding any other provision of this Agreement, the Company shall not be
obligated to issue or release from restrictions on transfer any Common Shares
pursuant to this Agreement if such issuance or release would result in a
violation of any such law.
10. WITHHOLDING TAXES. If the Company or any Subsidiary shall be required
to withhold any federal, state, local or foreign tax in connection with any
issuance or vesting of Common Shares or other securities pursuant to this
Agreement, and the amounts available to the Company or such Subsidiary for such
withholding are insufficient, the Grantee shall pay the tax or make provisions
that are satisfactory to the Company or such Subsidiary for the payment thereof.
The Grantee may elect to satisfy all or any part of any such withholding
obligation by surrendering to the Company or such Subsidiary a portion of the
Restricted Shares that become nonforfeitable hereunder, and the Common Shares so
surrendered by the Grantee shall be credited against any such withholding
obligation at the Market Value per Share of such Common Shares on the date of
such surrender.
11. NO EMPLOYMENT CONTRACT. Nothing contained in this Agreement shall
confer upon the Grantee any right with respect to continuance of employment by
the Company or a Subsidiary or limit or affect in any manner the right of the
Company or a Subsidiary to terminate the employment or adjust the compensation
of the Grantee.
12. RELATION TO OTHER BENEFITS. Any economic or other benefit to the
Grantee under this Agreement or the Plan shall not be taken into account in
determining any benefits to which the Grantee may be entitled under any
profit-sharing, retirement or other benefit or compensation plan maintained by
the Company or a Subsidiary and shall not affect the amount of any life
insurance coverage available to any beneficiary under any life insurance plan
covering employees of the Company or a Subsidiary.
13. AMENDMENTS. Any amendment to the Plan shall be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable
hereto; PROVIDED, HOWEVER, that no amendment shall adversely affect the rights
of the Grantee under this Agreement without the Grantee's consent.
14. SEVERABILITY. In the event that one or more of the provisions of this
Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.
15. RELATION TO PLAN. This Agreement is subject to the terms and
conditions of the Plan. In the event of any inconsistent provisions between this
Agreement and the Plan, the Plan shall govern. The Board acting pursuant to the
Plan, as constituted from time to time, shall except as otherwise expressly
provided herein have the right to determine any questions that arise under this
Agreement.
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16. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure
to the benefit of, and be binding upon, the successors, administrators, heirs,
legal representatives and assigns of the Grantee and the successors and assigns
of the Company.
17. NOTICES. Any notice to the Company provided for herein shall be in
writing to the attention of the Corporate Secretary at XXX.XXX INC., 0000
Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxx 00000, and any notice to the Grantee
shall be addressed to the Grantee at his address currently on file with the
Company. Except as otherwise provided herein, any written notice shall be deemed
to be duly given if and when hand delivered, or five business days after having
been mailed by United States registered or certified mail, return receipt
requested, postage prepaid, or three business days after having been sent by a
nationally recognized overnight courier service, addressed as aforesaid. Any
party may change the address to which notices are to be given hereunder by
written notice to the other party as herein specified, except that notices of
changes of address shall be effective only upon receipt.
18. GOVERNING LAW. The laws of the State of Delaware, without giving
effect to the principles of conflict of laws thereof, shall govern the
interpretation, performance and enforcement of this Agreement.
19. PRIOR AGREEMENT. This Agreement supersedes in its entirety the
Nonqualified Stock Option Agreements, each dated as of October 4, 1999,
between the Company and the Grantee.
[signature page follows]
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This Agreement is executed by the Company as of the 17th day of
May, 2000.
XXX.XXX INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Chairman of the Board
The undersigned hereby acknowledges receipt of an executed original of
this Agreement and accepts the award of Restricted Shares granted hereunder on
the terms and conditions set forth herein and in the Plan.
Date: May 17, 2000 /s/ Xxxxxxx X. Xxxxxx
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