ENTERPRISE FINANCIAL SERVICES CORP RESTRICTED STOCK AWARD AGREEMENT
To be used with employees subject to bonus
restrictions under CPP; not for STIP
EXHIBIT 99.3
THIS AGREEMENT (the “Agreement”) is made
between ENTERPRISE FINANCIAL SERVICES CORP, a Delaware corporation (the
“Company”), and Xxxx X. Xxxxx (“Grantee”), as of the Award Date (defined
below).
| 1. | AWARD. | ||
| Number of shares of Restricted Stock Subject to Award | 10,000 | ||
| Fair Market Value per Share on Date of Award: | $9.10 | ||
| Date of Award (“Award Date”) | February 17, 2010 | ||
(a) SHARES. The Company hereby awards and
issues to Grantee the shares of restricted stock specified above (the “Shares”),
pursuant to the terms of and subject to conditions of the Company's 2002 Stock
Incentive Plan (as amended from time to time, the “Plan”) and this
Agreement.
(b) PLAN INCORPORATED. The terms and
conditions of the Plan are incorporated herein by reference. Grantee
acknowledges receipt of a copy of the Plan (as amended and restated to the date
hereof) and agrees that this award of the Shares shall be subject to all of the
terms and conditions set forth in the Plan, including future amendments thereto,
if any, provided, however, that, except as provided in subsection (c) below, no
such future amendment shall have an effect upon the vesting requirements set
forth herein or impose additional forfeiture conditions or vesting requirements
or extend restrictions on the Shares beyond the time of vesting. Capitalized
terms not otherwise defined herein shall have the meaning set forth in the
Plan.
(c) CPP PROVISIONS. Grantee acknowledges that
(a) the Company is a participant in the Capital Purchase Program (the “CPP”)
offered by the United States Department of the Treasury and (b) the Company and
its affiliates are required to meet certain executive compensation and corporate
governance standards under Section 111 of the Emergency Economic Stabilization
Act of 2008, as amended, including amendments pursuant to Section 7001, et.
seq., of the American Recovery of Reinvestment Act of 2009 (“EESA”), as
implemented by guidance or regulation thereunder that has been issued and is in
effect as of the date of this Agreement or is promulgated thereafter, including
without limitation 31 C.F.R. Part 30 of the Code of Federal Regulations (such
guidance or regulation being hereinafter referred to as the “CPP Guidance”).
Notwithstanding anything contained in this Agreement to the contrary, as of the
date hereof (or on such date thereafter as it becomes necessary pursuant to the
EESA or CPP Guidance), if, in the good faith determination of the Company after
consultation with counsel of its choice, any statute or regulation promulgated
before, on or after the Award Date imposes additional requirements or
restrictions on compensation which the Company may pay to Grantee which conflict
with the provisions of this Agreement, (i) the Company shall not be required to
pay or accrue any grant, award, incentive or compensation to the extent of such
restriction and this Agreement shall be deemed automatically amended to the
extent of such restriction and (ii) Grantee shall execute and deliver any
amendments to this Agreement which the Company, in good faith after consultation
with counsel of its choice, deems necessary to comply with such statute or
regulation.
2. FORFEITURE AND
TRANSFERABILITY.
(a) The Shares, to the extent not then Vested
(as defined below) in accordance with the following schedule, shall be forfeited
to the Company for no consideration immediately after Employee fails to maintain
continuous employment with the Company or its subsidiaries for any reason
whatsoever:
| Percentage of | Cumulative Vesting | ||||||
| Vesting Date | Shares Vesting | Percentage | |||||
| February 17, 2011 | 0 | % | 0 | % | |||
| February 17, 2012 | 40 | % | 40 | % | |||
| February 17, 2013 | 20 | % | 60 | % | |||
| February 17, 2014 | 20 | % | 80 | % | |||
| February 17, 2015 | 20 | % | 100 | % | |||
Notwithstanding the
foregoing provisions of this Section 2(a), 100% of the Shares shall Vest upon
the date of the earlier to occur of (i) Employee’s death; (ii) Employee being
deemed Disabled (as defined below) or (iii) a “Change in Control Event” as
defined in Treasury Regulation 1.409A-3(i)(5)(i) (such earliest date a “Vesting
Date” and the lapse of such forfeiture contingency, “Vesting”). As used herein,
“Disabled” shall mean qualification for disability benefits under the Social
Security disability insurance program, or if an employee is determined to be
permanently disabled by the Committee in its discretion.
(b) In accordance with the EESA and the CPP
Guidance, the Shares may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner (collectively, “Transferred”), other
than by will or by the laws of descent or distribution, prior to the Vesting of
the Shares pursuant to paragraph 2(a) above. In addition, the Shares may not be
Transferred at any time earlier than permitted under the following schedule
(except as necessary to reflect a merger or acquisition of the Company, as
described in the definition of “Long-term Restricted Stock” in Q30.0 of 31
C.F.R. Part 30 of the Code of Federal Regulations):
(i) 25% of the Shares may be Transferred on or
after the time the Company repays 25% of the aggregate financial assistance
received by the Company under the CPP;
(ii) An additional 25% of the Shares may be
Transferred on or after the time the Company repays 50% of the aggregate
financial assistance received by the Company under the CPP;
(iii) An additional 25% of the Shares may be
Transferred on or after the time the Company repays 75% of the aggregate
financial assistance received by the Company under the CPP; and
(iv) An additional 25% of the Shares may be
Transferred on or after the time the Company repays 100% of the aggregate
financial assistance received by the Company under the CPP.
Notwithstanding the
foregoing, in the case of Shares subject to this Award for which the Grantee
does not make an election under Section 83(b) of the Code in accordance with
Section 4(b), at any time beginning with the date upon which the Shares Vest and
ending on December 31 of the calendar year including that date, a portion of the
Shares may be Transferred as may reasonably be required to pay the federal,
state, local, or foreign taxes that are anticipated to apply to the income
recognized due to the Vesting, and any Shares transferred for this purpose shall
not count toward the percentages in the schedule above.
(c) For purposes of this Agreement, including determination of vesting,
Grantee shall be considered to be in the employment of the Company as long as
Grantee remains an employee of either the Company, any successor corporation
(including any parent entity succeeding to the business of or control of the
Company) or subsidiary corporation (as defined in Section 424 of the Code) of
the Company or any successor corporation. Any question as to
whether and when there has been a termination of such employment, and the cause
of such termination, shall be determined by the Committee, and its determination
shall be final and binding on all persons, including Grantee.
(d) For purposes of this Agreement, including
determination of vesting, Grantee shall be considered to be in the employment of
the Company as long as Grantee remains an employee of either the Company, any
successor corporation (including any parent entity succeeding to the business of
or control of the Company) or subsidiary corporation (as defined in Section 424
of the Code) of the Company or any successor corporation. Any question as to
whether and when there has been a termination of such employment, and the cause
of such termination, shall be determined by the Committee, and its determination
shall be final and binding on all persons, including Grantee.
3. WITHHOLDING OF TAX. To the extent that the vesting of Shares or
receipt of Shares results in income to Grantee for federal, state or local
income tax purposes, Grantee shall pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any federal, state or local
taxes of any kind required by law to be withheld with respect to such income.
The Company shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the Grantee, including
the right but not the obligation to effect such withholding by deducting the a
number of Shares with a fair market value equal to the amount of any such
obligation, to the extent permitted by the CPP Guidance.
4. SECTION 83 OF THE CODE. Grantee acknowledges that he understands the
following:
(a) Under Section 83(a) of the Code, the
excess of the fair market value on the date of Vesting of the Shares over the
fair market value on the Award Date of such Shares will be taxed at the time of
Vesting as ordinary income and subject to payroll and withholding taxes and to
tax reporting, as applicable.
(b) Grantee may elect under Section 83(b) of
the Code to be taxed at ordinary income rates based on the fair market value of
the Shares at the time such shares are awarded, rather than at the time and as
the Shares Vest. Such election (an “83(b) Election”) must be filed with the
Internal Revenue Service within thirty (30) days from the Date of Award. Grantee
(i) will not be entitled to a deduction for any ordinary income previously
recognized as a result of the 83(b) Election if Shares are subsequently
forfeited to the Company, and (ii) the 83(b) Election may cause Grantee to
recognize more compensation income than he would have otherwise recognized if
the value of the Shares subsequently declines. As a convenience to Grantee, the
Company has provided Grantee with a form for making an 83(b) Election. FAILURE
TO FILE SUCH AN ELECTION WITHIN THE REQUIRED THIRTY (30) DAY PERIOD AND AS
OTHERWISE DESCRIBED IN THE FORM MAY RESULT IN THE RECOGNITION OF ORDINARY INCOME
BY EMPLOYEE AS SHARES OF RESTRICTED STOCK VEST. GRANTEE ACKNOWLEDGES THAT IT IS
GRANTEE’S SOLE RESPONSIBILITY TO TIMELY FILE THE ELECTION UNDER SECTION 83(B) OF
THE CODE IF GRANTEE CHOOSES TO MAKE SUCH AN ELECTION. Grantee agrees to provide
the Company with a copy of any such election.
(c) The foregoing is only a summary of the
federal income tax laws that apply to the Shares and does not purport to be
complete. EMPLOYEE IS DIRECTED TO SEEK INDEPENDENT ADVICE REGARDING THE
APPLICABLE PROVISIONS OF THE CODE, THE INCOME TAX LAWS OF ANY MUNICIPALITY,
STATE OR FOREIGN COUNTRY IN WHICH HE MAY RESIDE, AND THE TAX CONSEQUENCES OF
YOUR DEATH.
5. STOCK POWER. Grantee agrees to deliver a Stock Power and
Assignment Separate from Certificate in the form attached as Exhibit A (with the transferee, certificate number,
date and number of shares left blank), executed by Grantee and his spouse, if
any, along with any certificate(s) evidencing Shares issued to him, to the
Secretary of the Company or its designee (“Escrow Holder”). EMPLOYEE HEREBY
APPOINTS THE ESCROW HOLDER TO
HOLD SUCH STOCK POWER AND ANY SUCH CERTIFICATE(S) IN ESCROW AND TO TAKE ALL SUCH
ACTIONS, AND TO EFFECTUATE ALL SUCH TRANSFERS AND/OR RELEASES OF SUCH SHARES, AS
ARE REQUIRED TO EFFECTUATE THE TERMS OF THIS AWARD. The foregoing appointment is
a power coupled with an interest and may not be revoked by Grantee. Grantee and
the Company agree that any Escrow Holder will not be liable to any party to any
person for any actions or omissions, unless Escrow Holder is grossly negligent
relative thereto. Escrow Holder may rely on any letter, notice or other document
executed by any signature purported to be genuine and may rely on advice of
counsel and obey any order of any court with respect to the transactions by this
Agreement. Shares subject to this Award shall be released to Grantee from escrow
as they Vest.
6. LEGEND. Grantee
agrees that the certificate(s) representing the Shares may bear a legend in
substantially the following form:
“The securities represented by this certificate are subject to certain
transfer and forfeiture restrictions and may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner. A copy of the agreement
and plan setting forth such restrictions may be obtained at the principal office
of the issuer. Such transfer and forfeiture restrictions are binding on
transferees of these shares.”
7. RESTRICTIONS ON TRANSFER UNDER SECURITIES
LAWS. Grantee understands
that although the issuance of grants and awards under the Plan has been
registered under the Securities Act of 1933, such registration may not apply to
any resale or transfer by Grantee of the Shares. Grantee also agrees (i) that
the certificates representing the Shares may bear such legend or legends as the
Committee deems appropriate in order to assure compliance with applicable
securities laws, (ii) that the Company may refuse to register the transfer of
the Shares on the stock transfer records of the Company if such proposed
transfer would in the opinion of counsel satisfactory to the Company constitute
a violation of any applicable securities law, and (iii) that the Company may
give related instructions to its transfer agent to stop registration of the
transfer of the Shares.
8. COMMITTEE'S POWERS. No provision contained in this Agreement
shall in any way terminate, modify or alter, or be construed or interpreted as
terminating, modifying or altering any of the powers, rights or authority vested
in the Committee pursuant to the terms of the Plan, including, without
limitation, the Committee's rights to make certain determinations and elections
with respect to the Shares.
9. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the Company, its subsidiaries and any of their
respective successors, and all persons lawfully claiming under
Grantee.
10. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Missouri.
[The remainder of this
page is intentionally blank. The next page is the signature page.]
IN WITNESS WHEREOF, the Company has caused
this Agreement to be duly executed by an officer thereunto duly authorized, and
Grantee has executed this Agreement, all effective as of the date first above
written.
| ENTERPRISE FINANCIAL SERVICES CORP | |||
| By: | /s/ Xxxx Xxxxxx | ||
| Name: | Xxxx Xxxxxx | ||
| Title: | Senior Vice President – Human Resources | ||
| /s/ Xxxx X. Xxxxx | |||
| EMPLOYEE | |||
EXHIBIT A
STOCK POWER AND
ASSIGNMENT
FOR VALUE RECEIVED,
the undersigned hereby sells, assigns and transfers unto Enterprise Financial
Services Corp (the “Corporation”), 10,000 shares of the common stock of the
Corporation, standing in the undersigned’s name on the books of said
corporation, and does hereby irrevocably constitute the Secretary of said
corporation as attorney-in-fact, with full power of substitution, to transfer
said stock on the books of said corporation.
Dated: 2/18/10
| /s/ Xxxx X. Xxxxx | ||
| Print Name: |
