BROOKE CAPITAL CORPORATION
Exhibit 10.23
BROOKE CAPITAL CORPORATION
2007 BROOKE CAPITAL CORPORATION EQUITY INCENTIVE PLAN
This Restricted Shares Agreement (“Agreement”) is entered into by and between BROOKE CAPITAL
CORPORATION, a Kansas corporation (the “Company”), and the recipient named below (the “Recipient”).
WHEREAS, in accordance with the Company’s 2007 BROOKE CAPITAL CORPORATION EQUITY INCENTIVE
PLAN (the “Plan”), the Recipient has been selected by the Compensation Committee under the Plan
(the “Committee”) to receive the following award under the Plan of Restricted Shares, defined in
the Plan to mean shares of the Company’s Common Stock issued to a recipient thereunder subject to
such terms and conditions, including, without limitation, forfeiture or resale to the Company, and
to such restrictions against sale, transfer or other disposition, as the Committee may determine at
the time of issuance:
Date of Grant of Restricted Shares: August 15, 2007
Number of Restricted Shares awarded: 10,000
Vesting Schedule (Manner in which restrictions on Restricted Shares lapse):
The Restricted Shares shall vest in one-third annual increments beginning on the first
anniversary of the Date of Grant specified above, meaning that one-third of the number of
Restricted Shares specified above (rounded down to the nearest whole number) shall vest (no longer
be subject to forfeiture and the restrictions set forth in Exhibit 1 hereto) on August 15 of each
of 2008, 2009, and 2010, subject to the terms of Exhibit 1 attached hereto and by this reference
incorporated herein. The foregoing notwithstanding, the Restricted Shares shall vest immediately
upon (i) the sale of all or substantially all of the assets of the Company or (ii) the sale by
Brooke Corporation of all of its Company Common Stock; and
WHEREAS, the Recipient recognizes Awards made under the Plan are subject to certain
conditions, restrictions and risk of forfeiture;
NOW, THEREFORE, in consideration of the foregoing, the premises and the mutual covenants and
agreements set forth herein, the parties hereby agree to the terms and conditions of the Plan, as
the same may be amended from time to time, and the terms, conditions and mutual covenants as set
forth in Exhibit 1 attached hereto and made a part hereof in connection with the award of
Restricted Shares set forth above.
The parties hereto have executed this Agreement effective as of the Date of Grant.
| RECIPIENT: | BROOKE CAPITAL CORPORATION | |||||
XXXX X. XXXXX,
XX. |
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(Signature of Recipient) |
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Xxxx X. Xxxxx,
Xx.
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By: | XXXXXX X. XXX | ||||
(Printed or Typed Name of Recipient)
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Xxxxxx X. Xxx, President | |||||
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(Social Security Number) |
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BROOKE CAPITAL CORPORATION
2007 BROOKE CAPITAL CORPORATION EQUITY INCENTIVE PLAN
RESTRICTED SHARES AGREEMENT — EXHIBIT 1
I. RESTRICTED SHARES
(A) Issuance of Shares; Delivery of Shares.
(1) Restricted Shares (the “Shares”) issued under the Plan shall be held by the Company, or
its transfer agent or other designee, and shall be subject to forfeiture by or delivery to the
Recipient as set forth in this Exhibit 1 to the Agreement. Shares shall be considered to be held by
the Company for purposes of Section I(E) until such time as the Shares vest in accordance with the
terms of the vesting schedule set forth in the Agreement to which this Exhibit 1 applies. Defined
terms in such Agreement shall also apply to this Exhibit 1.
(2) Any Shares to be delivered to the Recipient by the Company in accordance with the terms of
the Plan shall be delivered free of restrictions in certificate form, unless otherwise requested by
the Recipient and approved by the Company.
(B) Dividends and Voting Rights. During the time that the Company, or its transfer agent or
other designee, continues to hold any Shares subject hereunder to forfeiture by (and delivery to)
the Recipient, the Recipient shall be entitled to receive any dividends paid with respect to such
Shares and to vote such Shares on any matters submitted by the Company to its shareholders.
(C) Transfer Restrictions.
(1) During the period that Shares issued under the Plan are held by the Company hereunder for
delivery to the Recipient, such Shares and the rights and privileges conferred shall not be
transferred, assigned, pledged, or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to sale under execution, attachment or similar process. Upon
any attempt, contrary to the terms hereof, to transfer, assign, pledge, hypothecate, or otherwise
so dispose of such Shares or any right or privilege conferred hereby, or upon any attempted sale
under any execution, attachment, or similar process upon such Shares or the rights and privileges
hereby granted, then and in any such event this Agreement and the rights and privileges hereby
granted shall, except as provided in Section II(K), immediately terminate. Immediately after such
termination, the Recipient’s rights to delivery of such Shares shall forfeit and the Recipient
hereby authorizes the Company and its stock transfer agent to cause the delivery, transfer and
conveyance of such Shares to the Company.
(2) If at any time counsel for the Company determines that qualification of the Shares under
any state or federal securities law, or the consent or approval of any governmental regulatory
authority, is necessary or desirable as a condition of the transfer of such Shares (including a
sale, assignment, pledge, grant of a security interest in respect of, attachment, or disposal of
the Shares in any manner, by operation of law or otherwise) or offer to transfer such Shares, the
Recipient shall not transfer or offer to transfer such Shares, in whole or in part, and any such
attempted transfer or offer to transfer will be void and of no effect, unless and until such
qualification, consent, or approval shall have been effected or obtained free of any conditions
such counsel deems unacceptable.
(D) Legend. While any Shares are held by the Company or its transfer agent or other designee
and subject to forfeiture by or delivery to the Recipient, such Shares shall be subject to, and any
certificate or certificates representing such Shares shall contain, the following restrictive
transfer legend:
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“THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED
HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE
2007 BROOKE CAPITAL CORPORATION EQUITY INCENTIVE PLAN OF BROOKE CAPITAL
CORPORATION AND AN AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND
BROOKE CAPITAL CORPORATION. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE WITH
THE SECRETARY OF BROOKE CAPITAL CORPORATION.”
(E) Forfeiture and Return of Shares. On the date the Recipient ceases for whatever reason to
be either (i) an employee of the Company or one of its “subsidiary corporations,” as such term is
defined in Section 424(f) of the Internal Revenue Code (an “Employee”) and is not immediately
thereafter and continuously employed as a regular active Employee of the Company or another such
subsidiary corporation of the Company or (ii) a director of the Company or any of its subsidiary
corporations (“Last Day of Affiliation”), all Shares held on such Last Day of Affiliation by the
Company, or its transfer agent or other designee, shall be forfeited by the Recipient and the
Recipient hereby authorizes the Company and its stock transfer agent to cause the delivery,
transfer and conveyance of such Shares to the Company. Thereafter, this Agreement shall terminate
and the Company and the Recipient shall, except as provided in Section II(K), have no further
rights or obligations hereunder.
(F) Withholding Taxes.
(1) Except with respect to those Shares for which an election under Section 83(b) of the
Internal Revenue Code (“83(b) Election”) has been made by Recipient, on the date any federal,
state, local or foreign taxes are required to be withheld by the Company or the Recipient’s
employer in connection with Shares awarded pursuant to the Plan (except dividends paid with respect
to the Shares), the Recipient shall make an irrevocable election to (a) pay to the Company in cash
the amount of any such tax withholding obligations or (b) have the Company withhold a portion of
such Shares to satisfy all or part of any such tax withholding obligations, with the value of each
such withheld Share equal to the fair market value of Common Stock on the date the tax withholding
is required to be made. The Recipient must make and deliver such irrevocable election to the
Company in writing within five business days after the date the tax withholding obligations arise,
or such shorter time period as the Company may require (the “Delivery Deadline”). Any such election
to make a payment to the Company in the amount of the tax withholding obligations must include
payment. If the election is not made on or before the Delivery Deadline or if the election to make
a payment to the Company in the amount of all or part of the tax withholding obligations is timely
made but does not include payment, the Company will withhold Shares to satisfy all of any such tax
withholding obligations, with the value of each such withheld Share equal to the fair market value
of Common Stock on the date the tax withholding is required to be made. If only whole Shares may be
withheld to satisfy the tax withholding obligations, the Company will round up to the closest whole
share necessary to completely satisfy the tax obligations. The dollar amount of any difference
between the amount required to be withheld and the amount actually withheld will be credited as
additional federal tax withholdings on the Recipient’s Form W-2 for the year in which the
obligations arise.
Notwithstanding the foregoing, the Company, in its sole discretion, may require the Recipient to
pay to the Company in cash the amount of tax required to be withheld in lieu of permitting or
causing the Company to withhold Shares to satisfy the tax withholding obligation, if the Company
determines that withholding of Shares will result in the violation of any state or federal
securities law by the Recipient or by the Company or any of its subsidiaries, or require the
Recipient to disgorge any profits associated with an acquisition or disposition of Common Stock.
(2) With respect to those Shares for which an 83(b) Election has been made by the Recipient,
the Recipient shall pay to the Company the amount of any federal, state, local or foreign taxes
required to be withheld by the Company or the Recipient’s employer as a result of making the 83(b)
Election promptly after such election has been made.
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(3) On the date any federal, state, local or foreign taxes are required to be withheld by the
Company or the Recipient’s employer in connection with dividends paid with respect to any Shares
that have not been delivered to the Recipient pursuant to Section I(A)and with respect to which an
83(b) Election has not been made, the Company shall withhold the amount of such tax obligations
from such dividend payment or instruct the Recipient’s employer to withhold such amount from the
Recipient’s next payment(s) of wages. The Recipient authorizes the Company to so instruct the
Recipient’s employer and authorizes the Recipient’s employer to make such withholdings from
payment(s) of wages if the Company does not withhold the tax obligations from the dividend
payments.
II. MISCELLANEOUS
(A) No Employment Contract. This Agreement does not confer on the Recipient any right to
continued employment for any period of time, is not an employment contract, shall not interfere
with or restrict in any manner the rights of the Company or any of its subsidiary corporations,
which are hereby exclusively reserved, to discharge the Recipient at any time for any reason
whatsoever with or without cause, and shall not in any manner modify any effective contract of
employment between the Recipient and the Company or any subsidiary corporation of the Company.
(B) No Right to Future Awards. The parties acknowledge that this Agreement does not confer on
the Recipient any right or guarantee to future awards under the Plan. The Committee shall retain
full authority and discretion to make determinations regarding eligibility for awards under the
Plan, including the types, sizes, terms and conditions of awards granted under the Plan. The
Company expressly reserves the right to change, modify or amend the terms and conditions of any
future awards of grants under the Plan.
(C) Adjustment of Shares. In the event that the outstanding shares of the Company’s Common
Stock subject to the award of Restricted Shares are changed into or exchanged for a different
number or kind of shares of the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split, stock dividend or combination of
shares, the Board of Directors of the Company shall make an appropriate and equitable adjustment in
the number and kind of shares of such Common Stock as to which the award of Restricted Shares, or
portions thereof then held by the Company in accordance with this Agreement (i.e., Shares not yet
delivered), shall be subject, to the end that after such event the Recipient’s proportionate
interest shall be maintained as close as possible to the Recipient’s interest before the occurrence
of such event. Any such adjustment made by the Committee shall be final and binding upon the
Recipient, the Company and all other interested persons.
(D) Merger, Consolidation, Reorganization, Liquidation, etc. If the Company shall become a
party to any corporate merger, consolidation, major acquisition of property for stock,
reorganization, or liquidation, the Board of Directors shall, acting in its absolute and sole
discretion, make such arrangements, which shall be binding upon the Recipient of Shares not yet
delivered, for the substitution of a new award or other contractual rights with regard to this
award.
(E) Interpretation and Regulations. The Committee shall have full power and authority to
construe, interpret and administer the Plan and, subject to the powers in the Plan specifically
reserved to the Board of Directors of the Company and subject to any other provisions of the Plan,
to make determinations which shall be final, conclusive and binding upon all persons including,
without limitation, the Company, the shareholders of the Company, the Board of Directors, the
Recipient and any persons having any interest in any awards which may be granted under the Plan.
The Committee shall have the sole power to determine, solely for purposes of the Plan and this
Agreement, the date of and circumstances which shall constitute a cessation or termination of
employment and further to determine, solely for purposes of the Plan and this Agreement, what
constitutes continuous employment with respect to the delivery of Shares under the Plan (except
that absence on leave approved by the Committee or transfers of continuous employment among the
subsidiary corporations of the Company shall not be considered an interruption of continuous
employment for any purpose under the Plan).
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(F) Waiver. The failure of the Company to enforce at any time any terms, covenants or
conditions of this Agreement shall not be construed to be a waiver of such terms, covenants or
conditions or of any other provision. Any waiver or modification of the terms, covenants or
conditions of this Agreement shall only be effective if reduced to writing and signed by both
Recipient and an officer of the Company.
(G) Notices. Any notice to be given to the Company or election to be made under the terms of
this Agreement shall be addressed to the Company (Attention: Human Resources Department) at 00000
Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx Xxxx, XX 00000, or at such other address as the Company may
hereafter designate in writing to the Recipient. Any notice to be given to the Recipient shall be
addressed to the Recipient at the last-known residence address of the Recipient contained in the
Recipient’s personnel file or at such other address as the Recipient may hereafter designate in
writing to the Company. Any such notice shall be deemed to have been duly given when delivered by
hand delivery (to the Human Resources Department, if delivered by the Recipient, and to the
Recipient, if delivered by the Company) or deposited in the United States mails via regular or
certified mail, addressed as aforesaid, postage prepaid.
(H) Choice of Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Kansas without reference to principles of conflicts of
laws.
(I) Headings. The section headings herein are for convenience only and shall not be considered
in construing this Agreement.
(J) Amendment. No amendment, supplement, or waiver to this Agreement is valid or binding
unless in writing and signed by both parties.
(K) Survival. Sections I(C), I(E), I(F), II(A), II(B), II(E), II(F), II(G), II(H), and II(J)
and this Section II(K) shall survive any termination of this Agreement and shall be applicable to
any Shares delivered to the Recipient pursuant to the terms of the Plan.
(L) Execution of Agreement. This Agreement shall not be enforceable by either party, and
Recipient shall have no rights with respect to the Shares, unless and until (1) this Agreement is
signed by Recipient and on behalf of the Company by an officer of the Company, provided that the
signature by such officer of the Company on behalf of the Company may be a facsimile or stamped
signature, and (2) returned to the Company.
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