RESTRICTED STOCK GRANT AGREEMENT
EXHIBIT
10.3
This
Restricted Stock Purchase Agreement dated as of January 15, 2008 (this “Agreement”) is made
by and between Technest Holdings, Inc., a Nevada corporation (including, as
context requires, its subsidiaries the “Company”), and Xxxxx
X. Kotak (the “Grantee”).
1. Definitions. As
used in this Agreement, the following terms shall have the following
meanings:
Qualified
Sale: The sale of all or substantially all of assets or issued
and outstanding capital stock of the Company, or merger or consolidation
involving the Company in which stockholders of the Company immediately before
such merger or consolidation do not own immediately after such merger or
consolidation capital stock or other equity interests of surviving corporation
or entity representing more than fifty percent in voting power of capital stock
or other equity interests of such surviving corporation or entity outstanding
immediately after such merger or consolidation.
Service: Service
as an employee, officer or director of, or a consultant or advisor to, the
Company or its successors.
Shares: The
shares of Common Stock issued to Grantee hereunder and any other securities
of
the Company which may be issued in exchange for or in respect of such shares
of
Common Stock, whether by way of stock split, stock dividend, combination of
shares, reclassification, recapitalization, reorganization or any other
means.
Unvested
Shares: Any Shares that are not Vested Shares.
Vested:
Released from
the Company’s Forfeiture Right (as defined in Section 5(a)).
Vested
Shares: Any Shares that have vested in accordance with Section
5(b).
2. Grant
of
Shares. The Company hereby grants to Grantee, and Grantee
hereby accepts from the Company, 50,000 shares of the Company’s common stock,
$0.001 par value per share (“Common
Stock”). Grantee and the Company hereby agree that such shares
are granted as compensation for Grantee’s Service to the Company.
3. Representations
of
Grantee. Grantee represents to the Company, and agrees that
the Company is entitled to rely on such representations, as
follows:
(a) Grantee
is
acquiring the Shares for Grantee’s own account for investment, and not for, with
a view to, or in connection with the resale or distribution
thereof. Grantee has no present intention to sell, hypothecate,
distribute or otherwise transfer the Shares or any portion thereof or any
interest therein.
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(b) In
connection
with Grantee’s acquisition of the Shares, Grantee accepts the condition that the
Company may maintain “stop transfer” orders with respect to the Shares and that
each certificate or other document evidencing the Shares will bear conspicuous
legends in substantially the form set forth in Section 7 of this
Agreement.
(c) Grantee
has
obtained all financial or legal advice as Grantee deems necessary with respect
to Grantee’s acquisition of the Shares. Grantee has fully
investigated the Company and its business and financial condition, to include
a
review of the Company’s pubic filings with the Securities and Exchange
Commission, and has knowledge of the Company’s current activities.
4. Restrictions
on
Transfer. The following restrictions on transfer of the Shares
shall apply:
(a) Unvested
Shares. Except for forfeitures of Unvested Shares to the
Company as contemplated by Section 5, no Shares, nor any interest therein,
may
be sold, assigned, pledged or otherwise transferred until such Shares shall
have
Vested as defined in Section 5.
(b) Remedies. No
sale, assignment, pledge or other transfer of Shares shall be effective or
given
effect on the books of the Company unless all of the applicable provisions
of
this Section 4 have been duly complied with. In addition to any other
legal or equitable remedies which it may have, the Company may enforce its
rights by actions for specific performance (to the extent permitted by law)
and
may refuse to recognize any transferee as one of its stockholders for any
purpose, including, without limitation, for purposes of dividend and voting
rights, until all applicable provisions hereof have been complied
with.
(c) Lock-Up. Grantee
agrees that for a period of up to 180 days from the effective date of any
registration of securities of the Company (upon request of the Company or the
underwriters managing any underwritten offering of the Company’s securities), he
or she will not sell, make any short sale or loan of, grant any option for
the
purchase of, or otherwise dispose of any Shares held by him or her without
the
prior written consent of the Company or such underwriters, as the case may
be.
(d) Termination
of
Restrictions. Section 4 shall terminate immediately prior to
the consummation of a Qualified Sale.
5. Forfeiture
of Unvested
Shares.
(a) Forfeiture
upon
Termination. In the event of the termination of Grantee’s
Service by Grantee for any reason, upon the date of such termination (the
“Termination Date”)
all the Unvested Shares shall be forfeited to the Company. As a
result of any forfeiture of Unvested Shares pursuant to this Section 5(a),
the
Company shall become the legal and beneficial owner of the Unvested Shares
being
forfeited and shall have all rights and interest therein or related thereto,
and
the Company shall have the right to transfer to its own name the number of
Unvested Shares being forfeited to the Company, without further action by
Grantee.
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(b) Vesting.
(i) The
Shares
will become vested on January 14, 2009, provided, however,
that the vesting of Shares on any such vesting date shall be conditioned
upon
Grantee’s continuing Service with the Company from the date hereof through such
vesting date.
(ii) Notwithstanding
Section 5(b)(i), all Shares shall be deemed to have vested immediately prior
to
the consummation of a Qualified Sale.
6. Custody
of
Certificates. In order to facilitate the exercise of Section
5(a), the Company or its counsel shall hold all certificates representing
Unvested Shares, together with an adequate number of undated and otherwise
blank
stock powers executed by Grantee. The Company shall have the right to
cause transfers of Unvested Shares to be effected pursuant to Section
5. After any Shares become Vested Shares, the Company shall, upon
request of Grantee, deliver to Grantee a certificate or certificates
representing such Vested Shares.
7. Legends. Each
certificate representing Shares shall prominently bear legends in substantially
the following forms:
The
Corporation is authorized to issue more than one class or series of
stock. The powers, designations, preferences and relative
participating, optional or other special rights, and the qualifications,
limitations or restrictions of such preferences and/or rights of each class
of
stock or series of any class set forth in the Certificate of Incorporation
of
the Corporation. The Corporation will furnish a copy of the
Certificate of Incorporation of the Corporation to the holder of this
certificate without charge upon request.
The
securities represented by this certificate are subject to restrictions on
transfer and reacquisition rights pursuant to the terms of a Restricted Stock
Grant Agreement, as amended from time to time, between the owner of this
certificate and the Corporation. The Corporation will furnish a copy
of this agreement to the holder hereof without charge upon written
request.
8.
Miscellaneous.
(a) Entire
Agreement. This Agreement in conjunction with the Employment
Agreement constitute the entire agreement between the parties with respect
to
the subject matter hereof, and supersedes all prior agreements, negotiations,
representations and proposals, written or oral, relating to such subject
matter.
(b) Amendments. Neither
this Agreement nor any provision hereof may be changed or modified except by
an
agreement in writing executed by Grantee and on behalf of the
Company.
(c) Binding
Effect of the
Agreement. This Agreement shall inure to the benefit of, and
be binding upon, the Company, Grantee and their respective estates, heirs,
executors, transferees, successors, assigns and legal
representatives.
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(d) Provisions
Severable.
In the event that any provision of this Agreement shall be determined to be
invalid, illegal or otherwise unenforceable by any court of competent
jurisdiction, the validity, legality and enforceability of the other provisions
of this Agreement shall not be affected thereby. Any invalid, illegal
or unenforceable provision of this Agreement shall be severed, and after any
such severance, all other provisions hereof shall remain in full force and
effect.
(e) Notices. All
notices under this Agreement shall be effective (i) upon personal or facsimile
delivery, (ii) two business days after deposit in the United States mail as
registered or certified mail postage fully prepaid, or (iii) one business day
after pickup by any overnight commercial courier service, in each case sent
or
addressed to the Company at its principal office and to Grantee at his record
address as carried in the stock records of the Company or at such other address
as he or she may from time to time designate in writing to the
Company.
(f) Construction. A
reference to a Section shall mean a Section of this Agreement unless otherwise
expressly stated. The titles and headings herein are for reference
purposes only and shall not in any manner limit the construction of this
Agreement which shall be considered as a whole. The words “include,”
“includes” and “including” when used herein shall be deemed in each case to be
followed by the words “without limitation.” Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of names and pronouns shall
include the plural and vice-versa.
(g) No
Employment
Agreement. This Agreement shall not be construed as an
agreement by the Company to employ Grantee, nor is the Company obligated to
employ Grantee by reason of this Agreement or the issuance of the Shares to
Grantee.
(h) Section
83(b)
Election. Grantee will furnish to the Company a copy of any
election made by Grantee under Section 83(b) of the Internal Revenue Code of
1986, as amended, with respect to his acquisition of the Shares.
(i) Applicable
Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Maryland, without regard to its
principles of conflicts of laws. Grantee consents to jurisdiction and
venue in any state or federal court in State of Maryland for the purposes of
any
action relating to or arising out of this Agreement or any breach or alleged
breach hereof, and to service of process in any such action by certified or
registered mail, return receipt requested.
(j) Disposition
of Shares;
Purchase by Nominee or Designee. Any Shares that the Company
elects to purchase hereunder may be disposed of by it in such manner as it
deems
appropriate with or without restrictions on the transfer thereof, and the
Company may require their transfer to a nominee or designee as part of any
purchase of the Shares from Grantee.
(k) Withholding
Taxes. Grantee acknowledges and agrees that the Company has
the right to deduct from payments of any kind otherwise due to Grantee any
federal, state or local taxes of any kind required by law to be withheld with
respect to the granting and vesting of the Shares to Grantee. Grantee
agrees that he or she shall, no later than the date as of which the value of
any
portion of the Shares first becomes includable in the gross income of the
Grantee for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Company regarding payment of any Federal,
state, local and/or payroll taxes of any kind required by law to be withheld
with respect such income. The Company and its affiliates 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 participant.
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(l) Arbitration. Any
dispute or controversy arising in connection with this Agreement shall be
determined and settled by arbitration in Maryland by a panel of three members
who shall be selected, and such arbitration shall be conducted, in accordance
with the commercial arbitration rules of the American Arbitration
Association. Any award rendered therein shall be final and binding
upon the parties hereto and their legal representatives and judgment upon any
such award may be entered in any court having jurisdiction
thereof. Each party shall bear its own expenses, including fees and
disbursements of its attorneys, accountants, and financial experts, and the
parties shall each pay 50% of all arbitration fees and expenses of the
arbitrators.
(j) Pursuant
to
Plan. This grant of Restricted Stock shall be subject in every
respect to the provisions of the Company’s 2006 Stock Incentive Plan (the “Plan”), as amended from
time
to time, which is incorporated herein by reference and made a part
hereof. The Grantee hereby accepts this grant of Restricted Stock
subject to all the terms and provisions of the Plan and agrees that (i) in
the
event of any conflict between the terms hereof and those of the Plan, the latter
shall prevail, and (ii) all decisions under and interpretations of the Plan
by
the Board of Directors of the Company or the Committee, as defined in the Plan,
shall be final, binding and conclusive upon the Grantee and his heirs and legal
representatives.
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IN
WITNESS WHEREOF, the parties hereto have executed this Restricted Stock Grant
Agreement as of the date first above written.
| Technest Holdings, Inc. | |
|
By:
/s/
Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: CEO
|
|
|
GRANTEE:
|
|
|
/s/
Xxxxx X. Kotak
Xxxxx X. Kotak
|
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STOCK
POWER
([____________])
FOR
VALUE
RECEIVED, [____________] hereby sells, assigns and transfers to Technest
Holdings, Inc., a Nevada corporation (the “Company”), a total of ______________
shares of the Common Stock of the Company standing in his name on the books
of
the Company represented by stock certificate number ___ to be
delivered herewith, and does hereby irrevocably constitute and appoint
______________________ as attorney to transfer said shares on the books of
the
Company with full power of substitution in the premises.
| Dated: ___________________ | |
|
________________________
[____________]
|
|
| In the Presence of: | |
|
_______________________________
Name:
|
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