EXHIBIT 10.43
RESTRICTED STOCK AGREEMENT
UNDER THE BORON XXXXXX & ASSOCIATES, INC.
1996 STOCK OPTION AND GRANT PLAN
Name of Grantee: Xxxxxx X. Xxxxxxx
Class of Shares: Common Stock
No. of Shares: 50,000 Grant Date: August 6, 2001
Per Share Purchase Price: $.01 Effective Date: August 6, 2001
Pursuant to the Boron, XxXxxx & Associates, Inc. 1996 Stock
Option and Grant Plan (the "Plan"), Boron, XxXxxx & Associates, Inc., a Delaware
corporation (together with its successors, the "Company"), hereby grants, sells
and issues to the person named above (the "Grantee"), who is an officer and
director of the Company, the number of shares of common stock, par value $.01
per share ("Common Stock"), of the Company indicated above (subject to the
provisions below, the "Shares"), for the per share purchase price specified
above, subject to the terms and conditions set forth herein and in the Plan. The
Grantee agrees to the provisions set forth herein and acknowledges that each
such provision is a material condition of the Company's agreement to issue and
sell the Shares to him. The Company hereby acknowledges receipt of $500 in full
payment for the Shares. All references to share prices and amounts herein shall
be equitably adjusted to reflect stock splits, stock dividends,
recapitalizations, mergers, reorganizations and similar changes affecting the
capital stock of the Company, and any shares of capital stock of the Company
received on or in respect of Shares in connection with any such event (including
any shares of capital stock or any right, option or warrant to receive the same
or any security convertible into or exchangeable for any such shares or received
upon conversion of any such shares) shall be subject to this Agreement on the
same basis and extent at the relevant time as the Shares in respect of which
they were issued, and shall be deemed Shares as if and to the same extent they
were issued at the date hereof.
Section 1. Definitions
"Change of Control" means (a) the sale of all or substantially
all of the assets of the Company and its Subsidiaries to another person or
entity; (b) a merger, reorganization or consolidation in which the holders of
the Company's outstanding voting power immediately prior to such transaction do
not own a majority of the outstanding voting power of the surviving or resulting
entity immediately upon completion of such transaction; (c) the sale of all or
substantially all of the outstanding stock of the Company to an unrelated person
or entity in which the holders of the Company's outstanding voting power
immediately prior to such transaction do not own a majority of the outstanding
voting power of the surviving or resulting entity immediately upon completion of
such transaction; or (d) any other transaction or series of transactions where
the owners of the Company's outstanding voting power immediately prior to
such transaction do not own a majority of the outstanding voting
power of the surviving or resulting entity immediately upon completion of such
transaction.
"Permitted Transferees" shall mean any of the following to
whom the Grantee may transfer Shares hereunder: the Grantee's spouse, parents,
children (natural or adopted), stepchildren or grandchildren or a trust for
their sole benefit of which the Grantor is the settlor; provided, however, that
any such trust does not require or permit distribution of any Shares during the
term of this Agreement unless subject to its terms.
"Restricted Shares" shall initially mean all of the Shares
provided that: (i) on the first anniversary of the Effective Date one-third
(1/3) of the Restricted Shares shall cease to be Restricted Shares and shall
become Vested Shares; (ii) on the second anniversary of the Effective Date an
additional one-third (1/3) of the Restricted Shares shall cease to be Restricted
Shares and shall become Vested Shares; and (iii) on the third anniversary of the
Effective Date the remaining one-third (1/3) of the Restricted Shares shall
cease to be Restricted Shares and shall become Vested Shares.
"Shares" shall mean the number of shares of Common Stock being
purchased by the Grantee on the date hereof and any additional shares of Common
Stock or other securities received as a dividend on, or otherwise on account of,
the Shares, as contemplated by the first paragraph of this Agreement.
"Subsidiary" shall mean any corporation or partnership of
which stock or other equity interests possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock or other equity
interests is owned directly or indirectly by the Company.
"Termination Event" shall mean the termination of the
Grantee's employment with the Company and its Subsidiaries for any reason
whatsoever, regardless of the circumstances thereof, and including without
limitation upon death, disability, retirement or discharge or resignation for
any reason, whether voluntary or involuntary.
"Vested Shares" shall mean all Shares which are not Restricted
Shares.
Section 2. Purchase and Sale of Shares.
On the date hereof, the Company hereby sells to the Grantee,
and the Grantee hereby purchases from the Company, the number of Shares set
forth above for the purchase price per share set forth above.
Section 3. Repurchase of Shares.
3.1. Repurchase. The Company or its assigns shall have the
right and option to repurchase all or any portion of the Restricted Shares (in
one or more transactions) held by the Grantee (and/or, if applicable, his
Permitted Transferees) as of the date of any Company notice that it has elected
to repurchase such Restricted Shares, for a purchase price of $.01 per share (i)
at any time during the Grantee's employment with the Company or (ii) for a
period of six (6)
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months following a Termination Event. The purchase and sale arrangements
contemplated by the preceding sentence of this Section 3.1 are referred to
herein as a "Repurchase."
3.2. Closing Procedure. The Company or its assigns shall
effect a Repurchase (if so elected) by delivering or mailing to the Grantee
(and/or, if applicable, his Permitted Transferees) written notice, specifying a
date (not earlier than ten (10) days from the date of such notice) on which a
Repurchase shall be effected. Upon such notification, the Grantee (and/or, if
applicable, his Permitted Transferees) shall promptly surrender to the Company
any certificates representing the Restricted Shares being purchased free and
clear of any liens or encumbrances, together with a duly executed stock power
for the transfer of such Restricted Shares to the Company or the Company's
assignee or assignees. Upon the Company's or its assignee's receipt of the
certificates from the Grantee (and/or, if applicable, his Permitted
Transferees), the Company or its assignee or assignees shall deliver to him, her
or it, as the case may be, a check for the purchase price of the Restricted
Shares being purchased, provided, however, that the Company may pay the purchase
price for such Restricted Shares by offsetting and canceling any indebtedness
then owed by the Grantee to the Company.
3.3. Remedy. Without limitation of any other provision of this
Agreement or other rights, in the event that the Grantee, or his Permitted
Transferees or any other person or entity is required to sell the Restricted
Shares pursuant to the provisions of this Section 3 and in the further event
that he, she or it refuses or for any reason fails to deliver to the designated
purchaser of such Restricted Shares the certificate or certificates evidencing
such Restricted Shares together with a related stock power, such designated
purchaser may deposit the purchase price for such Restricted Shares with any
bank doing business within fifty (50) miles of the Company's principal office,
or with the Company's independent public accounting firm, as agent or trustee,
or in escrow, for the Grantee, his Permitted Transferees or other person or
entity, to be held by such bank or accounting firm for the benefit of and for
delivery to him, them or it, and/or, in its discretion, pay such purchase price
by offsetting any indebtedness then owed by the Grantee as provided above. Upon
any such deposit and/or offset by the designated purchaser of such amount and
upon notice to the person or entity who was required to sell the Restricted
Shares to be sold pursuant to the provisions of this Section 3, such Restricted
Shares shall at such time be deemed to have been sold, assigned, transferred and
conveyed to such purchaser, the holder thereof shall have no further rights
thereto (other than the right to withdraw the payment thereof held in escrow, if
applicable), and the Company shall record such transfer in its stock transfer
book or in any appropriate manner.
3.4. Gross-Up Payment. Anything in this Agreement to the
contrary notwithstanding, if the Grantee elects, in accordance with Section
83(b) of the Internal Revenue Code of 1986, as amended, to recognize ordinary
income in the year the Shares were purchased, and pays to the Company all
withholding taxes shown as due on his Section 83(b) election form, or otherwise
ultimately determined to be due with respect to such election based on the
excess, if any, of the fair market value of the Shares as of the date of the
purchase over the purchase price for such Shares and the Company subsequently
exercises its right to repurchase Restricted Shares under Section 3.1, the
Grantee shall be entitled to receive, in addition to any amount payable under
Section 3.1, an additional payment (a "Gross-Up Payment"). The Gross-Up Payment
shall be an amount equal to the amount of tax actually paid in the year of
original
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purchase in respect of the Restricted Shares repurchased by the Company. The
determination of the amount of such Gross-Up Payment, shall be made by Xxxxxx
Xxxxxxxx LLP or any other nationally recognized accounting firm selected by the
Company (the "Accounting Firm"), which shall provide detailed supporting
calculations both to the Company and the Grantee within thirty (30) business
days of the date of the Repurchase. For purposes of determining the amount of
the Gross-Up Payment, the Grantee shall be deemed to pay federal, state and
local income taxes at the highest marginal rate of federal, state and local
income taxation applicable to individuals for the calendar year in which the
Shares were acquired, net of the maximum reduction in federal income taxes which
could be obtained from deduction of such state and local taxes. The Gross-Up
Payment, if any, as determined pursuant to this Section, shall be paid to the
Grantee within five (5) business days of the Grantee's receipt of the Accounting
Firm's determination. Absent manifest error, the determination by the Accounting
Firm shall be binding upon the Company and the Grantee.
Section 4. Restrictions on Transfer of Shares.
Except as set forth below, prior to the third anniversary of
the Effective Date set forth above, none of the Shares now owned or hereafter
acquired by the Grantee pursuant to this Agreement whether Restricted Shares or
Vested Shares, nor shall any interest in and such Shares, be sold, assigned,
transferred, pledged, hypothecated, given away or in any other manner disposed
of or encumbered, whether voluntarily or by operation of law, unless such
transfer is in compliance with all applicable federal and state securities laws
and such disposition is in accordance with the terms and conditions of this
Section 4. Subject to the foregoing general provisions, Shares may be
transferred pursuant to the following specific terms and conditions:
(a) Transfers to Permitted Transferees. The Grantee may
assign, transfer or give away any or all of the Shares to Permitted Transferees;
provided, however, that such Permitted Transferee(s) shall, as a condition to
any such transfer, agree to be subject to the provisions of this Agreement as if
the Shares continued to be held by the Grantee and shall have delivered a
written acknowledgment to that effect to the Company.
(b) Transfers Upon Death. Upon the death of the Grantee, (i)
all Restricted Shares shall be subject to the Company's Repurchase option and
the Grantee's estate, executors, administrators, personal representatives,
heirs, legatees and distributees shall be obligated to convey such Restricted
Shares to the Company or its assigns as contemplated by Section 3, and all
Restricted Shares not so repurchased shall be and remain subject to this Section
4, and (ii) all Vested Shares shall remain subject to this section 4.
Section 5. Legends.
Any certificate(s) representing the Shares shall carry
substantially the following legends:
The transferability of this certificate and the shares of
stock represented hereby are subject to the restrictions, terms and conditions
(including repurchase and restrictions against
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transfers) contained in a certain Restricted Stock Agreement dated August 6,
2001 between the Company and the holder of this certificate (a copy of which is
available at the offices of the Company for examination).
Section 6. Escrow.
In order to carry out the provisions of Sections 3 and 4 of
this Agreement more effectively, the Company shall hold the Shares in escrow
together with separate stock powers executed by the Grantee in blank for
transfer, and any Permitted Transferee shall, as an additional condition to any
transfer of Shares, execute a like stock power as to such Shares. The Company
shall not dispose of the Shares except as otherwise provided in this Agreement.
In the event of any Repurchase, the Company is hereby authorized by the Grantee,
as the Grantee's attorney-in-fact, to date and complete the stock powers
necessary for the transfer of the Restricted Shares being purchased and to
transfer such Restricted Shares in accordance with the terms hereof. At any time
after August 6, 2004, the Company shall, at the written request of the Grantee,
deliver to the Grantee (or the relevant Permitted Transferee) a certificate
representing the Shares.
Section 7. Withholding Taxes.
The Grantee acknowledges and agrees that the Company or any of
its subsidiaries have the right to deduct from payments of any kind otherwise
due to the Grantee, or from the Shares held pursuant to Section 6 hereof, any
federal, state or local taxes of any kind required by law to be withheld with
respect to the acquisition of the Shares.
Section 8. Change of Control.
Notwithstanding anything herein to the contrary, in the case of a
Change of Control:
(a) all Restricted Shares shall become Vested Shares
immediately prior to the closing or consummation of the Change of Control,
provided that such acceleration shall in all cases be contingent on the actual
occurrence of such closing or consummation;
(b) the transfer restrictions contemplated by Section 4
shall immediately terminate.
Section 9. Miscellaneous.
9.1. Assignment. At the discretion of the Board of Directors
of the Company, the Company shall have the right to assign the right to exercise
its rights with respect to a Repurchase to any person or persons, in whole or in
part in any particular instance, upon the same terms and conditions applicable
to the exercise thereof by the Company, and such assignee or assignees of the
Company shall then take and hold any Shares so acquired subject to such terms as
may be specified by the Company in connection with any such assignment. Unless
otherwise provided herein, the Grantee may not assign any of his rights or
obligations under this Agreement.
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9.2. Notices. Any notice or demand which is required or
provided to be given under this Agreement shall be deemed to have been
sufficiently given and received for all purposes when delivered by hand,
telecopy, telex or other method of facsimile, or five days after being sent by
certified or registered mail, postage and charges prepaid, return receipt
requested, or two days after being sent by overnight delivery providing receipt
of delivery, to the following addresses:
If to the Company: 0000 Xxxxxx Xxxx
Xxxxx, XX 00000
Facsimile No. 000-000-0000
or at any other address designated by the Company to the Grantee in writing;
If to the Grantee: Xxxxxx X. Xxxxxxx
00 Xxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Facsimile No. 000-000-0000
or at any other address designated by the Grantee to the Company in writing.
9.3. Governing Law. This Agreement shall be construed
under and be governed in all respects by the laws of the State of Delaware
without regard to its conflicts of laws principles.
9.4. Entire Agreement. This Agreement constitutes the entire
agreement between the Company and the Grantee with respect to the subject matter
hereof, and supersedes all prior representations and agreements with respect to
such subject matter. This Agreement may not be amended, modified or waived
except by a written instrument duly executed by the person against whom
enforcement of such amendment, modification or waiver is sought. The failure of
any party to require the performance of any term or obligation of this
Agreement, or the waiver by any party of any breach of this Agreement, in any
particular case will not prevent any subsequent enforcement of such term or
obligation or be deemed a waiver of any separate or subsequent breach.
9.5. Equitable Relief. The parties hereto agree and
declare that legal remedies are inadequate to enforce the provisions of this
Agreement and that equitable relief, including specific performance and
injunctive relief, may be used to enforce the provisions of this Agreement.
9.6. Dispute Resolution. In the event of a dispute between the
parties concerning their respective rights and obligations under this Agreement
or under any stock option agreement to which the Grantee and the Company are
party, that the parties are unable to resolve amicably between themselves within
sixty (60) days of proper notice from one party to another, such dispute shall
be settled by arbitration in the State of New Jersey in an expedited manner in
accordance with the Commercial Rules of the American Arbitration Association by
a
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duly registered arbitrator to be selected jointly by the parties. The decision
of the arbitrator shall be final and binding upon the parties. Notwithstanding
anything to the contrary herein, the provisions of this Section 9.6 shall not
apply to any equitable remedies to which any party may be entitled to hereunder.
9.7. Record Owner; Dividends. The Grantee and any Permitted
Transferees, during the duration of this Agreement, shall be considered the
record owners of and shall be entitled to vote the Shares. The Grantee and any
Permitted Transferees shall be entitled to receive all dividends and any other
distributions declared on the Shares; provided, however, that the Company is
under no duty to declare any such dividends or to make any such distribution.
9.8. Headings. The headings are intended only for
convenience in finding the subject matter and do not constitute part of the text
of this Agreement and shall not be considered in the interpretation of this
Agreement.
9.9. Saving Clause. If any provision(s) of this Agreement
shall be determined to be illegal or unenforceable, such determination shall in
no manner affect the legality or enforceability of any other provision hereof.
9.10. Benefit and Binding Effect. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, their
respective successors, assigns, and legal representatives; without limitation of
the foregoing upon any merger in which the Company is not the surviving entity,
securities of the Company's successor issued in respect of the Shares shall
remain subject to vesting, the Company's Repurchase option and transfer
restrictions hereunder.
9.11. Counterparts. For the convenience of the parties and
to facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
[Signature page to follow]
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This Agreement has been executed as of the date first set forth above.
COMPANY:
Boron, XxXxxx & Associates, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: CFO
GRANTEE:
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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