Exhibit 4.10
PERFORMANCE SHARES AGREEMENT
PERFORMANCE SHARES AGREEMENT (the "Agreement") made as of the _____ day of
_________, 1999 (the "Grant Date"), between MIM Corporation, a Delaware
corporation (the "Company"), and ____________________ (the "Awardee").
WHEREAS, the Company desires to afford the Awardee an opportunity to own
shares of the common stock of the Company, par value $.0001 per share ("Common
Shares"), as hereinafter provided, in accordance with the provisions of the MIM
Corporation 1996 Stock Incentive Plan, as amended and restated effective
December 1, 1998, a copy of which is attached (the "Plan").
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration the legal sufficiency of
which is hereby acknowledged, the parties hereto, intending to be legally bound
hereunder, agree as follows:
1. Grant of Restricted Shares. The Company hereby grants to the Awardee an
aggregate of _____________ Common Shares (the "Performance Shares"), the
effectiveness of which grant is contingent in all respects upon approval of the
Plan by the shareholders of the Company on or before ___________. The grant is
in all respects limited and conditioned as hereinafter provided, and is subject
to the terms and conditions of the Plan now in effect and as they may be amended
from time to time (which terms and conditions are and automatically shall be
incorporated herein by reference and made a part hereof and shall control in the
event of any conflict with any other terms of this Performance Shares
Agreement).
2. Vesting and Forfeiture. If the Awardee's Date of Termination does not
occur during the Restricted Period, then, at the end of the Restricted Period,
the Awardee shall become vested in all of the Performance Shares. If (a) the
Company meets the target Earnings Per Share for the year 2001 (as reflected on
Exhibit 1 attached hereto) and (b) the Awardee's Date of Termination does not
occur prior to December 31, 2001, then the Awardee shall become vested in all of
the Performance Shares upon closing of the Company's financial statements for
the year 2001 (the "Accelerated Vesting Date"). If the Awardee does not meet the
requirements for vesting contained in this paragraph, the Awardee shall
immediately forfeit all of the Performance Shares, except to the extent provided
as follows:
(a) If the Awardee's Date of Termination occurs by reason of the Awardee's
death, Disability or by reason of Termination without Cause or for Good Reason,
the Awardee shall become immediately vested, as of the Date of Termination, in
(i) 1/3 of the Performance Shares if the Date of Termination occurs before the
first anniversary of the Grant Date and the Company achieves the target Earnings
Per Share (as reflected on Exhibit 1) for the fiscal year in which the Date of
Termination occurs; (ii) 2/3 of the Performance Shares if the Date of
Termination occurs on or after the first anniversary but before the second
anniversary of the Grant Date and the Company
achieves the target Earnings Per Share (as reflected on Exhibit 1) for the
fiscal year in which the Date of Termination occurs; and, (iii) all of the
Performance Shares if the Date of Termination occurs on or after the second
anniversary but before the day following the third anniversary of the Grant Date
and the Company achieves the target Earnings Per Shares (as reflected on Exhibit
1) for the fiscal year in which the Date of Termination occurs.
(b) The Awardee shall become vested in all of the Performance Shares as of
the Date of Termination if the Awardee's Employment is terminated within one
year following such Change in Control (provided such termination occurs prior to
the end of the Restricted Period and such termination is a Termination without
Cause or is a Termination for Good Reason).
If the Awardee is at any time Terminated for Cause or if the Awardee
resigns without Good Reason, the Awardee shall forfeit all Performance Shares
that have not previously vested.
3. Delivery of Restricted Stock. As soon as practicable after the first to
occur of (a) the expiration of the Restricted Period, (b) the Awardee's Date of
Termination and (c) the date of a Change in Control, the Committee shall certify
in writing as to whether or not the performance objectives have been satisfied.
If the Committee certifies that the performance objectives have been satisfied,
or determines that Performance Shares otherwise have vested, the restrictions
applicable to such Performance Shares shall lapse and a certificate for the
number of Common Shares with respect to which the restrictions have lapsed shall
be delivered to the Awardee free and clear of all such restrictions.
4. Transfers. Performance Shares may not be sold, assigned, transferred,
pledged or otherwise encumbered until the Awardee is vested in the shares and
then only to the extent the Awardee is vested in the shares.
5. Dividends and Voting Rights. The Awardee shall be entitled to receive
any regular cash dividends paid with respect to Performance Shares that become
payable during the Restricted Period; provided, however, that no such dividends
shall be payable to or for the benefit of the Awardee with respect to record
dates occurring prior to the Grant Date, or with respect to record dates
occurring on or after the date, if any, on which the Awardee has forfeited
Performance Shares; and provided further that all distributions made with
respect to the Performance Shares as a result of any split, distribution or
combination of Performance Shares or other similar transaction shall be deemed
to be Performance Shares subject to the provisions of this Agreement. The
Awardee shall be entitled to vote the Performance Shares during the Restricted
Period to the same extent as would have been applicable to the Awardee if the
Awardee was then vested in the shares; provided, however, that the Awardee shall
not be entitled to vote the shares with respect to record dates for such voting
rights arising prior to the Grant Date, or with respect to record dates
occurring on or after the date, if any, on which the Awardee has forfeited the
Performance Shares.
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6. Deposit of Performance Shares. Each certificate issued in respect of
Performance Shares granted under this Agreement shall be registered in the name
of the Awardee and shall be deposited with the Company. The grant of Performance
Shares is conditioned upon the Awardee endorsing in blank a stock power for the
Performance Shares and delivering such stock power to the depository designated
by the Committee contemporaneously with the issuance and deposit of the
Performance Shares with the Company.
7. Definitions. For purposes of this Agreement, the terms used in this
Agreement shall be defined as follows:
(a) Date of Termination. The Awardee's "Date of Termination" shall be the
first day occurring on or after the Grant Date on which the Awardee's Employment
by the Company and its Subsidiaries and Affiliates is terminated, regardless of
the reason for the termination of Employment; provided that a termination of
Employment shall not be deemed to occur by reason of a transfer of the Awardee
between any of the Company and its Subsidiaries and Affiliates; and further
provided that the Awardee's employment shall not be considered terminated while
the Awardee is on a leave of absence from the Company or a Subsidiary or
Affiliate approved by the Awardee's employer.
(b) Designated Beneficiary. The term "Designated Beneficiary" means the
beneficiary or beneficiaries designated by the Awardee in a writing filed with
the Committee in such form and at such time as the Committee shall require.
(c) Disability. The term "Disability" shall have the meaning provided in
Section 22(e)(3) of the Code.
(d) Restricted Period. The term "Restricted Period" means the period
commencing on the Grant Date and ending on December 31, 2006.
(e) Termination Without Cause or For Good Reason. The term "Termination
without Cause or for Good Reason" shall mean the termination of the Awardee's
Employment by the Company and its Subsidiaries and Affiliates for reasons other
than "Cause" or by the Awardee for "Good Reason," as such quoted terms are
defined in the Employment Agreement between the Company and the Awardee. [If not
defined in the Employment Agreement or there is no Employment Agreement, a
definition will need to be inserted.]
(f) Plan Definitions. Except where the context clearly implies or indicates
the contrary, a word, term, or phrase used in the Plan shall have the same
meaning where used in this Agreement.
8. Shares Acquired for Investment. The Awardee hereby represents that the
Performance Shares are being acquired for investment for the Awardee's own
account, not as a nominee or agent, and not with the view to, or for resale in
connection with, any distribution thereof.
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The Awardee understands that the Performance Shares have not been, and will not
be, registered under the Securities Act of 1933, as amended (the "Securities
Act"), or the securities laws of any state by reason of exemptions from the
registration provisions of the Securities Act and such laws which depend upon,
among other things, the bona fide nature of the investment intent and the
accuracy of the Awardee's representations as expressed herein.
9. Withholding of Taxes. Any obligation of the Company to deliver Common
Shares pursuant to this Agreement shall be subject to applicable federal, state
and local withholding tax requirements. The Company shall have the right to
require recipients or their beneficiaries or legal representatives to remit to
the Company an amount sufficient to satisfy such withholding tax requirements,
or to deduct from all payments to be made hereunder amounts sufficient to
satisfy all such withholding tax requirements. The Committee may, in its sole
discretion, permit a recipient to satisfy his or her tax withholding obligation
either by (i) surrendering Common Shares owned by the recipient or (ii) having
the Company withhold from Common Shares otherwise deliverable to the Awardee.
Shares surrendered or withheld shall be valued at their Fair Market Value as of
the date on which income is required to be recognized for income tax purposes.
The Awardee hereby agrees that he will not make an election under Section 83(b)
of the Code with respect to any or all of the Performance Shares.
10. Heirs and Successors. This Agreement shall be binding upon, and inure
to the benefit of, the Company and its successors and assigns, and upon any
person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company's assets and business. If any
rights of the Awardee or benefits distributable to the Awardee under this
Agreement have not been exercised or distributed, respectively, at the time of
the Awardee's death, such rights shall be exercisable by the Designated
Beneficiary, and such benefits shall be distributed to the Designated
Beneficiary, in accordance with the provisions of this Agreement and the Plan.
If a deceased Awardee fails to designate a beneficiary, or if the Designated
Beneficiary does not survive the Awardee, any rights that would have been
exercisable by the Awardee and any benefits distributable to the Awardee shall
be exercised by or distributed to the legal representative of the estate of the
Awardee. If a deceased Awardee designates a beneficiary but the Designated
Beneficiary dies before the Designated Beneficiary's exercise of all rights
under this Agreement or before the complete distribution of benefits to the
Designated Beneficiary under this Agreement, then any rights that would have
been exercisable by the Designated Beneficiary shall be exercised by the legal
representative of the estate of the Designated Beneficiary, and any benefits
distributable to the Designated Beneficiary shall be distributed to the legal
representative of the estate of the Designated Beneficiary.
11. Governing Law. This Agreement shall be construed in accordance with,
and its interpretation shall be governed by applicable federal law, and
otherwise by the laws of the State of Delaware.
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12. Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of this Agreement by the Committee and
any decision made by it with respect to this Agreement is final and binding.
13. Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
contracts and other agreements to the extent of any discrepancies contained
between this document and such other document (including, without limitation,
sections 5.2(c)(v) and 5.1(c)(iii) of the Employment Agreement).
IN WITNESS WHEREOF, the Company has caused this Performance Shares
Agreement to be duly executed by its officers thereunto duly authorized, and the
Awardee has hereunto set his hand and seal, all on the day and year first above
written.
MIM CORPORATION
By ______________________________
Name:
Title:
ACCEPTED AND AGREED TO:
_________________________________
Awardee
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