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EXHIBIT 10.4
RESTRICTED STOCK AGREEMENT
THIS AGREEMENT, dated as of 199_, is by and between Xxxxx
Systems Corporation ("Xxxxx Systems"), a Delaware corporation and
("Participant").
WITNESSETH:
WHEREAS, Xxxxx Systems has adopted the Xxxxx Systems Corporation Restricted
Stock Plan (the "Plan") to enable employees of Xxxxx Systems and its
subsidiaries, if any (collectively, the "Company") to acquire shares of Common
Stock, $0.01 par value, of Xxxxx Systems ("Common Stock") in accordance with
the provisions of the Plan; and
WHEREAS, the Restricted Stock Committee of Xxxxx Systems (the "Committee") has
selected Participant to participate in the Plan and granted Participant the
right to purchase shares of Common Stock in accordance with the terms and
conditions of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual promises
and other terms and conditions set forth in this Agreement, Xxxxx Systems and
Participant agree as follows:
1. Purchase and Sale. Subject to the terms, conditions, and restrictions
set forth in this Agreement, Xxxxx Systems hereby sells to Participant, and
Participant hereby purchases from Xxxxx Systems, for a purchase price of $____
per share payable contemporaneously with the execution hereof, the number of
shares of Common Stock specified on Attachment A hereto, which shares shall
vest to Participant in accordance with the vesting schedule set forth on
Attachment A hereto. In connection with this purchase, Participant hereby
represents to Xxxxx Systems that Participant is purchasing these shares for
investment and not with a view to any resale or distribution thereof.
2. Definitions. As used in this Agreement, the following terms shall have
the respective meanings indicated as follows:
(a) "Holding Period" shall mean, (i) for one-half of the shares of
Vested Stock vesting on a particular Vesting Date, the period of
time commencing on the Vesting Date upon which such shares become
Vested Stock and ending two years thereafter, and (ii) for the
other one-half of the shares of Vested Stock vesting on a
particular Vesting Date, a period of time consisting of the day
upon which such shares become Vested Stock.
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(b) "Market Value" of a share of Restricted Stock on a given date
shall mean (i) if the Restricted Stock is Publicly Traded the
closing sale price for Restricted Stock, as determined in good
faith by the Board of Directors, on such date or, if no closing
sale price is available for such date, on the most recent prior
date for which a closing sale price is available or, if no closing
sale price is available, the closing bid price, as so determined,
on such date or, if no closing bid price is available for such
date, the closing bid price on the most recent prior date for
which a closing bid price is available, or (ii) if the Restricted
Stock is not Publicly Traded, its fair market value, as determined
in good faith by the Board of Directors, as of the most recent
Valuation Date before or after the date.
(c) "Publicly Traded" means Xxxxx Systems Restricted Stock has been
listed on a registered national securities exchange or approved
for quotation in the National Association of Securities Dealers
Automated Quotation ("NASDAQ") system.
(d) "Restricted Stock" shall mean the Common Stock issued to
Participant pursuant to the Plan and this Agreement, together with
any successor security, property or cash issued or distributed by
Xxxxx Systems or any successor entity, whether by way of merger,
consolidation, share exchange, reorganization, liquidation,
recapitalization, dividend or otherwise.
(e) "Termination for Substantial Misconduct" means termination of
employment for a felony conviction of the Participant; actions
involving moral turpitude, theft, or dishonesty in a material
matter; breach of any obligation under Section 7 of this
Agreement; or failure by Participant to carry out the directions,
instructions, policies, rules, regulations, or decisions of the
Board of Directors of Xxxxx Systems including, without limitation,
those relating to business ethics and the ethical conduct of the
business of the Company.
(f) "Transfer" or "transfer" or derivations thereof includes any sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage,
exchange or any other disposition.
(g) "Unvested Stock" shall mean all shares of Restricted Stock other
than Vested Stock.
(h) "Valuation Date" means each June 30 and December 31 of every year,
beginning on January 1, 1991, and any other date as of which the
Board of Directors determines the Market Value of Restricted
Stock.
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(i) "Vesting Date" shall mean each date upon which shares of
Restricted Stock vest to Participant or Participant's estate
pursuant to this Agreement.
(j) "Vesting Period" shall mean the period of time commencing on the
date of this Agreement and ending on the last Vesting Date.
(k) "Vested Stock" shall mean those shares of Restricted Stock that
have vested to Participant or Participant's estate pursuant to
this Agreement.
Other terms used in this Agreement are defined in the context in which
they occur and shall have the meanings there indicated.
3. Restrictions on Transfer. All shares of Restricted Stock shall be
subject to the following restrictions on transfer unless the Company
shall otherwise agree in writing:
(a) Shares of Unvested Stock may not be sold or otherwise transferred.
(b) Shares of Vested Stock may not be sold or otherwise transferred
during the Holding Period for those shares.
(c) Shares of Vested Stock may not be sold or otherwise transferred
after the Holding Period for those shares unless and until Xxxxx
Systems has waived or failed to exercise its option to purchase
those shares pursuant to Section 4 hereof.
(d) Shares of Vested Stock may not be sold or otherwise transferred
for six months after stock of the same class as the Vested Stock
is Publicly Traded.
Xxxxx Systems shall not be obligated to recognize any purported sale or
other transfer of Restricted Stock in violation of this Section 3 and,
unless it elects to do otherwise, may treat any such purported sale or
transfer as null, void, and of no effect. Shares of Vested Stock may,
however, be sold within the Holding Period to the extent necessary to
repay the principal of loans secured by Restricted Stock pursuant to a
security agreement to which Xxxxx Systems is a party, provided that stock
of the same class as the Vested Stock has been Publicly Traded for six
months or more.
4. Options to Purchase Vested Stock. Unless and until waived by Xxxxx
Systems and regardless of whether or not Participant is still employed by
the Company, Xxxxx Systems shall have the following option to purchase
Vested Stock:
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If, after the Holding Period therefor and prior to the date the
Restricted Stock is Publicly Traded, Participant, or any
subsequent holder of Vested Stock, desires or is obligated to sell
or otherwise transfer any shares of Vested Stock (other than a
transfer to Participant's estate upon Participant's death), the
holder of such shares shall give Xxxxx Systems written notice of
the proposed sale or transfer, including the identity of the
proposed purchaser or transferee, and, for 30 days after receipt
of such notice, Xxxxx Systems shall have the option, in addition
to its option under Section 3(d) above to treat any such purported
sale or transfer as null, void, and of no effect, to purchase for
cash any or all of such shares at the Market Value thereof.
5. Manner of Stock Buy Back. Whenever Xxxxx Systems has a right to buy back
shares of Restricted Stock, Xxxxx Systems may exercise its right by
notifying Participant or the subsequent holder of Xxxxx Systems' election
to exercise its right within the designated exercise period. In the case
of a buy back under Section 4 or Section 8, the giving of such notice
will give rise to an obligation on the part of Participant or the
subsequent holder to tender to Xxxxx Systems, within 10 days, any
previously issued certificate representing shares of Restricted Stock to
be bought back, duly endorsed in blank or having a duly executed stock
power attached in proper form for transfer. If any such endorsed
certificate or stock power is not tendered within 10 days, Xxxxx Systems
may cancel any outstanding certificate representing shares to be bought
back. Xxxxx Systems is required to tender the purchase price within 2
business days of the tender of the shares. If the person from whom the
shares are to be bought back has not complied with an obligation to
return a certificate and stock power representing shares to be bought
back, however, Xxxxx Systems is not required to tender the purchase price
until 20 days after the certificate is returned or 20 days after it
cancels the certificate, whichever occurs first.
6. Termination of Employment. If Participant's employment with the Company
is voluntarily or involuntarily terminated during the Vesting Period for
any reason, then Xxxxx Systems shall be entitled, by notice to
Participant within 90 days after such termination, to exercise the rights
specified in Section 8 below, but only as to Unvested Stock.
7. Competition. Participant acknowledges that, in the course and as a
result of employment with the Company, Participant will obtain special
training and knowledge and will come in contact with the Company's
customers and potential customers, which training, knowledge and contacts
would provide invaluable benefits to competitors of the Company.
Accordingly, and in consideration of Xxxxx Systems' agreement to issue
Restricted Stock to Participant hereunder, which Participant acknowledges
is conditioned on the covenants contained herein, Participant agrees that
Xxxxx Systems shall be entitled to exercise the rights
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specified in Section 8 below if Participant, either directly or
indirectly, whether as an employee, employer, consultant, agent,
principal, partner, owner, shareholder (other than as a holder of less
than 5% of a publicly traded class of securities), officer, director, or
in any other individual or representative capacity, does any of the
following without the prior written consent of the Company:
(a) while Participant is employed by the Company or within one year
thereafter:
(i) competes with, or engages in any business that is
competitive with, the Company within 250 miles of any
location at which Participant was employed by or provided
services to the Company;
(ii) solicits or accepts any business or employment from any
person or entity that is, or at any time within the
preceding two years was or was solicited to become, a
customer of the Company if Participant solicited business
from or performed services for that customer or prospect
while employed by the Company; or
(iii) recruits, hires, or helps anyone to recruit or hire anyone
who is, or at any time within the preceding six months was,
an employee of the Company or of any of its customers for
whom Participant performed services or from whom Participant
solicited business; or
(b) discloses to any unauthorized person or entity, or uses, licenses,
sells, conveys or otherwise exploits in competition with the
Company or otherwise for the benefit of any person or entity other
than the Company, any information proprietary to, used by, or in
the possession of the Company or any of its customers and not
generally known in the industry which is disclosed to or learned
by Participant while employed by the Company or thereafter,
whether or not reduced to writing and whether or not conceived,
originated, discovered or developed in whole or in part by
Participant.
If any provision of this Section 7 should be found by any court of
competent jurisdiction to be unreasonable by reason of its being too
broad as to the period of time, territory, and/or scope, then, and in
that event, such provision shall nevertheless remain valid and fully
effective, but shall be considered to be amended so that the period of
time, territory, and/or scope set forth shall be changed to be the
maximum period of time, the largest territory, and/or the broadest scope,
as the case may be, which would be found reasonable and enforceable by
such court.
8. Rights Upon Termination or Competition. If the Committee discovers that
Participant has engaged in any conduct prohibited by Section 7 or if
Participant
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ceases to be employed by the Company and the Committee, in its sole
discretion, determines that Participant's cessation of employment
resulted from a Termination for Substantial Misconduct or would have
resulted in a Termination for Substantial Misconduct had the relevant
facts been known at the time of Participant's cessation of employment,
Xxxxx Systems will have the right for 150 days after the Committee
discovers the relevant facts to require Participant to (i) sell to Xxxxx
Systems all or any part of the Restricted Stock (both Vested Stock and
Unvested Stock) then held by Participant, at the price per share paid by
Participant plus simple interest on such amount at the rate of 8% per
annum from the date of payment by Participant to the date of tender of
payment by Xxxxx Systems as set forth in Section 5 above, minus the
amount or value, as applicable, of any dividends or distributions paid on
such Restricted Stock and (ii) if any shares of Restricted Stock have
been sold or otherwise transferred by Participant (including any sale to
the Company), then at Xxxxx Systems' option Participant shall pay to
Xxxxx Systems an amount in cash with respect to each share of Restricted
Stock not still so held equal to the greater of the value of the proceeds
received by Participant for such share or the Market Value of such share
on the first date on which such share is no longer held by Participant,
less in either case the price paid by Participant for such share plus
simple interest on such amount at the rate of 8% per annum from the date
of payment by Participant to the date of tender of payment by Xxxxx
Systems as set forth in Section 5 above, minus the amount or value, as
applicable, of any dividends or distributions paid on such Restricted
Stock. If and when Xxxxx Systems is entitled to exercise the rights
specified in this Section 8, as provided in Section 6 above, then, upon
the demand of Xxxxx Systems, Participant shall sell to Xxxxx Systems all
or any part of the Unvested Stock then held by Participant, at the price
per share paid by Participant plus simple interest on such amount at the
rate of 8% per annum from the date of payment by Participant to the date
of tender of payment by Xxxxx Systems as set forth in Section 5 above,
minus the amount or value, as applicable, of any dividends or
distributions paid on such Restricted Stock.
9. Compliance with Securities Laws. Participant hereby represents and
warrants that Participant has acquired the Restricted Stock for
Participant's own account and not with a view to any resale or
distribution thereof. Participant agrees that neither he nor any
subsequent holder of the Restricted Stock will sell or otherwise transfer
any shares of Restricted Stock in any way that may result in a violation
of any federal or state securities laws or regulations. Participant
further acknowledges and agrees that Xxxxx Systems may require any
subsequent purchaser or other transferee of shares of Restricted Stock
that cannot be publicly traded to provide Xxxxx Systems, prior to such
sale or other transfer, with such representations, commitments and
opinions regarding compliance with applicable securities laws and
regulations as Xxxxx Systems may deem necessary or advisable.
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10. Stock Certificate. If requested by Participant, Xxxxx Systems will issue
and deliver to Participant certificates representing any shares of Vested
Stock held by Participant. Xxxxx Systems may require that any
certificates or other property representing shares of Unvested Stock
remain in the possession of the Company or an escrow agent designated by
the Committee. Each certificate representing Vested Stock or Unvested
Stock shall bear such legends as the Committee may determine to be
necessary or appropriate. Whether or not certificates representing such
shares have been issued or delivered, Participant shall have all the
rights of a shareholder of Restricted Stock, including voting, dividend
and distribution rights, with respect to all shares of Restricted Stock,
both Vested Stock and Unvested Stock, held by Participant, but any and
all stock and/or cash dividends (other than normal periodic cash
dividends), distributions in property, or other distributions made on or
in respect of the Restricted Stock, whether resulting from a subdivision,
combination or reclassification of the Restricted Stock of any issuer
thereof or received in exchange for Restricted Stock or any part thereof
or as a result of any merger, consolidation, acquisition or other
exchange of assets to which any such issuer may be a party or otherwise,
and any and all cash and other property received in exchange for the
Restricted Stock or received in payment of the principal of or in
redemption of the Restricted Stock (either at maturity, upon call for
redemption or otherwise), shall remain in the possession of Xxxxx Systems
for Unvested Stock.
11. Income Tax Withholding. Participant acknowledges and agrees that
Participant shall, upon request by the Company from time to time,
reimburse the Company for, or the Company may withhold from sums
otherwise payable to Participant, any amounts the Company is required to
remit to applicable taxing authorities as income tax withholding with
respect to the Restricted Stock. If Participant fails to reimburse the
Company for any such amount when requested, the Company shall have the
right to recover that amount by selling sufficient shares of
Participant's Restricted Stock.
12. Compliance with Plan. Participant acknowledges that this Agreement is
entered into, and the Restricted Stock is issued, pursuant to the Plan
and agrees to comply with the provisions of the Plan, as it may be
amended from time to time, to the extent that such provisions are not
inconsistent with the provisions of this Agreement.
13. Notices. Any notice to Xxxxx Systems or Company that is required or
permitted by this Agreement shall be addressed to the attention of the
Secretary of Xxxxx Systems at its principal office. Any notice to
Participant that is required or permitted by this Agreement shall be
addressed to Participant at the most recent address for Participant
reflected in the appropriate records of the Company. Either party may at
any time change its address for notification purposes by giving
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the other prior written notice of the new address and the date upon
which it will become effective. Whenever this Agreement requires or
permits any notice from one party to another, the notice must be in
writing to be effective and, if mailed, shall be deemed to have been
given on the third business day after the same is enclosed in an
envelope, addressed to the party to be notified at the appropriate
address, properly stamped, sealed and deposited in the United States
mail, and, if mailed to the Company, by certified mail, return receipt
requested.
14. Remedies. Xxxxx Systems shall be entitled, in addition to any other
remedies it may have at law or in equity, to temporary and permanent
injunctive and other equitable relief to enforce the provisions of this
Agreement. Any action to enforce the provisions of, or otherwise
relating to, this Agreement may be brought in the appropriate courts in
Dallas, Dallas County, Texas.
15. Assignment. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, personal
representatives, successors, and assigns. However, Participant shall
not, and shall not have the power to, assign this Agreement or any rights
relating to this Agreement without the prior written consent of Xxxxx
Systems. By signing this Agreement, Participant consents to the personal
jurisdiction of such courts in any such action.
16. Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party
shall be entitled to reasonable attorneys' fees, costs, and necessary
disbursements in addition to any other relief to which that party may be
entitled.
17. Severability. If any provision of this Agreement is held invalid or
unenforceable for any reason, the validity and enforceability of all
other provisions of this Agreement shall not be affected thereby.
18. Headings. The section headings used herein are for reference and
convenience only and shall not enter into the interpretation hereof.
19. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to the
choice of law rules in such law.
20. Entire Agreement. This Agreement, together with the Plan and any
procedures adopted by the Committee thereunder, constitutes the entire
agreement between the parties hereto with respect to its subject matter
and may be waived or modified only in writing.
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IN WITNESS WHEREOF, and intending to be legally bound hereby, Participant and a
duly-authorized representative of Xxxxx Systems have executed this Agreement as
of the date first above written.
PARTICIPANT XXXXX SYSTEMS CORPORATION
By:
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SIGNATURE TITLE:
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PRINTED NAME
CONSENT OF SPOUSE
As the spouse of Participant, I consent to be bound by this Restricted Stock
Agreement and agree that this consent shall be binding on my interest under
this Agreement and on my heirs, legatees and assigns.
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SIGNATURE
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PRINTED NAME
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ATTACHMENT A
TO
RESTRICTED STOCK AGREEMENT
FOR
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1. Number of Shares of Restricted Stock: _________________
2. Vesting Schedule:
Number of
Vesting Date Shares Vesting
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TOTAL
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