EXHIBIT 10.6
EUROBANCSHARES, INC.
RESTRICTED STOCK PURCHASE AGREEMENT
This Restricted Stock Purchase Agreement ("Agreement") by and between
Eurobancshares, Inc. (the "Company") and ___________ ("Employee") is made
pursuant to the meeting of the Board of Directors of the Company held the 26th
day of April, 2004 (hereafter referred to as the "Grant Date"), pursuant to
which the Company granted to the Employee a number of restricted shares of the
Company's common stock (the "Restricted Stock") subject to the terms and
conditions hereinafter set forth.
1. NUMBER OF SHARES. Pursuant to this Agreement, the Company has agreed
to grant to Employee 100 shares of Restricted Stock at a value of $16.25 per
share (the "Xxxxx Xxxxx"). The Restricted Stock shall be subject to all the
terms, conditions, and restrictions set forth in this Agreement. In the event of
any stock dividend, stock split, recapitalization or other change affecting the
outstanding common stock of the Company as a class is effected without
consideration, then any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) that is by
reason of any such transaction distributed with respect to the shares of
Restricted Stock that remain unvested (the "Unvested Shares") will be
immediately subject to the provisions of this Agreement in the same manner and
to the same extent as the Restricted Stock with respect to which such change was
effected.
2. VESTING , FORFEITURE AND TRANSFER RESTRICTIONS. All Restricted Stock
granted to Employee shall be issued and delivered on the Grant Date. Restricted
Stock is comprised of "Unvested Shares" and "Vested Shares." As of the Grant
Date, all of the shares of Restricted Stock granted under this Agreement are
"Unvested Shares" and will continue to be Unvested Shares for purposes of this
Agreement until the fifth (5th) anniversary of the Grant Date, at which time all
Unvested shares of Restricted Stock shall become Vested shares of Restricted
Stock.
Notwithstanding the preceding, in the event Employee terminates his
employment with the Company or has his employment terminated for any reason
whatsoever prior to ___________, 200__, or if Employee, Employee's legal
representative, or other holder of the Restricted Stock attempts to sell,
exchange, transfer, pledge, or otherwise dispose of any Unvested Shares, all
shares, Unvested or Vested, will be immediately forfeited without any further
action by the Company. In the event of such forfeiture, such forfeited Unvested
Shares shall be immediately repurchased by the Company, subject to any necessary
regulatory approvals, within ninety (90) days from such forfeiture. The Employee
shall receive from the Company an amount equal to the lesser of (i) the Xxxxx
Xxxxx for the forfeited shares, or (ii) the Fair Market Value of the forfeited
shares as of the date of the forfeiture. Any payments due pursuant to this
provision shall be shall occur within ninety (90) days of the date of such
forfeiture or such longer period as may be agreed to by the Company and the
Employee.
Any Restricted Stock granted may not be assigned, transferred, pledged or
otherwise disposed of in any way other than by the Last Will and Testament of
the Employee or the laws of descent, subject to the bylaws of the Company and
any S corporation restrictions, if applicable. Any Restricted Stock held by a
beneficiary shall be subject to the restrictions imposed on such
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Restricted Stock. Any such attempt at assignment, transfer, pledge or other
disposition shall be without effect.
3. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, no shares under this Agreement may be granted unless the
shares of Restricted Stock issuable upon such purchase are then registered under
the Securities Act of 1933, as amended (the "Securities Act") or, if such shares
of Restricted Stock are not then so registered, the Company has determined that
such grant and issuance would be exempt from the registration requirements of
the Securities Act. The grant of shares must also comply with other applicable
laws and regulations governing the grant, and no grant of shares will be
permitted if the Company determines that such purchase would not be in material
compliance with such laws and regulations.
4. STOCK LEGEND. The Company and Employee agree that all certificates
representing all shares of Restricted Stock that at any time are subject to the
provisions of this Agreement will have endorsed upon them in bold-faced type a
legend substantially in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE
WITH THE TERMS OF A RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE
COMPANY AND THE INITIAL HOLDER OF THE SHARES. THE RESTRICTED STOCK
PURCHASE AGREEMENT GRANTS CERTAIN PURCHASE OPTIONS TO THE COMPANY,
PROVIDES FOR FORFEITURE OF THE STOCK IN CERTAIN CIRCUMSTANCES, AND IMPOSES
RESTRICTIONS ON THE TRANSFER OF THESE SHARES. A COPY OF THE RESTRICTED
STOCK AGREEMENT IS ON DEPOSIT AT THE PRINCIPAL OFFICE OF THE COMPANY AND
WILL BE FURNISHED BY THE COMPANY TO THE REGISTERED HOLDER HEREOF UPON
WRITTEN REQUEST.
5. AGREEMENT NOT A SERVICE CONTRACT. This Agreement is not an
employment or service contract, and nothing in this Agreement shall be deemed to
create in any way whatsoever any obligation for the Employee to continue in the
employ of the Company, or of the Company to continue the Employee's employment.
In addition, nothing in this Agreement shall obligate the Company, their
respective shareholders, the Board of Directors of the Company, or officers or
other employees of the Company to continue any relationship that the Employee
has with the Company.
6. SECTION 83(B) ELECTION. Employee acknowledges that, under Section 83
of the Code, the difference between the Xxxxx Xxxxx and its fair market value at
the time any forfeiture restrictions applicable to such Restricted Stock lapse
is reportable as ordinary income at that time. For this purpose, the term
"forfeiture restrictions" includes the forfeiture provisions, restrictions, and
the Company's repurchase obligation as described in Section 2 of this Agreement.
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Notwithstanding the preceding, Employee understands that he or she may
elect to be taxed at the time the Restricted Stock is acquired hereunder, rather
than when and as such Restricted Stock ceases to be subject to such forfeiture
restrictions, by filing an election under Section 83(b) of the Code with the
Internal Revenue Service within 30 days after the Grant Date. If the Xxxxx Xxxxx
equals the fair market value of the Restricted Stock on such date, or if it is
likely that the fair market value of the Restricted Stock at the time any
forfeiture restrictions lapse will exceed the Xxxxx Xxxxx, the election may
avoid adverse tax consequences in the future. A form for making this election is
attached as Exhibit A. Employee understands that the failure to make this filing
within said 30 day period will result in the recognition of ordinary income by
Employee (in the event the fair market value of the Restricted Stock increases
after Grant Date) as the forfeiture restrictions lapse. Employee acknowledges
that it is his or her sole responsibility, and not the Company's, to file a
timely election under Section 83(b).
7. NOTICES. Any notices provided for in this Agreement or the Plan
shall be given in writing and shall be deemed effectively given upon receipt or,
in the case of notices delivered by mail by the Company to the Employee, five
(5) days after deposit in the United States mail, postage prepaid, addressed to
the Employee at the last address the Employee provided to the Company.
8. RIGHTS AS A SHAREHOLDER. The Employee shall be entitled to all of
the rights of a shareholder with respect to the shares of Restricted Stock
awarded pursuant to this Agreement including the right to vote such shares of
Restricted Stock and to receive dividends and other distributions (if any)
payable with respect to such shares.
9. TAX WITHHOLDING. The Company may withhold or cause to be withheld
from any Restricted Stock award (or Employee's compensation) any federal, state
or local taxes required by law to be withheld with respect to such Restricted
Stock aware. By acceptance of this Agreement, Employee agrees to such
deductions. In addition to the grant of Restricted Stock contemplated by this
Agreement, Employee may also receive from the Company a cash bonus payment of
$_______, representing approximately ____% of the amount of Restricted Stock
granted to Employee pursuant to this Agreement, from which amount the Company
will withhold the amount of taxes due as a result of the grant of Restricted
Stock to the Employee. The Employee recognizes that such cash bonus payment is
taxable compensation to the Employee. Consequently, the cash bonus payment will
be "grossed-up" such that the net amount of cash bonus retained by the Employee
after deduction of the taxes due on such cash bonus payment, shall be equal to
the amount of the tax withholding due on the Restricted Stock grant. For
purposes of determining the amount of the gross-up amount, Employee shall be
deemed to pay Federal income taxes at the highest marginal rate of taxation
applicable to individuals in the calendar year in which the cash bonus payment
is to be made, and state and local taxes (if any) at the highest marginal rate
of taxation in the state and locality of the Employee's residence on the Grant
Date, net of the maximum reduction in Federal income taxes which would be
obtained from deduction of such state and local taxes
10. GOVERNING LAW. All questions arising with respect to the provisions
of the Plan shall be determined by application of the laws of the Commonwealth
of Puerto Rice except to the extent such governing law is preempted by Federal
law. Questions arising with respect to the provisions of an Agreement that are
matters of contract law shall be governed by the laws of the
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jurisdiction specified in this Agreement, except to the extent preempted by
Federal law and except to the extent that the Puerto Rican corporate law
conflicts with the contract law of the Commonwealth of Puerto Rico, in which
event Puerto Rican corporate law shall govern. The obligation of the Company to
sell and deliver Restricted Stock under this Agreement is subject to applicable
laws and to the approval of any governmental authority required in connection
with the authorization, issuance, sale, or delivery of such Restricted Stock.
11. SEVERABILITY. If any provision of this Agreement is held to be
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining provisions of the Agreement, but such provision shall be fully
severable and the Agreement shall be construed and enforced as if the illegal or
invalid provision had never been included in the Agreement.
12. SUCCESSORS. This Agreement shall be binding upon the Employee, his
legal representatives, heirs, legatees, distributees, and shall be binding upon
the Company and its successors and assigns.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as
of this ____ day of _______________, 200__ .
EUROBANCSHARES, INC.
________________________________________
EMPLOYEE:
________________________________________
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EXHIBIT A
SECTION 83(b) STATEMENT
This statement is being made under Section 83(b) of the Internal Revenue
Code, pursuant to Treas. Reg. Section 1.83-2.
The person who performed the services is:
Name: ________________________________
Address: ________________________________
________________________________
Taxpayer Identification No.: ______________
Taxable Year: Calendar Year
The property with respect to which the election is being made is 100
shares of Common Stock of Eurobancshares, Inc. (the "Restricted Stock").
The property was issued on __________, 2004.
The property is subject to forfeiture if for any reason stockholder's
employment with the issuer is terminated prior to vesting of the property. The
forfeiture provision lapses according to Section 2 of the Agreement.
The fair market value at the time of transfer (determined without regard
to any restriction other than a restriction that by its terms will never lapse)
is $________ per share.
The value of such property was $16.25 per share on the Grant Date.
A copy of this statement is being furnished to Eurobancshares, Inc., for
whom employee rendered the service underlying the transfer of property.
This statement is executed as of ___________________, 2004.
________________________________________
Employee
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