EXHIBIT 10.4
SAPIENT CORPORATION
RESTRICTED STOCK UNITS
AGREEMENT
In recognition of the important contributions that ___________ (the
"Director") makes to the success of Sapient Corporation (the "Company") and its
Affiliates (together with the Company, the "Company Group") as a member of the
Company's Board of Directors, the Company hereby grants to the Director,
pursuant to the Sapient Corporation 1998 Stock Incentive Plan (the "Plan"), the
Restricted Stock Units Award described below.
1. THE RESTRICTED STOCK UNITS AWARD. The Company hereby grants to the
Director ________________ (________) Units, subject to the terms and
conditions of this Agreement and the Plan. An Award shall be paid
hereunder, only to the extent that such Award is Vested, as provided in
this Agreement. The Director's rights to the Units are subject to the
restrictions described in this Agreement and the Plan in addition to such
other restrictions, if any, as may be imposed by law.
2. DEFINITIONS. The following definitions will apply for purposes of this
Agreement. Capitalized terms not defined in this Agreement are used as
defined in the Plan.
(a) "Agreement" means this Restricted Stock Units Agreement granted by
the Company and agreed to by the Director.
(b) "Award" means the grant of Units in accordance with this Agreement.
(c) "Change in Control" means the occurrence of any of the following
events: (i) any "person", as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than the Company, Xxxxx X. Xxxxxxxxx, J.
Xxxxxx Xxxxx, any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or any corporation
owned directly or indirectly by the stockholders of the Company in
substantially the same proportion as their ownership of stock of the
Company), is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company representing 50% or more of the combined voting power
of the Company's then outstanding securities; (ii) the stockholders
of the Company approve a merger or consolidation of the Company with
any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) more than 50% of the combined voting power
of the voting securities of the Company or such surviving entity
outstanding
immediately after such merger or consolidation; (iii) the
stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale of disposition by the
Company of all or substantially all of the Company's assets; or (iv)
individuals who, on the date on which the Plan was adopted by the
Board, constituted the Board of Directors of the Company, together
with any new director whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at
least a majority of the directors then still in office who were
directors on the date on which the Plan was adopted by the Board or
whose election or nomination was previously so approved, cease for
any reason to constitute at least a majority of the Board of
Directors.
(d) "Common Stock" means common stock of the Company, .01 par value.
(e) "Grant Date" means ________ __, 200 _.
(f) "Fair Market Value" means the average trading price of the Common
Stock over the twenty trading days prior to the Valuation Date,
based on the closing price on each such day. For this purpose, the
"closing price" of the Common Stock on any trading day will be the
last sale price with respect to such Common Stock reported on the
NASDAQ, or, if on any such date such Common Stock is not quoted by
NASDAQ, the average of the closing bid and asked prices with respect
to such Common Stock, as furnished by a professional market maker
making a market in such Common Stock selected by the Company in good
faith; or, if no such market maker is available, the fair market
value of such Common Stock as of such day as determined in good
faith by the Company.
(g) "NASDAQ" means the Nasdaq Stock Market.
(h) "Payment Date" means, as to Vested Units, within 30 days of the date
on which the Units become Vested, except that in connection with a
Change in Control, the Payment Date shall mean immediately prior to
or coincident with the occurrence of the Change in Control.
(i) "Unit" means a notional unit which is equivalent to a single share
of Common Stock on the Grant Date, subject to Section 4.
(j) "Valuation Date" means the date on which the Fair Market Value of
the Common Stock is to be determined.
(k) "Vested" means that portion of the Award to which the Director has a
nonforfeitable right.
(l) "Vesting Dates" means the dates set forth in Section 3.
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3. VESTING.
(a) An Award shall become Vested only upon the Vesting Dates described
in this Section 3, except as otherwise provided herein or determined
by the Company in its sole discretion. No portion of any Award shall
become Vested on the Vesting Date unless the Director is then, and
since the Grant Date has continuously been, a Director of the
Company.
(b) Subject to subsections (c), (d) and (e), below, an Award shall
become Vested based on the following schedule.
VESTING DATE PERCENTAGE VESTED ON ANNIVERSARY DATE
First Anniversary of Grant Date 100%
(c) Upon the occurrence of a Change in Control, an Award shall become
100% Vested, such shares to be distributed immediately prior to or
coincident with the Change in Control.
(d) Notwithstanding Section 3(b), if the service of the Director
terminates by reason of death or disability (within the meaning of
Section 22(e)(3) of the Internal Revenue Code), the length of the
Director's service shall be deemed to be six months longer than the
actual length; provided, however, that in no event shall such deemed
time extension serve to increase the number of Vested shares to more
than the number of shares of Common Stock as equals that number of
Units which have been awarded hereunder.
(e) Notwithstanding Section 3(b), in the event that the Director has
completed the full term of service as a Director for which he or she
was elected at an Annual Meeting of Stockholders of the Company, but
is not standing for re-election to a subsequent term as a Director
at the Annual Meeting of Stockholders of the Company at which he or
she would otherwise have been re-elected (the "Retirement Meeting"),
all Award shares which are scheduled to vest subsequent to the
Retirement Meeting but within the same fiscal quarter in which the
Retirement Meeting is held shall become Vested shares as of the date
immediately preceding such Retirement Meeting; provided, however,
that in no event shall such deemed time extension serve to increase
the number of Vested Shares to more than the number of shares of
Common Stock as equals that number of Units which have been awarded
hereunder.
(f) In the event that the Director's tenure as a member of the Company's
Board of Directors terminates prior to a Vesting Date for any reason
other than as set forth in this Section 3, including without
limitation termination by the Company or the
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Company Group, any portion of the Award that has not then become
Vested will be forfeited automatically.
4. ADJUSTMENTS BASED ON CERTAIN CHANGES IN THE COMMON STOCK. In the event of
any stock split, reverse stock split, stock dividend, recapitalization or
similar change affecting the Common Stock, the Award shall be equitably
adjusted.
5. NO VOTING RIGHTS/DIVIDENDS. The Award shall not be interpreted to bestow
upon the Director any equity interest or ownership in the Company Group
prior to the Payment Date. The Director is not entitled to vote any Common
Stock by reason of the granting of this Award or to receive or be credited
with any dividends declared and payable on any Common Stock underlying any
Award prior to any Payment Date.
6. PAYMENT OF AWARD. On the Payment Date, the Company shall issue to the
Director that number of shares of Common Stock as equals that number of
Units which have become Vested.
7. UNFUNDED STATUS. The obligations of the Company Group hereunder shall be
contractual only. The Director shall rely solely on the unsecured promise
of the Company and nothing herein shall be construed to give the Director
or any other person or persons any right, title, interest or claim in or
to any specific asset, fund, reserve, account or property of any kind
whatsoever owned by the Company Group.
8. NO ASSIGNMENT. No right or benefit or payment under the Plan shall be
subject to assignment or other transfer nor shall it be liable or subject
in any manner to attachment, garnishment or execution.
9. WITHHOLDING. The Company's obligation to deliver to the Director shares of
Common Stock under an Award shall be subject to the satisfaction of all
applicable federal, state and local income tax withholding requirements as
determined by the Company Group ("Withholding Taxes"). To satisfy any
Withholding Taxes, if any, due upon vesting of the Director's Units, the
Director agrees to pay to the Company, or make provision satisfactory to
the Company for payment of, any Withholding Taxes, no later than the
Payment Date. The Company and any Affiliate may, to the extent permitted
by law, deduct any such tax obligations from any payment of any kind due
to the Director. Such withheld amounts shall include shares retained from
the Award creating the tax obligation, valued at their Fair Market Value
on the date of retention.
Further, as a condition of receiving any Vested Award, the Director hereby
agrees to the terms of the Irrevocable Standing Order to Sell Shares (the
"Standing Order"), attached as Exhibit A. Pursuant to the Standing Order,
and in lieu of taking the actions described in the immediately preceding
paragraph of this Section 9, the Company, in its sole discretion, may
require, and, in such event the Director agrees, to the following:
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(a) The Director authorizes the Company's agent to sell, at the
market price and on each Vesting Date (or the first NASDAQ trading
day thereafter if a Vesting Date is a day in which NASDAQ is
closed), the number of Vested Shares that, per the Company's
instructions to its agent, is necessary to obtain proceeds
sufficient to satisfy the Withholding Taxes. The Director
understands and agrees that the number of shares that such agent
will sell will be based on the closing price of the Common Stock on
the NASDAQ trading day immediately preceding the Vesting Date.
(b) The Director agrees that the proceeds received from the sale of
Vested Shares pursuant to this Section 9 will be used to satisfy the
Withholding Taxes and, accordingly, the Director hereby authorizes
the Company's agent to pay such proceeds to the Company for such
purpose. The Director understands that to the extent that the
proceeds obtained by such sale exceed the amount necessary to
satisfy the Withholding Taxes, such excess proceeds shall be
deposited into the Director's stock brokerage account with E*TRADE
Financial or such other third party brokerage under which the
Director maintains a brokerage account (the "Account"). The Director
further understands that any remaining Vested Shares shall be
deposited into the Account.
(c) The Director acknowledges and agrees that, in the event that a
market in the Common Stock does not exist, the Director shall pay to
the Company amounts sufficient to pay the Withholding Taxes and, to
the extent that such payment is not made, the Company shall have the
right to make other arrangements to satisfy the Withholding Taxes
due upon the vesting of the Director's Shares.
10. AMENDMENT OR TERMINATION. This Agreement may be amended by mutual written
agreement of the parties.
11. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, Sapient Corporation and ______________________ have
executed this Restricted Stock Units Agreement as of the ____ day of
___________, 200___.
SAPIENT CORPORATION DIRECTOR
__________________________________ ________________________
By: Xxxx X. Xxxxx
Title: Sr. Vice President and General Counsel
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EXHIBIT A
IRREVOCABLE STANDING ORDER TO SELL SHARES
I have received from the Company on a voluntary basis the right to acquire
shares of Company common stock (the "Shares") pursuant to the attached
Restricted Stock Units Agreement between the Company and me.
I understand that I must maintain a securities brokerage account with
E*TRADE Financial or such other third party brokerage (each of E*TRADE Financial
or such other third party brokerage is herein defined as the "Broker") to
participate in the stock unit plan described in detail in the Restricted Stock
Units Agreement, and the Company has informed me about this requirement as well
as the requirements for the opening of such a securities brokerage account so
that the vested Shares can be deposited into account. Furthermore, I understand
that on each vesting date, the vested Shares will be deposited into my stock
brokerage account with the broker and that I will incur taxable ordinary income
("Taxable Income") upon my receipt of the vested Shares. Per the terms of the
Agreement, and if so directed by the Company, I understand and agree to do the
following as a condition of my receipt of vested Shares:
Upon each vesting date, I must sell a number of Shares that is sufficient
to satisfy all withholding taxes, as determined by Sapient, which are
applicable to my Taxable Income (the "Withholding Taxes"). Accordingly, I
HEREBY DIRECT THE BROKER TO SELL, ON EACH VESTING DATE LISTED ABOVE (OR
THE FIRST NASDAQ TRADING DAY THEREAFTER IF A VESTING DATE IS A DAY ON
WHICH NASDAQ IS CLOSED), THAT NUMBER OF SHARES THAT, PER THE COMPANY'S
INSTRUCTIONS TO THE AGENT, IS SUFFICIENT TO OBTAIN SALE PROCEEDS
SUFFICIENT TO SATISFY THE WITHHOLDING TAXES. THE PER SHARE SALES PRICE
SHALL BE CALCULATED BASED ON THE CLOSING PRICE OF A SHARE OF COMPANY
COMMON STOCK ON THE NASDAQ TRADING DAY IMMEDIATELY PRECEDING THE
APPLICABLE VESTING DATE.
I understand that the Broker will remit the proceeds of the foregoing sale
promptly to the Company for payment by the Company of the Withholding Taxes, and
I authorize and direct the Broker to pay such proceeds to the Company for this
purpose.
I acknowledge that I have not been induced to participate in any trade in return
for or as an expectation of employment or continued employment. I understand and
agree that by signing below, I am making an Irrevocable Standing Order to Sell
Shares that will remain in effect until such time as I have received all Shares
to which I am entitled under this Agreement. I also agree that this Irrevocable
Standing Order to Sell Shares is in addition and subject to the terms and
conditions of any existing Account Agreement that I have with the Broker.
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