DGSE COMPANIES, INC. STOCK AWARD AGREEMENT
DGSE
COMPANIES, INC.
2006
EQUITY INCENTIVE PLAN
Unless
otherwise defined herein, capitalized terms shall have the defined meaning
set
forth in the DGSE Companies, Inc. 2006 Equity Incentive Plan.
1. NOTICE
OF RESTRICTED STOCK GRANT
You
have
been granted restricted shares of Common Stock, subject to the terms and
conditions of the Plan and this Stock Award Agreement, as follows:
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Name
of Awardee:
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Total Number of Shares Granted:
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Purchase
Price per Share:
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$
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Fair
Market Value per Share:
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$
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Grant
Date:
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Vesting Commencement Date:
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Vesting
Schedule:
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[Subject
to Section 2.8 below, the first [__]% of the Shares subject to this
Stock
Award Agreement shall vest on the Vesting Commencement Date, and
[__]% of
the Shares subject to this Stock Award Agreement shall vest each
[month/quarter/year] thereafter, subject to the Awardee continuing
to be a
Service Provider on such dates. Vesting shall accelerate as provided
in
Section 2.3 below.]
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2. AGREEMENT
2.1 Grant
of Restricted Stock.
Pursuant to the terms and conditions set forth in this Stock Award Agreement
(including Section 1 above) and the Plan, the Administrator hereby grants
to the Awardee named in Section 1, on the Grant Date set forth in
Section 1, the number of Shares set forth in Section 1. The granted
Shares may be subject to a purchase price, as set forth in
Section 1.
2.2 Purchase
of Restricted Stock.
If the
granted Shares are subject to a purchase price, as set forth in Section 1
above, the Awardee shall have the right to purchase such Shares at the specified
purchase price in accordance with such procedures as may be established by
the
Administrator from time to time. During any California Qualification Period,
the
Awardee may not transfer the right to purchase Shares under this Award other
than by will, by the laws of descent and distribution, or as permitted by Rule
701 of the Securities Act of 1933, as amended, as the Administrator may
determine.
2.3 Vesting.
The
Awardee shall vest in the granted Shares in accordance with the vesting schedule
provided for in Section 1 above; provided, however, that the Awardee shall
cease vesting in the granted Shares upon the Awardee’s Termination of Service.
[Notwithstanding the foregoing, the Awardee shall vest in all granted Shares
if
the Company is subject to a Change in Control before the Awardee’s Termination
of Service, and the Awardee is subject to a Termination of Service resulting
from: (i) the Optionee’s involuntary discharge by the Company (or the Affiliate
employing him or her) for reasons other than Cause (defined below), death or
Disability; or (ii) the Optionee’s resignation for Good Reason (defined below)
in anticipation of or within 24 months after the Change in
Control.]
[The
term
“Cause” shall mean (1) the Optionee’s theft, dishonesty, or falsification of any
documents or records of the Company or any Affiliate; (2) the Optionee’s
improper use or disclosure of confidential or proprietary information of the
Company or any Affiliate; (3) any action by the Optionee which has a detrimental
effect on the reputation or business of the Company or any Affiliate; (4) the
Optionee’s failure or inability to perform any reasonable assigned duties after
written notice from the Company or an Affiliate, and a reasonable opportunity
to
cure, such failure or inability; (5) any material breach by the Optionee of
any
employment or service agreement between the Optionee and the Company or an
Affiliate, which breach is not cured pursuant to the terms of such agreement;
(6) the Optionee’s conviction (including any plea of guilty or nolo contendere)
of any criminal act which impairs the Optionee’s ability to perform his or her
duties with the Company or an Affiliate; or (7) violation of a material Company
policy. The term “Good Reason” shall mean (A) a material adverse change in the
Optionee’s title, stature, authority, or responsibilities with the Company (or
the Affiliate employing him or her); (B) a material reduction in the Optionee’s
base salary or annual bonus opportunity; or (C) receipt of notice that the
Optionee’s principal workplace will be relocated by more than 50
miles.]
2.4 Risk
of Forfeiture.
(A) General
Rule.
The
granted Shares shall initially be subject to a risk of forfeiture. The Shares
subject to a risk of forfeiture shall be referred to herein as “Restricted
Shares.” The Awardee may not transfer, assign, encumber, or otherwise dispose of
any Restricted Shares other than in accordance with this Stock Award Agreement
and the Plan. If the Awardee transfers any Restricted Shares in accordance
with
this Stock Award Agreement and the Plan, then this Section shall apply to the
transferee to the same extent as to the transferor.
(B) Lapse
of Risk of Forfeiture.
The
risk of forfeiture shall lapse as the Awardee vests in the granted Shares in
accordance with the vesting schedule set forth in Section 1
above.
(C) Forfeiture
of Granted Shares.
The
Restricted Shares shall automatically be forfeited and immediately returned
to
the Company upon the Awardee’s Termination of Service; provided that if any
Restricted Shares were purchased by the Awardee, then upon the Awardee’s
Termination of Service, the Company shall have the right to repurchase such
Restricted Shares at the original price paid by the Awardee at any time during
the 90-day period following the date of the Awardee’s Termination of Service,
provided that during any California Qualification Period, the Company must
exercise such right to repurchase for either cash or cancellation of purchase
money indebtedness for such unvested Shares. The certificates evidencing the
Restricted Shares shall have stamped on them a special legend referring to
the
Company’s right of repurchase.
(D) Additional
Shares or Substituted Securities.
In the
event of a stock split, reverse stock split, stock dividend, recapitalization,
combination, or reclassification of the Common Stock or any other increase
or
decrease in the number of issued and outstanding Shares effected without receipt
of consideration by the Company, any new, substituted, or additional securities
or other property (including money paid other than as an ordinary cash dividend)
which are by reason of such transaction distributed with respect to any
Restricted Shares or into which such Restricted Shares thereby become
convertible shall immediately be subject to a risk of forfeiture as provided
herein.
(E) Escrow.
At the
discretion of the Administrator, the certificates representing the granted
Shares may, upon issuance, be deposited in escrow with the Company to be held
in
accordance with the provisions of this Stock Award Agreement. If the granted
Shares are held in escrow, as provided in this subsection, any new, substituted
or additional securities or other property described in Section 2.4(D) above
shall immediately be delivered to the Company to be held in escrow, but only
to
the extent the granted Shares are at the time Restricted Shares. All regular
cash dividends on Restricted Shares (or other securities) at the time held
in
escrow shall be paid directly to the Awardee and shall not be held in escrow.
Restricted Shares, together with any other assets or securities held in escrow
hereunder, shall be (i) surrendered to the Company for cancellation upon
forfeiture thereof; or (ii) released to the Awardee upon request, but only
to the extent that the granted Shares are no longer Restricted
Shares.
2.5 Leave
of Absence.
The
Awardee shall not incur a Termination of Service when the Awardee goes on any
bona fide leave of absence, if the leave was approved by the Company (or
Affiliate employing him or her) in writing and if continued crediting of service
is required by the terms of the leave or by applicable law. The Awardee shall
incur a Termination of Service when the approved leave ends, however, unless
the
Awardee immediately returns to active work.
2.6 Rights
as a Stockholder.
The
Awardee shall have the rights of a stockholder of the Company, including the
right to vote the granted Xxxxxx.
2.7 Regulatory
Compliance.
The
issuance of Common Stock pursuant to this Stock Award Agreement shall be subject
to full compliance with all applicable requirements of law and the requirements
of any stock exchange or interdealer quotation system upon which the Common
Stock may be listed or traded.
2.8 Vesting
if Sale Prohibited by Xxxxxxx Xxxxxxx Policy.
The
Company has established an Xxxxxxx Xxxxxxx Policy (as such policy may be amended
from time to time, the “Policy”) relative to trading while in possession of
material, undisclosed information. The Policy prohibits officers, directors,
employees, and consultants of the Company and its subsidiaries from trading
in
securities of the Company during certain “Blackout Periods” as described in the
Policy. If a scheduled vesting date for Shares falls on a day during such a
Blackout Period, then the Shares that would otherwise have vested on such date
shall not vest on such date, but shall instead vest, provided the Awardee
remains a Service Provider, on the second business day after the last day of
the
Blackout Period applicable to the Shares.
2.9 Withholding
Tax.
The
Company’s obligation to deliver the granted Shares or to remove any restrictive
legends upon vesting of such Shares under the Plan shall be subject to the
satisfaction of all applicable federal, state, local, and foreign income and
employment tax withholding requirements. The Awardee shall pay to the Company
an
amount equal to the withholding amount (or the Company may withhold such amount
from the Awardee’s salary) in cash. At the Administrator’s discretion, the
Awardee may pay the withholding amount with Shares; provided, however, that
payment in Shares shall be limited to the withholding amount calculated using
the minimum statutory withholding rates.
2.10 Certain
Federal Income Tax Issues.
(A) Subject
to provisions discussed in subsection (B) below, under Section 83 of the Code,
the Awardee will recognize ordinary income upon transfer of the Shares to the
Awardee, measured as the difference between the fair market value of the granted
Shares on the date of transfer and the amount paid for the granted Shares,
if
any. The capital gain holding period will begin on the date of
transfer.
(B) To
the
extent that the granted Shares are subject to a “substantial risk of forfeiture”
(within the meaning of Section 83 of the Code) on the Grant Date, the Awardee
will not recognize ordinary income until the granted Shares are no longer
subject to a substantial risk of forfeiture (i.e., as the Shares vest). The
Awardee’s ordinary income is measured as the difference between the amount paid
for the granted Shares, if any, and the fair market value of the granted Shares
when such Shares are no longer subject to a substantial risk of forfeiture.
The
capital gain holding period for Shares subject to a substantial risk of
forfeiture begins on the date when such Shares are no longer subject to a
substantial risk of forfeiture.
(C) If
the
Shares are subject to a substantial risk of forfeiture, the Awardee may
nonetheless accelerate his or her recognition of ordinary income, if any, and
begin his or her capital gains holding period by timely filing an election
pursuant to Section 83(b) of the Code (the “83(b) Election”). If the Awardee
makes an 83(b) Election, the excess of (i) the
fair market value of the granted Shares on the Grant Date over (ii) the
purchase price, if any, paid for the granted Shares will be included in the
Awardee’s ordinary income. If the granted Shares are later forfeited, however,
the Awardee will not be entitled to a tax deduction or a refund of the tax
already paid. If the Awardee makes the 83(b) Election, the Awardee will not
recognize any additional income when the granted Shares vest and any
appreciation in the value of the granted Shares after the election is not taxed
as compensation but instead is taxed as capital gain when the granted Shares
are
sold.
(D) The
83(b)
Election must be filed with the Internal Revenue Service within 30 days
after the Shares are transferred. If the Awardee is an employee or former
employee, any ordinary income resulting from the election will be subject to
applicable tax withholding requirements. The election is generally irrevocable
and cannot be made after the 30-day period has expired. In the event that the
Awardee makes an 83(b) Election, the Awardee (i) shall promptly provide the
Company with a copy of the 83(b) Election, as filed with the Internal Revenue
Service; and (ii) the Company may withhold from any payments due to the Awardee
any applicable federal, state, or local taxes and such other deductions as
are
prescribed by law, or the Awardee will pay to the Company all such tax
withholding amounts promptly upon request.
(E) The
foregoing is only a summary of the effect of U.S. federal income taxation upon
the Awardee with respect to the grant of restricted shares under the Plan.
It
does not purport to be a complete discussion of the U.S. federal income tax
consequences. It does not discuss the income tax laws of any state,
municipality, or foreign country in which the Awardee’s income or gain may be
taxable. In any event, the Awardee is hereby advised to consult its own tax
advisor as to the consequences of making an 83(b) Election. If the Awardee
desires to make an 83(b) Election, then it is the Awardee’s responsibility to
timely make a valid election.
2.11 Plan.
This
Stock Award Agreement is subject to all provisions of the Plan, receipt of
a
copy of which is hereby acknowledged by the Awardee. The Awardee shall accept
as
binding, conclusive, and final all decisions and interpretations of the
Administrator upon any questions arising under the Plan and this Stock Award
Agreement.
2.12 Successors.
This
Stock Award Agreement shall inure to the benefit of and be binding upon the
parties hereto and their legal representatives, heirs, and permitted successors
and assigns.
2.13 Restrictions
on Resale.
The
Awardee agrees not to sell any Shares at a time when Applicable Laws, Company
policies, or an agreement between the Company and its underwriters prohibit
a
sale. This restriction shall apply as long as the Awardee is a Service Provider
and for such period after the Awardee’s Termination of Service as the
Administrator may specify.
2.14 Lock-Up
Agreement.
In
connection with any underwritten public offering of Shares made by the Company
pursuant to a registration statement filed under the Securities Act, the Awardee
shall not offer, sell, contract to sell, pledge, hypothecate, grant any option
to purchase or make any short sale of, or otherwise dispose of any Shares or
any
rights to acquire Shares of the Company for such period beginning on the date
of
filing of such registration statement with the Securities and Exchange
Commission and ending at the time as may be established by the underwriters
for
such public offering; provided, however, that such period shall end not later
than 180 days from the effective date of such registration statement. The
foregoing limitation shall not apply to shares registered for sale in such
public offering.
2.15 Entire
Agreement; Governing Law.
This
Stock Award Agreement and the Plan constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Awardee
with respect to the subject matter hereof, and may not be modified adversely
to
the Awardee’s interest except by means of a writing signed by the Company and
the Awardee. This Stock Award Agreement is governed by the internal substantive
laws, but not the choice of law rules, of Nevada.
2.16 No
Guarantee of Continued Service.
The
vesting of the Shares pursuant to the vesting schedule hereof is earned only
by
continuing as a Service Provider at the will of the Company (and not through
the
act of being hired, being granted shares, or purchasing Shares hereunder).
This
Stock Award Agreement, the transactions contemplated hereunder, and the vesting
schedule set forth herein constitute neither an express nor implied promise
of
continued engagement as a Service Provider for the vesting period, for any
period, or at all, and shall not interfere with Awardee’s right or the Company’s
right to terminate Awardee’s relationship as a Service Provider at any time,
with or without Cause.
By
the
Awardee’s signature and the signature of the Company’s representative below, the
Awardee and the Company agree that this Award is granted under and governed
by
the terms and conditions of this Stock Award Agreement and the Plan. The Awardee
has reviewed this Stock Award Agreement and the Plan in their entirety, has
had
an opportunity to obtain the advice of counsel before executing this Stock
Award
Agreement and fully understands all provisions of this Stock Award Agreement
and
the Plan. The Awardee hereby agrees to accept as binding, conclusive, and final
all decisions or interpretations of the Administrator upon any questions
relating to this Stock Award Agreement and the Plan.
The
Awardee further agrees that the Company may deliver by email all documents
relating to the Plan or this Award (including prospectuses required by the
Securities and Exchange Commission) and all other documents that the Company
is
required to deliver to its security holders (including annual reports and proxy
statements). The Awardee also agrees that the Company may deliver these
documents by posting them on a web site maintained by the Company or by a third
party under contract with the Company.
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AWARDEE:
________________________________
Signature
________________________________
Printed
Name
________________________________
Residence
Address
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DGSE
COMPANIES, INC.
By:
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Its:
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