Exhibit 10.19
RESTRICTED STOCK AGREEMENT
UNDER THE BORON, XXXXXX & ASSOCIATES, INC.
1996 STOCK OPTION AND GRANT PLAN
NAME OF GRANTEE: Xxxxxxx X. XxXxxxxx
CLASS OF SHARES: Class A Common Stock
NO. OF SHARES: 20,000
PER SHARE PURCHASE PRICE: $0.285 DATE: June 6, 1997
AGGREGATE PURCHASE PRICE: $5,700
Pursuant to the Boron, XxXxxx & Associates, Inc. 1996 Stock Option and
Grant Plan (the "Plan"), Boron, XxXxxx & Associates, Inc., a Delaware
corporation (together with its successors, the "Company"), has heretofore
granted and hereby issues and sells to the person named above (the "Grantee"),
who is an officer or full-time employee of the Company or any of the
Subsidiaries (as defined below) of the Company, the number of shares of Class A
Common Stock, par value $0.01 per share ("Common Stock"), of the Company
indicated above (subject to the provisions below, the "Shares"), for the per
share purchase price specified above, subject to the terms and conditions set
forth herein and in the Plan. The Grantee agrees to the provisions set forth
herein and acknowledges that each such provision is a material condition of the
Company's issuance and sale of the Shares to him. The Company hereby
acknowledges receipt of the amount specified above in full payment for the
Shares. All references to share prices and amounts herein shall be equitably
adjusted to reflect stock splits, stock dividends, recapitalizations, mergers,
reorganizations and similar changes affecting the capital stock of the Company,
and any shares of capital stock of the Company received on or in respect of
Shares in connection with any such event (including any shares of capital stock
or any right, option or warrant to receive the same or any security convertible
into or exchangeable for any such shares or received upon conversion of any such
shares) shall be subject to this Agreement on the same basis and extent at the
relevant time as the Shares in respect of which they were issued, and shall be
deemed Shares as if they were issued at the date hereof.
Section 1. Definitions. For the purposes of this Agreement, the following
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terms shall have the following respective meanings:
"Act" shall mean the Securities Act of 1933, as amended, and the rules
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and regulations thereunder.
"Bankruptcy" means (i) the filing of a voluntary petition under any
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bankruptcy or insolvency law, or a petition for the appointment of a receiver or
the making of an assignment for the benefit of creditors, with respect to the
Grantee or any Permitted
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Transferee, or (ii) the Grantee or any Permitted Transferee being subjected
involuntarily to such a petition or assignment or to an attachment or other
legal or equitable interest with respect to his assets, which involuntary
petition or assignment or attachment is not discharged within 60 days after its
date, and (iii) the Grantee or any Permitted Transferee being subject to a
transfer of Restricted Shares by operation of law, except by reason of death.
"Common Stock" shall mean the Company's Class A Common Stock, par
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value $0.01 per share, together with any shares into which Common Stock may be
converted or exchanged.
"Initial Public Offering" shall mean the consummation of the first
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fully underwritten, firm commitment public offering pursuant to an effective
registration statement under the Act, other than on Forms S-4 or S-8 or their
then equivalents, covering the offer and sale by the Company of its equity
securities, or such other event as a result of or following which the Common
Stock shall be publicly held.
"Permitted Transferees" shall mean any of the following to whom the
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Grantee may transfer Shares hereunder: the Grantee's spouse, parents, children
(natural or adopted), stepchildren or grandchildren or a trust for their
principal benefit of which the Grantor is the settlor; provided, however, that
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any such trust does not require or permit distribution of any Shares during the
term of this Agreement unless subject to its terms.
"Restricted Shares" shall mean all of the Shares that are not Vested
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Shares at the relevant date of determination.
"Sale Event" shall mean any of the following transactions: (a) the
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dissolution or liquidation of the Company; (b) the sale of all or substantially
all of the assets of the Company and its Subsidiaries to another person or
entity; (c) a merger, reorganization or consolidation in which the holders of
the Company's outstanding voting power immediately prior to such transaction do
not own a majority of the outstanding voting power of the surviving or resulting
entity immediately upon completion of such transaction; (d) the sale of the
outstanding stock of the Company to an unrelated person or entity; or (e) any
other transaction or series of transactions where the owners of the Company's
outstanding voting power prior to such transaction do not own at least a
majority of the outstanding voting power of the relevant entity after the
transaction, in each case in which the Investors (as such term is defined in the
certain Stockholders' Agreement dated as of December 4, 1996), receive cash or
other assets having a value upon closing or effectiveness thereof in excess of
$37.5 million plus all accumulated and unpaid dividends in respect of the shares
acquired by them from the Company on December 4, 1996.
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"Shares" shall mean the number of shares of Common Stock being
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purchased by the Grantee on the date hereof and any additional shares of Common
Stock or other securities received as a dividend on, or otherwise on account of,
the Shares, as contemplated by the first paragraph of this Agreement.
"Subsidiary" shall mean any corporation or partnership of which stock
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or other equity interests possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock or other equity interests is owned
directly or indirectly by the Company.
"Termination Event" shall mean the termination of the Grantee's
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employment with the Company and its subsidiaries as a result of his resignation
or other voluntary termination or retirement at any time regardless of the
circumstances thereof, or termination of such employment by the Company at any
time for "cause," with the Board of Directors of the Company having the right to
its sole discretion, exercised in good faith, to determine the cause of any
termination of the Grantee's employment. For purposes hereof the employment of
the Grantee shall be deemed to have been terminated "for cause" if such
termination results from:
(i) the Grantee's commission of an act of fraud, embezzlement,
misappropriation or breach of fiduciary duty against the Company or any of
its subsidiaries, or conviction by a court of competent jurisdiction of, or
pleading guilty or nolo contendere to, any felony or any crime involving
moral turpitude; or
(ii) the Grantee's commission of a breach of any of the
covenants, terms or provisions of any agreement with the Company, which
breach has not been remedied within thirty (30) days after delivery to the
Grantee by the Company of written notice of the facts constituting the
breach; or
(iii) the Grantee's failure to comply with reasonable written
instructions from the Company's Chief Executive Officer or Board of
Directors, or the Grantee's substantial failure to perform his duties as an
employee of the Company or any of its Subsidiaries for a period of thirty
(30) days after written notice from the Company.
"Vested Shares" shall mean all of the Shares as of the close of
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business on December 31, 1997, it being understood that all of the Shares shall
be deemed vested as of such time provided that prior thereto no Termination
Event or Bankruptcy shall have occurred.
Section 2. Purchase and Sale of Shares; Investment Representations.
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2.1. Purchase and Sale. On the date hereof, the Company hereby sells to
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the Grantee, and the Grantee hereby purchases from the Company, the number of
Shares set forth above for the purchase price per share set forth above.
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2.2. Investment Representations. In connection with the purchase and sale
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of the Shares contemplated by Section 2.1 above, the Grantee hereby represents
and warrants to the Company as follows:
(a) The Grantee is purchasing the Shares for his own account for
investment only, and not for resale or with a view to the distribution thereof.
(b) The Grantee has had such an opportunity as he has deemed adequate
to obtain from the Company such information as is necessary to permit him to
evaluate the merits and risks of an investment in the Company and has consulted
with his own advisers with respect to his investment in the Company.
(c) The Grantee has sufficient experience in business, financial and
investment matters to be able to evaluate the risks involved in the purchase of
the Shares and to make an informed investment decision with respect to such
purchase.
(d) The Grantee can afford a complete loss of the value of the Shares
and is able to bear the economic risk of holding such Shares for an indefinite
period.
(e) The Grantee understands that the Shares are not registered under
the Act (it being understood that the Shares are being issued and sold in
reliance on the exemption provided in Rule 701 thereunder) or any applicable
state securities or "blue sky" laws and may not be sold or otherwise transferred
or disposed of in the absence of an effective registration statement under the
Act and under any applicable state securities or "blue sky" laws (or exemptions
from the registration requirements thereof). The Grantee further acknowledges
that certificates representing the Shares will bear restrictive legends
reflecting the foregoing.
Section 3. Repurchase of Restricted Shares.
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3.1. Repurchase. Upon the occurrence of a Termination Event or the
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Bankruptcy of the Grantee, the Company or its assigns shall repurchase and the
Grantee and each Permitted Transferee shall sell to it or them all of the
Restricted Shares held by the Grantee or any Permitted Transferee as of the date
of such Termination Event or Bankruptcy at the per share purchase price set
forth above, subject to adjustment as provided above. In addition, upon the
Bankruptcy of any of the Grantee's Permitted Transferees, the Company or its
assigns shall purchase and each such Permitted Transferee shall sell to it or
them all of the Restricted Shares held by such Permitted Transferee as of the
date of such Bankruptcy at a price equal to the per share purchase price set
forth above, also subject to such adjustment. The purchase and sale
arrangements contemplated by the preceding sentences of this Section 3.1 are
referred to herein as the "Repurchase."
3.2. Closing Procedure. The Company or its assigns shall effect the
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Repurchase by delivering or mailing to the Grantee (and/or, if applicable, his
Permitted Transferees) written notice within six (6) months after the
Termination Event or Bankruptcy, specifying a date
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within such six-month period in which the Repurchase shall be effected. Upon
such notification, the Grantee and his Permitted Transferees shall promptly
surrender to the Company any certificates representing the Restricted Shares
being purchased, together with a duly executed stock power for the transfer of
such Restricted Shares to the Company or the Company's assignee or assignees (as
contemplated by Section 6, if applicable). Upon the Company's or its assignee's
receipt of the certificates from the Grantee or his Permitted Transferees, the
Company or its assignee or assignees shall deliver to him or them a check for
the purchase price of the Restricted Shares being purchased, provided, however,
that the Company may pay the purchase price for such shares by offsetting and
canceling any indebtedness then owed by the Grantee to the Company. At such
time, the Grantee and/or any holder of the Restricted Shares shall deliver to
the Company the certificate or certificates representing the Restricted Shares
so repurchased, duly endorsed for transfer, free and clear of any liens or
encumbrances, as contemplated by Section 6, if applicable.
3.3 Sale Events. Upon the occurrence of a Sale Event, all of the Shares
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shall be deemed Vested Shares. However, the vesting provisions and the
Repurchase set forth herein will remain in effect and not change upon an initial
public offering or other public offering.
3.4. Remedy. Without limitation of any other provision of this Agreement
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or other rights, in the event that the Grantee, his Permitted Transferees or any
other person or entity is required to sell his Restricted Shares pursuant to the
provisions of this Section 3 and in the further event that he refuses or for any
reason fails to deliver to the designated purchaser of such Restricted Shares
the certificate or certificates evidencing such Restricted Shares together with
a related stock power, such designated purchaser may deposit the purchase price
for such Restricted Shares with any bank doing business within fifty (50) miles
of the Company's principal office, or with the Company's independent public
accounting firm, as agent or trustee, or in escrow, for the Grantee, his
Permitted Transferees or other person or entity, to be held by such bank or
accounting firm for the benefit of and for delivery to him, them or it, and/or,
in its discretion, pay such purchase price by offsetting any indebtedness then
owed by the Grantee as provided above. Upon any such deposit and/or offset by
the designated purchaser of such amount and upon notice to the person or entity
who was required to sell the Restricted Shares to be sold pursuant to the
provisions of this Section 3, such Restricted Shares shall at such time be
deemed to have been sold, assigned, transferred and conveyed to such purchaser,
the holder thereof shall have no further rights thereto (other than the right to
withdraw the payment thereof held in escrow, if applicable), and the Company
shall record such transfer in its stock transfer book or in any appropriate
manner.
Section 4. Restrictions on Transfer of Shares. None of the Shares now
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owned or hereafter acquired shall be sold, assigned, transferred, pledged,
hypothecated, given away or in any other manner disposed of or encumbered,
whether voluntarily or by operation of law, unless such transfer is in
compliance with all applicable securities laws (including, without limitation,
the Act), and such disposition is in accordance with the terms and conditions of
this Section 4. In connection with any transfer of Shares, the Company may
require the transferor to provide at his own expense an opinion of counsel to
the transferor, satisfactory to the
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Company, that such transfer is in compliance with all foreign, federal and state
securities laws (including, without limitation, the Act). Any attempted
disposition of Shares not in accordance with the terms and conditions of this
Section 4 shall be null and void, and the Company shall not reflect on its
records any change in record ownership of any Shares as a result of any such
disposition, shall otherwise refuse to recognize any such disposition and shall
not in any way give effect to any such disposition of any Shares. Subject to the
foregoing general provisions, Shares may be transferred pursuant to the
following specific terms and conditions:
(a) Transfers to Permitted Transferees. The Grantee may sell, assign,
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transfer or give away any or all of the Shares to Permitted Transferees;
provided, however, that such Permitted Transferee(s) shall, as a condition to
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any such transfer, agree to be subject to the provisions of this Agreement
(including, without limitation, the provisions of Section 3 and this Section 4)
and shall have delivered a written acknowledgment to that effect to the Company.
(b) Transfers Upon Death. Upon the death of the Grantee or any
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Permitted Transferee, the Shares may be transferred by operation of law to the
estate, legal representative, executors and administrators of the Grantee or any
such Permitted Transferee. Any Shares which are Restricted Shares at the time of
such death shall remain subject to the terms of this Agreement (including
Sections 3 and 4 to the extent applicable), and the Grantee's and any Permitted
Transferee's estate, executors, administrators, personal representatives, heirs,
legatees and distributees shall be obligated to convey such Shares to the
Company or its assigns if and to the extent contemplated hereby.
(c) Other Transfers; Notice; Right of First Refusal. In the event
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that the Grantee (or any transferee holding Shares subject to this Section 4(c))
desires to sell or otherwise transfer all or any part of the Vested Shares (but
in no event Restricted Shares, which shall not be sold or transferred except as
contemplated by Section 3.1, 3.3 or 4(a) or (b)), the Grantee first shall give
written notice to the Company of such proposed transfer. Such notice shall state
the number of Vested Shares which the Grantee or the Permitted Transferee
proposes to sell (the "Offered Shares"), the price and the terms at which the
proposed sale is to be made and the name and address of the proposed transferee.
At any time within 30 days after the receipt of such notice by the Company, the
Company or its assigns may elect to purchase all or any portion of the Offered
Shares at the price and on the terms offered by the proposed transferee and
specified in the notice. The Company or its assigns shall exercise this right
by mailing or delivering written notice to the Grantee or the Permitted
Transferee within the foregoing 30-day period. If the Company or its assigns
elect to exercise their purchase rights of this Section 4(c), the closing for
such purchase shall, in any event, take place within 30 days after the receipt
by the Company of the initial notice of the proposed transfer. In the event
that the Company or its assigns do not elect to exercise such purchase right, or
in the event that the Company or its assigns do not pay the full purchase price
within such 30-day period, the Grantee or the Permitted Transferee may, within
60 days thereafter, sell the Offered Shares to the proposed transferee and at
the same price and on the same terms
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as specified in his notice. Any Shares purchased by such proposed transferee
shall no longer be subject to the terms of this Agreement.
(d) Stand-Off. The Grantee and each Permitted Transferee shall agree,
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if requested by the Company and any underwriter engaged by the Company, not to
sell or otherwise transfer or dispose of any securities of the Company
(including, without limitation pursuant to Rule 144 under the Act (or any
successor or similar exemptive rule hereafter in effect)) held by them for such
period following the effective date of any registration statement of the Company
filed under the Act as the Company or such underwriter shall specify reasonably
and in good faith, not to exceed 180 days in the case of the Company's Initial
Public Offering or 90 days in the case of any other public offering.
Section 5. Legend. Any certificate(s) representing the Shares shall carry
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substantially the following legends:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the restrictions, terms and
conditions (including repurchase and restrictions against transfers)
contained in a certain Restricted Stock Agreement dated June __, 1997
between the Company and the holder of this certificate (a copy of
which is available at the offices of the Company for examination)."
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 or the securities laws of
any state. The shares may not be sold or transferred in the absence
of such registration or an exemption from registration."
Section 6. Escrow. In order to carry out the provisions of Sections 3 and
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4 of this Agreement more effectively, the Company shall hold the Shares in
escrow together with separate stock powers executed by the Grantee in blank for
transfer, and any Permitted Transferee shall, as an additional condition to any
transfer of Shares, execute a like stock power as to such Shares. The Company
shall not dispose of the Shares except as otherwise provided in this Agreement.
In the event of any Repurchase, the Company is hereby authorized by the Grantee
and each Permitted Transferee, as the Grantee's and each such Permitted
Transferee's attorney-in-fact, to date and complete the stock powers necessary
for the transfer of the Shares being purchased and to transfer such Shares in
accordance with the terms hereof. At such time as any Shares are no longer
Restricted Shares, the Company shall, at the written request of the Grantee,
deliver to the Grantee (or the relevant Permitted Transferee) a certificate
representing such Shares with the balance of the Shares to be held in escrow
pursuant to this Section 6.
Section 7. Withholding Taxes. The Grantee acknowledges and agrees that
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the Company or any of its Subsidiaries have the right to deduct from payments of
any kind
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otherwise due to the Grantee, or from the Shares held pursuant to Section 6
hereof, any federal, state or local taxes of any kind required by law to be
withheld with respect to the purchase of the Shares by the Grantee. In
furtherance of the foregoing the Grantee agrees to elect, in accordance with
Section 83(b) of the Internal Revenue Code of 1986, as amended, to recognize
ordinary income in the year of acquisition of the Shares, and to pay to the
Company all withholding taxes shown as due on his Section 83(b) election form,
or otherwise ultimately determined to be due with respect to such election,
based on the excess, if any, of the fair market value of such Shares as of the
date of the purchase of such Shares by the Grantee over the purchase price for
such Shares.
Section 8. Assignment. At the discretion of the Board of Directors of the
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Company, the Company shall have the right to assign the right to exercise its
obligation and rights with respect to the Repurchase or pursuant to Section 4(c)
to any person or persons, in whole or in part in any particular instance, upon
the same terms and conditions applicable to the exercise thereof by the Company,
and such assignee or assignees of the Company shall then take and hold any
Shares so acquired subject to such terms as may be specified by the Company in
connection with any such assignment.
Section 9. Miscellaneous Provisions.
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9.1. Termination. The restrictions on transfer of Vested Shares under
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Section 4(c) shall terminate on an Initial Public Offering; provided, however,
that all other provisions shall remain in effect following the same until all of
the Shares have become Vested Shares.
9.2. Record Owner; Dividends. The Grantee and any Permitted Transferees,
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during the duration of this Agreement, shall be considered the record owners of
and shall be entitled to vote the Shares (if and to the extent such Shares are
entitled to vote). The Grantee and any Permitted Transferees shall be entitled
to receive all dividends and any other distributions declared on the Shares;
provided, however, that the Company is under no duty to declare any such
dividends or to make any such distribution.
9.3. Equitable Relief. The parties hereto agree and declare that
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legal remedies are inadequate to enforce the provisions of this Agreement and
that equitable relief, including specific performance and injunctive relief, may
be used to enforce the provisions of this Agreement.
9.4. Change and Modifications. This Agreement may not be orally changed,
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modified or terminated, nor shall any oral waiver of any of its terms be
effective. This Agreement may be changed, modified or terminated only by an
agreement in writing signed by the Company and the Grantee.
9.5. Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Delaware.
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9.6. Headings. The headings are intended only for convenience in finding
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the subject matter and do not constitute part of the text of this Agreement and
shall not be considered in the interpretation of this Agreement.
9.7. Saving Clause. If any provision(s) of this Agreement shall be
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determined to be illegal or unenforceable, such determination shall in no manner
affect the legality or enforceability of any other provision hereof.
9.8. Notices. All notices, requests, consents and other communications
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shall be in writing and be deemed given when delivered personally, by telex or
facsimile transmission or when received if mailed by first class registered or
certified mail, postage prepaid. Notices to the Company or the Grantee shall be
addressed as set forth underneath their signatures below, or to such other
address or addresses as may have been furnished by such party in writing to the
other. Notices to any holder of the Shares other than the Grantee shall be
addressed to the address furnished by such holder to the Company.
9.9. Benefit and Binding Effect. This Agreement shall be binding upon and
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shall inure to the benefit of the parties hereto, their respective successors,
assigns, and legal representatives. This Agreement supersedes and replaces all
prior agreements or understandings, written, oral or otherwise, with respect to
the Shares subject hereto and the terms applicable thereto. The Company has the
right to assign this Agreement, and such assignee shall become entitled to all
the rights of the Company hereunder to the extent of such assignment.
9.10. Counterparts. For the convenience of the parties and to facilitate
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execution, this Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same document.
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IN WITNESS WHEREOF, the Company and the Grantee have executed this Agreement
as of June 6, 1997.
BORON, XXXXXX & ASSOCIATES, INC.
By:/s/ Xxxxxxx X. XxXxxx
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Xxxxxxx X. XxXxxx, President
GRANTEE
/s/ Xxxxxxx X. XxXxxxxx
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Xxxxxxx X. XxXxxxxx
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Address
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