PACIFIC ETHANOL, INC. RESTRICTED STOCK AGREEMENT
Exhibit
10.3
THIS
RESTRICTED STOCK AGREEMENT (this “Agreement”), dated and effective as of
__________ (the “Grant Date”) by and between Pacific Ethanol, Inc., a Delaware
corporation (the “Company”), and __________ (“Grantee”), is entered into as
follows:
WHEREAS,
the Company has established the Pacific Ethanol, Inc. 2006 Stock Incentive
Plan
(the “Plan”), a copy of which has previously been provided to Grantee or is
provided with this Agreement; and
WHEREAS,
the Compensation Committee of the Board of Directors of the Company (the
“Committee”) has determined that Grantee be granted shares of the Company’s
$.001 par value per share Common Stock (the “Restricted Stock”) subject to the
restrictions stated below.
Capitalized
terms used but not otherwise defined herein shall have the respective meanings
ascribed to them in the Plan. References herein to the Company shall also
include, where and as applicable, any Parent or Subsidiary of the Company in
the
same manner used in the Plan.
NOW,
THEREFORE, the parties hereby agree as follows:
1. Grant
of Restricted Stock.
Subject
to the terms and conditions of this Agreement and of the Plan, the Company
hereby grants to Grantee ***__________***
shares
of Restricted Stock. As soon as practicable, the Company shall cause the shares
of Restricted Stock to be issued in Grantee’s name. During the Restriction
Period, the Restricted Stock shall be held in the custody of the Company or
its
designee for Grantee’s account. The Restricted Stock shall be subject to, and
shall bear appropriate legends with respect to, the restrictions described
herein.
2. Vesting
Schedule.
(a) The
interest of Grantee in the Restricted Stock shall vest as to ***__________***
shares
of Restricted Stock immediately on the Grant Date and, provided Grantee remains
continuously in the service of the Company as a member of its board of directors
from the Grant Date through each subsequent vesting date, as to an additional
***__________***
shares
of Restricted Stock on the first (1st)
anniversary of the Grant Date and on each succeeding anniversary date, so as
to
be fully vested on the _____ (___) anniversary of the Grant Date. If a vesting
date falls on a weekend or any other day on which the NASDAQ Stock Market
(“NASDAQ”) is not open, vesting of the corresponding Restricted Stock shall
occur on the next following NASDAQ trading day. Notwithstanding the foregoing,
the interest of Grantee in the Restricted Stock may vest as to one hundred
percent (100%) of the then unvested Restricted Stock upon a Change in Control
but only in accordance with the Plan.
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(b) Upon
termination of the Restriction Period, the Company shall, as soon as practicable
thereafter, deliver to Grantee a certificate representing the Restricted Stock
with respect to which such restrictions have lapsed. Grantee may instruct the
Company in writing to deliver vested shares of Restricted Stock to Grantee’s
broker or other designee; provided, that (x) as to the Restricted Stock
that vests immediately on the Grant Date, Grantee shall communicate such
instruction in writing to the Chief Financial Officer of the Company within
two
(2) business days following the Grant Date, and (y) as to the Restricted Stock
that may vest following the Grant Date, Grantee shall communicate such
instruction in writing to the Chief Financial Officer of the Company as to
each
subsequent vesting amount not more than thirty (30) business days and not less
than five (5) business days prior to each subsequent vesting date. If Grantee
does not timely provide such instructions, the vested shares of Restricted
Stock
will be delivered to Grantee personally or to Grantee’s home or other address as
set forth in the Company’s books and records.
3. Restrictions.
(a) No
portion of the Restricted Stock or rights granted hereunder may be sold,
transferred, assigned, pledged or otherwise encumbered or disposed of by Grantee
until such portion of the Restricted Stock becomes vested in accordance with
Section 2
of this
Agreement. The period of time between the date hereof and the date Restricted
Stock becomes vested is referred to herein as the “Restriction Period.”
In
addition, none of the Restricted Stock, even if vested, may be sold or
transferred in contravention of (i) any market blackout periods the Company
may
impose from time to time, or (ii) the Company’s xxxxxxx xxxxxxx policies to the
extent applicable to Grantee from time to time.
(b) The
vesting schedule requires Grantee’s continued service as a member of the board
of directors of the Company during the applicable vesting periods as a condition
to the vesting of the Restricted Stock and the rights and benefits under this
Agreement. If Grantee’s service as a member of the board of directors of the
Company is terminated for any reason, whether voluntarily or involuntarily,
the
balance of the Restricted Stock subject to the provisions of this Agreement
which has not vested at the time of Grantee’s termination of service shall be
forfeited by Grantee without payment of any consideration by the Company and
neither Grantee nor any successor, heir, assign or personal representative
of
Grantee shall have any right, title or interest in or to the forfeited
Restricted Stock or the certificates evidencing them, and the Company shall
direct its transfer agent of the Common Stock to make the appropriate entries
in
its records showing the cancellation of the certificate or certificates for
such
Restricted Stock. Service as a member of the board of directors of the Company
for only a portion of a vesting period, even if a substantial portion, will
not
entitle Grantee to any proportionate vesting of the Restricted Stock allocated
to that period or avoid or mitigate the forfeiture of and vesting in Grantee’s
Restricted Stock that will occur upon the cessation of Grantee’s service as a
member of the board of directors of the Company.
4. Shareholder
Rights.
During
the Restriction Period, Grantee shall have all the rights of a shareholder
with
respect to the Restricted Stock except for the right to transfer the Restricted
Stock, as set forth in Section 3
of this
Agreement. Accordingly, Grantee shall have the right to vote the Restricted
Stock and to receive any cash dividends paid to or made with respect to the
Restricted Stock; provided, however, that dividends paid, if any, with respect
to that Restricted Stock which has not vested at the time of the dividend
payment shall be held in the custody of the Company and shall be subject to
the
same restrictions that apply to the corresponding Restricted Stock.
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5. Changes
in Common Stock.
If any
change is made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Company’s receipt
of consideration, appropriate adjustments shall be made by the Plan
Administrator to (i) the maximum number and/or class of securities issuable
under the Plan, (ii) the maximum number and/or class of securities for
which any one person may be granted Awards under the Plan per calendar year,
(iii) the number and/or class of securities and the exercise or base price
per
share (or any other cash consideration payable per share) in effect under each
outstanding Award under the Discretionary Grant Program, and (iv) the number
and/or class of securities subject to each outstanding Award under the Stock
Issuance Program and the cash consideration (if any) payable per share
thereunder. To the extent such adjustments are to be made to outstanding Awards,
those adjustments shall be effected in a manner that shall preclude the
enlargement or dilution of rights and benefits under those Awards. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.
6. Taxes.
(a) Grantee
will recognize ordinary income for federal income tax purposes on each date
the
Restricted Stock subject to Grantee award vests, whether pursuant to the normal
vesting schedule above or the acceleration provisions of this Agreement that
may
apply. The amount of Grantee’s taxable income on each such vesting date will be
equal to the fair market value per share of Common Stock on the date of vesting
times the number of shares of Restricted Stock which vest on that
date.
(b) Grantee
shall be liable for any and all taxes arising out of this grant or the vesting
of Restricted Stock hereunder. The Company makes no representation or
undertaking regarding the tax treatment to Grantee in connection with the grant,
issuance, vesting or settlement of the Restricted Stock or the subsequent sale
of any of the shares of Restricted Stock. The Company does not commit and is
under no obligation to structure the Restricted Stock award or program to reduce
or eliminate Grantee’s tax liability.
7. Securities
Law Compliance.
The
Company will use its reasonable commercial efforts to assure that all Restricted
Stock issued pursuant to this Agreement is registered under the federal
securities laws. However, no Restricted Stock will be issued pursuant to
Grantee’s award if such issuance would otherwise constitute a violation of any
applicable federal or state securities laws or regulations or the requirements
of The NASDAQ Global Market and any stock exchange or other market on which
the
Common Stock is then quoted or listed for trading. The inability of the Company
to obtain approval from any regulatory body having authority deemed by the
Company to be necessary to the lawful issuance of any Restricted Stock hereunder
shall defer the Company’s obligation with respect to the issuance of such
Restricted Stock until such approval has been obtained.
8. Miscellaneous.
(a) The
grant
of Restricted Stock or another award to a Grantee in any one year, or at any
time, does not obligate the Company to make a grant in any future year or in
any
given amount and should not create an expectation that the Company might make
a
grant in any future year or in any given amount.
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(b) The
Company shall not be required (i) to transfer on its books any shares of
Restricted Stock which shall have been sold or transferred in violation of
any
of the provisions set forth in this Agreement, or (ii) to treat as owner of
such
shares or to accord the right to vote as such owner or to pay dividends to
any
transferee to whom such shares shall have been so transferred.
(c) The
parties agree to execute such further instruments and to take such action as
may
reasonably be necessary to carry out the intent of this Agreement.
(d) Any
notice required or permitted hereunder shall be given in writing and shall
be
deemed effectively given upon delivery to Grantee at Grantee’s address then on
file with the Company.
(e) This
Agreement shall not be construed so as to grant Grantee any right to remain
in
the service of the Company.
(f) The
parties agree that neither the Company nor any of its affiliates shall have
any
further obligation to Grantee relating to the grant of stock or other incentive
compensation except as stated herein.
(g) This
Agreement and the Plan constitute the entire agreement of the parties with
respect to the subject matter hereof. This Agreement may not be amended except
with the consent of the Committee and by a written instrument duly executed
by
the Company and Grantee.
(h) This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their heirs, personal representatives, successors and assigns. The
terms of this Agreement shall in all respects be subject to the terms of the
Plan. Grantee hereby agrees to accept as binding, conclusive and final all
decisions and interpretations of the Committee upon any questions arising under
the Plan or this Agreement.
(i) The
interpretation, performance and enforcement of this Agreement shall be governed
by the laws of the State of Delaware without resort to that State’s
conflicts-of-laws rules.
(j) This
Agreement shall not in any way affect the right of the Company to adjust,
reclassify, reorganize or otherwise make changes in its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer
all
or any part of its business or assets.
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9. Mandatory
Arbitration.
ANY AND
ALL DISPUTES OR CONTROVERSIES BETWEEN GRANTEE AND THE COMPANY OR BETWEEN THE
COMPANY AND GRANTEE ARISING OUT OF, RELATING TO OR OTHERWISE CONNECTED WITH
THIS
AGREEMENT OR THE AWARD OF RESTRICTED STOCK EVIDENCED HEREBY OR THE VALIDITY,
CONSTRUCTION, PERFORMANCE OR TERMINATION OF THIS AGREEMENT SHALL BE SETTLED
EXCLUSIVELY BY BINDING ARBITRATION TO BE HELD IN FRESNO COUNTY, CALIFORNIA.
THE
ARBITRATION PROCEEDINGS SHALL BE GOVERNED BY (I) THE NATIONAL RULES FOR THE
RESOLUTION OF COMMERCIAL DISPUTES THEN IN EFFECT OF THE AMERICAN ARBITRATION
ASSOCIATION, AND (II) THE FEDERAL ARBITRATION ACT. THE ARBITRATOR SHALL HAVE
THE
SAME, BUT NO GREATER, REMEDIAL AUTHORITY AS WOULD A COURT HEARING THE SAME
DISPUTE. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE AND BINDING
ON THE PARTIES TO THE ARBITRATION AND SHALL BE IN LIEU OF THE RIGHTS THOSE
PARTIES MAY OTHERWISE HAVE TO A JURY TRIAL; PROVIDED, HOWEVER, THAT SUCH
DECISION SHALL BE SUBJECT TO CORRECTION, CONFIRMATION OR VACATION IN ACCORDANCE
WITH THE PROVISIONS AND STANDARDS OF APPLICABLE LAW GOVERNING THE JUDICIAL
REVIEW OF ARBITRATION AWARDS. THE
ARBITRATOR SHALL ISSUE A WRITTEN DECISION THAT REVEALS THE ESSENTIAL FINDINGS
AND CONCLUSIONS ON WHICH THE DECISION IS BASED, AND THE ARBITRATOR’S DECISION
SHALL BE SUBJECT TO SUCH JUDICIAL REVIEW AS IS PROVIDED BY LAW. EACH PARTY
SHALL
BEAR ITS, HIS OR HER OWN COSTS OF LEGAL REPRESENTATION; PROVIDED, HOWEVER,
IF
ANY PARTY PREVAILS ON A CLAIM ENTITLING THE PREVAILING PARTY TO ATTORNEYS’ FEES
AND/OR COSTS PURSUANT TO ANY APPLICABLE EMPLOYMENT OR CIVIL RIGHTS STATUTE,
THE
ARBITRATOR MAY AWARD REASONABLE FEES AND/OR COSTS TO THE PREVAILING PARTY IN
ACCORDANCE WITH SUCH CLAIM. JUDGMENT
SHALL BE ENTERED ON THE ARBITRATOR’S DECISION IN ANY COURT HAVING JURISDICTION
OVER THE SUBJECT MATTER OF SUCH DISPUTE OR CONTROVERSY. NOTWITHSTANDING THE
FOREGOING, EITHER PARTY MAY IN AN APPROPRIATE MATTER APPLY TO A COURT PURSUANT
TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1281.8, OR ANY COMPARABLE
STATUTORY PROVISION OR COMMON LAW PRINCIPLE, FOR PROVISIONAL RELIEF, INCLUDING
A
TEMPORARY RESTRAINING ORDER OR A PRELIMINARY INJUNCTION. TO THE EXTENT PERMITTED
BY LAW, THE PROCEEDINGS AND RESULTS, INCLUDING THE ARBITRATOR’S DECISION, SHALL
BE KEPT CONFIDENTIAL TO THE EXTENT PERMITTED BY APPLICABLE LAW.
10. Remaining
Terms.
The
remaining terms and conditions of Grantee’s award are governed by the Plan, and
Grantee’s award is also subject to all interpretations, amendments, rules,
regulations and decisions that may from time to time be adopted under the Plan.
The General Plan Description, which is the official prospectus summarizing
the
principal features of the Plan, has previously been provided to Grantee or
is
provided with this Agreement.
(Signature
page follows.)
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IN
WITNESS WHEREOF, the undersigned have executed this Agreement effective on
the
date first set above.
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COMPANY:
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a
Delaware corporation
By:
_______________________________________________
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I,
the
undersigned Grantee, hereby acknowledge receiving, reading and understanding
the
General Plan Description, which is the official prospectus summarizing the
principal features of the Plan, this Agreement and the Plan itself. I further
acknowledge and accept the foregoing terms and conditions of the Restricted
Stock award evidenced hereby. I also acknowledge and agree that the foregoing
sets forth the entire understanding between the Company and me regarding my
entitlement to receive the shares of the Company’s Common Stock subject to such
award and supersedes all prior oral and written agreements on that
subject.
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GRANTEE:
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___________________________________________
Print:_____________________________________________
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