Restricted Stock Award Agreement Under the ISCO International, Inc. 2003 Equity Incentive Plan
Exhibit 10.2
Under
the
ISCO
International, Inc. 2003 Equity Incentive Plan
THIS
RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”) is made
as of the 19th of
February 2008 (the “Date of Grant”),
between ISCO INTERNATIONAL, INC. (the “Company”) and AMR ABDELMONEM (the “Grantee”).
WHEREAS,
the Company maintains the ISCO International, Inc. 2003 Equity Incentive Plan
(the “Plan”)
for the benefit of the key employees, directors and consultants of the Company
and its Affiliates; and
WHEREAS,
the Grantee is an employee of the Company and is a party to the “Employment
Agreement” with the Company dated February 19th, 2008
(the “Employment
Agreement”); and
WHEREAS,
the Plan permits the grant of Shares, subject to certain restrictions;
and
WHEREAS,
in order to align the Grantee’s personal financial interests with those of the
Company’s stockholders, the Company desires to grant to the Grantee a number of
shares of Common Stock, subject to the restrictions and on the terms and
conditions contained in the Plan and this Agreement.
NOW,
THEREFORE, in consideration of these premises and the agreements set forth
herein, the parties, intending to be legally bound hereby, agree as
follows:
SECTION
1. Award of
Stock. Subject to the terms and conditions set forth in this
Agreement and the Plan, the Company hereby grants 1,200,000 (one million two
hundred thousand) Shares (the “Restricted Shares”)
to the Grantee. The executive is eligible for additional grants of up to
2,000,000 (two million shares) in aggregate that will be stipulated in section
2.b The terms of the Plan are hereby incorporated into this Agreement
by this reference, as though fully set forth herein. Capitalized
terms used but not defined herein will have the same meaning as defined in the
Plan.
SECTION
2. Vesting
of Restricted Shares. The Restricted Shares are subject to
forfeiture to the Company until they become vested in accordance with this Section 2, as
follows:
a. Time Vested
Shares.
(i) 300,000
Restricted Shares will vest on June 15, 2008, if the Grantee remains
continuously employed by the Company through that date.
(ii) an
additional 300,000 Restricted Shares will vest on December 15, 2008, if the
Grantee remains continuously employed by the Company through that
date;
(iii) an
additional 300,000 Restricted Shares will vest on June 15, 2009, if the Grantee
remains continuously employed by the Company through that date; and
(iv) an
additional 300,000 Restricted Shares will vest on December 15, 2009, if the
Grantee remains continuously employed by the Company through that
date.
b. Performance Vested
Shares.
(i) For the
2008 fiscal year, Executive will be eligible for a grant request to the
Compensation Committee of the Board of Directors equal to 300,000 restricted
shares upon achievement of 80% of specified performance goals, and a total of
600,000 restricted shared upon achievement of 100% of specified performance
goals, and a total of 1,000,000 restricted shares upon achievement of 130% of
specified performance goals, or an interpolated amount for accomplishing between
100% and 130% of approved performance goals. All restricted shares
will vest on the filing date of the Company’s Form 10-K for the 2008 fiscal
year, if the Grantee remains continuously employed by the Company through that
filing date and the performance goals specified by the Company with respect to
that fiscal year have been achieved; and
(ii) For the
2009 fiscal year, Executive will similarly be eligible for grant request to the
Compensation Committee of the Board of Directors equal to 300,000 restricted
shares upon achievement of 80% of specified performance goals, a total of
600,000 restricted shared upon achievement of 100% of specified performance
goals, and a total of 1,000,000 restricted shares upon achievement of 130% of
specified performance goals, or an interpolated amount for accomplishing between
100% and 130% of approved performance goals. Additional restricted shares and/or
cash compensation may be considered by the Compensation Committee is performance
exceeds 130% of goals. All restricted shares will vest on the filing
date of the Company’s Form 10-K for the 2009 fiscal year, if the Grantee remains
continuously employed by the Company through that filing date and the
performance goals specified by the Company with respect to that fiscal year have
been achieved.
(iii) The
performance goals relevant under this Section 2(b) (which
may include intermediate goals, the achievement of which will result in partial
vesting) will be determined by the Company, based on the Company’s operating
plan for the applicable year, and will be communicated to the Grantee not later
than 90 days following the start of the applicable year. The Company
will determine in good faith whether the goals for any year have been
achieved. In addition, the Company may in good faith make adjustments
to such goals so that departures from the Company’s operating plan, changes in
accounting principles, acquisitions, dispositions, mergers, consolidations and
other transactions, events or factors influencing the achievement or measurement
of such goals do not affect the operation of this section in a manner
inconsistent with its intended purpose of encouraging growth in the Company’s
equity value.
c. Effect of
Termination. Upon termination of the Grantee’s service to the
Company for any reason or for no reason (and whether such termination is by the
Company, the Grantee or otherwise), (i) any Restricted Shares which have not
prior to the effective date of such termination become vested pursuant to this
Section 2
will immediately and automatically, without any action on the part of the
Company, be forfeited by the Grantee to the Company, and (ii) the Grantee will
have no further rights with respect to those Shares. Notwithstanding
the foregoing, if prior to December 15, 2009 the Grantee is involuntarily
terminated by the Company without “Cause” (as defined in Section 10.2 of the
Employment Agreement), 300,000 of the Restricted Shares otherwise subject to
vesting under Section
2(b) will become vested as of the date of such termination.
d. Failure to Achieve
Performance Goals. With respect to restricted shares subject
to vesting based on the achievement of a performance goals under Section 2(b), if the
performance goals for a given year are not achieved, then on the date of the
filing of the Company’s Form 10-K for that year (or, if earlier, upon a
conclusive determination by the Company that such goals were not achieved the
Grantee will not receive those Shares.
e. Effect of Change in
Control. If there occurs a Change in Control prior to December
31, 2009 and the Grantee remains in continuous service to the Company through
the date of that Change in Control, then immediately prior to (but contingent
upon) the occurrence of that Change in Control:
(i) any
otherwise unvested restricted shares subject to vesting under Section 2(a) will
become vested; and
(ii) restricted
shares otherwise subject to vesting under Section 2(b) based on
performance in the fiscal year of the Change in Control will enjoy an
accelerated grant request with immediate vesting to the extent that performance
for the portion of that year that transpires prior to the Change in Control
meets or exceeds a pro-rata portion of the performance goals specified by the
Board for that year under Section
2(b).
SECTION
3. Share
Legends. The certificates
evidencing all the Restricted Shares shall bear such legend(s) as may be
required by the Plan or applicable law.
SECTION
4. Escrow of Restricted
Shares.
a. Certificates Held in
Escrow. Certificates evidencing the Restricted Shares issued
under this Agreement will be held in escrow by the Secretary of the Company or
his or her designee (the “Escrow Holder”) until such shares become vested in
accordance with Section 2, at
which time, the Escrow Holder will deliver such certificates representing the
Restricted Shares to the Grantee; provided, however, that no
certificates for Restricted Shares will be delivered to the Grantee until
appropriate arrangements have been made with the Company for the withholding or
payment of any taxes that may be due with respect to such shares.
b. Forfeited Shares to be
Returned. If the Restricted Shares are forfeited by the
Grantee under Section 2 or
9(g), the Escrow Holder will deliver the stock certificate(s) evidencing
those shares to the Company, which will then have the right to retain and
transfer those shares to its own name free and clear of any rights of the
Grantee under this Agreement or otherwise.
c. Instructions to Escrow
Holder. The Escrow Holder is hereby directed to permit
transfer of the Restricted Shares only in accordance with this Agreement or in
accordance with instructions which are consistent with this Agreement which are
signed by both parties. In the event further instructions are
reasonably desired by the Escrow Holder, he or she shall be entitled to
conclusively rely upon directions executed by a majority of the members of the
Board. The Escrow Holder shall have no liability for any act or
omissions hereunder while acting in good faith in the exercise of his or her own
judgment.
SECTION
5. Rights of
Grantee. The Grantee shall
have the right to vote the Shares and to receive cash dividends with respect to
the Restricted Shares; provided however, that any
cash dividends paid on the Restricted Shares while those shares remain
forfeitable will be reinvested in additional restricted Shares. Such
additional restricted Shares will be subject to the same vesting conditions as
were applicable to the Restricted Shares giving rise to such dividends,
deposited with the Escrow Holder and included thereafter as Restricted Shares
for purposes of this Agreement.
SECTION
6. Stock
Splits, etc. If, while any of
the Restricted Shares remain subject to forfeiture, there occurs any merger,
consolidation, reorganization, recapitalization, stock split, stock dividend, or
other similar change in the Company’s common stock, then any and all new,
substituted or additional securities or other consideration to which the Grantee
is entitled by reason of the Grantee’s ownership of the Restricted Shares will
be immediately subject to escrow, deposited with the Escrow Holder and included
thereafter as “Restricted Shares”
for purposes of this Agreement.
SECTION
7. Tax
Consequences. The Grantee
understands and agrees that the Company has not advised the Grantee regarding
the Grantee’s income tax liability in connection with the vesting of the
Restricted Shares. The Grantee has reviewed with the Grantee’s own
tax advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. The
Grantee is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. The Grantee
understands that the Grantee (and not the Company) shall be responsible for the
Grantee’s own tax liability that may arise as a result of this investment or the
transactions contemplated by this Agreement and that he may pursuant to Section 9(g) be
required to pay cash to the Company at the time tax withholding obligations
arise with respect to the Restricted Shares. The Grantee understands
that Section 83 of the Code taxes as ordinary income the difference between
(i) the amount (if any) paid for the Restricted Shares, and (ii) the
fair market value of the Restricted Shares on the date any restrictions on the
Restricted Shares lapse. The Grantee understands that the Grantee may
elect to be taxed at the time the Restricted Shares are granted rather than when
the applicable restrictions lapse by filing an election under Section 83(b)
of the Code with the I.R.S. within 30 days from the date of
grant. The Grantee acknowledges that it is the Grantee’s sole
responsibility and not the Company’s to file timely any 83(b)
election.
SECTION
8. Restrictions
on Transfer. Except for the
escrow described in Section 4 or the
forfeiture of the Restricted Shares to the Company as described in Xxxxxxx 0, xxxx of
the Restricted Shares or any beneficial interest therein shall be transferred,
encumbered, pledged or otherwise alienated or disposed of in any way until the
Restricted Shares become vested.
SECTION
9. General
Provisions.
a. Entire
Agreement. This Agreement, together with the Plan, represents
the entire agreement between the parties with respect to the grant of the Shares
and may only be modified or amended in a writing signed by both
parties.
b. Notice. Any
notice to be given to the Company will be addressed to the Company in care of
its Secretary (or such other person as the Company may designate from time to
time) at its principal executive office, and any notice to be given to the
Grantee will be delivered personally or addressed to him or her at the address
given beneath his or her signature, below, or at such other address as the
Grantee may hereafter designate in writing to the Company. Any such
notice will be deemed duly given on the date and at the time delivered via
personal, courier or recognized overnight delivery service or, if sent via
telecopier, on the date and at the time telecopied with confirmation of delivery
or, if mailed, on the date five (5) days after the date of the mailing (which
will be by regular, registered or certified mail). Delivery of a
notice by telecopy (with confirmation) will be permitted and will be considered
delivery of a notice notwithstanding that it is not an original that is
received. Any notice to the Escrow Holder shall be sent to the
Company’s address, with a copy to the other party not sending the
notice.
c. No Implied
Waiver. Either party’s failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor prevent that party thereafter from
enforcing each and every other provision of this Agreement.
d. No Right to Continued
Employment. The grant of Shares hereunder will not confer upon
the Grantee any right to continue in the employ of the Company or any of its
subsidiaries or affiliates.
e. Amendment. The
Committee may from time to time impose any conditions on the Restricted Shares
as it deems necessary or advisable to ensure that the Plan and this award
satisfy the requirements of all applicable laws (including without limitation,
the conditions of Rule 16b-3), and that Restricted Shares are issued and resold
in compliance with the Securities Act of 1933, as amended.
f. Governing
Law. This Agreement shall be governed by, and enforced in
accordance with, the laws of the State of Delaware without regard to the
application of the principals of conflicts or choice of laws.
g. Tax
Withholding. Notwithstanding any other provision of this
Agreement, if the Grantee does not at least three (3) days prior to the date
that any Restricted Shares would otherwise vest (or, if the Grantee makes an
election under Section 83(b) of the Code with respect to Restricted Shares, at
least three days prior to the date of such election) deliver to the Company a
cash amount reasonably estimated to be sufficient to satisfy any required tax
withholding obligations with respect to the vesting of such Shares (or the
Section 83(b) election), then the Restricted Shares that would otherwise vest
(or be subject to that Section 83(b) election) will instead then be forfeited
automatically and the Grantee will have no further right to those
Shares.
h. Counterparts and
Facsimiles. This Agreement may be executed, including
execution by facsimile signature, in one or more counterparts, each of which
shall be deemed an original, and all of which together shall be deemed to be one
and the same instrument.
IN
WITNESS WHEREOF, this Agreement has been executed by the parties on the 19th day
of February 2008.
ISCO
INTERNATIONAL, INC.
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By:
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Title:
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GRANTEE
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[Amr
Abdelmonem]
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