Restricted Stock Unit Agreement
This
Restricted Stock Unit Agreement (“Agreement”) is entered into
as of March 23, 2010, by Xxxxx
International , Inc., a Delaware corporation (the “Company”), and INTELLIGENT
DECISIONS, INC. a
Delaware limited liability company (the “INTELLIGENT”).
Recitals
WHEREAS,
the parties entered into a Services Agreement of even date herewith (the
“Services Agreement), pursuant to which, in exchange for services rendered, the
Company granted INTELLIGENT a certain number of Restricted Stock Units
representing the contingent right to 12,500,000 of shares of the Company’s
Common Stock (the “Common Stock”); and
WHEREAS,
the parties wish to establish certain restrictions on the grant of the
Restricted Stock Units, to set forth conditions under which the units shall
vest, and otherwise to set forth the rights of the parties thereto;
and
WHEREAS,
capitalized terms not defined above are defined in Section 15 of this
Agreement.
NOW,
THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereby agree as follows:
SECTION
1. GRANT AWARD. In
consideration of the INTELLIGENT’S services to the Company, the Company hereby
grants to INTELLIGENT 12,500,000 restricted stock units each with a par value of
$.08 (the “Restricted Stock Units”). Restricted Stock Units are
notational units of measurement denominated in shares of Common
Stock. Each Restricted Stock Unit represents one hypothetical share
of Common Stock, subject to the conditions and restrictions set forth below and
in the Services Agreement.
SECTION
2. FORFEITURE;
VESTING.
(a) Forfeiture. Until
they vest in accordance with Subsection (b) below, the Restricted Stock
Units shall be non-vested, restricted and subject to the
forfeiture. In the event that the Restricted Stock Units have not
vested in accordance with Subsection (b) within three (3) years of the date
hereof, INTELLIGENT shall immediately
forfeit such Restricted Stock Units and this Agreement, and the parties’ rights
hereunder, shall terminate. In the event of
any forfeiture of the Restricted Stock Units, such forfeiture shall be automatic
and without further act or deed by INTELLIGENT. Upon forfeiture, neither
INTELLIGENT nor any successors, heirs, assigns or legal representatives shall
thereafter have any further rights or interest in the unvested Restricted Stock
Units or certificates therefor. Notwithstanding the foregoing, if
requested by the Company (or its agent), INTELLIGENT shall execute such
documents (including, without limitation, a power of attorney in favor of the
Company) and take such other action deemed necessary or desirable by the Company
to evidence such forfeiture.
(b) Vesting. The
restrictions set forth herein on the Restricted Stock Units shall lapse and the
Restricted Stock Units shall immediately become 100% vested in INTELLIGENT on a pro rata basis as follows:
(i) Business
Support Services described in the Services Agreement provided by INTELLIGENT to
the Company the value of which shall be calculated as set forth in the Services
Agreement;
(ii) a
Change of Control, provided that if such Change of Control is announced or
occurs within 30 days of the date on which the Services Agreement is executed,
then the Restricted Stock Units shall be forfeited back to the Company, and the
parties shall proceed as set forth in the Services Agreement; or
(c) Escrow. Upon
execution of this Agreement, the certificate(s) for Restricted Stock Units shall
be deposited in escrow with the Company’s legal counsel to be held in accordance
with the provisions of this Agreement. Any additional or exchanged
securities or other property described in Subsection (d) below shall
immediately be delivered to the Company to be held in
escrow. Dividend Equivalents on unvested Restricted Stock Units due
at such time as all ordinary cash dividends as provided in Section 4 (or on
other securities held in escrow) shall be paid directly to INTELLIGENT and shall
not be held in escrow. Restricted Stock Units, together with any
other assets held in escrow under this Agreement, shall be (i) surrendered
to the Company upon forfeiture or (ii) released to INTELLIGENT to the
extent that Restricted Stock Units have vested and are no longer subject to the
restrictions set forth herein. In the event that the Restricted Stock
Units have vested and INTELLIGENT elects to receive the shares of Common Stock
represented thereby, such shares shall be issued to INTELLIGENT within
30 days of such election.
(d) Additional or Exchanged Securities
and Property. In the event of a stock split, the declaration
of a stock dividend, the declaration of an extraordinary dividend payable in a
form other than stock, a spin-off, an adjustment in conversion ratio, a
recapitalization or a similar transaction affecting the Company’s outstanding
securities, any securities or other property (including cash or cash
equivalents) that are by reason of such transaction exchanged for, or
distributed with respect to, the Company’s outstanding securities, appropriate
adjustments shall be made to the number and/or class of the Restricted Stock
Units to reflect the exchange or distribution of such securities or
property.
(e) Transfer of Restricted Stock
Units. INTELLIGENT shall not transfer, assign, encumber or
otherwise dispose of any Restricted Stock Units without the Company’s written
consent. If INTELLIGENT transfers any Restricted Stock
Units as provided herein, then this Agreement shall apply to the Transferee to
the same extent as to INTELLIGENT.
SECTION
3. REGISTRATION
RIGHTS. In the event that the Restricted Stock Units are
vested in INTELLIGENT and Registrable Securities are issued pursuant
thereto, INTELLIGENT shall enjoy the following registration
rights. If the Company proposes to register (including, for this
purpose, a registration effected by the Company for stockholders other than
INTELLIGENT) any of its Common Stock under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (the “Securities
Act”) and the registration form to be used may be used for the registration of
the Registrable Securities, the Company shall, at such time, promptly give
INTELLIGENT notice of such registration. Upon the request
of INTELLIGENT given within twenty (20) days after such notice is
given by the Company, the Company shall cause to be registered all of the shares
of Common Stock that INTELLIGENT has requested to be included in such
registration.
SECTION
4. RIGHTS AS A STOCKHOLDER.
INTELLIGENT
shall have no rights as a stockholder of the Company and no voting rights with
respect to the Restricted Stock Units unless, until and only to the extent that
INTELLIGENT becomes the holder of record of fully vested shares of Common
Stock. The Company will pay to INTELLIGENT an amount of cash equal to
all dividends and other distributions (or the economic equivalent thereof) that
are payable by the Company on shares of Common Stock to stockholders of
record.
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SECTION
5. SUCCESSORS AND
ASSIGNS.
Except as
otherwise expressly provided to the contrary, the provisions of this Agreement
shall inure to the benefit of, and be binding upon, the Company and its
successors and assigns and be binding upon INTELLIGENT and
INTELLIGENT’s legal representatives, heirs, legatees, distributees, assigns and
transferees by operation of law, whether or not any such person has become a
party to this Agreement or has agreed in writing to join herein and to be bound
by the terms, conditions and restrictions hereof.
SECTION
6. NO RETENTION RIGHTS.
Nothing
in this Agreement shall confer upon INTELLIGENT any right to continue providing
services to the Company pursuant to the Services Agreement or interfere with or
otherwise restrict in any way the rights of the Company or
of INTELLIGENT, which rights are hereby expressly reserved by each as
set forth in the Services Agreement; provided however that this Agreement and
the grant of the Restricted Stock Units hereunder shall survive for a period of
four years from the date hereof.
SECTION
7. LEGEND.
The
Company may at any time place legends referencing any applicable federal, state
or foreign securities law restrictions on all certificates representing the
Restricted Stock Units or shares of Common Stock issued upon vesting. All
certificates evidencing the Restricted Stock Units shall bear the following
legend (in addition to any legend(s) required by applicable law):
“THE
RESTRICTED STOCK UNITS REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH
THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER
OF THE RESTRICTED STOCK UNITS (OR THE PREDECESSOR IN INTEREST TO SUCH
UNITS). THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST
FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT
CHARGE.”
SECTION
8. NATURE OF
ARRANGEMENT.
INTELLIGENT’s rights under this
Agreement shall be only contractual in nature unsecured by any assets of the
Company. The Company shall not be required to segregate any specific funds,
assets or other property with respect to the Restricted Stock Units. To the
extent that this Agreement provides for a deferral of compensation within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended,
this Agreement is intended to comply with Section 409A of the Code and
shall be interpreted consistent with such intent.
SECTION
9. COMPLIANCE WITH SECURITIES
LAWS; BLACKOUT PERIODS.
The Company will not be required to
deliver any shares of Common Stock pursuant to this Agreement if, in the opinion
of its counsel, such issuance would violate the Securities Act or any other
applicable federal or state securities laws or regulations. Prior to
the issuance of any shares pursuant hereto, the Company may require the
INTELLIGENT to enter into such written representations and agreements as the
Company may reasonably request in order to comply with applicable securities
laws or with this Agreement.
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Prior to each issuance of any shares
pursuant hereto, the Company hereby undertakes to provide notice to INTELLIGENT
of any Company “blackout” policy or other trading restriction imposed by the
Company that may be in effect on the date of such issuance. If
INTELLIGENT elects to receive the shares of Common Stock deliverable upon
vesting of the Restricted Stock Units pursuant to Section 2 above, the Company
shall ensure that INTELLIGENT is not in receipt of material non-public
information that would in anyway restrict INTELLIGENT’s ability to trade in the
Company’s securities, acknowledging any restrictions on trading that may be
imposed pursuant to this Agreement or under the Securities Act. If
INTELLIGENT is subject to any “blackout” policy or other Company imposed trading
restriction, such issuance of shares shall be instead made on the earlier of (i)
the date INTELLIGENT is not subject to any such policy or restriction and (ii)
the earlier of (A) the end of the calendar year in which such distribution would
otherwise have been made and (B) a date that is immediately prior to 2.5 months
following the date such distribution would otherwise have been
made.
SECTION
10. TAXES.
INTELLIGENT shall be liable for any and
all taxes arising out of this grant or the vesting of Restricted Stock Units
hereunder
SECTION
11. NOTICE.
Any
notice required by the terms of this Agreement shall be given in
writing. It shall be deemed effective upon (i) personal
delivery, (ii) deposit with the United States Postal Service, by registered
or certified mail, with postage and fees prepaid or (iii) deposit with
Federal Express Corporation or any other nationally recognized overnight
carrier, with shipping charges prepaid. Notice shall be addressed to
the Company at its principal executive office and to the INTELLIGENT at the
address most recently provided to the Company in accordance with this
Section 11.
SECTION
12. ENTIRE AGREEMENT; AMENDMENT;
SEVERABILITY.
This
Agreement, along with the Services Agreement, constitutes the entire agreement
between the parties hereto with regard to the subject matter
hereof. It supersedes any other agreements, representations or
understandings (whether oral or written and whether express or implied) which
relate to the subject matter hereof. Any amendment, modification or
waiver of the terms hereof shall be in writing and signed by both
parties. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision had been omitted.
SECTION
13. CHOICE OF LAW; DISPUTES.
This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware, as such
laws are applied to contracts entered into and performed in such State. Any
question of interpretation, dispute or disagreement that arises under, or as a
result of, this Agreement shall be settled in accordance with the dispute
resolution provisions set forth in the Services Agreement.
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SECTION 14.
COUNTERPARTS.
This Agreement may be executed in any
number of counterparts, each of which shall constitute an original and all of
which taken together shall constitute one and the same
instrument. Delivery of an executed signature page by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof.
SECTION
15. DEFINITIONS.
(a) “Change in Control” shall mean
one or more transactions resulting in (i) the liquidation, dissolution or
winding up of the Company, (ii) the transfer of all or substantially all of the
assets of the Company, (iii) a merger or consolidation of the Company with
another entity where the Company is not the surviving or successor entity, (iv)
a reverse merger involving the Company with another entity; or (v) one or more
persons or entities (other than the shareholders of the Company that are
existing as of the date hereof) either (A) owning in the aggregate in excess of
50% of the then outstanding capital stock of the Company or (B) being able to
elect a majority of the Board or otherwise to exercise, directly or indirectly,
a controlling influence over the management or policies of the
Company.
(b) “Qualifying Investment” shall
mean one or more capital raising events (whether by way of a secondary public
offering or other investment transaction involving the sale of securities
(including, for this purpose, any convertible securities), which in the
aggregate exceeds $5,000,000.
(c) “Registrable Securities” means
the shares of Common Stock issuable or issued upon lapse of the restrictions as
set forth in Section 2(b).
(d) “Transferee” shall mean any
person to whom the INTELLIGENT has directly transferred Restricted Stock
Units.
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{Signatures
appear on the Following Page}
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In
Witness Whereof, each of the parties has caused this Restricted Stock
Unit Agreement to be duly executed by its duly authorized officers as of the day
and year first above written.
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Xxxxx
International, Inc.
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INTELLIGENT
DECISIONS, INC.
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By:
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/s/ Xxxxxx X.
Xxxxx
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By:
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/s/ XXXXX X. XXXXXX, XX.
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Name:
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Xxxxxx X. Xxxxx
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Name:
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Xxxxx X. Xxxxxx, Xx.
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Title:
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President
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Title:
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President
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