Exhibit 10.2
[Director Annual Grant]
SAPIENT CORPORATION
RESTRICTED STOCK UNITS
AGREEMENT
In recognition of the important contributions that ___________ (the
"Director") makes to the success of Sapient Corporation (the "Company") and its
Affiliates (together with the Company, the "Company Group") as a member of the
Company's Board of Directors, the Company hereby grants to the Director,
pursuant to the Sapient Corporation 1998 Stock Incentive Plan (the "Plan"), the
Restricted Stock Units Award described below.
1. The Restricted Stock Units Award. The Company hereby grants to the Director
________________ (________) Units, subject to the terms and conditions of
this Agreement and the Plan. An Award shall be paid hereunder, only to the
extent that such Award is Vested, as provided in this Agreement. The
Director's rights to the Units are subject to the restrictions described in
this Agreement and the Plan in addition to such other restrictions, if any,
as may be imposed by law.
2. Definitions. The following definitions will apply for purposes of this
Agreement. Capitalized terms not defined in this Agreement are used as
defined in the Plan.
(a) "Agreement" means this Restricted Stock Units Agreement granted by the
Company and agreed to by the Director.
(b) "Award" means the grant of Units in accordance with this Agreement.
(c) "Change in Control" means the occurrence of any of the following
events: (i) any "person", as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than the Company, Xxxxx X. Xxxxxxxxx, X. Xxxxxx
Xxxxx, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any corporation owned
directly or indirectly by the stockholders of the Company in
substantially the same proportion as their ownership of stock of the
Company), is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company representing 50% or more of the combined voting power
of the Company's then outstanding securities; (ii) the stockholders of
the Company approve a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity)
more than 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after
such merger or consolidation; (iii) the stockholders of the Company
approve a plan of complete liquidation of the Company or an agreement
for the sale of disposition by the Company of all or substantially all
of the Company's assets; or (iv) individuals who, on the date on which
the Plan was adopted by the Board, constituted the Board of Directors
of the Company, together with any new director whose election by the
Board or nomination for election by the Company's stockholders was
approved by a vote of at least a majority of the directors then still
in office who were directors on the date on which the Plan was adopted
by the Board or whose election or nomination was previously so
approved, cease for any reason to constitute at least a majority of
the Board of Directors.
(d) "Common Stock" means common stock of the Company, .01 par value.
(e) "Grant Date" means ________ __, 200 _.
(f) "Fair Market Value" means the average trading price of the Common
Stock over the twenty trading days prior to the Valuation Date, based
on the closing price on each such day. For this purpose, the "closing
price" of the Common Stock on any trading day will be the last sale
price with respect to such Common Stock reported on the NASDAQ, or, if
on any such date such Common Stock is not quoted by NASDAQ, the
average of the closing bid and asked prices with respect to such
Common Stock, as furnished by a professional market maker making a
market in such Common Stock selected by the Company in good faith; or,
if no such market maker is available, the fair market value of such
Common Stock as of such day as determined in good faith by the
Company.
(g) "NASDAQ" means the Nasdaq Stock Market.
(h) "Payment Date" means, as to Vested Units, within 30 days of the date
on which the Units become Vested, except that in connection with a
Change in Control, the Payment Date shall mean immediately prior to or
coincident with the occurrence of the Change in Control.
(i) "Unit" means a notional unit which is equivalent to a single share of
Common Stock on the Grant Date, subject to Section 4.
(j) "Valuation Date" means the date on which the Fair Market Value of the
Common Stock is to be determined.
(k) "Vested" means that portion of the Award to which the Director has a
nonforfeitable right.
(l) "Vesting Dates" means the dates set forth in Section 3.
3. Vesting.
(a) An Award shall become Vested only upon the Vesting Dates described in
this Section 3, except as otherwise provided herein or determined by
the Company in its sole discretion. No portion of any Award shall
become Vested on the Vesting Date unless the Director is then, and
since the Grant Date has continuously been, a Director of the Company.
(b) Subject to subsections (c), (d) and (e), below, an Award shall become
Vested based on the following schedule.
Vesting Date Percentage Vested on Anniversary Date
First Anniversary of Grant Date 100%
(c) Upon the occurrence of a Change in Control, an Award shall become 100%
Vested, such shares to be distributed immediately prior to or
coincident with the Change in Control.
(d) Notwithstanding Section 3(b), if the service of the Director
terminates by reason of death or disability (within the meaning of
Section 22(e)(3) of the Internal Revenue Code), the length of the
Director's service shall be deemed to be six months longer than the
actual length; provided, however, that in no event shall such deemed
time extension serve to increase the number of Vested shares to more
than the number of shares of Common Stock as equals that number of
Units which have been awarded hereunder.
(e) Notwithstanding Section 3(b), in the event that the Director has
completed the full term of service as a Director for which he or she
was elected at an Annual Meeting of Stockholders of the Company, but
is not standing for re-election to a subsequent term as a Director at
the Annual Meeting of Stockholders of the Company at which he or she
would otherwise have been re-elected (the "Retirement Meeting"), all
Award shares which are scheduled to vest subsequent to the Retirement
Meeting but within the same fiscal quarter in which the Retirement
Meeting is held shall become Vested shares as of the date immediately
preceding such Retirement Meeting; provided, however, that in no event
shall such deemed time extension serve to increase the number of
Vested Shares to more than the number of shares of Common Stock as
equals that number of Units which have been awarded hereunder.
(f) In the event that the Director's tenure as a member of the Company's
Board of Directors terminates prior to a Vesting Date for any reason
other than as set forth in this Section 3, including without
limitation termination by the Company or the Company Group, any
portion of the Award that has not then become Vested will be forfeited
automatically.
4. Adjustments Based on Certain Changes in the Common Stock. In the event of
any stock split, reverse stock split, stock dividend, recapitalization or
similar change affecting the Common Stock, the Award shall be equitably
adjusted.
5. No Voting Rights/Dividends. The Award shall not be interpreted to bestow
upon the Director any equity interest or ownership in the Company Group
prior to the Payment Date. The Director is not entitled to vote any Common
Stock by reason of the granting of this Award or to receive or be credited
with any dividends declared and payable on any Common Stock underlying any
Award prior to any Payment Date
6. Payment of Award. On the Payment Date, the Company shall issue to the
Director that number of shares of Common Stock as equals that number of
Units which have become Vested.
7. Unfunded Status. The obligations of the Company Group hereunder shall be
contractual only. The Director shall rely solely on the unsecured promise
of the Company and nothing herein shall be construed to give the Director
or any other person or persons any right, title, interest or claim in or to
any specific asset, fund, reserve, account or property of any kind
whatsoever owned by the Company Group.
8. No Assignment. No right or benefit or payment under the Plan shall be
subject to assignment or other transfer nor shall it be liable or subject
in any manner to attachment, garnishment or execution.
9. Withholding. The Company's obligation to deliver to the Director shares of
Common Stock under an Award shall be subject to the satisfaction of all
applicable federal, state and local income tax withholding requirements as
determined by the Company Group ("Withholding Taxes"). To satisfy any
Withholding Taxes, if any, due upon vesting of the Director's Units, the
Director agrees to pay to the Company, or make provision satisfactory to
the Company for payment of, any Withholding Taxes, no later than the
Payment Date. The Company and any Affiliate may, to the extent permitted by
law, deduct any such tax obligations from any payment of any kind due to
the Director. Such withheld amounts shall include shares retained from the
Award creating the tax obligation, valued at their Fair Market Value on the
date of retention.
Further, as a condition of receiving any Vested Award, the Director hereby
agrees to the terms of the Irrevocable Standing Order to Sell Shares (the
"Standing Order"), attached as Exhibit A. Pursuant to the Standing Order,
and in lieu of taking the actions described in the immediately preceding
paragraph of this Section 9, the Company, in its sole discretion, may
require, and, in such event the Director agrees, to the following:
(a) The Director authorizes the Company's agent to sell, at the market
price and on each Vesting Date (or the first NASDAQ trading day
thereafter if a Vesting Date is a day in which NASDAQ is closed), the
number of Vested Shares that, per the Company's instructions to its
agent, is necessary to obtain proceeds sufficient to satisfy the
Withholding Taxes. The Director understands and agrees that the number
of shares that such agent will sell will be based on the closing price
of the Common Stock on the NASDAQ trading day immediately preceding
the Vesting Date.
(b) The Director agrees that the proceeds received from the sale of
Vested Shares pursuant to this Section 9 will be used to satisfy the
Withholding Taxes and, accordingly, the Director hereby authorizes the
Company's agent to pay such proceeds to the Company for such purpose.
The Director understands that to the extent that the proceeds obtained
by such sale exceed the amount necessary to satisfy the Withholding
Taxes, such excess proceeds shall be deposited into the Director's
stock brokerage account with E*TRADE Financial or such other third
party brokerage under which the Director maintains a brokerage account
(the "Account"). The Director further understands that any remaining
Vested Shares shall be deposited into the Account.
(c) The Director acknowledges and agrees that, in the event that a
market in the Common Stock does not exist, the Director shall pay to
the Company amounts sufficient to pay the Withholding Taxes and, to
the extent that such payment is not made, the Company shall have the
right to make other arrangements to satisfy the Withholding Taxes due
upon the vesting of the Director's Shares.
10. Amendment or Termination. This Agreement may be amended by mutual written
agreement of the parties.
11. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, Sapient Corporation has executed this Restricted Stock
Units Agreement as of the ____ day of ___________, 200___.
Sapient Corporation
By: Xxxx X. Xxxxx
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Title: Sr. Vice President and General Counsel
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Exhibit A
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IRREVOCABLE STANDING ORDER TO SELL SHARES
I have received from the Company on a voluntary basis the right to acquire
shares of Company common stock (the "Shares") pursuant to the attached
Restricted Stock Units Agreement between the Company and me.
I understand that I must maintain a securities brokerage account with E*TRADE
Financial or such other third party brokerage (each of E*TRADE Financial or such
other third party brokerage is herein defined as the "Broker") to participate in
the stock unit plan described in detail in the Restricted Stock Units Agreement,
and the Company has informed me about this requirement as well as the
requirements for the opening of such a securities brokerage account so that the
vested Shares can be deposited into account. Furthermore, I understand that on
each vesting date, the vested Shares will be deposited into my stock brokerage
account with the broker and that I will incur taxable ordinary income ("Taxable
Income") upon my receipt of the vested Shares. Per the terms of the Agreement,
and if so directed by the Company, I understand and agree to do the following as
a condition of my receipt of vested Shares:
Upon each vesting date, I must sell a number of Shares that is sufficient
to satisfy all withholding taxes, as determined by Sapient, which are
applicable to my Taxable Income (the "Withholding Taxes"). Accordingly, I
HEREBY DIRECT THE BROKER TO SELL, ON EACH VESTING DATE LISTED ABOVE (OR THE
FIRST NASDAQ TRADING DAY THEREAFTER IF A VESTING DATE IS A DAY ON WHICH
NASDAQ IS CLOSED), THAT NUMBER OF SHARES THAT, PER THE COMPANY'S
INSTRUCTIONS TO THE AGENT, IS SUFFICIENT TO OBTAIN SALE PROCEEDS SUFFICIENT
TO SATISFY THE WITHHOLDING TAXES. THE PER SHARE SALES PRICE SHALL BE
CALCULATED BASED ON THE CLOSING PRICE OF A SHARE OF COMPANY COMMON STOCK ON
THE NASDAQ TRADING DAY IMMEDIATELY PRECEDING THE APPLICABLE VESTING DATE.
I understand that the Broker will remit the proceeds of the foregoing sale
promptly to the Company for payment by the Company of the Withholding Taxes, and
I authorize and direct the Broker to pay such proceeds to the Company for this
purpose.
I acknowledge that I have not been induced to participate in any trade in return
for or as an expectation of employment or continued employment. I understand and
agree that by signing below, I am making an Irrevocable Standing Order to Sell
Shares that will remain in effect until such time as I have received all Shares
to which I am entitled under this Agreement. I also agree that this Irrevocable
Standing Order to Sell Shares is in addition and subject to the terms and
conditions of any existing Account Agreement that I have with the Broker.
