FORM OF] DYNATRONICS CORPORATION RESTRICTED STOCK UNITS AGREEMENT
Exhibit
4.5
[FORM OF]
DYNATRONICS CORPORATION
This Restricted Stock Units
Agreement (this
“Agreement”)
is made and entered into as of [DATE OF GRANT] (the
“Grant
Date”) by and between
Dynatronics Corporation, a Utah corporation (the
“Company”)
and [NAME OF EMPLOYEE/GRANTEE] (the “Grantee”).
WHEREAS, the Company has adopted the 2018 Equity
Incentive Plan (the “Plan”)
pursuant to which Restricted Stock Units may be granted;
and
WHEREAS, the Committee has determined that it is in the
best interests of the Company and its shareholders to grant
Restricted Stock Units provided for herein.
NOW,
THEREFORE, the parties hereto,
intending to be legally bound, agree as
follows:
1.1 Pursuant
to Section 7.2 of the Plan, the
Company hereby issues to the Grantee on the Grant Date an Award
consisting of, in the
aggregate, [NUMBER OF SHARES] Restricted Stock Units (the
“Restricted Stock
Units”). Each Restricted
Stock Unit represents the right to receive one (1) share of Common
Stock, subject to the terms and conditions set forth in this
Agreement and the Plan. Capitalized terms that are used but not
defined herein have the meaning ascribed to them in the
Plan.
1.2 The
Restricted Stock Units shall be credited to a separate account
maintained for the Grantee on the books and records of the Company
(the “Account”).
All amounts credited to the Account shall continue for all purposes
to be part of the general assets of the
Company.
2. Consideration.
The Restricted Stock Units are granted in consideration of the
services to be rendered by the Grantee to the Company as its Chief
Executive Officer.
3. Restricted
Period; Vesting.
3.1 Except
as otherwise provided herein, provided that the Grantee remains in
Continuous Service through the applicable vesting date, the
Restricted Stock Units will vest at the rate of [VESTING RATE]% of
the Restricted Stock Units on
each of the [VESTING SCHEDULE] anniversar[y][ies] of the
Grant Date. The period during which
restrictions apply is referred to as the “Restricted
Period”. Once
vested, the Restricted Stock Units become
“Vested
Units.”
3.2 The
foregoing vesting schedule notwithstanding, if the Grantee’s
Continuous Service terminates for any reason at any time before
all of his Restricted Stock
Units have vested, the
Grantee’s unvested Restricted Stock Units shall be
automatically forfeited upon such termination of Continuous Service
and neither the Company nor any Affiliate shall have any further
obligations to the Grantee under this
Agreement.
4. Restrictions.
Subject to any exceptions set forth in this Agreement or the Plan,
during the Restricted Period and until such time as the Restricted
Stock Units are settled in accordance with Section
6,
the Restricted Stock Units or the rights relating thereto may not
be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by the Grantee. Any attempt to assign,
alienate, pledge, attach, sell or otherwise transfer or encumber
the Restricted Stock Units or the rights relating thereto shall be
wholly ineffective and, if any such attempt is made, the Restricted
Stock Units will be forfeited by the Grantee and all of the
Grantee’s rights to such units shall immediately terminate
without any payment or consideration by the
Company.
5. Rights
as Shareholder; Dividends.
5.1 The
Grantee shall not have any rights of a shareholder with respect
to the shares of Common Stock
underlying the Restricted Stock Units unless and until the
Restricted Stock Units vest and are settled by the issuance of such
shares of Common Stock.
5.2 Upon
and following the settlement of
the Restricted Stock Units, the Grantee shall be the record owner
of the shares of Common Stock underlying the Restricted Stock Units
unless and until such shares are sold or otherwise disposed of, and
as record owner shall be entitled to all rights of a shareholder of
the Company (including voting rights).
5.3 The
Grantee shall not be entitled to any Dividend Equivalents with
respect to the Restricted Stock Units to reflect any dividends
payable on shares of Common Stock.
6.1 Subject to Section
9
hereof, promptly following the vesting
date, and in any event no later than March 15 of the calendar year
following the calendar year in which such vesting occurs, the
Company shall (a) issue and deliver to the Grantee
the number of shares of Common Stock
equal to the number of Vested Units; and (b) enter the
Grantee’s name on the books of the Company as the shareholder
of record with respect to the shares of Common Stock delivered to
the Grantee.
6.2 Notwithstanding
Section
6.1,
in accordance with Section 14.4
of the Plan, the Committee may, but is not required to, prescribe
rules pursuant to which the Grantee may elect to defer settlement
of the Restricted Stock Units. Any deferral election must be made
in compliance with such rules and procedures as the Committee deems
advisable.
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6.3 If
the Grantee is deemed a “specified employee” within the
meaning of Section 409A of the
Code, as determined by the Committee, at a time when the Grantee
becomes eligible for settlement of the RSUs upon his
“separation from service” within the meaning of
Section 409A of the Code, then to the
extent necessary to prevent any accelerated or additional tax
under Section 409A of the Code,
such settlement will be delayed until the earlier of: (a) the date
that is six months following the Grantee’s separation from
service and (b) the Grantee’s death.
7. No
Right to Continued Service.
Neither the Plan nor this
Agreement shall confer upon the Grantee any right to be retained in
any position, as an Employee, Consultant or Director of the
Company. Further, nothing in the Plan or this Agreement shall be
construed to limit the discretion of the Company to terminate the
Grantee’s Continuous Service at any time, with or without
cause.
8. Adjustments.
If any change is made to the outstanding Common Stock or the
capital structure of the Company, if required, the shares of Common
Stock shall be adjusted or terminated in any manner as contemplated
by Article 11 of the
Plan.
9.1 The
Grantee shall be required to pay to the Company, and the Company
shall have the right to deduct from any compensation paid to the
Grantee pursuant to the Plan, the amount of any required
withholding taxes in respect of the Restricted Stock Units and to
take all such other action as the Committee deems necessary to
satisfy all obligations for the payment of such withholding taxes.
The Committee may permit the Grantee to satisfy any federal, state
or local tax withholding obligation by any of the following means,
or by a combination of such means:
(a) tendering
a cash payment.
(b) authorizing
the Company to withhold shares of
Common Stock from the shares of Common Stock otherwise issuable or
deliverable to the Grantee as a result of the vesting
of the Restricted Stock Units; provided, however, that no shares of
Common Stock shall be withheld with a value exceeding the maximum
amount of tax required to be withheld by law.
(c) delivering
to the Company previously owned and unencumbered shares of Common
Stock.
9.2 Notwithstanding
any action the Company takes with respect to any or all income tax,
social insurance, payroll tax, or other tax-related withholding
(“Tax-Related
Items”), the ultimate
liability for all Tax-Related Items is and remains the
Grantee’s responsibility and the Company (a) makes no
representation or undertakings regarding the treatment of any
Tax-Related Items in connection with the grant or vesting
of the Restricted Stock Units or the subsequent sale
of any shares; and (b) does not commit to structure the Restricted
Stock Units to reduce or eliminate the Grantee’s liability
for Tax-Related Items.
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10. Compliance
with Law. The issuance and
transfer of shares of Common Stock shall be subject to compliance
by the Company and the Grantee with all applicable requirements of
federal and state securities laws and with all applicable
requirements of any stock exchange on which the Company’s shares of Common Stock may be
listed. No shares of Common Stock shall be issued or transferred
unless and until any then applicable requirements of state and
federal laws and regulatory agencies have been fully complied with
to the satisfaction of the Company and its
counsel.
11. Notices.
Any notice required to be delivered to the Company under this
Agreement shall be in writing and addressed to the Secretary of the
Company at the Company’s principal corporate offices. Any
notice required to be delivered to the Grantee under this Agreement
shall be in writing and addressed to the Grantee at the
Grantee’s address as shown in the records of the Company.
Either party may designate another address in writing (or by such
other method approved by the Company) from time to
time.
12. Governing
Law. This Agreement will be
construed and interpreted in accordance with the laws of the State
of Utah without regard to conflict of law
principles.
13. Interpretation.
Any dispute regarding the interpretation of this Agreement shall be
submitted by the Grantee or the Company to the Committee for
review. The resolution of such dispute by the Committee shall be
final and binding on the Grantee and the
Company.
14. Restricted
Stock Units Subject to Plan.
This Agreement is subject to the Plan as approved by the
Company’s shareholders. The terms and provisions of the Plan
as it may be amended from time to time are hereby incorporated
herein by reference. In the event of a conflict between any term or
provision contained herein and a term or provision of the Plan, the
applicable terms and provisions of the Plan will govern and
prevail.
15. Successors
and Assigns. The Company may
assign any of its rights under this Agreement. This Agreement will
be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer set
forth herein, this Agreement will be binding upon the Grantee and
the Grantee’s beneficiaries, executors, administrators and
the person(s) to whom the Restricted Stock Units may be transferred
by will or the laws of descent or distribution.
16. Severability.
The invalidity or unenforceability of any provision
of the Plan or this Agreement shall not affect the
validity or enforceability of any other provision
of the Plan or this Agreement, and
each provision of the Plan and
this Agreement shall be severable and enforceable to the extent
permitted by law.
17. Discretionary
Nature of Plan. The Plan is
discretionary and may be amended, cancelled or terminated by the
Company at any time, in its discretion. The grant of the Restricted Stock Units in this
Agreement does not create any contractual right or other right to
receive any Restricted Stock Units or other Awards in the future.
Future Awards, if any, will be at the sole discretion of the
Company. Any amendment, modification, or termination of the Plan
shall not constitute a change or impairment of the terms and
conditions of the Grantee’s employment with the
Company.
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18. Amendment.
The Committee has the right to amend, alter, suspend, discontinue
or cancel the Restricted Stock Units, prospectively or
retroactively; provided, that, no such amendment shall adversely affect
the Grantee’s material rights under this Agreement without
the Grantee’s consent.
19. Section
409A. This Agreement is
intended to comply with Section
409A of the Code or an exemption thereunder and shall be construed
and interpreted in a manner that is consistent with the
requirements for avoiding additional taxes or penalties
under Section 409A of the Code.
Notwithstanding the foregoing, the Company makes no representations
that the payments and benefits provided under this Agreement comply
with Section 409A of the Code
and in no event shall the Company be liable for all or any portion
of any taxes, penalties, interest or other expenses that may be
incurred by the Grantee on account of non-compliance with
Section 409A of the
Code.
20. No
Impact on Other Benefits. The value of
the Restricted Stock Units is not part of Grantee’s normal or
expected compensation for purposes of calculating any severance,
retirement, welfare, insurance or similar employee
benefit.
21. Counterparts.
This Agreement may be executed in counterparts, each of which shall
be deemed an original but all of which together will constitute one
and the same instrument. Counterpart signature pages to this
Agreement transmitted by facsimile transmission, by electronic mail
in portable document format (.pdf), or by any other electronic
means intended to preserve the original graphic and pictorial
appearance of a document, will have the same effect as physical
delivery of the paper document bearing an original
signature.
22. Acceptance.
The Grantee hereby acknowledges receipt of a copy of the Plan and
this Agreement. The Grantee has read and understands the terms and
provisions thereof, and accepts the Restricted Stock Units subject
to all of the terms and conditions of the Plan and this Agreement.
The Grantee acknowledges that there may be adverse tax consequences
upon the vesting or settlement
of the Restricted Stock Units or disposition of the underlying
shares and that the Grantee has been advised to consult a tax
advisor prior to such vesting, settlement or
disposition.
[SIGNATURE
PAGE FOLLOWS]
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SIGNATURES
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
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DYNATRONICS
CORPORATION
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By: __________________________
Name:________________________
Title:_________________________
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[NAME OF EMPLOYEE/GRANTEE]
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_________________________
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Signature
Page to Restricted Stock Units Agreement – Dynatronics
Corporation
