etrials Worldwide, Inc. RESTRICTED STOCK AGREEMENT Pursuant to etrials WORLDWIDE, INC. 2005 PERFORMANCE EQUITY PLAN
Exhibit
99.3
etrials
Worldwide, Inc.
Pursuant
to etrials
WORLDWIDE,
INC. 2005 PERFORMANCE EQUITY PLAN
THIS
RESTRICTED STOCK AGREEMENT, made and entered into as of the 18th day of May,
2007, by and between etrials Worldwide, Inc., a Delaware corporation (the
“Corporation”),
and
Xxxxxx Xxxxxxxx (the “Participant”).
WHEREAS,
on May 18, 2007, (the “Original
Grant Date”),
the
Board approved the sale to Participant of Fifty Thousand (50,000) shares of
the
Corporation’s common stock, $0.0001 par value per share (the “Common
Stock”),subject
to execution and delivery of this Agreement; and
WHEREAS,
such sale was approved by the Board of Directors of the Company, including
by a
majority of the “Independent” Directors, as defined in NASDAQ Rules, and the
Non-Employee Directors as defined in Rule 16b-3 of the Securities and Exchange
Commission; and
WHEREAS,
such sale is pursuant to the 2005 Performance Equity Plan of the Corporation
(the “Plan”) (capitalized terms used herein shall have the meanings set out in
the Plan unless otherwise specified in this Agreement); and
WHEREAS,
such sale is required by an Employment Agreement dated May 18, 2007 between
the
Company and Participant and the provisions of this Agreement are subject to
certain provisions of the Employment Agreement, which upon the occurrence of
certain events supersedes vesting and termination provisions of this Agreement;
and
WHEREAS,
this Agreement evidences such sale.
NOW,
THEREFORE, in consideration of the foregoing, of the mutual promises set forth
below and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
1. Sale
of Shares.
The
Corporation hereby agrees to sell to Participant, and Participant hereby agrees
to purchase, a total of Fifty Thousand (50,000) shares of Common Stock, at
the
purchase price of $0.0001 per
share
(the “Purchase
Price”),
in
accordance with the terms and conditions stated in this Agreement. The shares
of
Common Stock sold pursuant to this Agreement are referred to below as the
“Shares”
subject
to the terms and conditions of this Agreement. Until Shares become vested a
provided in Section 3 below, the Shares are deemed to be “Restricted Shares.”
Such purchase and sale shall occur within ten (10) days after the date of this
Agreement.
2. Forfeiture.
Upon
occurrence of a “Termination of Employment” (as defined below) at any time
before all the Shares are vested as provide in Section 3 hereof, the Corporation
shall have an immediate and automatic option (the “Repurchase Option”), without
any action having to be taken on the part of Participant to activate the
Repurchase Option, to purchase from Participant at $0.0001 per share (the
“Option Price”) any Shares that remain unvested pursuant to Section 3 hereof on
the date of Termination of Employment. For purposes of this Agreement, all
references to “Participant” shall be deemed to include Participant’s estate and
successors wherever applicable.
3. Vesting.
Three
Thousand One Hundred Twenty-Five (3,125) of the Shares shall vest on each of
the
sixteen (16) quarterly anniversaries of the Original Grant Date, provided that
the Shares shall vest with respect to an increment as specified only if a
Termination of Employment has not occurred on or prior to the specified date
for
such increment.
The
vesting schedule set forth above is cumulative, so that Shares that become
vested on and after a date indicated by the vesting schedule may not be
repurchased by the Corporation at any subsequent date. The Repurchase Option
may
be exercised by the Corporation at any time and from time to time after the
Termination of Employment in accordance with Section 5 hereof to purchase up
to
the number of Shares which did not vest prior to the Termination of
Employment.
For
purposes of this Agreement, “Termination
of Employment”
shall
mean termination of any consulting or employment relationship of Participant
with the Corporation for any reason whatsoever other than Normal Retirement,
includ-ing, without limitation, death, disability, voluntary termination,
involuntary termination, dismissal with or without cause or
resignation.
The
provisions of Section 10 of the Plan shall apply to the this Agreement.
4. Transfer
of Stock, Investment Intent.
Except
as otherwise provide in this Agreement, Participant shall not sell, transfer,
assign, convey, pledge, encumber or in any manner dispose of the Restricted
Shares, either voluntarily or involuntarily. All stock certificates evidencing
the Restricted Shares shall be restricted by a legend on each certificate in
substantially the following form:
The
shares of stock represented by the within certificate are subject to a
repurchase right by the Issuer. The transferring or encumbrance of the shares
of
stock represented by the within certificate is restricted. The terms of a
Restricted Stock Agreement dated May 18, 2007, a copy of which is on file at
the
principal office of the Issuer, govern the repurchase rights and transfer
restrictions.
The
shares represented by this certificate have not been registered under the
Securities Act of 1933. These shares have been acquired for investment and
not
with a view to distribution or resale, and may not be mortgaged, pledge,
hypothecated, or otherwise transferred without an effective registration
statement for such shares under the Securities Act of 1933 or an opinion of
counsel for the corporation that registration is not required under such
act.
Participant
understands that transfer of the Restricted Shares will not be made otherwise
than in accordance with both of the legends set forth above and Shares after
they cease to be Restricted Shares will not be transferred otherwise than in
accordance with the second legend and that such lack of transferability means
that the economic risk of the investment may be substantial.
2
Participant
represents and warrants that Participant has received a copy of the Plan and
the
Participant understands the Plan If the terms of this Agreement and the terms
of
the Plan conflict with one another, Participant hereby agrees that the terms
of
the Plan shall supersede the terms of this Agreement.
5. Exercise
of Corporation’s Repurchase Option.
The
Corporation may exercise its Repurchase Option pursuant to this Agreement by
giving Participant notice of its election within one hundred eighty (180) days
after the latest of the date on which a Termination of Employment occurs, or
Participant acquires the Restricted Shares. The notice shall include a closing
date, which date shall be within thirty (30) days of the date the notice is
given. The Closing shall be at the principal office of the Corporation. Voting
rights on the Restricted Shares shall be vested in the Corporation as of the
date the Corporation gives notice of its election to exercise the
option.
At
its
election, the Corporation, may pay the full amount for the Restricted Shares
in
cash or by check at the Closing. Alternatively, if the Corporation at the time
of purchase is prohibited from repurchasing its shares under law or any
contract, the Corporation may pay the amount due by executing a promissory
note
for the portion of the Option Price the Corporation is prohibited from paying.
The promissory note shall provide for payment of the balance when the
restriction on repurchase of its shares terminates. The unpaid principal balance
of such note shall bear interest at the prime rate of Bank of America in
Charlotte, North Carolina, on the date of closing; provided, however, that
the
interest rate shall not be lower than the rate established by the Internal
Revenue Service for the avoidance of imputed interest on such note at such
time.
Accrued interest shall be paid on the date(s) payments of principal are due.
The
Corporation shall have the right to prepay any portion or all of the balance
due
under such note at any time without penalty.
At
the
Closing, Participant’s legal representative (as the case may be) shall deliver
to the Corporation the stock certificate(s) evidencing the Restricted Shares
to
be redeemed, properly endorsed in blank with all transfer and excise taxes
paid
(and, where appropriate, with stamps affixed thereto); and in the event of
death, Participant’s legal representative shall also deliver copies of his or
her letters testamentary or authority to act on behalf of the estate and a
release or tax release or tax letter from the appropriate tax authorities
stating that the Restricted Shares transferred are not subject to taxes.
Participant or Participant’s representative if Participant is deceased, shall;
warrant that the Restricted Shares transferred are free and clear of all liens,
encumbrances and claims.
6. Encumbrance
of Shares.
The
Restricted Shares may not be pledged, hypothecated or otherwise encumbered
during the Escrow Period (as defined below) without the prior express written
consent of the Corporation, which may be withheld for any reason or without
reason.
3
7. Payment
of Taxes and Section 83(b) Election.
Participant acknowledges that Participant understands that Participant may
(i)
concurrently with the execution of this Agreement, execute an election under
Section 83(b) of the Internal Revenue Code to be taxed currently on
Participant’s compensation related to receipt of the Restricted Shares or (ii)
if Participant fails to make such 83(b) election Participant will incur tax
liability when the Restricted Shares vest pursuant to Section 3 hereof. The
Corporation shall determine the amount of federal and state withholding due
with
respect to Participant’s compensation from the Restricted Shares, and
Participant agrees to pay the Corporation the amount of withholding due with
respect to the Restricted Shares within five (5) days of the date the
Corporation gives Participant notice of the amount due, time being of the
essence. No stock certificates shall be delivered on behalf of Participant
until
the payment of the withholding due is satisfied. If payment of the withholding
is not made within the time required, the Corporation shall have the option
of
declaring this Agreement and the offer to issue the Restricted Shares to
Participant’s void, or the Corporation may arrange for withholding of all
amounts due from Participant’s paycheck until Participant’s obligation is
satisfied.
8. Escrow.
As
security for the faithful performance of the terms of this Agreement and to
ensure the availability for delivery of Participant’s shares upon exercise of
the Repurchase Option, Participant agrees to deliver to and deposit with the
Chief Financial Officer of the Corporation (the “Escrow Agent”), the
certificate(s) representing the Restricted Shares, together with sixteen (16)
assignments separate from certificate duly endorsed (with date and number of
shares blank) in the form acceptable to the Corporation. Said documents are
to
be held by the Escrow Agent. The Escrow Agent shall deliver the Shares to the
Participant acting on instructions of a majority of the Board of Directors
or of
a Committee of the Board that is authorized to administer the Plan. “Escrow
Period” shall mean the period beginning the date the Restricted Shares issued in
the name of Participant and continuing to the date the restrictions on the
Restricted Shares are terminated pursuant to the Section 3 hereof.
9. Rights
in Restricted Stock.
Subject
to the provisions of this Agreement, Participant shall exercise all rights
and
privileges of a Participant of the Corporation with respect to the Restricted
Shares.
10.
Termination
of Certain Rights and Obligations. The
Board
of Directors of the Corporation shall have the right, but not the obligation,
to
terminate all or any selected provisions of this Agreement. In no event shall
Participant be required or requested to perform additional services for the
Corporation, be subject to a salary adjustment, or in any way be required to
provide consideration in the form of services for the cancellation of the
restrictions pursuant to this Section, it being the express intention of the
Corporation that any such cancellation be in all respects
noncompensatory.
11.
Specific
Performance.
Because
of the unique character of the Restricted Shares, the parties to this Agreement
agree that the Corporation will be irreparably damaged in the event that this
Agreement is not specifically enforced. Should any dispute arise concerning
the
sale or transfer of the Restricted Shares, an injunction may be issued
restraining any sale or transfer pending the determination of such controversy.
In the event of any controversy concerning the right of the Corporation to
purchase, or of Participant to sell, any of the Shares, such right or obligation
shall be enforceable in a court of equity by a decree of specific performance.
Such remedy shall, however, be in addition to any other remedies which the
parties may have
4
Participant
agrees that in the event of any violation of this Agreement, an action may
be
commenced by the Corporation for any such preliminary and permanent injunctive
relief and other equitable relief in any court of competent jurisdiction in
the
State of North Carolina or in any other court of competent jurisdiction.
Participant hereby waives any objections on the grounds of improper jurisdiction
or venue to the commencement of any action in the State of North Carolina and
agrees that effective service of process may be made upon Shareholder by mail
under the notice provisions contained in Section 16 hereof.
12.
No
Contract of Employment.
Nothing
contained in this Agreement shall be deemed to require the Corporation to
continue Participant’s employment with the Corporation. Participant shall,
except as otherwise provided in Participant’s employment agreement with the
Corporation, if any, at all times be an employee-at-will of the Corporation
and
the Corporation may discharge Participant at any time for any reason, with
or
without cause, and with or without severance compensation. From time to time,
the Corporation may distribute employee manuals or handbooks, and officers
or
other representatives of the Corporation may make written or oral statements
relating to the Corporation’s policies and procedures. Such manuals, handbooks
and statements are intended only for the general compliance of employees. No
policies, procedures or statements of any nature by or on behalf of the
Corporation (whether written or oral, and whether or not contained in any formal
employee manual or handbook) shall be construed to modify this
Agreement.
13.
Stock
Splits, etc.
In the
event that, as a result of a stock split or stock dividend or combination of
shares or any other change, or exchange for other securities, by
reclassification, reorganization, merger, consolidation, recapitalization or
otherwise, Participant shall, as the owner of Restricted Shares subject to
restrictions hereunder, be entitled to new or additional or different shares
of
stock certificates, the certificate or certificates for, or other evidences
of,
such new or additional or different shares or securities, shall also be
imprinted with a legend as provided in Section 4 hereof, and be deposited with
the Escrow Agent in accordance with Section 8 hereof and all provisions of
this
Agreement relating to restrictions and lapse of restrictions shall be applicable
to such new or additional or different shares or securities to the extent
applicable to the shares with respect to which they were distributed, and such
new or additional or different shares or securities shall be deemed to be
“Restricted Shares” for all purposes hereof; provided, however, that if
Participant shall receive rights, warrants or fractional interests in respect
of
any of such Restricted Shares, such rights or warrants may be held, exercised,
sold or otherwise disposed of, and such fractional interests may be settled,
by
Participant free and clear of the restrictions set forth in this Agreement.
The
Option Price per share set forth in Section 2 hereof shall be equitably adjusted
upon any change in the number of Restricted Shares pursuant to this Section
so
that the aggregate repurchase price for all Restricted Shares shall not
change.
14.
Burden
and Benefit; Corporation.
This
Agreement shall be binding upon, and shall inure to the benefit of, the
Corpora-tion and Participant, and their respective heirs, personal and legal
representatives, successors and assigns. As used in this Section as well as
in
Sections 2 and 3 hereof, the term the “Corporation”
shall
also include any corporation which is the parent or a subsidiary of the
Corpora-tion or any corporation or entity which is an affiliate of the
Corporation by virtue of common (although not identical) owner-ship, and for
which Participant is providing services in any form during Participant’s
employment with the Corporation or any such other corporation or entity.
Participant hereby consents to the enforcement of any and all of the provisions
of this Agreement by or for the benefit of the Corporation and any such other
corpo-ration or entity.
5
15.
Entire
Agreement; Authority of Committee. This
Agreement contains the entire agreement between the parties with respect to
the
subject matter hereof and supersedes all prior agreements or understandings,
oral or written, with respect to the subject matter herein. Participant accepts
the Shares in full satisfaction of any and all obligations of the Corporation
to
sell Shares to Participant as of the date hereof. All determinations made by
the
Committee with respect to the interpretation, construction and application
of
any provision of this Agreement shall be final, conclusive and binding on the
parties.
16.
Notices.
Any and
all notices under this Agreement shall be in writing, and sent by hand delivery
or by certified or registered mail (return receipt requested and first-class
postage prepaid), in the case of the Corporation, to its principal executive
offices to the attention of the President, and, in the case of Participant,
to
Participant’s address as shown on the Corporation’s records.
17.
Governing
Law. This
Agreement shall be construed and enforced in accordance with the laws of the
State of Delaware, without reference to its conflicts of laws rules or the
principles of the choice of law.
18.
Modifications.
No
change or modification of this Agreement shall be valid unless the same is
in
writing and signed by the parties hereto.
19.
Terms
and Conditions of Plan.
The
terms and conditions included in the Plan, the receipt of a copy of which
Participant hereby acknowledges by execution of this Agreement, are
incorpo-rated by reference herein, and to the extent that any conflict may
exist
between any term or provision of this Agreement and any term or provision of
the
Plan, such term or provision of the Plan shall control.
20.
Covenants
and Representations and Covenants of Participant.
Participant represents, warrants, covenants and agrees with the Corporation
as
follows:
(a) The
Shares are being received for Participant’s own account without the
participation of any other person, with the intent of holding the Shares
issuable pursuant thereto for investment and without the intent of
participating, directly or indirectly, in a distribution of the Shares and
not
with a view to, or for resale in connection with, any distribution of the Shares
or any portion thereof.
6
(b) Participant
is not acquiring the Shares based upon any representation, oral or written,
by
any person with respect to the future value of, or income from, the Shares,
but
rather upon an independent examination and judgment as to the prospects of
the
Corporation.
(c) Participant
has had the opportunity to ask questions of and receive answers from the
Corporation and its executive officers and to obtain all information necessary
for Participant to make an informed decision with respect to the investment
in
the Corporation represented by the Shares.
(d) Participant
is able to bear the economic risk of any investment in the Shares, including
the
risk of a complete loss of the investment, and Participant acknowledges that
Participant must continue to bear the economic risk of any investment in Shares
for an indefinite period.
(e) Participant
understands and agrees that the Shares may be issued and sold to Participant
without registration under any state or federal laws relating to the
registration of securities and in that event will be issued and sold in reliance
on exemptions from registration under appropriate state and federal
laws.
(f) Shares
issued to Participant will not be offered for sale, sold or transferred by
Participant other than pursuant to: (i) an effective registration under
applicable state securities laws or in a transaction which is otherwise in
compliance with those laws; (ii) an effective registration under the Securities
Act of 1933, or a transaction otherwise in compliance with such Act; and (iii)
evidence satisfactory to the Corporation of compliance with all applicable
state
and federal securities laws. The Corporation shall be entitled to rely upon
an
opinion of counsel satisfactory to it with respect to compliance with the
foregoing laws.
(g) The
Corporation will be under no obligation to register the Shares or to comply
with
any exemption available for sale of the Shares by Participant without
registration, and the Corporation is under no obligation to act in any manner
so
as to make Rule 144 promulgated under the Securities Act of 1933 available
with
respect to any sale of the Shares by Participant.
(h) Participant
has not relied upon the Corporation with respect to any tax consequences related
to the grant or exercise of this Option, or the disposition of Shares purchased
pursuant to its exercise. Participant acknowledges that, as a result of the
grant or vesting of the Shares, Participant may incur a substantial tax
liability. Participant assumes full responsibility for all such consequences
and
the filing of all tax returns and elections Participant may be required or
find
desirable to file in connection therewith. In the event any valuation of Shares
purchased pursuant to its exercise must be made under federal or state tax
laws
and such valuation affects any return or election of the Corporation,
Participant agrees that the Corporation may determine such value and that
Participant will observe any determination so made by the Corporation in all
returns and elections filed by Participant. In the event the Corporation is
required by applicable law to collect any withholding, payroll or similar taxes
by reason of the grant or vesting of the Shares, Participant agrees that the
Corporation may withhold such taxes from any monetary amounts otherwise payable
by the Corporation to Participant and that, if such amounts are insufficient
to
cover the taxes required to be collected by the Corporation, Participant will
pay to the Corporation such additional amounts as are required.
7
(i) The
agreements, representations, warranties and covenants made by Participant herein
shall apply to all of the Shares issued to Participant from time to time.
Acceptance by Participant of any certificate representing Shares shall
constitute a confirmation by Participant that all such agreements,
representations, warranties and covenants made herein shall be true and correct
at that time.
(j) In
the
event any underwriter of securities of the Corporation requests Participant
to
sign any agreement restricting resale of the Shares in connection with any
public offering by the Corporation, Participant agrees to sign such agreement,
provided the officers of the Corporation have signed an agreement no less
restrictive. The Corporation may instruct its transfer agent not to transfer
the
Shares if requested by an underwriter as described above.
(The
remainder of this page is intentionally left blank.)
8
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
effective as of the day and year first above written.
etrials
Worldwide, Inc.
By:
/s/ Xxxxx X. Xxxxx, Xx.
Xxxxx
X.
Xxxxx, Xx.
Chief
Financial Officer
PARTICIPANT:
/s/
Xxxxxx Xxxxxxxx
Xxxxxx
Xxxxxxxx
Address:
_________________________
_________________________
9
