EXHIBIT 10(dd)
RESTRICTED SHARE AGREEMENT
This agreement is made effective February 13, 2002 (the "Effective
Date"), between Metatec International, Inc., an Ohio corporation (the
"Company"), and Xxxx X. Xxxxxxxx ("Xx. Xxxxxxxx").
Background Information
As of the Effective Date, the Company and Xx. Xxxxxxxx (the "Parties")
are entering into an employment relationship pursuant to which the Company is
employing Xx. Xxxxxxxx as the Company's Chief Financial Officer. As an
inducement essential to Xx. Xxxxxxxx'x agreement to become an employee of the
Company, the Company is awarding and issuing to Xx. Xxxxxxxx 100,000 common
shares, without par value, of the Company (the "Shares"). The Parties are
entering into this agreement to establish certain terms and conditions relating
to the Shares.
Statement of Agreement
The Parties hereby acknowledge the accuracy of the foregoing Background
Information and agree as follows:
Section 1. Award of Shares. In connection with and as additional
consideration for his employment by the Company, the Company hereby awards the
Shares to Xx. Xxxxxxxx subject to the following terms and conditions of this
agreement. Following the execution of this agreement by both Parties, the
Company shall cause a share certificate evidencing the Shares to be issued in
Xx. Xxxxxxxx'x name (the "Share Certificate").
Section 2. Forfeiture. All of the Shares shall be forfeited to the
Company if Xx. Xxxxxxxx'x employment with the Company terminates for any reason
prior to the first anniversary of the Effective Date (the "First Anniversary").
50,000 of the Shares shall be forfeited to the Company if Xx. Xxxxxxxx'x
employment with the Company terminates for any reason on or after the First
Anniversary but prior to the second anniversary of the Effective Date (the
"Second Anniversary"). However, if a Change In Control (as defined below) occurs
prior to the Second Anniversary, then, as of the date of such Change In Control,
such forfeiture restrictions shall lapse automatically with respect to all
Shares not forfeited to the Company under the foregoing provisions prior to such
Change In Control.
For purposes of this agreement, the term "Change In Control" shall mean
the occurrence of any of the events described in Section 8 of the Company's 1990
Stock Option Plan, as amended (the "Plan"), the occurrence of which would cause
or permit stock options granted under the Plan that are not yet otherwise fully
exercisable to become fully exercisable.
Section 3. Transfer Restrictions. None of the Shares, nor any
beneficial interest therein, shall be sold, assigned, pledged or otherwise
transferred, voluntarily or involuntarily, prior to the date that such Shares
are no longer subject to forfeiture under section 2, above. Thereafter, the
Shares may be transferred only in compliance with this agreement and all
applicable federal and state
securities laws. Any transfer or attempted transfer in violation of the
foregoing restrictions shall be null and void.
Section 4. Rights As a Shareholder. Subject to the terms of this
agreement, Xx. Xxxxxxxx shall be entitled to all of the rights of a shareholder
with respect to the Shares, including the right to vote the Shares. However,
nothing in this agreement shall be construed as conferring upon Xx. Xxxxxxxx any
right to continued employment with the Company for any period, and Xx. Xxxxxxxx
acknowledges that such employment is "at will" and may be terminated by either
Party at any time, with or without cause.
Section 5. Escrow of Shares. The Share Certificate shall be held by the
Company, together with a stock power endorsed in blank, which shall be executed
by Xx. Xxxxxxxx concurrently with his execution of this agreement, until the
earlier of the Second Anniversary or the termination of Xx. Xxxxxxxx'x
employment with the Company. At such time: (a) if Shares are forfeited to the
Company under Section 2, above, then the Company shall cause such Shares to be
transferred to the Company and a new certificate evidencing the Shares that are
not forfeited, if any, to be issued to Xx. Xxxxxxxx; or (b) if no Shares are so
forfeited, then the Company shall deliver the Share Certificate and such stock
power to Xx. Xxxxxxxx.
Section 6. Value of Shares, Tax Consequences. The Parties hereby agree
that on the Effective Date the fair market value of the Shares (determined
without regard to any restriction, whether under this agreement or otherwise,
other than any restriction which by its terms will never lapse) is $0.39 per
Share, or a total of $39,000 for all of the Shares. Xx. Xxxxxxxx understands
that he (and not the Company) shall be responsible for his own federal, state,
and local tax liability and any of his other tax consequences that may arise as
a result of the transactions contemplated by this agreement, including without
limitation filing an election under Section 83(b) of the Internal Revenue Code
of 1986, as amended (the "83(b) Election"), if he deems it to be appropriate.
Xx. Xxxxxxxx shall rely solely on the determinations of his own tax advisors or
his own determinations, and not on any statements or representations by the
Company or any of its agents, with regard to all such tax matters. Xx. Xxxxxxxx
shall notify the Company in writing if Xx. Xxxxxxxx files the 83(b) Election
with the Internal Revenue Service within 30 days from the Effective Date. The
Company intends, in the event it does not receive from Xx. Xxxxxxxx evidence of
the 83(b) Election filing by Xx. Xxxxxxxx, to claim a tax deduction for any
amount which would be taxable to Xx. Xxxxxxxx in the absence of such an
election. If the Company is required to withhold or pay any taxes with respect
to the issuance or vesting of the Shares, Xx. Xxxxxxxx shall pay to the Company
the amount of such required withholding or payment promptly following the
Company's request.
Section 7. Investment Representations. Xx. Xxxxxxxx hereby:
(a) Acknowledges that he has been advised that the Shares have not been
registered under the Securities Act of 1933, as amended (the "Act"), in
reliance upon certain exemptions contained in the Act and rules and
regulations promulgated thereunder.
(b) Understands and agrees that because the Company is relying upon the
exemptions contained in the Act and the rules and regulations promulgated
thereunder, the Shares must be held indefinitely unless they are
subsequently registered under the Act or an exemption from registration is
determined by counsel for or satisfactory to the Company to be available;
that the requirement that such counsel determine whether an exemption from
registration is
available will apply to any transfer of the Shares, including routine
sales; that the Company is under no obligation, and has no present
intention to attempt to secure an exemption for any subsequent sales of the
Shares; that the provisions of Rule 144, promulgated under the Act, which,
in certain circumstances, permit routine sales of securities, are not
presently available for sales of the Shares; and that the Company has no
present intention of providing the undersigned with information which may
be necessary to effectuate sales thereunder.
(c) Represents to the Company that he is acquiring the Shares for his own
account for investment purposes and not with a view to distribution or
resale in connection with any distribution of securities within the meaning
of the Act, and that no transfer of the Shares will be made that will
jeopardize the exemptions from federal registration referred to in section
(a) above.
(d) Represents to the Company that he has such knowledge and experience in
financial and business matters that he is capable of evaluating the merits
and risks of his investment in the Company.
(e) Represents to the Company that he is presently a resident of the State
of Ohio.
(f) Acknowledges that he has been advised to seek expert legal, tax and
accounting advice in connection with his investment decision.
(g) Represents to the Company that to his satisfaction he has been provided the
opportunity to ask questions and receive answers concerning the terms and
conditions of the granting of the Shares, has had all such questions
answered to his satisfaction and has been supplied all additional
information deemed necessary by him to verify the accuracy of all
information furnished to him; that he is familiar with the condition of the
Company, has had access to adequate information to make this investment
decision and has had access during the course of this transaction and prior
to this grant to such information as he deems material to his investment
decision to the extent that the Company possesses such information or has
been able to acquire it without unreasonable effort or expense; that he
believes that the securities covered hereby are securities of the kind he
wishes to be granted and hold for investment and that the nature and amount
of such securities are consistent with his investment program.
(h) Represents to the Company that he is willing and able to bear the economic
risk of an investment in the Shares and that his net worth is such that the
loss of his entire investment would not materially and adversely affect his
standard of living. In making this statement, consideration has been given
to whether the undersigned could afford to hold the Shares for an
indefinite period and whether, at this time, he could afford a complete
loss of his investment.
(i) Represents to the Company that his financial condition is such that he has
no need for liquidity with respect to his investment in the Shares and he
has no need to dispose of any portion of the Shares to satisfy any existing
or contemplated undertaking or indebtedness.
(j) Acknowledges that he understands that in addition to the federal securities
restrictions on transfer, the transfer of the Shares is further restricted
by applicable state securities laws and, notwithstanding any compliance
with federal requirements, no transfer will be permitted which is not in
compliance with applicable state securities laws.
(k) Represents to the Company that he is an accredited investor within the
meaning of Regulation D, Rule 501 promulgated under the Act.
(l) Agrees that any certificate or certificates delivered to him evidencing the
Shares or any substitute therefor will contain a legend stating that the
Shares have not been registered under the Act and may set forth the
limitations on resale contained in or contemplated by this agreement.
(m) Agrees and understands that stop transfer instructions prohibiting transfer
of the Shares in violation of the restrictions referred to in this
agreement will be filed with the Company and its transfer agent.
Xx. Xxxxxxxx recognizes that the issuing of the Shares to him is based
upon his representations and warranties contained in this agreement, and Xx.
Xxxxxxxx shall indemnify the Company and anyone acting on behalf of it with
respect to the issuing of the Shares, and to hold the Company and any such
persons harmless against all liabilities, costs, or expenses (including
reasonable attorneys' fees) arising by reason of or in connection with any
misrepresentation or any breach of such warranties by Xx. Xxxxxxxx or in
connection with any resulting violation of the Act, applicable state securities
laws and any other applicable law, or his failure to fulfill any of his
covenants or agreements set forth herein.
Section 8. Legends. All certificates evidencing the Shares shall be
endorsed with the following legends (in addition to any legend required by
applicable law):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("THE ACT"), OR STATE SECURITIES LAWS, AND
CANNOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
THE SALE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE ACT AND ALL
APPLICABLE STATE SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE
WITH THE TERMS OF THE RESTRICTED SHARE AGREEMENT DATED FEBRUARY 13, 2002 BETWEEN
THE COMPANY AND THE HOLDER OF SUCH SHARES, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY.
Section 9. General Provisions
(a) This agreement shall be governed by the internal laws of the State of Ohio.
This agreement represents the entire agreement between the Parties with
respect to the subject matter of this agreement, may only be modified or
amended in writing signed by both Parties, and satisfies all of the
Company's obligations to Xx. Xxxxxxxx with regard to the granting or
awarding of securities.
(b) The captions of the various sections of this agreement are not part of the
context of this agreement, are only guides to assist in locating those
sections, and shall be ignored in construing this agreement.
(c) Where permitted by the context, each pronoun used in this agreement
includes the same pronoun in other genders and numbers, and each noun used
in this agreement includes the same noun in other numbers.
(d) All notices and other communications required or permitted hereunder shall,
for all purposes of this agreement, be treated as effective or having been
given (i) if delivered personally (including by overnight express or
messenger), when received, (ii) if delivered by facsimile, the first
business day after the date of confirmation that the facsimile has been
successfully transmitted to the facsimile number for the party notified,
(iii) if sent by mail to an address in the United States, at the earlier of
its receipt or three days after the same has been deposited in a regularly
maintained receptacle for the deposit of the United States mail, addressed
and mailed as aforesaid, or (iv) if sent by mail to an address outside of
the United States, seven days after being mailed to the recipient by
certified or registered mail, return receipt requested and postage prepaid.
Each such notice shall be addressed to the Parties at the addresses of the
Parties set forth at the end of this agreement or such other address as a
Party may request by notifying the other in writing.
(e) The rights and benefits of the Company under this agreement shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by
the Company's successors and assigns.
(f) This agreement shall be personal to Xx. Xxxxxxxx, and neither this
agreement nor any rights or obligations of Xx. Xxxxxxxx under this
agreement may be assigned by Xx. Xxxxxxxx to any third party. Any
assignment or attempted assignment by Xx. Xxxxxxxx in violation of the
preceding sentence shall be null and void. Subject to the foregoing, this
agreement shall be binding upon, inure to the benefit of, and be
enforceable by and against the heirs, personal representatives, successors,
and assigns of each Party.
(g) 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. The rights granted both
Parties herein are cumulative and shall not constitute a waiver of either
Party's right to assert all other legal remedies available to it under the
circumstances.
(h) Xx. Xxxxxxxx agrees upon request to execute any further documents or
instruments reasonably requested by the Company to carry out the purposes
or intent of this agreement.
METATEC INTERNATIONAL, INC.
By /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxx X. Xxxxxxxx
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Xxxxxxxxxxx X. Xxxxx, President and XXXX X. XXXXXXXX
Chief Executive Officer
Notices:
Metatec International, Inc. Xxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxxxxxxx
Xxxxxx, Xxxx 00000 --------------------------------
Attn: Xxxxxxxxxxx X. Xxxxx, President --------------------------------
Telecopy No.: (000) 000-0000 Telecopy No.: ( ) -
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