EXHIBIT 10.13A
Date of Grant: September 14, 2005
CHARTWELL INTERNATIONAL, INC.
RESTRICTED STOCK AWARD AGREEMENT
THIS AGREEMENT is made by and between Chartwell International, Inc.
("Chartwell" or the "Company") and Xxxxx Xxxxx ("Director").
1. Award of Restricted Stock. Pursuant to the Plan, Chartwell hereby grants to
Director, in the manner and subject to the conditions hereinafter provided,
seventy five thousand (75,000) shares of Chartwell's Common Stock (the
"Restricted Stock"). As used in this Agreement, the term "Restricted Stock"
refers to the stock granted under this Agreement and includes all securities
received (a) in replacement of the Restricted Stock, (b) as a result of stock
dividends or stock splits in respect of the Restricted Stock, and (c) in
replacement of the Restricted Stock in a recapitalization, merger,
reorganization or the like.
This Restricted Stock is specifically conditioned on compliance with
the terms and conditions set forth herein.
2. Vesting of Restricted Stock.
2.1 The right to unrestricted ownership in the Restricted Stock under
this Restricted Stock Award shall vest with respect to 37,500 shares on January
1, 2006 and the remaining shares shall be fully vested in the Director on
October 1, 2006 ("Vesting Date").
2.2 Permitted Forfeiture of Unvested Restricted Stock. Director
acknowledges that all of the Restricted Stock that has not vested in accordance
with Section 2.1 shall be forfeited and all rights of the Director to such
Restricted Stock shall terminate without further obligation on the part of
Chartwell, unless the Director has remained an employee of, or a non-employee
Director of, or active consultant providing services to Chartwell or any of its
Subsidiaries, until the Vesting Date of the Restricted Stock. Upon the
forfeiture of any Restricted Stock, such forfeited Restricted Stock shall be
transferred to Chartwell without further action by the Director.
The Restricted Stock may not be sold, assigned, pledged, exchanged,
hypothecated or otherwise transferred, encumbered or disposed of to the extent
that Shares are subject to vesting and in the event of termination of employment
with or services to Chartwell or any Subsidiary for any reason.
2.3 Deliveries by Chartwell. A certificate evidencing the Restricted
Stock shall be issued by Chartwell in Director's name, pursuant to which
Director shall have voting rights and shall be entitled to receive all dividends
unless and until the Shares of Restricted Stock are forfeited pursuant to this
Agreement. The certificate shall bear a legend evidencing the nature of the
Restricted Stock, and Chartwell may cause the certificate to be delivered upon
issuance to the Secretary of the Company or to such other depository as may be
designated by the Company for safekeeping until all vesting and forfeiture
restrictions lapse pursuant to the terms of this Agreement. Upon the lapse of
the vesting and forfeiture restrictions, Chartwell shall cause a new certificate
or certificates to be issued without legend in the name of the Director.
Notwithstanding any other provisions of this Agreement, the issuance or delivery
of any shares under this Restricted Stock Award (whether vested or unvested) may
be postponed for such period as may be required to comply with applicable
requirements of any national securities exchange or any requirements under any
1
federal or state securities law or regulation. Chartwell shall not be obligated
to (a) issue or deliver any Restricted Stock if the issuance or delivery thereof
shall constitute a violation of any provision of any law or regulation of any
governmental authority or any national securities exchange, (b) qualify the
issuance of the stock in any jurisdiction, or (c) register the shares of
Restricted Stock with the SEC.
3. Adjustments. Should any change be made to the Common Stock of Chartwell by
reason of any stock split, reverse stock split, stock dividend, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without Chartwell's receipt of consideration, Chartwell shall
make appropriate adjustments to the number and/or class of securities and the
exercise price per share in effect under this Restricted Stock Award in order to
prevent the dilution or enlargement of benefits thereunder; provided however,
that the number of shares subject to this Restricted Stock Award shall always be
a whole number and Chartwell shall make such adjustments as are necessary to
insure this Restricted Stock Award is set as whole shares.
4. Suspension and Cancellation of Stock
4.1 Mandatory Suspension and Cancellation of Stock. In the event
Chartwell reasonably believes Director has committed an act of misconduct
including, but limited to acts specified below, the Chartwell may suspend
Director's right in his or her Restricted Stock Award granted hereunder pending
final determination by the Board of Directors. If Director is determined by the
Board to have:
(a) committed an act of embezzlement, fraud, dishonesty,
breach of fiduciary duty to Chartwell or a subsidiary;
(b) deliberately disregarded the rules of Chartwell or a
subsidiary which resulted in loss, damage or injury to Chartwell or a
subsidiary;
(c) made any unauthorized disclosure of any trade secret or
confidential information of Chartwell or a subsidiary;
(d) induced any partner, collaborator, client or customer of
Chartwell or a subsidiary to break any contract with Chartwell or a subsidiary
or induced any principal for whom Chartwell or a subsidiary acts as agent to
terminate such agency relations;
(e) engaged in any substantial conduct which constitutes
unfair competition with Chartwell or a subsidiary; or
(f) violated any requirement of the federal Environmental
Protection Agency or any analogous state regulatory agency,
neither Director nor Director's estate shall be entitled to shares of the
Restricted Stock hereunder, whether vested or unvested. The determination of the
Board shall be final and conclusive. In making its determination, the Board
shall give the Director an opportunity to appear and be heard at a hearing
before the full Board and present evidence on Director's behalf.
5. Dissolution, Liquidation and Merger.
5.1 Chartwell Not The Survivor. In the event of a dissolution or
liquidation of the Company, a merger, consolidation, combination or
reorganization in which the Company is not the surviving corporation, or a sale
of all of the assets of the Company (an "Event"), the restrictions under any
Award, including vesting, shall be waived, and all awards shall become fully
vested on the day prior to the consummation of such an Event.
2
5.2 Chartwell is the Survivor. In the event of a merger, consolidation,
combination or reorganization in which Chartwell is the surviving corporation,
the Board of Directors shall determine the appropriate adjustment of the number
and kind of securities with respect to outstanding Restricted Stock Awards. The
Board of Directors shall determine, in its sole and absolute discretion, when
Chartwell shall be deemed to survive for these purposes.
6. Reservation of Shares. Chartwell agrees that prior to the issuance of the
Restricted Stock represented by this Restricted Stock Award, there shall be
reserved for issuance such number of Chartwell's authorized and unissued Shares
as shall be necessary to satisfy the terms and conditions of this Agreement.
7. Rights of Directors.
7.1. No Obligation To Employ. Nothing in this Restricted Stock Award
will confer or be deemed to confer on Director any right to continue in the
employ of, or to continue any other relationship with, Chartwell or a subsidiary
or to limit in any way the right of Chartwell or a subsidiary to terminate
Director's employment or other relationship at any time, with or without cause.
7.2 Compliance With Code Section 162(m). At all times when Chartwell
determines that compliance with Code Section 162(m) is required or desired, this
Restricted Stock Award if granted to a Named Executive Officer shall comply with
the requirements of Code Section 162(m). In addition, in the event that changes
are made to Code Section 162(m) to permit greater flexibility with respect to
this Restricted Stock Award Chartwell may, subject to this Section 7, make any
adjustments it deems appropriate.
8. Securities Law And Other Regulatory Compliance. Chartwell shall not be
obligated to issue any Restricted Stock with respect to this Restricted Stock
Award unless such shares are at that time effectively registered or exempt from
registration under the federal securities laws and the offer and sale of the
shares are otherwise in compliance with all applicable securities laws. Director
may be required to furnish representations or undertakings deemed appropriate by
Chartwell to enable the offer and sale of the shares or subsequent transfers of
any interest in such shares to comply with applicable securities laws. Evidences
of ownership of shares acquired with respect to this Restricted Stock Award
shall bear any legend required by, or useful for purposes of compliance with,
applicable securities laws or this Restricted Stock Award.
9. Restricted Securities. Director understands that the Restricted Stock are
characterized as "restricted securities" under the Securities Act inasmuch as
they are being acquired from Company in a transaction not involving a public
offering and that under the Securities Act and applicable regulations thereunder
such securities may be resold without registration under the Securities Act only
in certain limited circumstances. Accordingly, the Restricted Stock, absent an
effective registration statement, can only be sold pursuant to an exemption from
registration, such as Rule 701 or Rule 144 of the Securities Act. Director
understands that Company is under no obligation to register any of the
securities sold hereunder.
10. Restrictive Legends and Stop-Transfer Orders.
10.1 Legends. Director understands and agrees that the Company will
place the legends set forth below or similar legends on any stock certificate(s)
evidencing the Restricted Stock, together with any other legends that may be
required by state or federal securities laws, the Company's Articles of
Incorporation or Bylaws, any other agreement between Director and the Company or
any agreement between Director and any third party:
3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). THE SHARES
REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO
SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO VESTING AND
FORFEITURE RESTRICTIONS AS SET FORTH IN THE RESTRICTED STOCK AWARD
AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A
COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH
RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES.
10.2 Stop-Transfer Instructions. Director agrees that, to ensure
compliance with the restrictions imposed by this Agreement, Company may issue
appropriate "stop-transfer" instructions to its transfer agent, if any, and if
Company transfers its own securities, it may make appropriate notations to the
same effect in its own records.
10.3 Refusal to Transfer. The Company will not be required (i) to
transfer on its books any Restricted Stock that have been sold or otherwise
transferred in violation of any of the provisions of this Agreement, or (ii) to
treat as owner of such Restricted Stock, or to accord the right to vote or pay
dividends, to any purchaser or other transferee to whom such Restricted Stock
have been so transferred.
11. Section 83(b) Election; Tax Advice. Director should understand that Section
83 of the Internal Revenue Service Code of 1986, as amended (the "Code"), taxes
as ordinary income the difference between the amount paid for Restricted Stock
and the Fair Market Value of the Restricted Stock as of the date any
restrictions on the Restricted Stock lapse. Director understands that if such
provision is applicable to Director, Director may elect to be taxed at the time
the Restricted Stock are granted rather then when the vesting restriction
expires by filing an election under Section 83(b) of the Code with the Internal
Revenue Service within thirty (30) days from the date of grant of this
Restricted Stock Award. The form for making this election may be provided by
Director's tax advisor. Director understands that failure to make this filing
timely will result in the recognition of ordinary income by Director, as the
Restricted Stock vests at the Fair Market Value at the time of vesting as
opposed to the Fair Market Value at the time of grant of this Restricted Stock
Award. Director further understands that the income tax laws of the State of
California or other states may contain similar provisions to Section 83 of the
Code. IT IS DIRECTOR'S SOLE RESPONSIBILITY AND NOT CHARTWELL'S TO FILE TIMELY
ANY ELECTION UNDER SECTION 83(b) OF THE CODE AND UNDER ANY CORRESPONDING
PROVISIONS OF STATE TAX LAW, EVEN IF DIRECTOR REQUESTS CHARTWELL OR ITS
REPRESENTATIVES TO MAKE THIS ELECTION ON DIRECTOR'S BEHALF.
DIRECTOR UNDERSTANDS THAT NEITHER THE COMPANY NOR ITS REPRESENTATIVES CAN
PROVIDE TAX ADVICE. DIRECTOR REPRESENTS (A) THAT DIRECTOR HAS HAD THE
OPPORTUNITY TO CONSULT WITH A TAX ADVISER IN CONNECTION WITH THE RESTRICTED
STOCK AWARD, AND (B) THAT DIRECTOR IS NOT RELYING ON COMPANY FOR ANY TAX ADVICE.
DIRECTOR HEREBY ASSUMES ALL RESPONSIBILITY FOR INVESTIGATING THE TAX
CONSEQUENCES OF DIRECTOR'S INDIVIDUAL SITUATION, INCLUDING ANY CHANGES IN THE
LAW, AND FOR ANY TAXES RESULTING FROM AN ELECTION UNDER SECTION 83 OR FROM
FAILURE TO FILE THE ELECTION AND FOR TAXES RESULTING FROM THE LAPSE OF THE
FORFEITURE RESTRICTIONS ON THE UNVESTED SHARES.
4
12. Attorneys' Fees. In the event of any litigation, arbitration, or other
proceeding arising out of this Restricted Stock Award, the prevailing party
shall be entitled to an award of costs, including an award of reasonable
attorneys' fees. Any judgment, order, or award entered in any such proceeding
shall designate a specific sum as an award of attorneys' fees and costs
incurred. This attorneys' fee provision is intended to be severable from the
other provisions of this Agreement, shall survive any judgment or order entered
in any proceeding, and shall not be deemed merged into any such judgment or
order, so that such further fees and costs as may be incurred in the enforcement
of an award or judgment or in defending it on appeal shall likewise be
recoverable by further order of a court or panel or in a separate action as may
be appropriate.
13. Consent of Spouse. If the Director is married on the date of this Agreement,
Director's spouse must execute a Consent of Spouse in the form of Exhibit A
attached. The consent does not confer or convey to Director's spouse any rights
in the Restricted Stock that do not otherwise exist by operation of law by the
agreement of the parties. If Director marries or remarries subsequent to the
date of this Agreement, Director's new spouse must acknowledge and consent to
the existence and binding effect of all restrictions contained in this Agreement
by executing a Consent of Spouse within thirty (30) days of the marriage.
14. Miscellaneous Provisions.
14.1 Notice. All notices to be given by either party to the other shall
be in writing and may be transmitted by personal delivery, facsimile
transmission, overnight courier or mail, registered or certified, postage
prepaid with return receipt requested; provided, however, that notices of change
of address or telex or facsimile number shall be effective only upon actual
receipt by the other party. Notices shall be delivered at the following
addresses, unless changed as provided for herein.
To the Director: Xxxxx Xxxxx
0000 Xxxxxx Xxx., Xxxxx 000
Xxxxxxxxxx, XX 00000
To Chartwell: Chartwell International, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Chairman
14.2 Entire Agreement. This Agreement constitutes the entire contract
between the parties hereto with regard to the subject matter hereof. They
supersede any other agreements, representations or understandings (whether oral
or written and whether express or implied) that relate to the subject matter
hereof.
14.3 Severability; Conflicts. Should any provision of this Agreement be
held to be invalid or illegal, such illegality shall not invalidate the whole of
the Agreement, but, rather, the Agreement shall be construed as if it did not
contain the illegal part or narrowed to permit its enforcement, and the rights
and obligations of the parties shall be construed and enforced accordingly.
14.4 Choice of Law; Venue. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Nevada, as such laws are
applied to contracts entered into and performed in such state. Any action
brought in connection with this Agreement shall be subject the exclusive
jurisdiction of the state and federal courts sitting in West Virginia in the
5
venue of Kanawha County in any action on a claim arising out of, under or in
connection with this Agreement or the transactions contemplated by this
Agreement.
14.5 Binding Effect. This Agreement shall inure to the benefit of, and
be binding upon, the parties hereto and their respective heirs, executors, and
successors.
14.6 Counterparts. This Restricted Stock Award Agreement may be
executed in one or more counterparts, each of which when taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, this Restricted Stock Award Agreement has been
executed as of the ____ day of ________, 2005.
CHARTWELL: Chartwell International, Inc.
By:--------------------------
DIRECTOR: -----------------------------
Name (Please Print)
Exhibit A
CONSENT OF SPOUSE
I, ---------------, spouse of -------------, have read and approve the
foregoing Restricted Stock Award Agreement (the "Agreement"). In consideration
of granting the right to my spouse Restricted Stock of Chartwell Group, Inc. as
set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact in
respect of the exercise of any rights under the Agreement and agree to be bound
by the provisions of the Agreement insofar as I may have any rights in said
Agreement or in any Restricted Stock issued pursuant thereto under the laws
relating to marital property in effect in the state of our residence as of the
date of the signing of the foregoing Agreement.
I understand that I may benefit from independent legal counsel
regarding the Agreement and this Consent of Spouse and related matters,
including specific tax, legal and financial consequences of the Agreement. I
acknowledge that I have the right to and have had the opportunity to consult
with independent legal counsel regarding these matters.
Executed in --------------, ----------------.
Dated: -----------, 2005 ---------------------------
[Name of Spouse]
