IRVINE SENSORS CORPORATION FORM OF RESTRICTED STOCK AWARD AGREEMENT
Exhibit 10.4
IRVINE SENSORS CORPORATION
FORM OF RESTRICTED STOCK AWARD AGREEMENT
FORM OF RESTRICTED STOCK AWARD AGREEMENT
This RESTRICTED STOCK AWARD AGREEMENT (the “Agreement”) is made this _____ day of _____,
_____, by and between Irvine Sensors Corporation, a Delaware corporation (the “Company”) and _____,
an individual resident of _____, _____(“Participant”).
1. Award. The Company hereby grants to Participant a restricted stock award of _____
shares (the “Shares”) of common stock, par value $0.01 (“Common Stock”), of the Company according
to the terms and conditions set forth herein and in the Irvine Sensors Corporation 2011 Omnibus
Incentive Plan (the “Plan”). The Shares are Restricted Stock granted under Section 6(c) of the
Plan. A copy of the Plan will be furnished upon request of Participant. With respect to the
Shares, Participant shall be entitled at all times on and after the date of issuance of the Shares
to exercise the rights of a stockholder of Common Stock of the Company, including the right to vote
the Shares and the right to receive dividends, if any, declared on the Shares.
2. Vesting. Except as otherwise provided in this Agreement, the Shares shall vest in
accordance with the following schedule:
On each of
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Number of Shares | |
the following dates
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Vested | |
3. Restrictions on Transfer. Until the Shares vest pursuant to Sections 2, 4 or 6
hereof, none of the Shares may be pledged, alienated, attached or otherwise encumbered, and any
purported pledge, alienation, attachment or encumbrance shall be void and unenforceable against the
Company, and no attempt to transfer the Shares, whether voluntary or involuntary, by operation of
law or otherwise, shall vest the purported transferee with any interest or right in or with respect
to the Shares.
4. Forfeiture; Early Vesting. If Participant ceases to be an employee of or provide
Service to the Company or any Affiliate prior to vesting of the Shares pursuant to Sections 2, 4 or
6 hereof, all of Participant’s
rights to all of the unvested Shares shall be immediately and irrevocably forfeited, except
that: (i) if Participant ceases to be an employee or provide Service by reason of death or
Permanent Disability prior to the vesting of Shares under Sections 2, 4 or 6 hereof, the next
vesting date for the Shares, as set out in Section 2 above, shall accelerate by twelve (12) months
as of such date of termination; and (ii) if, after the initial vesting date set forth in Section 2
above, Participant ceases to be an employee or provide Service by reason of
Form Restricted Stock Award Agreement (2011)
Ordinary Retirement
prior to the vesting of Shares under Sections 2, 4 or 6 hereof, then the vesting of the Shares, as
set out in Section 2 above, shall accelerate in full as of such date of Ordinary Retirement. For
purposes of this Agreement, “Ordinary Retirement” shall mean the retirement of the Participant on a
date upon which, if the Participant is an employee, the sum of the Participant’s age and number of
years of employment with the Company equals or exceeds eighty-five (85) years or, if the
Participant is a non-employee director, the number of years of Service to the Company exceeds five
(5) years. Upon forfeiture, Participant will no longer have any rights relating to the unvested
Shares, including the right to vote the Shares and the right to receive dividends, if any, declared
on the Shares.
5. Distributions and Adjustments.
(a) If any Shares vest subsequent to any change in the number of character of the Common Stock
of the Company (through any stock dividend or other distribution, recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of shares, or otherwise), Participant shall receive upon such vesting the
number and type of securities or other consideration which Participant would have received if such
Shares had vested prior to the event changing the number or character of the outstanding Common
Stock.
(b) Any additional shares of Common Stock of the Company, any other securities of the Company
and any other property (except for regular cash dividends or other cash distributions) distributed
with respect to the Shares prior to the date or dates the Shares vest shall be subject to the same
restrictions, terms and conditions as the Shares to which they relate and shall be promptly
deposited with the Secretary of the Company or a custodian designated by the Secretary.
6. Change in Control.
(a) Immediately prior to the effective date of a “Change in Control” (as defined in Section
6(e)), all of the Shares shall vest. However, the Shares shall not vest on an accelerated basis if
and to the extent: (i) this Agreement is to be assumed by the successor corporation (or parent
thereof) or is otherwise to be continued in full force and effect pursuant to the terms of the
Change in Control transaction or (ii) this Agreement is to be replaced with a cash incentive
program of the successor corporation which preserves the economic value existing at the time of the
Change in Control of the Shares that are not otherwise at that time vested and provides for
subsequent payout of that economic value no later than the time those Shares would have vested.
(b) Immediately following the consummation of the Change in Control, this Agreement shall
terminate, except to the extent assumed by the successor corporation (or parent thereof) or
otherwise continued in effect pursuant to the terms of the Change in Control transaction.
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(c) If this Agreement is assumed or otherwise continued in effect in connection with a Change
in Control, then this Agreement shall be appropriately adjusted, upon such Change in Control, to
apply to the number and class of securities which would have been issuable to Participant in
consummation of such Change in Control had the Shares been vested immediately prior to such Change
in Control. To the extent that the holders of Common Stock receive cash consideration for their
Common Stock in consummation of the Change in Control, the successor corporation (or its parent)
may, in connection with the assumption of this Agreement, substitute one or more shares of its own
common stock with a fair market value equivalent to the cash consideration paid per share of Common
Stock in such Change in Control.
(d) This Agreement shall not in any way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or assets.
(e) For purposes of this Agreement, “Change in Control” shall mean a change in ownership or
control of the Company effected through any of the following transactions: (i) a merger,
consolidation or other reorganization unless securities representing more than 50% of the total
combined voting power of the voting securities of the successor corporation are immediately
thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by
the persons who beneficially owned the Company’s outstanding voting securities immediately prior to
such transaction; (ii) the sale, transfer or other disposition of all or substantially all of the
Company’s assets; or (iii) the acquisition, directly or indirectly by any person or related group
of persons (other than the Company or a person that directly or indirectly controls, is controlled
by, or is under common control with, the Company), of beneficial ownership (within the meaning of
Rule 13d-3 of the Exchange Act) of securities possessing more than 50% of the total combined voting
power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly
to the Company’s stockholders.
7. Miscellaneous.
(a) Issuance of Shares. The Company shall cause the Shares to be issued in the name
of Participant, either by book-entry registration or issuance of a stock certificate or
certificates evidencing the Shares, which certificate or certificates shall be held by the
Secretary of the Company or the stock transfer agent or brokerage service selected by the Secretary
of the Company to provide such services for the Plan. The Shares shall be restricted from transfer
and shall be subject to an appropriate stop-transfer order. If any certificate is used, the
certificate shall bear an appropriate legend referring to the restrictions applicable to the
Shares. Participant hereby agrees to the retention by the Company of the Shares and, if a stock
certificate is used, agrees to execute and deliver to the Company a blank stock power with respect
to the Shares as a condition to the receipt of this award of Shares. After any Shares vest
pursuant to Sections 2, 4
or 6 hereof, and following payment of the applicable withholding taxes pursuant to Section
7(b) of this Agreement, the Company shall promptly cause to be issued a certificate or
certificates, registered in the name of Participant or in the name of Participant’s legal
representatives, beneficiaries or heirs, as the case may be, evidencing such vested whole Shares
(less any shares withheld to pay withholding taxes) and shall cause such certificate or
certificates to be delivered to Participant or Participant’s legal representatives, beneficiaries
or heirs, as the case may be, free of the legend or the stop-transfer order referenced above. No
fractional share of stock shall be issued.
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(b) Income Tax Matters.
(i) In order to comply with all applicable federal or state income tax laws or
regulations, the Company may take such action as it deems appropriate to ensure that all
applicable federal or state payroll, withholding, income or other taxes, which are the sole
and absolute responsibility of Participant, are withheld or collected from Participant.
(ii) In accordance with the terms of the Plan, and such rules as may be adopted by the
Committee under the Plan, Participant may elect to satisfy Participant’s federal and state
income tax withholding obligations arising from the receipt of, or the lapse of restrictions
relating to, the Shares, by (i) delivering cash, check (bank check, certified check or
personal check) or money order payable to the Company, (ii) having the Company withhold a
portion of the Shares otherwise to be delivered having a Fair Market Value equal to the
amount of such taxes, or (iii) delivering to the Company shares of Common Stock already
owned by Participant having a Fair Market Value equal to the amount of such taxes. Any
shares already owned by Participant for no less than six months prior to the date delivered
to the Company if such shares were acquired upon the exercise of an option or upon the
vesting of restricted stock units or other restricted stock. The Company will not deliver
any fractional Shares but will pay, in lieu thereof, the Fair Market Value of such
fractional Shares. Participant’s election must be made on or before the date that the
amount of tax to be withheld is determined.
(c) Entire Agreement; Plan Provisions Control. This Agreement (and any addendum
hereto) and the Plan constitute the entire agreement between the parties hereto with regard to the
subject matter hereof. In the event that any provision of the Agreement conflicts with or is
inconsistent in any respect with the terms of the Plan, the terms of the Plan shall control. All
decisions of the Committee with respect to any question or issue arising under the Plan or this
Agreement shall be and binding on all persons having an interest in the Shares. All capitalized
terms used in this Agreement and not otherwise defined in this Agreement shall have the meaning
assigned to them in the Plan.
(d) No Right to Employment. The issuance of the Shares shall not be construed as
giving Participant the right to be retained in the employ of, or if Participant is a director of
the Company or an Affiliate as giving the Participant the right to continue as a director of, the
Company or an Affiliate, nor will it affect in any way the right of the Company or an Affiliate to
terminate such employment or position at any time, with or without cause. In addition, the Company
or an Affiliate may at any time dismiss Participant from employment, or terminate the term of a
director of the Company or an Affiliate, free from any liability or any claim under the
Plan or the Agreement. Nothing in the Agreement shall confer on any person any legal or
equitable right against the Company or any Affiliate, directly or indirectly, or give rise to any
cause of action at law or in equity against the Company or an Affiliate. The Shares shall not form
any part of the wages or salary of Participant for purposes of severance pay or termination
indemnities, irrespective of the reason for termination of employment. Under no circumstances
shall any person ceasing to be an employee of the Company or any Affiliate be entitled to any
compensation for any loss of any right or benefit under the Agreement or Plan which such employee
might otherwise have enjoyed but for termination of employment, whether such compensation is
claimed by way of damages for wrongful or unfair dismissal, breach of contract or otherwise. By
participating in the Plan, Participant shall be deemed to have accepted all the
conditions of the
Plan and the Agreement and the terms and conditions of any rules and regulations adopted by the
Committee and shall be fully bound thereby.
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(e) Governing Law. The validity, construction and effect of the Plan and the
Agreement, and any rules and regulations relating to the Plan and the Agreement, shall be
determined in accordance with the internal laws, and not the law of conflicts, of the State of
Delaware.
(f) Severability. If any provision of the Agreement is or becomes or is deemed to be
invalid, illegal or unenforceable in any jurisdiction or would disqualify the Agreement under any
law deemed applicable by the Committee, such provision shall be construed or deemed amended to
conform to applicable laws, or if it cannot be so construed or deemed amended without, in the
determination of the Committee, materially altering the purpose or intent of the Plan or the
Agreement, such provision shall be stricken as to such jurisdiction or the Agreement, and the
remainder of the Agreement shall remain in full force and effect.
(g) No Trust or Fund Created. Neither the Plan nor the Agreement shall create or be
construed to create a trust or separate fund of any kind or a fiduciary relationship between the
Company or any Affiliate and Participant or any other person.
(h) Headings. Headings are given to the Sections and subsections of the Agreement
solely as a convenience to facilitate reference. Such headings shall not be deemed in any way
material or relevant to the construction or interpretation of the Agreement or any provision
thereof.
(i) Notices. Any notice required to be given or delivered to the Company under the
terms of this Agreement shall be addressed to the Company at its principal corporate offices. Any
notice required to be given or delivered to Participant shall be addressed to Participant at the
address indicated below Participant’s signature line at the end of this Agreement or at such other
address as Participant may designate by ten (10) days’ advance written notice to the Company. Any
notice required to be given under this Agreement shall be in writing and shall be deemed effective
upon personal delivery or upon the third (3rd) day following deposit in the U.S. mail, registered
or certified, postage prepaid and properly addressed to the party entitled to such notice.
(j) Conditions Precedent to Issuance of Shares. Shares shall not be issued pursuant
to this Agreement unless such issuance and delivery of the Shares pursuant hereto shall comply
with all relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act of 1934, as amended, the rules and regulations promulgated
thereunder, state blue sky laws, the requirements of any applicable stock exchange and the Delaware
General Corporation Law. As a condition to the issuance of the Shares, the Company may require
that the person receiving such Shares represent and warrant that the Shares are being acquired only
for investment and without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation and warranty is required by law.
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(k) Consultation With Professional Tax and Investment Advisors. Participant
acknowledges that the grant and vesting with respect to the Shares, and the sale or other taxable
disposition of the vested Shares, may have tax consequences pursuant to the Internal Revenue Code
of 1986, as amended, or under local, state or international tax laws. Participant further
acknowledges that Participant is relying solely and exclusively on Participant’s own professional
tax and investment advisors with respect to any and all such matters (and is not relying, in any
manner, on the Company or any of its employees or representatives). Participant understands and
agrees that any and all tax consequences resulting from the grant and vesting of the Shares, and
the sale or other taxable disposition of the vested Shares, is solely and exclusively the
responsibility of Participant without any expectation or understanding that the Company or any of
its employees or representatives will pay or reimburse Participant for such taxes or other items.
IN WITNESS WHEREOF, the Company and Participant have executed this Restricted Stock Award
Agreement on the date set forth in the first paragraph.
| IRVINE SENSORS CORPORATION |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| PARTICIPANT: |
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| Name: | ||||
| Address: | ||||
| Facsimile: | ||||
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Spousal Acknowledgment
The undersigned spouse of Participant has read and hereby approves the foregoing Restricted
Stock Award Agreement. In consideration of the Company’s granting Participant the Shares in
accordance with the terms of such Agreement, the undersigned hereby agrees to be irrevocably bound
by all the terms of such Agreement, including (without limitation) the forfeiture provisions with
respect to the Shares in which Participant is not vested at the time his or her employment or
Service ceases.
| Signature |
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| Address: | ||||
Assignment Separate from Certificate
For Value Received __________ hereby sell(s), assign(s) and transfer(s)
unto Irvine Sensors Corporation or its successors or assigns (the “Company”) _______________ shares of the Common Stock of the Company standing in his or her name on
the books of the Company represented by Certificate No. herewith and
do(es) hereby irrevocably constitute and appoint _________________________ as Attorney to transfer the
said stock on the books of the Company with full power of substitution in the premises.
Dated: ____________________
Signature
Instruction: Please do not fill in any blanks other than the signature line. Please sign
exactly as you would like your name to appear on the issued stock certificate. The purpose of this
assignment is to enable the Company to exercise the forfeiture provisions without requiring
additional signatures on the part of Participant.
