Employment Agreement
Employment
Agreement,
dated
as of September 22, 2006, by and between Iconix Brand Group, Inc., a
Delaware
corporation (the “Company”), and Xxxxxx Xxxxxxx (the “Executive”).
W
I T N E S S E T H
WHEREAS,
the Executive is currently Senior Vice President, Business Affairs and Associate
Counsel of the Company and Senior Vice President, Business Affairs and General
Counsel of the Company’s Xxx Xxxxx division (the “Division”); and
WHEREAS,
the Company and Executive entered into a two-year Employment Agreement dated
as
of July 22, 2005 (the “Original Agreement”); and
WHEREAS,
the Company wishes, among other things, to continue the Executive’s employment
with the Company beyond the term currently provided by the Original Agreement
pursuant to the terms as provided herein;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and Executive hereby
agree as follows:
1. Engagement
of Executive; Duties. During
the Term (as hereinafter defined), the Executive shall have the titles of Senior
Vice President and General Counsel of the Company, which shall be the most
senior legal position of the Company, and shall have such duties as may be
from
time to time delegated to him by the Chief Executive Officer. The Executive
shall faithfully and diligently discharge his duties hereunder and use his
best
efforts to implement the policies established by the Company.
2. Time.
The
Executive shall devote substantially all of his professional time to the
business affairs of the Division and the Company.
3. Term.
The
Executive’s engagement shall commence effective the date hereof and shall
continue for three (3) years (the “Term”) unless otherwise terminated as
provided herein. The Company may terminate the Agreement for cause (“Cause”) in
the event that Executive is convicted of a crime of moral turpitude or
dishonesty which conviction may reasonably be expected to have an adverse impact
on the Company, or for the willful and continued refusal of Executive to follow
the directives of the Chief Executive Officer of the Company (provided that
the
Company shall have provided Executive with written notice of such willful and
continued refusal and Executive has been afforded a reasonable opportunity
of at
least thirty days to cure the same), or the breach or threatened breach by
the
Executive of the provisions of Section 6 of this Agreement. Executive may
terminate this Agreement in the event (“Good Reason”) his title, reporting
relationship or job responsibilities are materially or adversely affected or
in
the event that Executive is re-located to an office outside the greater New
York
metropolitan area (which metropolitan area shall not be deemed to include New
Jersey). In the event the Company elects to terminate this Agreement for any
reason other than for Cause as specified herein or Executive terminates for
Good
Reason, Executive shall be entitled to receive the greater of (i) his current
salary through the remainder of the Term, or (ii) one (1) year of his then
base
salary.
4. Compensation.
| (a) |
Base
Salary.
Executive's base salary for the first year of the Term will be at
a rate
of not less than $275,000 per annum and Executive’s base salary for the
second and third year(s) of the Term will be at a rate of not less
than
$300,000 per annum, in each case, paid in accordance with the Company's
payroll practices and policies then in
effect.
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| (b) |
Bonus.
Executive shall be entitled to participate in the Company’s executive
bonus program then in effect. Executive shall be eligible for an
annual
bonus of up to 100% of Executive’s salary, to be superceded by the maximum
amount available under the Company’s executive bonus program and any other
bonus program generally applicable to senior executives of the
Company.
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| (c) |
Restricted
Stock.
The Company shall issue to the Executive 18,461 shares of Restricted
Stock
under the Company’s 2006 Equity Incentive Plan (the ”Plan”), subject to
restrictions on the full enjoyment of such shares set forth in the
Restricted Stock Agreement in the form attached hereto as Exhibit
A (the
“Restricted Stock Agreement), such restrictions to lapse with respect
to
one-third of such shares on each of the first three anniversaries
of the
date hereof, in accordance with the terms and conditions of the Restricted
Stock Agreement.
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| (d) |
Fringe
Benefits.
Executive shall receive the fringe benefits given to other executive
officers of the Company including, but not limited to, major medical,
dental, life insurance, pension including any 401 (K) or other profit
sharing plan. Executive shall also be added as an insured under the
Company's officers and directors insurance and all other polices
which
pertain to officers of the Company. The Company shall pay Executive
a car
allowance of $1,500 per month during the Term of this
Agreement.
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| (e) |
Reimbursement
of Expenses.
The Company shall pay to Executive the reasonable expenses incurred
by him
in the performance of his duties hereunder, including, without limitation,
expenses related to cell phones, blackberrys and laptop computers
and such
other expenses incurred in connection with business related travel
or
entertainment in accordance with the Company’s policy, or, if such
expenses are paid directly by the Executive, the Company shall promptly
reimburse the Executive for such payments, provided that the Executive
(i) properly accounts for such expenses in accordance with the
Company’s policy and (ii) has received prior approval by the Chief
Executive Officer of the Company for major
expenses.
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| (f) |
Vacation.
Executive shall be entitled to four weeks of paid vacation per year.
The
Executive shall use his vacation in the calendar year in which it
is
accrued.
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2
5. Confidentiality.
Executive
shall not divulge to anyone, either during or at any time after the Term, any
information constituting a trade secret or other confidential information
acquired by him concerning the Company, any subsidiary or other affiliate of
the
Company, except in the performance of his duties hereunder, including but not
limited to its licensees, revenues, business systems and processes
(“Confidential Information”). Executive acknowledges that any Confidential
Information is of great value to the Company, and upon the termination of his
engagement Executive shall redeliver to the Company all Confidential Information
and other related data in his possession.
6. Noncompetition;
Nonsolicitation
6.1 The
Executive hereby agrees that during the Term and, unless the Company does not
offer to extend the Term on comparable terms and conditions after the expiration
thereof, for a period of one year following the expiration of the Term (the
“Non-Compete Term”), he shall not, directly or indirectly, engage, have an
interest in or render any services to any business (whether as owner, manager,
operator, licensor, licensee, lender, partner, stockholder, joint venturer,
employee, consultant or otherwise) to Xxxxxxx Xxxxxxxx or Xxxxxx X’Xxxxx or any
entity with which either such person is affiliated or associated.
6.2 The
Executive shall not, during the Non-Compete Term, directly or indirectly, take
any action which constitutes an interference with or a disruption of any of
the
Company’s business activities including, without limitation, the solicitations
of the Company’s customers, or persons listed on the personnel lists of the
Company.
6.3 For
purposes of clarification, but not of limitation, the Executive hereby
acknowledges and agrees that the provisions of Sections 6.1 and 6.2 above shall
serve as a prohibition against him from, during the period referred to therein,
directly or indirectly, hiring, offering to hire, enticing, soliciting or in
any
other manner persuading or attempting to persuade any officer, employee, agent,
lessor, lessee, licensor, licensee or customer of the Company (but only those
suppliers existing during the time of the Executive’s employment by the Company,
or at the termination of his employment), to discontinue or alter his, her
or
its relationship with the Company.
6.4 Without
intending to limit the remedies available to the Company, the Executive
acknowledges that a breach of any of the covenants contained in this Section
6
may result in material and irreparable injury to the Company, or its affiliates
or subsidiaries, for which there is no adequate remedy at law, that it will
not
be possible to measure damages for such injuries precisely and that, in the
event of such a breach or threat the Company shall be entitled to seek a
temporary restraining order and/or a preliminary or permanent injunction
restraining the Executive from engaging in activities prohibited by this Section
6 or such other relief as may be required specifically to enforce any of the
covenants in this Section 6. If for any reason it is held that the restrictions
under this Section 6 are not reasonable or that consideration therefor is
inadequate, such restrictions shall be interpreted or modified to include as
much of the duration and scope identified in this Section 6 as will render
such
restrictions valid and enforceable.
3
7. Change
in Control.
| (a) |
If
the Company terminates Executive’s employment without Cause or Executive
terminates Executive’s employment for Good Reason within 12 months after a
Change in Control (as defined in Subsection 7(b)), then the Company
shall
pay to Executive in complete satisfaction of its obligations under
this
Agreement, as severance pay and as liquidated damages (because actual
damages are difficult to ascertain), in a lump sum, in cash, within
15
days after the date of Executive’s termination, an amount equal to $100
less than three times Executive’s “annualized includable compensation for
the base period” (as defined in Section 280G of the Internal Revenue Code
of 1986); provided,
however,
that if such lump sum severance payment, either alone or together
with
other payments or benefits, either cash or non-cash, that Executive
has
the right to receive from the Company, including, but not limited
to,
accelerated vesting or payment of any deferred compensation, options,
stock appreciation rights or any benefits payable to Executive under
any
plan for the benefit of employees, which would constitute an “excess
parachute payment” (as defined in Section 280G of the Internal Revenue
Code of 1986), then such lump sum severance payment or other benefit
shall
be reduced to the largest amount that will not result in receipt
by
Executive of a parachute payment. The determination of the amount
of the
payment described in this subsection shall be made by the Company’s
independent auditors at the sole expense of the Company. For purposes
of
clarification the value of any options described above will be determined
by the Company’s independent auditors using a Black-Scholes valuation
methodology.
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| (b) |
For
purposes of Subsection 7(a), a “Change in Control” shall mean any of the
following:
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(1) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company’s
common stock would be converted into cash, securities or other property, other
than a merger of the Company in which the holders of the Company common stock
immediately prior to the merger have the same proportionate ownership of common
stock of the surviving corporation immediately after the merger;
(2) any
sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the
Company;
(3) any
approval by the stockholders of the Company of any plan or proposal for the
liquidation or dissolution of the Company;
(4) the
cessation of control (by virtue of their not constituting a majority of
directors) of the Company’s Board of Directors by the individuals (the
“Continuing Directors”) who (x) at the date of this Agreement were directors or
(y) become directors after the date of this Agreement and whose election or
nomination for election by the Company’s stockholders, was approved by a vote of
at least two-thirds of the directors then in office who were directors at the
date of this Agreement or whose election or nomination for election was
previously so approved); or
4
(5) (A)
the
acquisition of beneficial ownership (“Beneficial Ownership”), within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), of an aggregate of 25% or more of the voting power of the
Company’s outstanding voting securities by any person or group (as such term is
used in Rule 13d-5 under the Exchange Act) who beneficially owned less than
10%
of the voting power of the Company’s outstanding voting securities on the
effective date of this Agreement, (B) the acquisition of Beneficial Ownership
of
an additional 15% of the voting power of the Company’s outstanding voting
securities by any person or group who beneficially owned at least 10% of the
voting power of the Company’s outstanding voting securities on the effective
date of this Agreement, or (C) the execution by the Company and a stockholder
of
a contract that by its terms grants such stockholder (in its, hers or his
capacity as a stockholder) or such stockholder’s Affiliate (as defined in Rule
405 promulgated under the Securities Act of 1933 (an “Affiliate”)) including,
without limitation, such stockholder’s nominee to the Company’s Board of
Directors (in its, hers or his capacity as an Affiliate of such stockholders),
the right to veto or block decisions or actions of the Company’s Board of
Directors’ provided however,
that
notwithstanding the foregoing, the events described in items (A), (B) or (C)
above shall not constitute a Change in Control hereunder if the acquiror is
(aa)
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or one of its affiliated entities and acting in such capacity,
(bb) a corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of voting
securities of the Company or (cc) a person or group meeting the requirements
of
clauses (i) and (ii) of Rule 13d-1(b)(1) under the Exchange Act;
(6) subject
to applicable law, in a Chapter 11 bankruptcy proceeding, the appointment of
a
trustee or the conversion of a case involving the Company to a case under
Chapter 7.
| (c) |
Executive
shall not be required to mitigate the amount of any payment provided
for
in this Section 7 by seeking other employment or otherwise, nor shall
the
amount of any payment provided for in this Section 7 be reduced by
any
compensation earned by Executive as the result of Executive’s employment
by another employer or business or by profits earned by Executive
from any
other source at any time before and after Executive date of
termination.
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| (d) |
If
within 12 months after the occurrence of a Change of Control, as
defined
in the Plan, the Company shall terminate Executive’s employment without
Cause, as defined herein, or Executive terminates Executive’s employment
for Good Reason, as defined herein, then notwithstanding the vesting
schedule contained in the Restricted Stock Agreement, all restrictions
set
forth in the Restricted Stock Agreement shall immediately
lapse.
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8. Indemnification.
The
Company shall indemnify and hold harmless the Executive against any and all
expenses reasonably incurred by him in connection with or arising out of (a)
the
defense of any action, suit or proceeding in which he is a party, or (b) any
claim asserted or threatened against him, in either case by reason of or
relating to his being or having been an employee, officer or director of the
Company, whether or not he continues to be such an employee, officer or director
at the time of incurring such expenses, except insofar as such indemnification
is prohibited by law. Such expenses shall include, without limitation, the
fees
and disbursements of attorneys, amounts of judgments and amounts of any
settlements, provided that such expenses are agreed to in advance by the
Company. The foregoing indemnification obligation is independent of any similar
obligation provided in the Company’s Certificate of Incorporation or Bylaws, and
shall apply with respect to any matters attributable to periods prior to the
date of this Agreement, and to matters attributable to Executive's employment
hereunder, without regard to when asserted.
5
9. Miscellaneous.
| (a) |
This
Agreement shall be deemed to be a contract made under the laws of
the
State of New York and for all purposes shall be construed in accordance
with those laws. The Company and Executive unconditionally consent
to
submit to the exclusive jurisdiction of the New York State Supreme
Court,
County of New York or the United States District Court for the Southern
District of New York for any actions, suits or proceedings arising
out of
or relating to this Agreement and the transactions contemplated hereby
(and agree not to commence any action, suit or proceeding relating
thereto
except in such courts), and further agree that service of any process,
summons, notice or document by registered mail to the address set
forth
below shall be effective service of process for any action, suit
or
proceeding brought against the Company or the Executive, as the case
may
be, in any such court.
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| (b) |
If
not terminated in accordance with its terms, this Agreement shall
be
binding upon, and inure to the benefit of, the Parties, their heirs,
legal
representatives, successors and permitted
assigns.
|
| (c) |
The
invalidity or unenforceability of any provision hereof shall not
in any
way affect the validity or enforceability of any other provision.
This
Agreement reflects the entire understanding between the
Parties.
|
| (d) |
This
Agreement supersedes any and all other agreements, either oral or
in
writing, between the parties hereto with respect to the employment
of the
Executive by the Company and contains all of the covenants and agreements
between the parties with respect to such employment in any manner
whatsoever. Any modification or termination of this Agreement will
be
effective only if it is in writing signed by the party to be
charged.
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| (e) |
This
Agreement may be executed by the parties in one or more counterparts,
each
of which shall be deemed to be an original but all of which taken
together
shall constitute one and the same agreement, and shall become effective
when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties
hereto.
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10. Notices.
All
notices relating to this Agreement shall be in writing and shall be either
personally delivered, sent by telecopy (receipt confirmed) or mailed by
certified mail, return receipt requested, to be delivered at such address as
is
indicated below, or at such other address or to the attention of such other
person as the recipient has specified by prior written notice to the sending
party. Notice shall be effective when so personally delivered, one business
day
after being sent by telecopy or five days after being mailed.
6
To
the
Company:
0000
Xxxxxxxx, 0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxx Xxxx, Chief Executive Officer
With
a
copy in the same manner to:
Blank
Rome LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx X. Xxxxxxx, Esq.
To
the
Executive:
Xxxxxx
Xxxxxxx
000
Xxxxxxxx Xxxx
Xxxxxxxx,
Xxxxxxxxxxx 00000
-SIGNATURE
PAGE
FOLLOWS
7
IN
WITNESS WHEREOF, the parties hereto have executed this agreement as of the
22nd
day of September, 2006.
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By:
/s/
Xxxx
Xxxx
Xxxx
Xxxx
Chief
Executive Officer
|
Executive
/s/
Xxxxxx X.
Xxxxxxx
Xxxxxx
Xxxxxxx
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8
Exhibit
A
RESTRICTED
STOCK AGREEMENT
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To:
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Xxxxxx
Xxxxxxx
|
|
000
Xxxxxxxx Xxxx
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Xxxxxxxx,
Xxxxxxxxxxx 00000
Date
of Award: September 22, 2006
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You
are
hereby awarded, effective as of the date hereof, 18,461 shares (the “Shares”) of
common stock, $.001 par value (“Common Stock”), of Iconix Brand Group, Inc., a
Delaware corporation (the “Company”), pursuant to the Company’s 2006 Equity
Incentive Plan (the “Plan”), subject to certain restrictions specified below in
Restrictions and
Forfeiture. (While
subject to the Restrictions, this Agreement refers to the Shares as “Restricted
Shares”.)
During
the period commencing on the Award Date and terminating on the third anniversary
of the date hereof (the “Restricted Period”), except as otherwise provided
herein, the Shares may not be sold, assigned, transferred, pledged, or otherwise
encumbered and are subject to forfeiture (the “Restrictions”).
Except
as
set forth below, the Restricted Period with respect to the Shares will lapse
in
accordance with the vesting schedule set forth below (the “Vesting Schedule”).
Subject to the restrictions set forth in the Plan, the Administrator (as
defined
in the Plan) shall have the authority, in its discretion, to accelerate the
time
at which any or all of the Restrictions shall lapse with respect to any Shares
subject thereto, or to remove any or all of such Restrictions, whenever the
Administrator may determine that such action is appropriate by reason of
changes
in applicable tax or other laws, or other changes in circumstances occurring
after the commencement of the Restricted Period.
In
addition to the terms, conditions, and restrictions set forth in the Plan,
the
following terms, conditions, and restrictions apply to the Restricted
Shares:
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Restrictions
and Forfeiture
|
You
may not sell, assign, pledge, encumber, or otherwise transfer any
interest
in the Restricted Shares until the dates set forth in the Vesting
Schedule, at which point the Restricted Shares will be referred
to as
“Vested.”
If
your employment is terminated by the Company for Cause or by you
without
Good Reason (as such terms are defined in your Employment Agreement
with
the Company (the “Employment Agreement”)), the Company will have the right
to reacquire your unvested Restricted Shares at the lower of (a)
your
original purchase price, if any, for such Shares, or (b) the fair
market
value of the Shares on your date of termination. If there was no
purchase
price, your unvested Restricted Shares will be forfeited.
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Page
1 of
10
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Vesting
Schedule
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Assuming
you provide
Continuous Service (as defined in the Plan) as an Employee (as
defined in
the Plan) of the Company or an Affiliate of the Company, all Restrictions
will lapse on the Restricted Shares on the Vesting date or Vesting
dates
set forth in the schedule below for the applicable grant of Restricted
Shares and they will become Vested.
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Vesting
Schedule
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Vesting
Date
|
Number
of Restricted Shares that Vest
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First
Anniversary of Date of Award
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33
1/3% of Restricted Shares
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Second
Anniversary of Date of Award
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33
1/3% of Restricted Shares
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Third
Anniversary of Date of Award
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33
1/3% of Restricted Shares
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Change
in Control
|
In
the event of a Change in Control (as defined in the Plan), if within
twelve (12) months after the Change in Control, your employment
is
terminated by the Company without Cause or by you for Good Reason
(as such
terms are defined in the Employment Agreement), all of the Restricted
Shares shall thereupon become fully vested.
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|
Continuous
Service
|
“Continuous
Service,” as used herein, means the absence of any interruption or
termination of your service as an Employee (as defined in the Plan)
of the
Company or any Affiliate (other than a termination by the Company
without
Cause or a termination by you for Good Reason). If you are employed
by an
Affiliate of the Company, your employment shall be deemed to have
terminated on the date your employer ceases to be an Affiliate
of the
Company, unless you are on that date transferred to the Company
or another
Affiliate of the Company. Service shall not be considered interrupted
in
the case of sick leave, military leave or any other leave of absence
approved by the Company or any then Affiliate of the Company. Your
employment shall not be deemed to have terminated if you are transferred
from the Company to an Affiliate of the Company, or vice versa,
or from
one Company Affiliate to another Company Affiliate.
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Page
2 of
10
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Share
Certificates
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The
Company will issue a certificate (or certificates) in your name
with
respect to the Shares, and will hold such certificate (or certificates)
on
deposit for your account until the expiration of the Restricted
Period
with respect to the Shares represented thereby. Such certificate
(or
certificates) will contain the following restrictive legend:
“The
transferability of this certificate and the shares of stock represented
hereby are subject to the terms and conditions (including forfeiture)
contained in the 2006 Equity Incentive Plan of the Company, copies
of
which are on file in the office of the Secretary of the
Company.”
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Additional
Conditions
to
Issuance of Stock
Certificates
|
You
will not receive the certificates
representing the Restricted Shares unless and until the Company
has
received a stock power or stock powers in favor of the Company
executed by
you.
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Cash
Dividends
|
Cash
dividends, if any, paid on the Restricted Shares shall be held
by the
Company for your account and paid to you upon the expiration of
the
Restricted Period, except as otherwise determined by the Administrator.
All such withheld dividends shall not earn interest, except as
otherwise
determined by the Xxxxxxxxxxxxx.Xxx
will not receive withheld cash dividends on any Restricted Shares
which
are forfeited and all such cash dividends shall be forfeited along
with
the Restricted Shares which are forfeited.
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Tax
Withholding
|
Unless
you make an election under Section 83(b) of the Internal Revenue
Code of
1986, as amended (the “Code”), and pay taxes in accordance with that
election, you will be taxed on the Shares as they become Vested
and must
arrange to pay the taxes on this income. If the Administrator so
determines, arrangements for paying the taxes may include your
surrendering Shares that otherwise would be released to you upon
becoming
Vested or your surrendering Shares you already own. The fair market
value
of the Shares you surrender, determined as of the date when taxes
otherwise would have been withheld in cash, will be applied as
a credit
against the withholding taxes.
The
Company shall have the right to withhold from your compensation
an amount
sufficient to fulfill its or its Affiliate’s obligations for any
applicable withholding and
employment
taxes. Alternatively, the Company may require you to pay to the
Company
the amount of any taxes which the Company is required to withhold
with
respect to the Shares, or, in lieu thereof, to retain or sell without
notice a sufficient number of Shares to cover the amount required
to be
withheld. The Company may withhold from any cash dividends paid
on the
Restricted Shares an amount sufficient to cover taxes owed as a
result of
the dividend payment. The Company’s method of satisfying its withholding
obligations shall be solely in the discretion of the Administrator,
subject to applicable federal, state, local and foreign laws. The
Company
shall have a lien and security interest in the Shares and any accumulated
dividends to secure your obligations
hereunder.
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Page
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10
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Tax
Representations
|
You
hereby represent and warrant to the Company as follows:
(a) You
have reviewed with your own tax advisors the federal, state, local
and
foreign tax consequences of this investment and the transactions
contemplated by this Agreement. You are relying solely on such
advisors
and not on any statements or representations of the Company or
any of its
Employees or agents.
(b) You
understand that you (and not the Company) shall be responsible
for your
own tax liability that may arise as a result of this investment
or the
transactions contemplated by this Agreement. You understand that
Section
83 of the Code taxes (as ordinary income) the fair market value
of the
Shares as of the date any “restrictions” on the Shares lapse. To the
extent that an award hereunder is not otherwise an exempt transaction
for
purposes of Section 16(b) of the Securities Exchange Act of 1934,
as
amended (the “1934 Act”), with respect to officers, directors and 10%
shareholders subject to Section 16 of the 1934 Act, a “restriction” on the
Shares includes for these purposes the period after the award of
the
Shares during which such officers, directors and 10% shareholders
could be
subject to suit under Section 16(b) of the 1934 Act. Alternatively,
you
understand that you may elect to be taxed at the time the Shares
are
awarded rather than when the restrictions on the Shares lapse,
or the
Section 16(b) period 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 the award.
YOU
HEREBY ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY AND NOT
THE
COMPANY’S TO FILE TIMELY THE ELECTION AVAILABLE TO YOU UNDER SECTION 83(B)
OF THE CODE, EVEN IF YOU REQUEST THAT THE COMPANY OR ITS REPRESENTATIVES
MAKE THIS FILING ON YOUR BEHALF.
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Securities
Law Representations
|
The
following two paragraphs shall be applicable if, on the date of
issuance
of the Restricted Shares, no registration statement and current
prospectus
under the Securities Act of 1933, as amended (the “1933 Act”), covers the
Shares, and shall continue to be applicable for so long as such
registration has not occurred and such current prospectus is not
available:
(a) You
hereby agree, warrant and represent that you will acquire the Shares
to be
issued hereunder for your own account for investment purposes only,
and
not with a view to, or in connection with, any resale or other
distribution of any of such shares, except as hereafter permitted.
You
further agree that you will not at any time make any offer, sale,
transfer, pledge or other disposition of such Shares to be issued
hereunder without an effective registration statement under the
1933 Act,
and under any applicable state securities laws or an opinion of
counsel
acceptable to the Company to the effect that the proposed transaction
will
be exempt from such registration. You agree to execute such instruments,
representations, acknowledgments and agreements as the Company
may, in its
sole discretion, deem advisable to avoid any violation of federal,
state,
local or foreign law, rule or regulation, or any securities exchange
rule
or listing agreement.
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(b) The
certificates for Shares to be issued to you hereunder shall bear
the
following legend:
“The
shares represented by this certificate have not been registered
under the
Securities Act of 1933, as amended, or under applicable state securities
laws. The shares have been acquired for investment and may not
be offered,
sold, transferred, pledged or otherwise disposed of without an
effective
registration statement under the Securities Act of 1933, as amended,
and
under any applicable state securities laws or an opinion of counsel
acceptable to the Company that the proposed transaction will be
exempt
from such registration.” |
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Stock
Dividend, Stock Split
and
Similar Capital Changes
|
In
the event of any change in the outstanding shares of the Common
Stock of
the Company by reason of a stock dividend, stock split, combination
of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Administrator deems in its
sole
discretion to be similar circumstances, the number and kind of
shares
subject to this Agreement shall be appropriately adjusted in a
manner to
be determined in the sole discretion of the Administrator, whose
decision
shall be final, binding and conclusive in the absence of clear
and
convincing evidence of bad faith. Any shares of Common Stock or
other
securities received, as a result of the foregoing, by you with
respect to
the Restricted Shares shall be subject to the same restrictions
as the
Restricted Shares, the certificate or other instruments evidencing
such
shares of Common Stock or other securities shall be legended and
deposited
with the Company as provided above with respect to the Restricted
Shares,
and any cash dividends received with respect to such shares of
Common
Stock or other securities shall be accumulated as provided above
with
respect to the Restricted Shares.
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Non-Transferability
|
Restricted
Shares are not transferable.
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No
Effect on Employment
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Except
as otherwise provided in the Employment Agreement, nothing
herein shall modify your status as an at-will employee of the Company
or
any of its Affiliates. Further, nothing herein guarantees you employment
for any specified period of time. This means that, except as provided
in
the Employment Agreement, either you or the Company or any of its
Affiliates may terminate your employment at any time for any reason,
with
or without cause, or for no reason. You recognize that, for instance,
you
may terminate your employment or the Company or any of its Affiliates
may
terminate your employment prior to the date on which your Shares
become
vested.
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No
Effect on
Corporate
Authority
|
You
understand and agree that the existence of this Agreement will
not affect
in any way the right or power of the Company or its shareholders
to make
or authorize any or all adjustments, recapitalizations, reorganizations,
or other changes in the Company’s capital structure or its business, or
any merger or consolidation of the Company, or any issuance of
bonds,
debentures, preferred or other stocks with preferences ahead of
or
convertible into, or otherwise affecting the common shares or the
rights
thereof, or the dissolution or liquidation of the Company, or any
sale or
transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or
otherwise.
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Arbitration
|
Any
dispute or disagreement between you and the Company with respect
to any
portion of this Agreement (excluding Attachment A hereto) or its
validity,
construction, meaning, performance or your rights hereunder shall,
unless
the Company in its sole discretion determines otherwise, be settled
by
arbitration, at a location designated by the Company, in accordance
with
the Commercial Arbitration Rules of the American Arbitration Association
or its successor, as amended from time to time. However, prior
to
submission to arbitration you will attempt to resolve any disputes
or
disagreements with the Company over this Agreement amicably and
informally, in good faith, for a period not to exceed two weeks.
Thereafter, the dispute or disagreement will be submitted to arbitration.
At any time prior to a decision from the arbitrator(s) being rendered,
you
and the Company may resolve the dispute by settlement. You and
the Company
shall equally share the costs charged by the American Arbitration
Association or its successor, but you and the Company shall otherwise
be
solely responsible for your own respective counsel fees and expenses.
The
decision of the arbitrator(s) shall be made in writing, setting
forth the
award, the reasons for the decision and award and shall be binding
and
conclusive on you and the Company. Further, neither you nor the
Company
shall appeal any such award. Judgment of a court of competent jurisdiction
may be entered upon the award and may be enforced as such in accordance
with the provisions of the award.
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Governing
Law
|
The
laws of the State
of Delaware will govern all matters relating to this Agreement,
without
regard to the principles of conflict of
laws.
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Notices
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Any
notice you give to the Company must be in writing and either
hand-delivered or mailed to the office of the Chief Executive Officer
of
the Company. If mailed, it should be addressed to the Chief Executive
Officer of the Company at its then main headquarters. Any notice
given to
you will be addressed to you at your address as reflected on the
personnel
records of the Company. You and the Company may change the address
for
notice by like notice to the other. Notice will be deemed to have
been
duly delivered when hand-delivered or, if mailed, on the day such
notice
is postmarked.
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Agreement
Subject to Plan;
Entire
Agreement
|
This
Agreement shall be subject to the terms of the Plan in effect on
the date
hereof, which terms are hereby incorporated herein by reference
and made a
part hereof. This Agreement constitutes the entire understanding
between
the Company and you with respect to the subject matter hereof and
no
amendment, supplement or waiver of this Agreement, in whole or
in part,
shall be binding upon the Company unless in writing and signed
by the
President of the Company.
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Conflicting
Terms
|
Wherever
a conflict may arise between the terms of this Agreement and the
terms of
the Plan
in
effect on the date hereof, the terms of the Plan will
control.
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Attachment
A
|
In
consideration of the award to you of Restricted Shares, you hereby
agree
to the confidentiality and non-interference provisions set forth
in
Attachment A hereto.
|
Please
sign the copy of this Restricted Stock Agreement and return it to the Company’s
Secretary, thereby indicating your understanding of and agreement with its
terms
and conditions, including
Attachment A hereto.
By:
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ACKNOWLEDGMENT
I
hereby
acknowledge receipt of a copy of the Plan. I hereby represent that I have
read
and understood the terms and conditions of the Plan and of the Restricted
Stock
Agreement, including
Attachment A hereto.
I
hereby signify my understanding of, and my agreement with, the terms and
conditions of the Plan and of the Restricted Stock Agreement, including
Attachment A hereto.
I agree
to accept as binding, conclusive, and final all decisions or interpretations
of
the Administrator concerning any questions arising under the Plan with respect
to this Restricted Stock Agreement. I accept this Restricted Stock Agreement
in
full satisfaction of any previous written or oral promise made to me by the
Company or any of its Affiliates with respect to option or stock
grants.
Date:
XXXXXX
XXXXXXX
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Attachment
A to Restricted Stock Agreement
Confidentiality
and Non-Interference.
(a) You
covenant and agree that, in consideration of the award to you of Restricted
Shares, you will not, during your employment with the Company or at any time
thereafter, except with the express prior written consent of the Company
or
pursuant to the lawful order of any judicial or administrative agency of
government, directly or indirectly, disclose, communicate or divulge to any
individual or entity, or use for the benefit of any individual or entity,
any
knowledge or information with respect to the conduct or details of the Company’s
business which you, acting reasonably, believe or should believe to be of
a
confidential nature and the disclosure of which not to be in the Company’s
interest.
(b) You
covenant and agree that, in consideration of the award to you of Restricted
Shares, you will not, during your employment with the Company, except with
the
express prior written consent of the Company, directly or indirectly, whether
as
employee, owner, partner, member, consultant, agent, director, officer,
shareholder or in any other capacity, engage in or assist any individual
or
entity to engage in any act or action which you, acting reasonably, believe
or
should believe would be harmful or inimical to the interests of the
Company.
(c) You
covenant and agree that, in consideration of the award to you of Restricted
Shares, you will not, for a period of two years after your employment with
the
Company ceases for any reason whatsoever (whether voluntary or not), except
with
the express prior written consent of the Company, directly or indirectly,
whether as employee, owner, partner, member, consultant, agent, director,
officer, shareholder or in any other capacity, for your own account or for
the
benefit of any individual or entity, (i) solicit any customer of the Company
for
business which would result in such customer terminating their relationship
with
the Company; or (ii) solicit or induce any individual or entity which is
an
employee of the Company to leave the Company or to otherwise terminate their
relationship with the Company.
(d) The
parties agree that any breach by you of any of the covenants or agreements
contained in this Attachment A will result in irreparable injury to the Company
for which money damages could not adequately compensate the Company and
therefore, in the event of any such breach, the Company shall be entitled
(in
addition to any other rights and remedies which it may have at law or in
equity)
to have an injunction issued by any competent court enjoining and restraining
you and/or any other individual or entity involved therein from continuing
such
breach. The existence of any claim or cause of action which you may have
against
the Company or any other individual or entity shall not constitute a defense
or
bar to the enforcement of such covenants. If the Company is obliged to resort
to
the courts for the enforcement of any of the covenants or agreements contained
in this Attachment A, or if such covenants or agreements are otherwise the
subject of litigation between the parties, and the Company prevails in such
enforcement or litigation, then the term of such covenants and agreements
shall
be extended for a period of time equal to the period of such breach, which
extension shall commence on the later of (a) the date on which the original
(unextended) term of such covenants and agreements is scheduled to terminate
or
(b) the date of the final court order (without further right of appeal)
enforcing such covenant or agreement.
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(e) If
any
portion of the covenants or agreements contained in this Attachment A, or
the
application hereof, is construed to be invalid or unenforceable, the other
portions of such covenant(s) or agreement(s) or the application thereof shall
not be affected and shall be given full force and effect without regard to
the
invalid or unenforceable portions to the fullest extent possible. If any
covenant or agreement in this Attachment A is held unenforceable because
of the
area covered, the duration thereof, or the scope thereof, then the court
making
such determination shall have the power to reduce the area and/or duration
and/or limit the scope thereof, and the covenant or agreement shall then
be
enforceable in its reduced form.
(f) For
purposes of this Attachment A, the term “the Company” shall include the Company,
any successor to the Company and all present and future direct and indirect
subsidiaries and affiliates of the Company.
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