FAR EAST WIND POWER CORP. RESTRICTED STOCK AWARD AGREEMENT
Exhibit
10.2
Date
of Grant: June 24, 2010
THIS RESTRICTED
STOCK AWARD AGREEMENT (this “Agreement”) is made by
and between Far East Wind Power Corp., a Nevada corporation (the “Company”) and X.
Xxxxx & Company, Limited (“Consultant”), as of
June 24, 2010.
1. Award of Restricted
Stock. In consideration for services to be rendered by
Consultant to the Company pursuant to that certain Consultant Agreement dated
June 24, 2010 by and between the Company and Consultant (the “Consulting
Agreement”), the Company hereby grants to Consultant, in the manner and
subject to the conditions hereinafter provided, six hundred fifty thousand
(650,000) shares of the Company’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.
2. Vesting
of Restricted Stock.
2.1 Vesting. The
right to unrestricted ownership in the Restricted Stock under this Agreement
shall vest as follows:
(a) two
hundred fifty thousand (250,000) shares of Restricted Stock shall vest at the
rate of one-sixth (1/6) of such shares upon each monthly anniversary of the date
of grant set forth above, until all such shares have vested on the date six (6)
months from the date of grant; and
(b) four
hundred thousand (400,000) shares of Restricted Stock shall vest at the rate of
one-thirty-sixth (1/36) of such shares upon each monthly anniversary of the date
of grant set forth above, until all such shares have vested on the date
thirty-six (36) months from the date of grant.
2.2 Permitted Forfeiture of
Unvested Restricted Stock. Consultant acknowledges that to the
extent the Restricted Stock has not vested in accordance with Section 2.1 at
such time as Consultant is no longer serving as an active consultant providing
services to the Company or any of its subsidiaries pursuant to the Consulting
Agreement, except as otherwise provided in Section 2.4 hereof, such unvested
Restricted Stock shall immediately be forfeited and all rights of Consultant to
such Restricted Stock shall terminate without further obligation on the part of
the Company. Upon the forfeiture of any Restricted Stock, such forfeited
Restricted Stock shall be immediately transferred to the Company without further
action by the Consultant.
The
Restricted Stock may not be sold, assigned, pledged, exchanged, hypothecated or
otherwise transferred, encumbered or disposed of to the extent that the
Restricted Stock is subject to vesting and in the event of termination of
employment with or services to the Company or any subsidiary for any
reason.
2.3 Acceleration of Vesting upon
Change of Control. Upon the effective date of a Change of
Control (as defined below), all of the then unvested Restricted Stock shall
become vested and any repurchase right on behalf of the Company shall lapse as
to such shares immediately prior to the closing of such Change of
Control. “Change of Control”
shall have the meaning set forth in the Consulting Agreement.
2.4 Acceleration of Vesting Upon
Termination With No Cause. In the event the Company terminates
the Consultant Agreement with no Cause (as defined below), a number of shares
equal to twenty-five percent (25%) of the then unvested Restricted Stock shall
become vested and any repurchase right on behalf of the Company shall lapse as
to such shares. As used herein, the term “Cause” shall have the
meaning set forth in the Consulting Agreement.
2.3
Deliveries by the
Company. A certificate evidencing the Restricted Stock shall
be issued by the Company in Consultant’s name, pursuant to which Consultant
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 the Company 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, the Company shall cause a new
certificate or certificates to be issued without legend in the name of
Consultant.
Notwithstanding
any other provisions of this Agreement, the issuance or delivery of any shares
under this Agreement (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 federal or state securities
law or regulation. The Company 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
Restricted Stock in any jurisdiction, or (c) register the shares of Restricted
Stock with the United States Securities and Exchange Commission.
3. Adjustments. Should
any change be made to the Common Stock of the Company 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
the Company's receipt of consideration, the Company shall make appropriate
adjustments to the number and/or class of securities in effect under this
Agreement in order to prevent the dilution or enlargement of benefits
thereunder; provided however, that the number of shares subject to this
Agreement shall always be a whole number and the Company shall make such
adjustments as are necessary to insure this Restricted Stock Award is set as
whole shares.
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4. Suspension
and Cancellation of Stock
4.1 Mandatory Suspension and
Cancellation of Stock. In the event the Company reasonably
believes Consultant has committed an act of misconduct including, but limited to
acts specified below, the Company may suspend Consultant’s right in the
Restricted Stock Award granted hereunder pending final determination by the
Board of Directors of the Company (the “Board”). If
Consultant is determined by the Board to have:
(a) committed
an act of embezzlement, fraud, dishonesty, breach of fiduciary duty to the
Company or a subsidiary;
(b) deliberately
disregarded the rules or policies of the Company or a subsidiary which resulted
in loss, damage or injury to the Company or a subsidiary;
(c) made
any unauthorized disclosure of any trade secret or confidential information of
the Company or a subsidiary;
(d) induced
any partner, collaborator, client or customer of the Company or a subsidiary to
break any contract with the Company or a subsidiary or induced any principal for
whom the Company or a subsidiary acts as agent to terminate such agency
relations;
(e) engaged
in any substantial conduct which constitutes unfair competition with the Company
or a subsidiary; or
(f) violated
any requirement of the Foreign Corrupt Practices Act or any analogous foreign
regulations,
neither
Consultant nor Consultant’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 Consultant an opportunity to appear and be heard at a hearing before the
full Board and present evidence on Consultant’s behalf.
5. Reservation of
Shares. The Company agrees that prior to the issuance of the
Restricted Stock represented by this Agreement, there shall be reserved for
issuance such number of the Company’s authorized and unissued shares as shall be
necessary to satisfy the terms and conditions of this Agreement.
6. Rights
of Consultant.
6.1 No Obligation To
Employ. Nothing in this Agreement will confer or be deemed to
confer on Consultant any right to continue in the employ of, or to continue any
other relationship with, the Company or a subsidiary or to limit in any way the
right of the Company or a subsidiary to terminate Consultant's employment or
other relationship at any time, with or without cause.
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6.2 Compliance With Code Section
162(m). At all times when the Company determines that
compliance with Section 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”) is
required or desired, the Restricted Stock 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 Agreement the Company may, subject to this
Section 6, make any adjustments it deems appropriate.
7. Consultant’s
Representations.
7.1 Purchase for Own
Account. Consultant represents that Consultant is acquiring
the Restricted Stock solely for Consultant’s own account and beneficial interest
for investment and not for sale or with a view to distribution of the Restricted
Stock or any part thereof, has no present intention of selling (in connection
with a distribution or otherwise), granting any participation in, or otherwise
distributing the same, and does not presently have reason to anticipate a change
in such intention.
7.2 Information and
Sophistication. Consultant hereby: (i) acknowledges that
Consultant has received all the information Consultant has requested from the
Company and considers necessary or appropriate for deciding whether to acquire
the Restricted Stock, (ii) represents that Consultant has had an opportunity to
ask questions and receive answers from the Company regarding the terms and
conditions of the offering of the Restricted Stock and to obtain any additional
information necessary to verify the accuracy of such information and (iii)
further represents that Consultant has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risk of this investment.
7.3 Ability to Bear Economic
Risk. Consultant acknowledges that investment in the
Restricted Stock involves a high degree of risk, and represents that Consultant
is able, without materially impairing Consultant’s financial condition, to hold
the Restricted Stock for an indefinite period of time and to suffer a complete
loss of Consultant’s investment.
7.4 Foreign Persons. If Consultant is not a
United States person (as defined by Section 7701(a)(30) of the Internal Revenue
Code of 1986, as amended), Consultant hereby represents that Consultant has
satisfied itself as to the full observance of the laws of Consultant’s
jurisdiction in connection with any invitation to purchase the Restricted Stock
or any use of this Agreement, including (i) the legal requirements within
Consultant’s jurisdiction for the purchase of the Restricted Stock, (ii) any
foreign exchange restrictions applicable to such purchase, (iii) any government
or other consents that may need to be obtained, and (iv) the income tax and
other tax consequences, if any, that may be relevant to the purchase, holding,
redemption, sale or transfer of the Restricted Stock. The Company’s
offer and sale and Consultant’s subscription and payment for and continued
beneficial ownership of the Restricted Stock will not violate any applicable
securities or other laws of Consultant’s jurisdiction.
7.5 Further
Assurances. Consultant agrees and covenants that at any time
and from time to time Consultant will promptly execute and deliver to the
Company such further instruments and documents and take such further action as
the Company may reasonably require in order to carry out the full intent and
purpose of this Agreement and to comply with state or federal restricted stock
laws or other regulatory approvals.
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8. Securities Law And
Other Regulatory Compliance. The Company shall not be obligated to issue
any Restricted Stock with respect to this Agreement 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. Consultant may be required to furnish
representations or undertakings deemed appropriate by the Company 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 Agreement shall bear any legend required
by, or useful for purposes of compliance with, applicable securities laws or
this Agreement.
9. Restricted
Securities. Consultant understands that the Restricted Stock
are characterized as “restricted securities” under the Securities Act inasmuch
as they are being acquired from the 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. Consultant understands that the Company is under no obligation
to register any of the securities sold hereunder.
10.
Restrictive Legends and Stop-Transfer Orders.
10.1 Legends. Consultant
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 Consultant and the Company or any agreement between Consultant
and any third party:
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.
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10.2 Stop-Transfer
Instructions. Consultant agrees that, to ensure compliance
with the restrictions imposed by this Agreement, the Company may issue
appropriate “stop-transfer” instructions to its transfer agent, if any, and if
the 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. Consultant should understand that Section 83 of 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. Consultant understands that
if such provision is applicable to Consultant, Consultant 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 Agreement. The form for making this election may be provided by
Consultant’s tax advisor. Consultant understands that failure to make this
filing timely will result in the recognition of ordinary income by Consultant,
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 Agreement.
Consultant further understands that the income tax laws of the State of Arizona
or other states may contain similar provisions to Section 83 of the
Code.
IT IS
CONSULTANT’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY ANY
ELECTION UNDER SECTION 83(b) OF THE CODE AND UNDER ANY CORRESPONDING PROVISIONS
OF STATE TAX LAW, EVEN IF CONSULTANT REQUESTS THE COMPANY OR ITS REPRESENTATIVES
TO MAKE THIS ELECTION ON CONSULTANT’S BEHALF.
CONSULTANT
UNDERSTANDS THAT NEITHER THE COMPANY NOR ITS REPRESENTATIVES CAN PROVIDE TAX
ADVICE. CONSULTANT REPRESENTS (A) THAT CONSULTANT HAS HAD THE OPPORTUNITY TO
CONSULT WITH A TAX ADVISER IN CONNECTION WITH THE RESTRICTED STOCK AWARD, AND
(B) THAT CONSULTANT IS NOT RELYING ON COMPANY FOR ANY TAX ADVICE. CONSULTANT
HEREBY ASSUMES ALL RESPONSIBILITY FOR INVESTIGATING THE TAX CONSEQUENCES OF
CONSULTANT'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.
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12. Attorneys'
Fees. In the event of any litigation, arbitration, or other
proceeding arising out of this Agreement, 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. Miscellaneous
Provisions.
13.1 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.
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To
Consultant:
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X.
Xxxxx & Company, Limited
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00
Xxxxx Xxxxxx
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Xxxxxxxxx,
Xxxxxxxxxxxxxx 00000
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00000
X. Xxxxx Xxxx., Xxxxx 0000
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Xxxxxxx,
Xxxxxxx 00000
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13.2 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.
13.3 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.
13.4 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 Nevada in any action on a claim arising
out of, under or in connection with this Agreement or the transactions
contemplated by this Agreement.
13.5 Binding
Effect. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective heirs, executors, and
successors.
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13.6 Counterparts. This
Agreement may be executed in one or more counterparts, each of which when taken
together shall constitute one and the same instrument.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, this Restricted Stock Award Agreement has been executed as of
the date first written above.
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THE COMPANY:
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By:
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Xxx
Xxxxxxxx
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President
and Chief Executive Officer
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CONSULTANT:
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X.
XXXXX & COMPANY, LIMITED
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By:
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Xxxxx
X. Xxxxx
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President
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