WORDLOGIC CORPORATION STOCK AWARD AGREEMENT FOR RESTRICTED STOCK
Exhibit 4.03
WORDLOGIC CORPORATION
2012 EQUITY INCENTIVE PLAN
STOCK AWARD AGREEMENT FOR RESTRICTED STOCK
Unless otherwise defined herein, capitalized terms shall have the defined meaning set forth in the WordLogic Corporation 2012 Equity Incentive Plan.
1. NOTICE OF RESTRICTED STOCK GRANT
You have been granted restricted shares of Common Stock, subject to the terms and conditions of the Plan and this Stock Award Agreement, as follows:
Name of Awardee: |
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Total Number of Shares Granted: |
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Purchase Price per Share: | $ |
Fair Market Value per Share: | $ |
Grant Date: |
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Vesting Commencement Date: |
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Vesting Schedule: | [Subject to Section 2.8 below, the first [__]% of the Shares subject to this Stock Award Agreement shall vest on the Vesting Commencement Date, and [__]% of the Shares subject to this Stock Award Agreement shall vest each [month/quarter/year] thereafter, subject to the Awardee continuing to be a Service Provider on such dates. Vesting shall accelerate as provided in Section 2.3 below.] |
2.1 Grant of Restricted Stock. Pursuant to the terms and conditions set forth in this Stock Award Agreement (including Section 1 above) and the Plan, the Administrator hereby grants to the Awardee named in Section 1, on the Grant Date set forth in Section 1, the number of Shares set forth in Section 1. The granted Shares may be subject to a purchase price, as set forth in Section 1.
The term "Cause" shall mean (1) the Awardee's theft, dishonesty, or falsification of any documents or records of the Company or any Affiliate; (2) the Awardee's improper use or disclosure of confidential or proprietary information of the Company or any Affiliate that results or will result in material harm to the Company or any Affiliate; (3) any action by the Awardee which has a detrimental effect on the reputation or business of the Company or any Affiliate; (4) the Awardee's failure or inability to perform any reasonable assigned duties after written notice from the Company or an Affiliate, and a reasonable opportunity to cure, such failure or inability; (5) any material breach by the Awardee of any employment or service agreement between the Awardee and the Company or an Affiliate, which breach is not cured pursuant to the terms of such agreement; (6) the Awardee's conviction (including any plea of guilty or nolo contendere) of any criminal act which impairs the Awardee's ability to perform his or her duties with the Company or an Affiliate; or (7) violation of a material Company policy. The term "Good Reason" shall mean, as determined by the Administrator, (A) a material adverse change in the Awardee's title, stature, authority, or responsibilities with the Company (or the Affiliate employing him or her); (B) a material reduction in the Awardee's base salary or annual bonus opportunity; or (C) receipt of notice that the Awardee's principal workplace will be relocated by more than 50 miles.
(A) General Rule. The granted Shares shall initially be subject to a risk of forfeiture. The Shares subject to a risk of forfeiture shall be referred to herein as "Restricted Shares." The Awardee may not transfer, assign, encumber, or otherwise dispose of any Restricted Shares other than in accordance with this Stock Award Agreement and the Plan. If the Awardee transfers any Restricted Shares in accordance with this Stock Award Agreement and the Plan, then this Section shall apply to the transferee to the same extent as to the transferor.
(E) Escrow. At the discretion of the Administrator, the certificates representing the granted Shares may, upon issuance, be deposited in escrow with the Company to be held in accordance with the provisions of this Stock Award Agreement. If the granted Shares are held in escrow, as provided in this subsection, any new, substituted or additional securities or other property described in Section 2.4(D) above shall immediately be delivered to the Company to be held in escrow, but only to the extent the granted Shares are at the time Restricted Shares. All regular cash dividends on Restricted Shares (or other securities) at the time held in escrow shall be paid directly to the Awardee and shall not be held in escrow. Restricted Shares, together with any other assets or securities held in escrow hereunder, shall be (i) surrendered to the Company for cancellation upon forfeiture thereof; or (ii) released to the Awardee upon request, but only to the extent that the granted Shares are no longer Restricted Shares.
2.7 Regulatory Compliance. The issuance of Common Stock pursuant to this Stock Award Agreement shall be subject to full compliance with all applicable requirements of law and the requirements of any stock exchange or interdealer quotation system upon which the Common Stock may be listed or traded.
2.8 Vesting if Sale Prohibited by Xxxxxxx Xxxxxxx Policy. The Company has established an Xxxxxxx Xxxxxxx Policy (as such policy may be amended from time to time, the "Policy") relative to trading while in possession of material, undisclosed information. The Policy prohibits officers, directors, employees, and consultants of the Company and its subsidiaries from trading in securities of the Company during certain "Blackout Periods" as described in the Policy. If a scheduled vesting date for Shares falls on a day during such a Blackout Period, then the Shares that would otherwise have vested on such date shall not vest on such date, but shall instead vest, provided the Awardee remains a Service Provider, on the second business day after the last day of the Blackout Period applicable to the Shares.
2.10 Certain Federal Income Tax Issues.
(A) Subject to provisions discussed in subsection (B) below, under Section 83 of the Code, the Awardee will recognize ordinary income upon transfer of the Shares to the Awardee, measured as the difference between the fair market value of the granted Shares on the date of transfer and the amount paid for the granted Shares, if any. The capital gain holding period will begin on the date of transfer.
(B) To the extent that the granted Shares are subject to a "substantial risk of forfeiture" (within the meaning of Section 83 of the Code) on the Grant Date, the Awardee will not recognize ordinary income until the granted Shares are no longer subject to a substantial risk of forfeiture (i.e., as the Shares vest). The Awardee's ordinary income is measured as the difference between the amount paid for the granted Shares, if any, and the fair market value of the granted Shares when such Shares are no longer subject to a substantial risk of forfeiture. The capital gain holding period for Shares subject to a substantial risk of forfeiture begins on the date when such Shares are no longer subject to a substantial risk of forfeiture.
(C) If the Shares are subject to a substantial risk of forfeiture, the Awardee may nonetheless accelerate his or her recognition of ordinary income, if any, and begin his or her capital gains holding period by timely filing an election pursuant to Section 83(b) of the Code (the "83(b) Election"). If the Awardee makes an 83(b) Election, the excess of (i) the fair market value of the granted Shares on the Grant Date over (ii) the purchase price, if any, paid for the granted Shares will be included in the Awardee's ordinary income. If the granted Shares are later forfeited, however, the Awardee will not be entitled to a tax deduction or a refund of the tax already paid. If the Awardee makes the 83(b) Election, the Awardee will not recognize any additional income when the granted Shares vest and any appreciation in the value of the granted Shares after the election is not taxed as compensation but instead is taxed as capital gain when the granted Shares are sold.
(D) The 83(b) Election must be filed with the Internal Revenue Service within 30 days after the Shares are transferred. If the Awardee is an employee or former employee, any ordinary income resulting from the election will be subject to applicable tax withholding requirements. The election is generally irrevocable and cannot be made after the 30-day period has expired. In the event that the Awardee makes an 83(b) Election, the Awardee (i) shall promptly provide the Company with a copy of the 83(b) Election, as filed with the Internal Revenue Service; and (ii) the Company may withhold from any payments due to the Awardee any applicable federal, state, or local taxes and such other deductions as are prescribed by law, or the Awardee will pay to the Company all such tax withholding amounts promptly upon request.
2.11 Plan. This Stock Award Agreement is subject to all provisions of the Plan, receipt of a copy of which is hereby acknowledged by the Awardee. The Awardee shall accept as binding, conclusive, and final all decisions and interpretations of the Administrator upon any questions arising under the Plan and this Stock Award Agreement.
2.15 Entire Agreement; Governing Law. This Stock Award Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Awardee with respect to the subject matter hereof, and may not be modified adversely to the Awardee's interest except by means of a writing signed by the Company and the Awardee. This Stock Award Agreement is governed by the internal substantive laws, but not the choice of law rules, of Nevada.
By the Awardee's signature and the signature of the Company's representative below, the Awardee and the Company agree that this Award is granted under and governed by the terms and conditions of this Stock Award Agreement and the Plan. The Awardee has reviewed this Stock Award Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of counsel before executing this Stock Award Agreement and fully understands all provisions of this Stock Award Agreement and the Plan. The Awardee hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Administrator upon any questions relating to this Stock Award Agreement and the Plan.
The Awardee further agrees that the Company may deliver by email all documents relating to the Plan or this Award (including prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including annual reports and proxy statements). The Awardee also agrees that the Company may deliver these documents by posting them on a web site maintained by the Company or by a third party under contract with the Company.
AWARDEE:
_________________________________ Signature _________________________________ Printed Name _________________________________ Residence Address | WORDLOGIC CORPORATION
By:_________________________________ Its:_________________________________ |
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