EXHIBIT 10.21
XXX.XXX INC.
FORM OF RESTRICTED SHARES AGREEMENT
WHEREAS, Xxxxxxxxx X. Xxxxxxx (the "Grantee") is an employee of
XXX.XXX INC., a Delaware corporation (the "Company"); and
WHEREAS, the grant of the Restricted Shares (as defined in the
Company's 1999 Equity Incentive Plan (the "Plan")) has been authorized by a
resolution of the I.R.C. Section 162(m) Subcommittee of the Compensation
Committee of the Board of Directors of the Company (the "Board") that was
duly adopted on May 17, 2000;
NOW, THEREFORE, pursuant to the Plan, the Company hereby grants to
the Grantee 350,000 Restricted Shares (such 350,000 Restricted Shares being
hereinafter referred to as the "Restricted Shares"), effective as of May 17,
2000 (the "Date of Grant"), and subject to the terms and conditions of the
Plan and the terms and conditions of this Agreement.
1. DEFINITIONS. All capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the Plan.
2. ISSUANCE OF SHARES. The Restricted Shares shall be issued to
the Grantee, shall be fully paid and nonassessable and shall be represented
by a certificate or certificates issued in the name of the Grantee and
endorsed with an appropriate legend referring to the restrictions hereinafter
set forth.
3. RESTRICTIONS ON TRANSFER OF SHARES. The Restricted Shares may
not be sold, assigned, transferred, conveyed, pledged, exchanged or otherwise
encumbered or disposed of by the Grantee, except to the Company, until they
have become nonforfeitable as provided in Section 4. Any purported
encumbrance or disposition in violation of the provisions of this Section 3
shall be void AB INITIO, and the other party to any such purported
transaction shall not obtain any rights to or interest in the Restricted
Shares. As and when permitted by the Plan, the Company may in its sole
discretion waive the restrictions on transferability with respect to all or a
portion of the Restricted Shares.
4. VESTING OF SHARES. (a) The Restricted Shares shall become
nonforfeitable if the Grantee remains in the continuous employment of the
Company or a Subsidiary through (i) May 17, 2001, with respect to 116,667 of
the Restricted Shares, (ii) May 17, 2002, with respect to 116,667 of the
Restricted Shares, and (iii) May 17, 2003, with respect to 116,666 of the
Restricted Shares.
(b) Notwithstanding the provisions of Section 4(a), (i) 75% of any
forfeitable Restricted Shares shall become nonforfeitable upon a Change in
Control if such Change in Control occurs prior to the second anniversary of
the Date of Grant and (ii) 100% of any forfeitable Restricted Shares shall
become nonforfeitable upon a Change in Control if such Change in Control
occurs following the second anniversary of the Date of Grant and prior to the
third anniversary of the Date of Grant.
5. FORFEITURE OF SHARES. Except as and to the extent the
Restricted Shares have become nonforfeitable pursuant to Section 4, the
Restricted Shares shall be forfeited by the Grantee, if the Grantee ceases to
be employed by the Company or a Subsidiary prior to the third anniversary of
the Date of Grant, and the certificate(s) representing Restricted Shares so
forfeited shall be canceled.
6. CERTAIN SALES UPON TERMINATION OF EMPLOYMENT. (a) If the
Grantee's employment with the Company is terminated (i) by the Company for
any reason other than for Cause (as defined in Section 6(c) below), (ii) by
the Grantee for any reason or (iii) by reason of the Grantee's death or
Disability, the Company shall have the right to repurchase Restricted Shares
held by the Grantee that have theretofore been released from the restrictions
set forth in Section 3 of this Agreement at the Fair Market Value (as defined
in Section 6(d) below) thereof as of the effective date of such termination.
If the Grantee's employment with the Company is terminated by the Company for
Cause, (x) the Company shall have the right to repurchase Restricted Shares
held by the Grantee that have theretofore been released from the restrictions
set forth in Section 3 of this Agreement at (1) the Fair Market Value thereof
as of the effective date of such termination or (2) the Grantee's cost of
obtaining such shares, whichever is lower, and (y) any profit realized from
the sale of any Restricted Shares that have theretofore been released from
the restrictions set forth in Section 3 of this Agreement shall inure to and
be recoverable by the Company. "Disability" shall mean as a result of the
Grantee's incapacity due to physical or mental illness (as determined in good
faith by a physician acceptable to the Company), the Grantee shall have been
absent from full-time performance of his duties with the Company for 135
consecutive days during any 12-month period.
(b) Provided that the rights described in Section 6(a) above have
not previously been triggered by termination of the Grantee's employment with
the Company, such rights shall terminate upon a Change in Control. The rights
specified in Section 6(a), once triggered, may be exercised at any time
during the 90-day period following the effective date of termination of the
Grantee's employment.
(c) For purposes of this Agreement, "Cause" means any of the
following events that the Company or the Board has determined, in good faith,
has occurred: (i) the Grantee's continual or deliberate neglect of the
performance of his material duties; (ii) the Grantee's failure to devote
substantially all of his working time to the business of the Company and its
Subsidiaries or affiliated companies; (iii) the Grantee's engaging willfully
in misconduct in connection with the performance of any of his duties,
including, without limitation, the misappropriation of funds or securing or
attempting to secure personally any profit in connection with any transaction
entered into on behalf of the Company or its Subsidiaries or affiliated
companies; (iv) the Grantee's willful breach of any confidentiality or
nondisclosure agreements with the Company or the Grantee's violation, in any
material respect, of any code or standard of behavior generally applicable to
employees or executive employees of the Company; (v) the Grantee's active
disloyalty to the Company, including, without limitation, willfully aiding a
competitor or improperly disclosing confidential information; or (vi) the
Grantee's engaging in conduct that may reasonably result in material injury
to the reputation of the Company, including conviction or entry of a plea of
nolo contendre for a felony or any crime involving fraud under Federal, state
or local laws, embezzlement, bankruptcy, insolvency or general assignment for
the benefit of creditors.
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(d) "Fair Market Value" shall mean:
(i) if the Common Shares are listed for trading on any
national stock exchange or admitted for trading on the Nasdaq
National Market or other principal national automated quotation
system, the Fair Market Value per Common Share shall be the average
of (i) the closing sale price per Common Share on such national
stock exchange or (ii) the final reported bid side price per Common
Share on such principal automated quotation system, in each case for
the ten most recent days on which trades occurred immediately
preceding the effective date of the termination of Grantee's
employment; or
(ii) if the Common Shares are not listed for trading on any
national stock exchange or admitted for trading on the Nasdaq
National Market or other principal national automated quotation
system, then the Fair Market Value per Common Share shall be
determined in good faith by the Board, based upon, among other
factors that the Board deems relevant, the financial performance
and prospects of the Company in the light of market conditions
generally.
7. DIVIDEND, VOTING AND OTHER RIGHTS. (a) Except as otherwise
provided in this Agreement, from and after the Date of Grant, the Grantee
shall have all of the rights of a stockholder with respect to the Restricted
Shares, including the right to vote the Restricted Shares and receive any
dividends that may be paid thereon; PROVIDED, HOWEVER, that any additional
Common Shares or other securities that the Grantee may become entitled to
receive pursuant to a stock dividend, stock split, recapitalization,
combination of shares, merger, consolidation, separation or reorganization or
any other change in the capital structure of the Company shall be subject to
the same risk of forfeiture and restrictions on transfer as the forfeitable
Restricted Shares in respect of which they are issued or transferred and
shall become Restricted Shares for the purposes of this Agreement.
(b) Cash dividends on the Restricted Shares shall be sequestered by
the Company from and after the Date of Grant until such time as any of such
Restricted Shares become nonforfeitable in accordance with Section 4,
whereupon such dividends shall be paid to the Grantee in cash to the extent
such dividends are attributable to Restricted Shares that have become
nonforfeitable. To the extent that Restricted Shares are forfeited pursuant
to Section 5, all dividends sequestered with respect to such Restricted
Shares shall also be forfeited. No interest shall be payable with respect to
any such dividends.
8. RETENTION OF STOCK CERTIFICATE(S) BY THE COMPANY. The
certificate(s) representing the Restricted Shares shall be held in custody by
the Company, together with a stock power endorsed in blank by the Grantee
with respect thereto, until such shares have become nonforfeitable in
accordance with Section 4.
9. COMPLIANCE WITH LAW. The Company shall make reasonable efforts
to comply with all applicable federal and state securities laws; PROVIDED,
HOWEVER, notwithstanding any other provision of this Agreement, the Company
shall not be obligated to issue or release from restrictions on transfer any
Common Shares pursuant to this Agreement if such issuance or release would
result in a violation of any such law.
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10. WITHHOLDING TAXES. If the Company or any Subsidiary shall be
required to withhold any federal, state, local or foreign tax in connection
with any issuance or vesting of Common Shares or other securities pursuant to
this Agreement, and the amounts available to the Company or such Subsidiary
for such withholding are insufficient, the Grantee shall pay the tax or make
provisions that are satisfactory to the Company or such Subsidiary for the
payment thereof. The Grantee may elect to satisfy all or any part of any such
withholding obligation by surrendering to the Company or such Subsidiary a
portion of the Restricted Shares that become nonforfeitable hereunder, and
the Common Shares so surrendered by the Grantee shall be credited against any
such withholding obligation at the Market Value per Share of such Common
Shares on the date of such surrender.
11. NO EMPLOYMENT CONTRACT. Nothing contained in this Agreement
shall confer upon the Grantee any right with respect to continuance of
employment by the Company or a Subsidiary or limit or affect in any manner
the right of the Company or a Subsidiary to terminate the employment or
adjust the compensation of the Grantee.
12. RELATION TO OTHER BENEFITS. Any economic or other benefit to
the Grantee under this Agreement or the Plan shall not be taken into account
in determining any benefits to which the Grantee may be entitled under any
profit-sharing, retirement or other benefit or compensation plan maintained
by the Company or a Subsidiary and shall not affect the amount of any life
insurance coverage available to any beneficiary under any life insurance plan
covering employees of the Company or a Subsidiary.
13. AMENDMENTS. Any amendment to the Plan shall be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable
hereto; PROVIDED, HOWEVER, that no amendment shall adversely affect the
rights of the Grantee under this Agreement without the Grantee's consent.
14. SEVERABILITY. In the event that one or more of the provisions
of this Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable
from the other provisions hereof, and the remaining provisions hereof shall
continue to be valid and fully enforceable.
15. RELATION TO PLAN. This Agreement is subject to the terms and
conditions of the Plan. In the event of any inconsistent provisions between
this Agreement and the Plan, the Plan shall govern. The Board acting pursuant
to the Plan, as constituted from time to time, shall except as otherwise
expressly provided herein have the right to determine any questions that
arise under this Agreement.
16. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the successors, administrators,
heirs, legal representatives and assigns of the Grantee and the successors
and assigns of the Company.
17. NOTICES. Any notice to the Company provided for herein shall be
in writing to the attention of the Corporate Secretary at XXX.XXX INC., 0000
Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxx 00000, and any notice to the Grantee
shall be addressed to the Grantee at his address currently on file with the
Company. Except as otherwise provided herein, any written
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notice shall be deemed to be duly given if and when hand delivered, or five
business days after having been mailed by United States registered or
certified mail, return receipt requested, postage prepaid, or three business
days after having been sent by a nationally recognized overnight courier
service, addressed as aforesaid. Any party may change the address to which
notices are to be given hereunder by written notice to the other party as
herein specified, except that notices of changes of address shall be
effective only upon receipt.
18. GOVERNING LAW. The laws of the State of Delaware, without
giving effect to the principles of conflict of laws thereof, shall govern the
interpretation, performance and enforcement of this Agreement.
19. PRIOR AGREEMENT. This Agreement supersedes in its entirety the
Nonqualified Stock Option Agreement, dated as of October 4, 1999, between the
Company and the Grantee.
[signature page follows]
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This Agreement is executed by the Company as of the 17th day of
May, 2000.
XXX.XXX INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Chairman of the Board
The undersigned hereby acknowledges receipt of an executed original
of this Agreement and accepts the award of Restricted Shares granted
hereunder on the terms and conditions set forth herein and in the Plan.
Date: May 17, 2000 /s/ Xxxxxxxxx X. Xxxxxxx
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