Exhibit 10.6
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RESTRICTED STOCK GRANT AGREEMENT
THIS RESTRICTED STOCK GRANT AGREEMENT(the "Agreement") is made as of
this 25 day of February, 2004, between XXXXX TECHNOLOGIES, INC. ("Company") and
XXXXXXX X. XXXX, ("Employee").
RECITALS
WHEREAS, Company is presently engaged in the electric-motor industry;
WHEREAS, Employee has relevant experience in management and engineering
that is valuable to Company;
WHEREAS, Company desires to grant a portion of shares to Employee
according to the terms of this Agreement;
WHEREAS, Company desires to obtain the employment of Employee by
providing incentives in the Company; and
WHEREAS, Company and Employee desire to enter into this Agreement.
NOW, THEREFORE, in view of the foregoing recitals which are
incorporated as a part of this Agreement, and in consideration of the terms and
conditions of this Agreement, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Grant of Shares. Company hereby grants to Employee Five Hundred
Thousand (500,000) shares (the Shares) of common stock of the Company in
accordance with this Agreement and subject to the vesting schedule, restrictions
and rights described herein. The Grant shall be effective upon execution by all
parties of this Agreement.
2. Vesting of Grant of Shares. Company shall grant to Employee within
three (3) business days of the stated vesting dates, shares of Company's common
stock as described more fully below. After vesting, Employee shall obtain the
Shares by delivering to the Company at its principal business offices a letter
in writing and signed by Employee stating that: (i) Employee has remained
employed with Company and therefore met the requirements for the Grant; (ii) the
number of Shares for which Employee is eligible under the Grant; and (iii) at
the same time delivering to Company the address and person to whom the Grant
should be issued. Company will thereafter have a period of three (3) business
days from the date Employee delivers the notice to verify the facts set forth in
Employee's notice and either issue the Shares or to deny the Grant. If the
exercise of the Grant is denied, Company shall immediately upon making such
determination, state in writing the basis for denying the Grant.
The Grant shall be and is subject to the following vesting schedule:
A. 150,000 shares shall vest immediately upon Employee and
Company Executing this Agreement.
B. Subject to the terms of this Agreement, the balance of
350,000 shares shall vest in allotments on the first business
day of the month set forth below:
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February 2005 100,000 shares
February 2006 100,000 shares
February 2007 150,000 shares
At the sole discretion of Company, Employee shall also be entitled to
receive stock options under applicable Company stock option plans.
3. Change of Control. All Shares under this Agreement as set forth in
Section 2 shall fully vest in Employee upon a "Change in Control." A "Change in
Control" shall be deemed to occur if (i) any "person" (as that term is used in
Sections 13 and 14(d)(2) of the Securities Exchange Act of 1934 as amended
("Exchange Act")) is or becomes the beneficial owner (as that term is used in
Section 13(d) of the Exchange Act), directly or indirectly, of 50% or more of
the voting Capital Stock of the Company ("Voting Stock") or (ii) during any
period of two consecutive years, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at least a majority
thereof, unless the election or the nomination for election by the Company's
shareholders of each new director was approved by a vote of at least
three-quarters of the directors then still in office who were directors at the
beginning of the period. Any merger, consolidation or corporate reorganization
in which the owners of the Company's capital stock entitled to vote in the
election of directors prior to said combination, own 50% or more of the
resulting entity's Voting Stock shall not, by itself, be considered a change in
control for the purposes of this Agreement.
4. Employee Termination or Voluntary Departure. Employee is an "at-will
employee" as that term is defined by Utah law and therefore Employee may be
terminated for any reason. If Employee is terminated prior to the first business
day of February 2007, Employee shall receive a prorated number of shares equal
to 12,500 shares per month for every full month Employee has been employed by
Company. Employee shall not be compensated for partial months worked if Employee
is terminated. Upon termination of Employee, all obligations and rights under
this Agreement shall terminate excepting those shares that have vested according
to the vesting schedule set forth in Section 2 above. If Employee is not
terminated, but instead voluntarily departs from the employment of Company,
Employee shall not be entitled to a monthly prorated number of shares, but shall
only be entitled to those shares that have vested under the vesting schedule set
forth in Section 2 above.
5. Price. Employee agrees that his remuneration for his employment with
the Company shall be equal to the "Price." The "Price" for each share as that
phrase is used herein shall be the value established by the Company's
independent auditor. The independent auditor shall review available relevant
market factors in determining the Price. It is anticipated, but not required,
that Employee will file necessary elections to secure the Price as basis for the
Shares, under Section 83(b) election of the Internal Revenue Code, for all
shares granted to Employee under this Agreement. Employee agrees and represents
that Employee is not relying upon Company for tax advice with relation to the
Agreement and Company shall not be responsible for preparing any tax documents
for Employee related to this Agreement other than employment tax documents
prepared in the ordinary course of business for salaried employees. Employee
understands that if Employee does not file a Section 83(b) election that each
grant of shares will be treated as "ordinary income" as that term is defined by
the Internal Revenue Service. Employee agrees and represents that the Price
established by Company's auditor has not been prepared by Company and that
Employee accepts the Price without any representation from Company as to the
accuracy of the Price. Employee also agrees and represents that Company shall
not be liable for any state or federal tax liability of Employee flowing from an
undervaluation or overvaluation of the Price by Company or the independent
auditor.
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6. Restrictions on Shares. Employee agrees that the Shares shall be
restricted and not subject to resale or transfer of any type except according to
the terms and conditions of this Agreement.
7. Transfer Subject to Securities Laws. Unless the Shares shall at some
time become registered shares under the securities laws of the United States and
any applicable State securities laws, any transfer of the Shares shall be
subject to the securities laws of the United States and any State or local laws
or ordinances which may be affected by such transfer or proposed transfer. No
transfer of the Shares shall be allowed on the books and records of Company
unless Employee or the proposed transferee shall provide a legal opinion
acceptable in form and content to Company and its legal counsel, and from legal
counsel acceptable to them, confirming that the transfer may be made under
various exemptions to such securities laws and that registration of the Shares
is not required. Any costs incurred by Company in obtaining an opinion from its
counsel shall be at the expense of Employee.
8. Representations Regarding Securities Laws. The Shares of Company
which may be issued or transferred subject to the Grant are part of a private
offering of such Shares by Company. Such Shares are securities within the
definition of State and Federal Securities Laws. Company has relied on certain
exemptions for private sales of securities and have not registered these
securities with the Securities & Exchange Commission under the Securities Act of
1933 nor have the Shares been registered with any State. To insure exemption
under applicable Federal and State Securities Laws, Employee hereby makes the
following representations which shall survive the delivery of the Shares herein
and which shall be true at the date of Grant issued herein:
(a) Residence. Employee is a bona fide resident of the State
of Utah as the term "resident" is used for securities law purposes.
(b) Intent. Employee is receiving the Shares with the intent
to hold such Shares for investment and in accordance with the purpose and intent
of this Agreement. No such Shares acquired are being acquired with the intent to
resell or redistribute to other persons except as otherwise permitted under
applicable securities laws and regulations.
(c) Legend on Certificates. The following legend shall be
placed on all certificates for Shares issued pursuant to this Agreement:
The securities evidenced by this certificate have not been registered
under the Securities Act of 1933 or the securities laws of Utah or any
other jurisdiction and have been taken for investment purposes only and
not with a view to the distribution thereof, and such securities may
not be offered, sold, transferred, assigned, pledged or hypothecated
unless registered pursuant to the applicable provisions of federal and
state securities laws or the Company receives an opinion of counsel
(which may be counsel for the Company) reasonably acceptable to the
Company stating that such offer, sale or transfer is exempt from such
registration requirements.
(d) Economic Risks. Employee understands the economic risks of
the Shares and understands that there is presently a limited public market for
the Shares and a more substantial public market may never be developed. Employee
further acknowledges the opportunity to obtain additional information from
Company upon request.
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9. Dividends. For purposes of dividends issued from Company on the
Shares, Employee shall be considered to own Five Hundred Thousand (500,000)
shares of Company's common stock from the date of this Agreement. Therefore,
Employee shall receive from Company cash or stock equivalent dividend options on
all dividends issued by Company as those dividends may be issued to the
Company's common stockholders. Employee may not receive favorable dividend tax
treatment on the dividends received depending upon the vesting period of the
shares.
10. Voting Rights. Employee shall have the right to vote each share of
common stock as has vested in Employee on the date of any vote of the common
stockholders of Company.
11. Miscellaneous.
11.1 Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally, sent
by electronic mail, sent by facsimile or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, sent by electronic mail, or sent by facsimile transmission
or, if mailed, three (3) days after the date of deposit in the United States
mails. Any party may, by notice given in accordance with this Section to the
other parties, designate the address or person for receipt of notice hereunder.
If to Company:
XXXXX TECHNOLOGIES, INC.
attn: Xxxxxxxx X. Xxxx
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, XX 00000
fax(801)000-0000
e-mail xxxxx@xxxxxxxxx.xxx
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If to Employee:
XXXXXXX X. XXXX
0000 Xxxxxxxx Xxxx
Xxxx Xxxx, XX 00000
11.2 Entire Agreement. The Agreement contains the entire
agreement among the parties with respect to the purchase of the Shares and
related transactions, and supersedes all prior agreements, written or oral, with
respect thereto.
11.3 Waivers and Amendments; Non-Contractual Remedies;
Preservation of Remedies. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by the parties or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof. Nor shall any
waiver on the part of any party of any such right, power or privilege, nor any
single or partial exercise of any such right, power or privilege, preclude any
further exercise thereof or the exercise thereof of any other such right, power
or privilege. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any party may otherwise have at law or
in equity. The rights and remedies of any party based upon, arising out of or
otherwise in respect of any inaccuracy in or breach of any representation,
warranty, covenant or agreement contained in this Agreement shall in no way be
limited by the fact that the act, omission, occurrence or other state of facts
upon which any claim of any such inaccuracy or breach is based may also be the
subject matter of any other representation, warranty, covenant or agreement
contained in this Agreement (or in any other agreement between the parties) as
to which there is no inaccuracy or breach.
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11.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Utah.
11.5 Binding Effect; No Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns and legal representatives. This Agreement is not
assignable by Employee.
11.6 No Third Party Beneficiaries. Nothing in this Agreement
is intended or shall be construed to give any person, other than the parties
hereto, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein.
11.7 Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all of the
parties hereto.
11.8 Headings. The headings in this Agreement are for
reference only, and shall not affect the interpretation of this Agreement.
11.9 Survival of Representations and Warranties. All
representations, warranties, agreements, covenants and obligations herein
delivered by Employee incident to the transactions contemplated hereby are
material, shall be deemed to have been relied upon by the other parties, shall
survive the execution hereof regardless of any investigation and shall not merge
in the performance of any obligation by any party hereto.
11.10 Severability. If any provisions of this Agreement shall
be held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
11.11 Conflict of Interest. Employee understands that this
Agreement has been prepared by Company to meet the needs and protect the
interests of Company. Employee represents that Company has encouraged and given
Employee a full and fair opportunity to review this Agreement with legal, tax
and all other necessary professional advisors who act solely on behalf of
Employee.
IN WITNESS WHEREOF, Company and Employee have executed this Agreement
effective as of the date first set forth above.
COMPANY: EMPLOYEE:
XXXXX TECHNOLOGIES, INC.
By /s/ Xxxxx Xxxxxxxxx By /s/ Xxxxxxx X. Xxxx
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Its: Chief Executive Officer Xxxxxxx X. Xxxx
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