YTB INTERNATIONAL, INC. RESTRICTED STOCK AWARD AT ELECTION AWARD FOR NON- EMPLOYEE DIRECTORS
Exhibit
10.1
RESTRICTED
STOCK AWARD
AT
ELECTION AWARD FOR NON-EMPLOYEE DIRECTORS
RESTRICTED STOCK AWARD
AGREEMENT (this “Agreement”) effective
as of the 22nd day of
June, 2009 by and between YTB
INTERNATIONAL, INC., a Delaware corporation with principal executive
offices located at 0000 Xxxx Xxxxxxxxxxxx Xxxx, Xxxx Xxxxx, XX 00000 (the “Company”), and
__________ (the “Grantee”), with an
address at c/o YTB International, 0000 Xxxx Xxxxxxxxxxxx Xxxx, Xxxx Xxxxx, XX
00000.
WHEREAS, on ___________ (the “Grant Date”),
the Board of Directors (the “Board”) of the
Company granted to the Grantee a restricted stock award (the “Award”) in connection
with the Grantee’s election to the Board on ____________;
WHEREAS, pursuant to the
Company’s policy of compensating its non-employee members of the
Board, the Award shall consist of shares of the Company’s Class A common stock,
$0.001 par value per share (“Class A Common
Stock”), valued at $40,000, based on the Fair Market Value of the Class A
Common Stock as of the Grant Date; and
WHEREAS, the Award shall be granted under
the Company’s 2004 Stock Option and Restricted Stock Plan, as amended and
restated (the “2004
Plan”) (all capitalized terms used herein and not otherwise defined shall
have the meaning assigned thereto in the 2004 Plan).
NOW, THEREFORE, the Company
and the Grantee, intending to be legally bound hereby, agree as
follows:
1. Grant
of Award.
(a) Subject
to the terms and conditions of the 2004 Plan and those set forth below in this
Agreement, Grantee shall receive an Award of _______ shares of Class A Common
Stock (the “Shares”). The
Award shall vest in accordance with Section 2 below.
(b) The
Award shall be administered and interpreted by the Board. The Board
may delegate its authority to a committee or subcommittee, which may consist of
members of the Board. Unless otherwise specified in this Agreement,
the term “Board” shall include any committee or subcommittee to which the Board
has delegated such authority.
2. Vesting
of Award.
(a) Except
as otherwise provided in this Agreement, the number of Shares constituting the
Award shall vest ratably according to the vesting schedule set forth below;
provided, however, that the Grantee has continued to serve as a director of the
Company as of each Vesting Date set forth below.
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Vesting
Date
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Number
of Shares
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1st
Anniversary of Date of Grant
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xxx
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2nd
Anniversary of Date of Grant
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xxx
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3rd
Anniversary of Date of Grant
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xxx
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4th
Anniversary of Date of Grant
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xxx
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(b) Any
unvested portion of the Award shall be immediately forfeited upon the Grantee’s
failure for any reason to serve as a director of the Company.
3. Delivery
of Shares, Restrictions and Distributions.
(a) The
Grantee may not assign, transfer, pledge, or otherwise dispose of (any such
action being hereinafter referred to as a “Disposition”) any
unvested Shares or rights under this Agreement. Any attempt to
assign, transfer, pledge, or otherwise dispose of any unvested Shares or any
rights under this Agreement contrary to the provisions hereof, and the levy of
any execution, attachment, or similar process upon the unvested Shares, shall be
null, void, and without effect and shall result in the immediate forfeiture to
the Company without consideration of any unvested Shares. The Grantee
acknowledges that the Shares are “control securities” under Rule 144 (“Rule 144”)
promulgated under the Securities Act of 1933, as amended, and as such,
understands that he or she must resell the Shares subject to all conditions and
limitations set forth in Rule 144 applicable to control securities. The Grantee
understands and agrees that the Company may require, as a condition to any
Disposition of the Shares by the Grantee, that the Grantee furnish to the
Company a representation letter and an opinion of counsel satisfactory to the
Company that such Disposition is permissible under Rule 144.
(b) The
Grantee acknowledges that the Company’s Xxxxxxx Xxxxxxx Policy (the “Xxxxxxx Xxxxxxx
Policy”) imposes restrictions upon the Disposition of the Shares and
agrees that any Disposition is subject to the terms of the Xxxxxxx Xxxxxxx
Policy, Rule 10b-5 promulgated under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), and Section 16(b) of the Exchange Act.
(c) Notwithstanding
any other provision of this Agreement, the award, issuance, vesting and delivery
to the Grantee of the Shares and any distributions thereon shall be subject to
compliance with all applicable laws and regulations from time to time in effect
and with the rules and regulations of any securities exchange on which
securities of the Company may then be listed. The Grantee hereby
agrees to take any action and consents to the taking of any action by the
Company, with respect to the Shares awarded hereunder, necessary to achieve
compliance with such laws, regulations and rules. Any determination
by the Company with respect to the need for any action in order to achieve such
compliance with laws, regulations or rules shall be final, binding and
conclusive.
(d) The
Grantee hereby agrees to indemnify the Company and hold it harmless from and
against any and all damages or liabilities incurred by the Company (including
liabilities for attorneys’ fees and disbursements) arising out of any breach by
the Grantee of this Agreement, including, without limitation, any attempted
disposition of the Shares by the Grantee in violation of this Agreement,
applicable securities law requirements, or the Xxxxxxx Xxxxxxx
Policy.
(e) The
Grantee agrees that any legends required or deemed necessary or appropriate by
the Company under federal or state securities laws, may be placed on the
certificate(s) representing the Shares. The following legend shall be
placed on the Shares:
NOTICE IS
HEREBY GIVEN THAT THE SHARES OF CLASS A COMMON STOCK REPRESENTED BY THIS
CERTIFICATE ARE HELD SUBJECT TO, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED, GIFTED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH, THE TERMS,
CONDITIONS AND RESTRICTIONS SET FORTH IN THE AGREEMENT BETWEEN YTB
INTERNATIONAL, INC. AND THE GRANTEE (THE “AGREEMENT”), A COPY
OF WHICH IS ON FILE AT THE OFFICE OF YTB INTERNATIONAL, INC. NO SUCH
TRANSACTION SHALL BE RECOGNIZED AS VALID OR EFFECTIVE UNLESS THERE SHALL HAVE
BEEN COMPLIANCE WITH THE TERMS AND CONDITIONS OF THE AGREEMENT. IN
ADDITION, THE SHARES OF CLASS A COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE
DEEMED “CONTROL” SECURITIES AND THEIR RESALE IS SUBJECT TO CERTAIN PROVISIONS OF
RULE 144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
(f) The
Grantee hereby acknowledges that the Company will deliver certificates
representing the Shares as such Shares vest in accordance with this
Agreement.
(g) The
Grantee further understands and agrees that until the Shares vest, any
distributions with respect to unvested Shares shall be paid to and held by the
Company under and subject to the terms of this Agreement. As soon as
practicable after the date on which the Shares vest, the Company will cause to
be paid or delivered to the Grantee (which payment or delivery may be by the
U.S. mail at the last address for the Grantee indicated in the Company’s
records), the distributions held by the Company with respect to such Shares,
without interest thereon. In the event and at the time any Shares are
forfeited to the Company as provided in Section 2, all distributions held by the
Company with respect to such forfeited Shares shall be forfeited to and revert
to the Company.
4. Change
in Control.
(a) Upon
a Change in Control of the Company, the Board of Directors may, in its
discretion, accelerate the vesting on all unvested Shares.
(b) Upon
a Change in Control where the Company is not the surviving corporation (or
survives only as a subsidiary of another corporation), the Board may, in
addition to any action taken pursuant to clause (a) above, take one or a
combination of the following actions: (i) replace all outstanding
Awards that are not vested with comparable Awards by the surviving corporation
(or a parent or subsidiary of the surviving corporation), or (ii) exchange
outstanding unvested Shares for a payment by the Company in cash.
(c) For
purpose of this Agreement, a “Change in Control” of the Company means the
determination (which may be made effective as of a particular date specified by
the Board) by the Board, made by a majority vote that a Change in Control has
occurred, or is about to occur. Such a change shall not include,
however, a restructuring, reorganization, merger, or other change in
capitalization in which the persons who own an interest in the Company on the
date hereof (the “Current Owners”) (or
any individual or entity which receives from a Current Owner an interest in the
Company through will or the laws of descent and distribution) maintain more than
a 50% voting or economic interest in the resultant entity. Regardless
of the vote of the Board or whether or not the Board votes, a Change in Control
shall be deemed to have occurred as of the first day if any one or more of the
following subsections shall have been satisfied:
(i) Any
person (other than a person in control of the Company as of the effective date
of this Agreement, or other than a trustee or other fiduciary holding securities
under an Grantee benefit plan of the Company, or a company owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), becomes the beneficial
owner, directly or indirectly, of securities of the Company representing more
than thirty-five percent (35%) of the combined voting power of the Company’s
then outstanding securities;
(ii) individuals
who, as of the effective date of this Agreement, constituted the Board (the
“Incumbent
Board”) cease for any reasons to constitute at least a majority of the
Board; provided, that
any person becoming a director subsequent to the effective date of this
Agreement, whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least three quarters of the directors
comprising the Incumbent Board (other than an election or nomination of an
individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the
Company) shall be, for purposes of this Agreement, considered as though such
person were a member of the Incumbent Board, or
(iii) The
stockholders of the Company approve:
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(1)
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A plan of complete
liquidation of the Company;
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(2)
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An agreement for the sale
or disposition of all or substantially all of the Company’s assets;
or
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(iv) A
merger, consolidation, or reorganization of the Company with or involving any
other company, other than a merger, consolidation, or reorganization that would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 50% of the
combined voting power of the voting securities of the Company (or such surviving
entity) outstanding immediately after such merger, consolidation, or
reorganization.
5. Grantee
Rights.
(a) The
grant of the Award shall not confer upon the Grantee any right to continue to
provide service to the Company and shall not interfere in any way with the right
of Company to terminate the Grantee’s relationship with the
Company.
(b) The
rights granted pursuant to the Award shall not afford Grantee any rights or
additional rights to compensation or damages in consequence of the loss or
termination of his relationship with the Company for any reason
whatsoever.
(c) Grantee
shall not be entitled to any compensation or damages for any loss or potential
loss which Grantee may suffer by reason of a forfeiture of the Award due to the
termination of his relationship with the Company for any
reason.
6. Taxes.
(a) The
Grantee acknowledges that any and all taxes, whether local, state, or federal,
imposed as a result of this Award or any sums paid hereunder shall be borne by
Grantee without reimbursement by the Company.
(b) The
Grantee understands that under Section 83 of the Internal Revenue Code of 1986,
as amended (the “Code”), the fair
market value of the Shares on the date any forfeiture restrictions applicable to
such Shares lapse will be reportable as ordinary income on such lapse
date. The Grantee understands that he may elect under Section 83(b)
of the Code to be taxed at the Grant Date, rather than when such Shares ceases
to be subject to such forfeiture restrictions. Such election must be
filed with the Internal Revenue Service within thirty (30) days after the date
of this Agreement. The form for making this election is attached as
Exhibit A hereto. GRANTEE UNDERSTANDS THAT FAILURE TO MAKE THIS
FILING WITHIN THE THIRTY (30) DAY PERIOD WILL RESULT IN THE RECOGNITION OF
ORDINARY INCOME BY THE GRANTEE AS AND WHEN THE FORFEITURE RESTRICTIONS
LAPSE.
(c) GRANTEE ACKNOWLEDGES THAT IT IS
GRANTEE’S SOLE RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY ELECTION
UNDER SECTION 83(b), EVEN IF GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES
TO MAKE THIS FILING ON HIS BEHALF. This filing should be made by
registered or certified mail, return receipt requested, and Grantee must retain two (2)
copies of the completed form for filing with his state and federal tax returns
for the current tax year and an additional copy for his personal
records.
(d) Grantee
agrees to hold harmless and indemnify the Company, any member of its Board of
Directors and any equity holder from any and all Federal, state, local,
withholding or employment tax liability that may arise from this
Agreement.
7. No Shareholder
Rights. The Grantee shall not have any of the rights and
privileges of a shareholder with respect to unvested Shares, except as otherwise
provided herein.
8. Governing
Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.
9. Assignment and
Transfers. The Company may without the consent of the Grantee
assign all of its rights and obligations under this Agreement to a wholly-owned
subsidiary, a newly created legal entity (or a partnership controlled by the
Company), subsidiaries of the Company or to a successor in interest to the
Company which shall assume all obligations and liabilities
hereunder.
IN WITNESS WHEREOF, the
Company has caused its duly authorized officers to execute and attest this
Agreement, and the Grantee has executed this Agreement, effective as of the date
first written above.
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By:
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J.
Xxxxx Xxxxx, Chief
Executive
Officer
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I hereby
accept the Award described in this Agreement, and I agree to be bound by the
terms of the Agreement. I hereby further agree that all the decisions
and determinations of the Board shall be final, binding, and
conclusive.
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____________________________________
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_____________,
Grantee
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EXHIBIT
A
SECTION
83(b) ELECTION
Pursuant
to Section 83(b) of the Internal Revenue Code of 1986 (the “Code”), I hereby
elect to have the value of the restricted property described below taxed at the
time of transfer.
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1.
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Taxpayer’s
name, identification (social security) number and
address:
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(a)
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Name: ________________
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(b)
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Identification
Number: ______________________________________________
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(c)
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Address: _________________________________________________________
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_________________________________________________________________
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_________________________________________________________________
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2.
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Description of the
restricted property: xxx Shares of Class A Common Stock
of YTB International, Inc. (the “Shares”).
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3.
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Date
of transfer of the restricted property, and the taxable year for which
this election is made:
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(a)
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Date
of
transfer: ______________
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(b)
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Taxable
year: Calendar Year
Ended: _________.
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4.
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Nature
of the restriction: The Shares are subject to a four (4) year
vesting period.
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5.
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Fair
market value of the restricted property at the time of the transfer equals
$40,000, determined without regard to any lapse restriction (as defined in
Treas. Reg. §1.83-3(i)):
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6.
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Amount
paid for the restricted
property: $0.00.
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7.
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A
copy of this statement is being furnished to YTB International,
Inc.
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Signature
of Taxpayer
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Date
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