EXHIBIT (d)(2)
MILLENNIUM CELL INC.
RESTRICTED STOCK AGREEMENT
Millennium Cell Inc. (the "Company") hereby grants you, [NAME OF
HOLDER] (the "Holder"), a grant of Restricted Stock under the Company's Amended
and Restated 2000 Stock Option Plan (the "Plan"). The date of this Agreement is
August 22, 2003 (the "Grant Date"). Subject to the provisions of Appendix A
(attached) and of the Plan, the principal features of this grant are as follows:
Total Number of Shares of Restricted Stock: [ ]
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SCHEDULED NUMBER OF SHARES
VESTING DATES ("SHARES")
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August 22, 2004
(or if the common stock price closes at
or above $4.25, whichever occurs first)
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August 22, 2005
(or if the common stock price closes at
or above $5.10, whichever occurs first)
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Your signature below indicates your agreement and understanding that
this grant is subject to all of the terms and conditions contained in this
Agreement and the Plan. For example, important additional information on vesting
and forfeiture of the Shares covered by this grant is contained in Paragraphs 3
and 4 of Appendix A. PLEASE BE SURE TO READ ALL OF APPENDIX A WHICH CONTAINS THE
SPECIFIC TERMS AND CONDITIONS OF THIS AGREEMENT. YOU AGREE TO EXECUTE THIS
AGREEMENT AS A CONDITION TO RECEIVING ANY SHARES.
MILLENNIUM CELL INC. HOLDER
By: _______________________________ ______________________________
Name: Name:
Title:
APPENDIX A
TERMS AND CONDITIONS OF RESTRICTED STOCK
1. Grant. The Company hereby grants to the Holder under the Plan for past
services and as a separate incentive in connection with his or her
employment or retention and not in lieu of any salary or other
compensation for his or her services, an award of _______ shares of
Restricted Stock (the "Restricted Shares") on the Grant Date, subject
to all of the terms and conditions in this Agreement and the Plan.
2. Shares Held in Escrow. Unless and until the Restricted Shares shall
have vested in the manner set forth in paragraph 3 below, such Shares
shall be issued to and held by Xxxxxx Xxxxxx & Company, Inc. ("Xxxxxx
Xxxxxx") as escrow agent (the "Escrow Agent"), and shall not be sold,
transferred or otherwise disposed of, and shall not be pledged or
otherwise hypothecated. The Company may instruct the transfer agent for
its Common Stock to place a legend on the certificates representing the
Restricted Shares or otherwise note its records as to the restrictions
on transfer set forth in this Agreement and the Plan. The Holder
acknowledges that his or her stock certificate representing the
Restricted Shares shall be issued in the custody of Xxxxxx Xxxxxx. Upon
vesting of the Restricted Shares, the Company shall instruct its
transfer agent to remove any restrictive legend from the share
certificate and deposit that portion of the Shares that has vested (the
"Vested Shares") into the Holder's existing account at Xxxxxx Xxxxxx,
subject to payment (through the sale of a portion of the Vested Shares)
of all applicable withholding taxes, as described in paragraph 7 below.
3. Vesting Schedule.
(a) Except as otherwise provided in this paragraph 3 and subject to
paragraph 4 below, the Restricted Shares awarded by this Agreement shall vest in
the Holder, as follows (i) fifty percent (50%) of the Restricted Shares shall
vest on August 22, 2004, or if the Common Stock price closes at or above $4.25,
whichever occurs first, (ii) the remaining fifty percent (50%) of the Restricted
Stock shall vest on August 22, 2005, or if the Common Stock price closes at or
above $5.10, whichever occurs first (each, a "Vesting Date"). The Restricted
Shares shall not vest in accordance with any of the provisions of this Agreement
unless the Holder provides Continues Service from the Grant Date until the date
such vesting is deemed to have occurred.
(b) Notwithstanding the foregoing, if the Holder takes a Company-approved
leave of absence or changes to part-time (less than 30 hours per week)
employment with the Company ("LOA"), the scheduled vesting of any Restricted
Shares granted hereunder shall be modified as follows: (1) if the duration of
the Holder's LOA does not exceed one-half of the period between (A) the Grant
Date and the next scheduled Vesting Date, or (B) Vesting Dates (the "Vesting
Period"), the vesting schedule set forth above shall not be affected by the
Holder's LOA; and (2) if the duration of the Holder's LOA exceeds one-half of
any Vesting Period, the Restricted Shares scheduled to vest in that Vesting
Period shall not vest, but instead shall be scheduled to vest on the date (the
"Deferred Vesting Date") determined by adding the duration of that Vesting
Period to the last scheduled Vesting Date (or, if later, to the last Deferred
Vesting Date resulting from the application of this paragraph 3(b)(2)).
The provisions of this paragraph 3(b) are illustrated by the following
examples:
(i) Example 1. 50% of Holder's Restricted Shares is scheduled to vest on
August 22, 2004. On December 15, 2003, Holder begins a three-month LOA.
50% of Holder's Restricted Shares will continue to be scheduled to vest
on August 22, 2004.
(ii) Example 2. 50% of Holder's Restricted Shares is scheduled to vest on
August 22, 2004. On December 15, 2003, Holder begins a seven month LOA
and returns on a full-time basis on July 15, 2004. Holder's Restricted
Shares that were scheduled to vest on August 22, 2004 will not vest on
that date, but instead will be scheduled to vest on August 22, 2006
(that is, the date determined by adding one year (the duration of the
Vesting Period of August 22, 2003 through August 22, 2004) to August
22, 2005 (the last scheduled Vesting Date)).
Note that the vesting examples and dates provided above could change if
the common stock price closes at or above $4.25 or $5.10 prior to the
first and second anniversary vesting dates, respectively.
4. Forfeiture. Notwithstanding any contrary provision of this Agreement,
the balance of the Restricted Shares that has not vested at the time
the Holder ceases to be provide Continuous Service shall thereupon be
forfeited and automatically transferred to and reacquired by the
Company at no cost to the Company. The Holder hereby appoints the
Escrow Agent with full power of substitution as the Holder's true and
lawful attorney-in-fact, with irrevocable power and authority, in the
name and on behalf of the Holder to take any action and execute all
documents and instruments which may be necessary to transfer the
certificate or certificates evidencing such unvested Shares to the
Company upon the Holder's termination of Continuous Service.
5. Assignment Separate from Certificate. For purposes of facilitating the
enforcement of the provisions of paragraph 4 above, the Holder agrees
immediately upon the execution of this Agreement, to deliver an
Assignment Separate from Certificate in the form attached hereto as
Exhibit A, executed by the Holder and by the Holder's spouse (if
required for transfer), in blank, to Xxxxxx Xxxxxx, Director of Human
Resources of the Company, or his designee, who shall hold such
Assignment in escrow and shall take all such actions and effectuate all
such transfers and/or releases in accordance with the terms of this
Agreement.
6. Withholding of Taxes. The Company's obligation to deliver unrestricted
Shares to the Holder upon the vesting of such Shares, or the making of
a Section 83(b) election described in paragraph 7 below, shall be
subject to the satisfaction of all applicable foreign, federal, state
and local income, payroll, excise and employment tax withholding
requirements ("Withholding Taxes"). In order to satisfy all Withholding
Taxes due upon vesting of the Holder's Shares, or at any other time,
the Holder agrees to the following:
(a) As a condition of receiving any Shares, on the Grant Date, the Holder
must execute the Irrevocable Standing Order to Sell Shares, attached hereto as
Exhibit B, which authorizes the Company and --------- Xxxxxx Xxxxxx to take the
actions described in this Section (the "Standing Order"). The Holder authorizes
Xxxxxx Xxxxxx to sell, at the market price on any one of the three market
trading days following the applicable Vesting Date, (or in one-third increments
on each of the three market trading days following the applicable Vesting Date,
if the Holder is an executive officer of the Company subject to the reporting
requirements of Section 16 of the Securities Exchange Act of 1934, as amended,
or the Holder is a specifically named "Covered Person" under the Company's
Amended and Restated Compliance Procedures), as determined by Xxxxxx Xxxxxx, the
number of Vested Shares that the Company and Xxxxxx Xxxxxx have determined is
necessary to obtain proceeds sufficient to satisfy the Withholding Taxes and the
applicable commissions. The Holder understands and agrees that the number of
Shares that Xxxxxx Xxxxxx will sell will be based on the closing price of the
Common Stock on next market trading day following the Vesting Date.
(b) The Holder agrees that the proceeds received from the sale of Vested
Shares pursuant to paragraph 6(a) will be used to satisfy the Withholding Taxes
and, accordingly, the Holder hereby authorizes Xxxxxx Xxxxxx to pay such
proceeds to the Company for such purpose. The Holder understands that to the
extent that the proceeds obtained by such sale exceed the amount necessary to
satisfy the Withholding Taxes, such excess proceeds shall be deposited into the
Holder's account at Xxxxxx Xxxxxx. The Holder understands that the sale
described in paragraph 6(a) constitutes an estimate and that to the extent that
the proceeds obtained by such sale are insufficient of the amount necessary to
satisfy the Withholding Taxes, the Company may either (i) instruct Xxxxxx Xxxxxx
to sell (which such sale the Holder hereby authorizes), at the market price as
soon as practicable thereafter, the number of Vested Shares that the Company and
Xxxxxx Xxxxxx have determined is necessary to obtain proceeds sufficient to
satisfy the Withholding Taxes, or (ii) withhold from the Holder's wages or other
remuneration the amount sufficient to satisfy the Withholding Taxes, or (iii) a
combination thereof. The Holder further understands that any remaining Vested
Shares shall be deposited into the Holder's account at Xxxxxx Xxxxxx.
(c) The Holder acknowledges and agrees that if the number of Vested Shares
available for sale is insufficient to satisfy the Holder's Withholding Taxes, or
if a sale of Shares is not possible for any reason, then the Holder shall make
arrangements for the timely satisfaction of the portion of the Withholding Taxes
that cannot be satisfied through the sale of Vested Shares.
7. Section 83(b) Election.
(a) The Holder understands that Section 83(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), taxes as ordinary income the difference
between any amount paid for the Restricted Shares and the fair market value of
the Shares as of the date any restrictions on the Shares lapse. In this context,
"restriction" means the risk of forfeiture pursuant to paragraph 4 of this
Agreement. The Holder understands that the Holder may elect to be taxed at the
time the Restricted Shares are granted, rather than when and as the Shares vest
(and the risk of forfeiture lapses), by filing an election under Section 83(b)
of the Code with the Internal Revenue Service (attached hereto as Exhibit C)
within thirty (30) days from the Grant Date. ---------
(b) If the Holder chooses to make a Section 83(b) election as described
above, the Holder agrees to deliver to the Company a signed copy of the election
and deliver such copy to the Company prior to, or promptly upon, such filing,
accompanied by a cash payment in the amount the Company anticipates is required
to remit the Withholding Taxes. The Holder further agrees that the Company may
withhold from the Holder's wages or other remuneration the appropriate amount of
Withholding Taxes (to the extent not covered by the Holder's cash payment to the
Company). The Holder further agrees that, if the Company does not withhold an
amount from the Holder's wages or other remuneration sufficient to satisfy the
Withholding Taxes, the Holder shall make reimbursement on demand, in cash, for
the amount under-withheld.
(c) The Holder understands that if he or she makes a timely election under
Section 83(b) of the Code and provides the Company with (i) a copy of such
election, (ii) proof of filing such election, and (iii) cash payment in the
amount necessary to satisfy the Withholding Taxes, the Company shall not enforce
its rights under the Standing Order.
(d) The Holder acknowledges that the Holder must decide whether or not to
make a Section 83(b) election and that the Holder is solely responsible for
making or not making a timely Section 83(b) election (and obtaining tax advice
concerning whether and how to make such election). The Holder further
understands that an additional copy of such election form must be filed with his
or her federal income tax return for the calendar year in which the Grant Date
falls. The Holder acknowledges that the foregoing is only a summary of the
effect of United States federal income taxation laws with respect to the grant
of Restricted Shares hereunder, and does not purport to be complete. The Holder
further acknowledges that the Company has directed the Holder to seek
independent advice regarding the applicable provisions of the Code, the income
tax laws of any municipality, state or foreign country in which the Holder may
reside or work, the tax consequences of the Holder's death and the decision as
to whether or not to file an Section 83(b) election in connection with the
acquisition of the Restricted Shares.
8. Rights as Stockholder. Subject to the terms hereof, the Holder shall
have all the rights of a stockholder of the Company with respect to the
Restricted Shares while they are held in escrow, including without
limitation, the right to vote such Shares and to receive any cash
dividends declared thereon. If, from time to time until vesting, there
is (i) any stock dividend, stock split or other change in the
Restricted Shares, or (ii) any merger or sale of all or substantially
all of the assets or other acquisition of the Company, any and all new,
substituted or additional securities to which the Holder is entitled by
reason of the Holder's ownership of the Restricted Shares shall be
immediately subject to escrow, deposited with the Escrow Agent and
included thereafter as "Restricted Shares" for purposes of this
Agreement.
9. No Effect on Employment. The Holder acknowledges and agrees that the
vesting of Shares pursuant to paragraph 2 above is earned only by
providing Continuous Service at the will of the Company or in
accordance with the terms of any written employment agreement. The
Holder further acknowledges and agrees that this Agreement, the
transactions contemplated hereunder and the vesting schedule set forth
herein do not constitute an express or implied promise of continued
engagement for Continuous Service for the vesting period, for any
period, or at all, and shall not interfere with the Holder's right or
the Company's right to terminate the Holder's Continuous Service at any
time, with or without cause.
10. Adjustment for Stock Split. All references to the number of Restricted
Shares shall be proportionately adjusted to reflect any stock split,
stock dividend or other change in such Shares that may be made by the
Company after the Grant Date.
11. Address for Notices. Any notice to be given to the Company under the
terms of this Agreement shall be addressed to the Company, in care of
Xxxxxx Xxxxxx, Director of Human Resources, at 0 Xxxxxxxxxx Xxx Xxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000, or at such other address as the Company
may hereafter designate in writing.
12. Grant is Not Transferable. This grant and the rights and privileges
conferred hereby shall not be transferred, assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) and
shall not be subject to sale under execution, attachment or similar
process. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of this grant, or of any right or privilege conferred
hereby, or upon any attempted sale under any execution, attachment or
similar process, this grant and the rights and privileges conferred
hereby immediately shall become null and void.
13. Binding Agreement. Subject to the limitation on the transferability of
this grant contained herein and in the Plan, this Agreement shall be
binding upon and inure to the benefit of the heirs, legatees, legal
representatives, successors and assigns of the parties hereto.
14. Plan Governs. This Agreement is subject to all terms and provisions of
the Plan. In the event of a conflict between one or more provisions of
this Agreement and one or more provisions of the Plan, the provisions
of the Plan shall govern. Capitalized terms used and not defined in
this Agreement shall have the meaning set forth in the Plan.
15. Committee Authority. The Committee shall have the exclusive authority
and discretion to interpret the Plan and this Agreement, to adopt such
rules for the administration, interpretation and application of the
Plan as are consistent therewith and to interpret or revoke any such
rules. All actions taken and all interpretations and determinations
made by the Committee shall be final and binding upon the Holder, the
Company and all other persons. The Committee and any member thereof
shall not be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or this
Agreement.
16. Captions. Captions provided herein are for convenience only and are not
to serve as a basis for interpretation or construction of this
Agreement.
17. Agreement Severable. In the event that any provision in this Agreement
shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be
construed to have any effect on, the remaining provisions of this
Agreement.
18. Entire Agreement. This Agreement constitutes the entire understanding
of the parties on the subjects covered. The Holder expressly warrants
that he or she is not executing this Agreement in reliance on any
promises, representations, or inducements other than those contained
herein.
19. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to
its conflicts of law doctrine.
EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, _________________, hereby sell, assign and
transfer unto ________________________ (____) shares of the Common Stock of
Millennium Cell Inc., standing in my name on the books of said corporation
represented by Certificate No. ______ herewith and do hereby irrevocably
constitute and appoint to transfer the said stock on the books of the within
named corporation with full power of substitution in the premises.
This Stock Assignment may be used only in accordance with the
Restricted Stock Agreement (the "Agreement") between ________________________
and the undersigned Holder dated ________________.
Dated: _________________ Signature of Holder: ______________________________
Signature of Holder's Spouse: _____________________
INSTRUCTIONS: Please do not fill in any blanks other than the
signature line. The purpose of this assignment is to
facilitate the forfeiture provision set forth in the
Agreement, without requiring additional signatures on
the part of the Holder.
EXHIBIT B
IRREVOCABLE STANDING ORDER TO SELL SHARES
August 22, 2003
Xxxxxx Xxxxxx & Company, Inc.
0000 Xxxxxxxxx Xxxx XX
Xxxxx 0000
Xxxxxxx, XX 00000
Dear Sir or Madam:
The following relates to shares of Millennium Cell Inc. Common Stock
issued as restricted stock (the "Restricted Stock") under the Millennium Cell
Inc. Amended and Restated 2000 Stock Option Plan. Please consider this your
authorization to sell upon the request of my employer, Millennium Cell Inc. the
amount of shares required in order to cover withholding taxes, as well as the
fees associated with such sales.
Also, please consider this your authorization to transfer funds to my
employer, Millennium Cell Inc., in order to cover all taxes associated with the
Restricted Stock.
These instructions shall remain in effect for the duration of the
vesting of my Restricted Stock under the Plan and the time that is necessary to
cover withholding taxes, which is approximately two years.
In consideration for your honoring this request, I hereby agree to
waive any and all claims I may have against Xxxxxx Xxxxxx & Company, Inc.
relating to adverse consequences with fulfilling this request. I also agree to
indemnify you and hold you harmless for any and all losses, liabilities, or
expenses you may incur as a result of complying with this request.
Thank you,
Holder Signature:___________________________________
Print Holder Name:__________________________________
Date:_______________________________________________
EXHIBIT C
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of
the Internal Revenue Code of 1986, as amended, to include in taxpayer's gross
income for the current taxable year the amount of any compensation taxable to
taxpayer in connection with his or her receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year
of the undersigned are as follows:
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TAXPAYER SPOUSE
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----------------------------- -------------------- --------------------
NAME
----------------------------- -------------------- --------------------
----------------------------- -------------------- --------------------
TAXPAYER IDENTIFICATION NO.
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----------------------------- -------------------- --------------------
ADDRESS
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2. The property with respect to which the election is made is
described as follows: ____ shares (the "Shares") of the Common
Stock of Millennium Cell Inc. (the "Company").
3. The date on which the property was transferred is:
________________________
4. The property is subject to the following restrictions:
The Shares may be repurchased by the Company, or its assignee,
upon certain events. This right lapses with regard to a
portion of the Shares that are publicly traded and that the
taxpayer would be required to transfer at less than fair
market value based on the continued performance of services by
the taxpayer over time.
5. The fair market value at the time of transfer, determined
without regard to any restriction other than a restriction
which by its terms will never lapse, of such property is:
$__________.
6. The amount (if any) paid for such property is: $___________.
The undersigned has submitted a copy of this statement to the
person for whom the services were performed in connection with
the undersigned's receipt of the above-described property. The
transferee of such property is the person performing the
services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be
revoked except with the consent of the Commissioner.
Dated: _________________ Taxpayer: _________________________
The undersigned spouse of taxpayer joins in this election
Dated: _________________ Spouse of Taxpayer: __________________
