STOCK PURCHASE AGREEMENT
UNDER
JACO ELECTRONICS, INC.
RESTRICTED STOCK PLAN
AGREEMENT, made this 27th day of March 1998, by and between Jaco
Electronics, Inc., a New York corporation having offices at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 (the "Company"), and
_____________________________________________, (the "Participant").
RECITALS:
WHEREAS, the Company has adopted the Jaco Electronics, Inc. Restricted
Stock Plan (the "Plan") under which eligible employees selected by the Board may
purchase certain stock of the Company, subject to those restrictions as
determined by the Board; and
WHEREAS, the Participant is an employee of the Company and has been
selected by the Board to purchase Restricted Stock in accordance with the Plan;
and
WHEREAS, the defined and capitalized terms of this agreement have the
same meaning and definition as in the Plan, unless otherwise provided herein.
NOW, THEREFORE, for valuable consideration, receipt of which is
acknowledged, the parties agree as follows:
1. Purchase of Shares. The Participant subscribes for and, upon
acceptance, shall purchase, subject to the terms and conditions set forth in
this Agreement, common shares (the "Restricted Stock"), par value $.10 per share
(the "Common Shares"), of the Company at a purchase price of $1.00 per share.
The aggregate purchase price of the Restricted Stock shall be paid by the
Participant by Check payable to the order of the Company.
Upon the Company receiving payment for the Restricted Stock, it shall
issue to the Participant one or more certificates in the name of the Participant
for that number of shares of Restricted Stock purchased by Participant. The
Participant agrees that the Restricted Stock shall be subject to the forfeiture
restrictions set forth in Paragraphs 2 and 3 of this Agreement and the
restrictions on transfer set forth in Paragraph 4 of this Agreement and that all
of such shares are Restricted Stock.
2. Repurchase Provisions. Purchase by the Participant of all Restricted
Stock hereunder is subject to the following restrictions:
(a) If a Participant's employment with the Company shall be
terminated by the Company based upon Discharge For Cause, or by the act of the
Participant in voluntarily terminating his employment with the Company, within
five (5) years from the date Restricted Stock shall have been purchased
hereunder, the Company shall have the option for a period of sixty (60) days
after such termination of employment, to buy any or all of the shares purchased
by such terminated employee, which have not vested in accordance with the
vesting schedule determined by the Board, for an amount equal to the product of
(x) the consideration paid by the terminated employee to the Company to acquire
such shares, multiplied by (y) the number of shares which the Company
repurchases ("Repurchase Price"). The provisions of this paragraph shall
automatically terminate and the restrictions shall be removed in accordance with
the Section 6.9 of the Plan immediately following a "Change of Control of the
Company." A "Change of Control of the Company" shall mean a dissolution or
liquidation of the Company or a merger, consolidation, sale of all or
substantially all of its assets, or other corporate reorganization in which the
Company is not the surviving corporation.
(b) If a Participant shall, within five (5) years from the
date Restricted Stock shall have been purchased, directly or indirectly, own,
manage, operate, control, be employed by, or participate in, as a partner, joint
venture, employee, agent, salesman, officer, director, five (5%) percent
shareholder, or be connected in any manner with the ownership, management,
operation, control, employment or participation as a partner, joint venture,
employee, agent, salesman, officer, director, or five (5%) percent shareholder,
of any business similar to the type of business conducted by the Company at that
time, as determined in the sole discretion of the Board, the Company shall have
the option for a period of sixty (60) days after such determination to buy any
or all of the shares purchased by Participant, which have not vested in
accordance with the vesting schedule determined by the Board, for an amount
equal to the Repurchase Price. The provisions of this paragraph shall
automatically terminate and the restrictions shall be removed in accordance with
Section 6.9 of the Plan immediately following a Change of Control of the Company
or if the Participant is terminated by the Company under circumstances which do
not constitute a Discharge for Cause.
(c) If, within twelve (12) months of the date on which
Restricted Stock is purchased hereunder, the Company shall not have filed a
registration statement under the Securities Act for the public offer and sale of
its Common Shares and any such registration statement shall not have been
declared effective by the Securities and Exchange Commission, then the Company
shall have the option for a period of sixty (60) days after the end of such
twelve (12) month period to buy any or all of the shares purchased hereunder for
an amount equal to the Repurchase Price.
3. Exercise of Repurchase Provision.
(a) If at any time within five (5) years from the date hereof,
the Company determines to exercise its option to purchase all of the Restricted
Stock or such lesser percentage of the Restricted Stock as is, at such time,
subject to restriction as provided in Paragraph 2(a), 2(b) and 2(c), the Company
shall give notice of such exercise to the Participant within the applicable
sixty (60) day period.
(b) Within three (3) business days after the Company gives
notice to the Participant of the exercise of its repurchase option pursuant to
Paragraph 3(a), the Participant shall deliver to the Company at its address
shown above the certificate or certificates representing the Restricted Stock
that the Company has elected to purchase, duly endorsed in blank by the
Participant or with duly endorsed stock powers attached, all in form suitable
for the transfer of the Restricted Stock to the Company. Upon receipt of the
Restricted Stock, the Company shall deliver or mail to the Participant payment
for the aggregate Repurchase Price, or the Company may, at its option, set off
the Repurchase Price from any obligation or liability to a Participant, whether
as compensation or otherwise.
(c) After the time when any Restricted Stock is required to be
delivered to the Company for transfer pursuant to Paragraph 3(b), the Company
shall not pay any dividend to the Participant on account of such Restricted
Stock, or permit the Participant to exercise any of the privileges or rights of
a shareholder with respect to such Restricted Stock, but shall, insofar as
permitted by law, treat the Company as the owner of such Restricted Stock.
(d) The Company shall not be required to purchase any fraction
of a share of Restricted Stock upon exercise of the repurchase provision, and
any such fraction resulting from a computation made pursuant to paragraph 9 of
this Agreement may be rounded to the nearest whole share (with any one-half
share being rounded upward).
4. Restrictions on Transfer.
(a) Except as otherwise provided in Paragraph 4(b), the
Participant shall not, during the term of the repurchase provisions specified in
Paragraphs 2 and 3, sell, assign, transfer, pledge, hypothecate, or otherwise
dispose of, by operation of law or otherwise (collectively "transfer"), any of
the Restricted Stock, or any interest therein, unless the Restricted Stock is no
longer subject to the repurchase provisions in Paragraphs 2 and 3.
(b) Notwithstanding the foregoing, the Participant may
transfer Restricted Stock by Last Will and Testament or the laws of Descent and
Distribution, provided that such shares shall remain subject to this Agreement,
including without limitation the restrictions on transfer set forth in this
Paragraph 4 and the repurchase provisions set forth in Paragraphs 2 and 3, and
the permitted transferee shall, as a condition to the transfer, deliver to the
Company a written instrument confirming that the transferee shall be bound by
all of the terms and conditions of this Agreement.
(c) Except insofar as may otherwise be required by law or this
Agreement, no Restricted Stock held at any time pursuant to an Escrow Agreement
entered into between the Participant, the Company and an Escrow Agent, as
referred to in the Plan, shall be subject in any manner to alienation by
anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment,
charge, or encumbrance of any kind nor in any manner be subject to the debts or
liabilities of Participant and/or any person and any attempt to so alienate or
subject any such amount, whether presently or thereafter payable, shall be void.
If Participant and/or any person in violation of the provisions of this
Agreement shall attempt to, or shall alienate, sell, transfer, assign, pledge,
attach, charge, or otherwise encumber any Restricted Stock purchased under this
Agreement, or any part thereof, or if by reason of Participant's bankruptcy or
other event happening at any such time, such Restricted Stock would be made
subject to Participant's debts or liabilities or would otherwise not be enjoyed
by Participant, then the Board, if they so elect, may direct that such
Restricted Stock be withheld and that the same or any part thereof be paid or
applied to or for the benefit of such Participant, his or her spouse, children
or other dependents, or any of them, in such manner and proportion as the Board
may deem proper, in their sole discretion.
5. Effect of Prohibited Transfer. In the event of a transfer of
Restricted Stock without compliance with the terms of this Agreement or the
Plan, the Company shall not be required:
(a) To transfer on its books any of the Restricted Stock that
shall have been sold or transferred in violation of any of the provisions set
forth in this Agreement or the Plan; or
(b) To treat as owner of such Restricted Stock or to pay
dividends to any transferee to whom any of such shares shall have been so sold
or transferred.
6. Restrictive Legends. All certificates representing Restricted Stock
shall have affixed thereto legends in substantially the following form, in
addition to any other legends that may be required under federal or state
securities laws:
(i) "The shares of Jaco Electronics, Inc. $.10 par value
common stock evidenced by this certificate are subject to
repurchase by Jaco Electronics, Inc., and such shares may not
be sold or otherwise transferred, pledged or hypothecated
except pursuant to the provisions of the Escrow Agreement
and/or Stock Purchase Agreement by and between the Escrow
Agent, Jaco Electronics, Inc. and the registered owner of such
shares." and
(ii) "This stock certificate may not be sold, transferred,
pledged or hypothecated unless it has first been registered
under the Securities Act of 1933, as amended, or unless
counsel for Jaco Electronics, Inc. has given an opinion that
registration under said Act is not required, except that after
a Change of Control of the Company, an opinion of counsel that
registration under said Act is not required, may be provided
by counsel independent of Jaco Electronics, Inc. These shares
are subject to the terms of an Escrow Agreement and/or Stock
Purchase Agreement with the Escrow Agent, Jaco Electronics,
Inc. and the registered owner of such shares."
7. Removal of Restrictions.
(a) If (i) a Participant shall die, retire, or become
permanently and totally disabled, as determined in accordance with applicable
Company personnel policies, or (ii) there is a Change of Control of the Company
at any time after the date Restricted Stock shall have been purchased hereunder,
or (iii) with respect to Restricted Stock released from restriction upon the
passage of time as provided in Paragraph 2(a) and 2(b), the events of forfeiture
specified in Paragraphs 2(a) and (b) (but not 2(c)) shall automatically
terminate as to all of the Restricted Stock in the case of an event described in
clause 7(a)(i) or 7(a)(ii), or as to the applicable number of shares in the case
of an event described in clause 7(a)(iii), and upon surrender and presentation
to the Company of the legended certificates evidencing such shares, replacement
certificates shall be issued and delivered to the Participant, free from the
legend provided for in Paragraph 6(i) hereof or any other restrictions on the
sale or other transfer of such shares, pursuant to the Plan, and free from the
legend provided for in Paragraph 6(ii) hereof pursuant to the rules and
regulations of the Securities Act, and such shares shall, nonetheless, remain
subject to the Securities Act and the Exchange Act, unless an opinion of counsel
is provided in accordance with Section 6.7(d) of the Plan.
(b) If the Company chooses not to exercise its sixty (60) day
option with respect to any Restricted Stock or such sixty (60) day option period
has expired pursuant to the applicable provisions of Paragraph 2, the events of
forfeiture specified in Paragraph 2 shall terminate, and upon surrender and
presentation to the Company of the legended certificates evidencing such
Restricted Stock, replacement certificates shall be issued and delivered to the
Participant, free from the legend provided for in Paragraph 6(i) hereof or any
other restrictions on the sale or transfer of such Restricted Stock pursuant to
the Plan or this Agreement, and free from the legend provided for in Paragraph
6(ii) hereof pursuant to the rules and regulations of the Securities Act, and
such shares shall, nonetheless, remain subject to the Securities Act and the
Exchange Act, unless an opinion of counsel is provided in accordance with
Section 6.7(d) of the Plan.
8. Investment Representations. The Participant represents, warrants, and
covenants as follows: (a) The Participant is purchasing the Shares for his or
her own account for investment only, and not with a view to distribution or
resale. (b) The Participant understands that the offering and sale of the
Restricted Stock is intended to be exempt under the Securities Act and any
applicable "Blue Sky" laws. (c) The Participant understands that the Shares are
deemed to be "Restricted Securities" as defined in Rule 144 under the Securities
Act and that such Shares may not be offered for sale, sold, delivered after
sale, pledged, hypothecated, transferred, assigned, or otherwise disposed of
except pursuant to registration under the Securities Act or pursuant to an
opinion of counsel satisfactory in form and substance to the Company, that the
sale, transfer or other disposition may be made without registration.
9. Adjustments. In the event the Common Shares hereafter is changed
into or exchanged for a different number or kind of shares or other securities
of the Company or of another corporation by reason of merger, consolidation, or
other reorganization, recapitalization, reclassification, combination of shares,
stock split-up, or stock dividend, then:
(a) The number of shares of Restricted Stock purchased by
Participant pursuant to this Agreement shall be adjusted appropriately, both as
to the number of shares and the price;
(b) Such new or additional or different shares or securities
which are distributed to the Participant, in his or her capacity as the owner of
Restricted Stock purchased hereunder, shall be subject to all of the conditions
and restrictions applicable to Restricted Stock issued as provided herein.
Any adjustments required hereunder and the manner of
application of the foregoing provisions shall be determined solely by the Board,
and any such adjustment may provide for the elimination of fractional share
interests.
10. Withholding Taxes.
(a) A Participant who files an election with the Internal
Revenue Service to include the fair market value of any Restricted Stock in
gross income while such shares are still subject to restrictions shall promptly
furnish the Company with a copy of such election together with information as to
the amount of any federal, state, local or other taxes required to be withheld
to enable the Company to claim an income tax deduction with respect to such
election.
(b) All Restricted Stock purchased pursuant hereto and
dividends on such shares shall be subject to withholding as required by
applicable federal, state and local laws, and the Board may make such
arrangements for the payment of any withholding taxes on Restricted Stock
purchased pursuant hereto as they deem satisfactory, including but not limited
to (i) reducing the number of shares of Restricted Stock otherwise deliverable,
based upon their fair market value, to permit deduction of the amount of any
such withholding taxes from the amount which may otherwise be purchased under
the Plan, (ii) deducting the amount required to be withheld from salary or any
other amount then or thereafter payable to the Participant, and (iii) requiring
the Participant to pay to the Company the amount required to be withheld as a
condition of releasing the Shares and any other distributions related thereto.
11. Rights as Shareholder. Subject to the provisions of Paragraph 12
hereof, a certificate or certificates for all Restricted Stock registered in the
name of the Participant shall be delivered to him or her as soon as reasonably
practicable and he or she shall thereupon be a shareholder and have all the
rights of a shareholder with respect to such shares, including the right to vote
and receive all dividends or other distributions made or paid with respect to
such shares; provided, that such shares, and any new, additional or different
securities the Participant may become entitled to receive with respect to such
shares by virtue of a stock split or stock dividend or any other change in the
corporate or capital structure of the Company, shall be subject to the
restrictions described in Paragraphs 2, 3 and 4 hereof.
12. Escrow. In order to enforce the restrictions imposed upon the
Restricted Stock issued under the Plan, the Board may require the Participant to
deposit with the Escrow Agent all certificates for Restricted Stock together
with stock powers, appropriately endorsed in blank, and to enter into an Escrow
Agreement providing that the certificates representing Restricted Stock issued
pursuant to the Plan shall remain in the physical custody of the Escrow Agent
until any or all of the restrictions imposed pursuant hereto have terminated. If
required by the Board, the Escrow Agreement shall be executed at the time the
Participant is entitled to receive the Restricted Stock.
13. Stock Certificates. The Company may, but shall not be required to,
issue or deliver any certificate for Restricted Stock purchased hereunder or any
portion thereof, prior to fulfillment of all of the following conditions:
(a) The admission of such Restricted Stock to listing on all
stock exchanges on which the Common Shares is then listed;
(b) The completion of any registration or other qualification
of such Restricted Stock under any federal or state law or under the rules or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body, which the Board shall in their sole discretion deem necessary
or advisable;
(c) The obtaining of any approval or other clearance from any
federal or state governmental agency which the Board shall in their sole
discretion determine to be necessary or advisable;
(d) Compliance with all terms and provisions of the Plan, this
Agreement and the Escrow Agreement;
(e) The lapse of such reasonable period of time following the
purchase of the Restricted Stock as the Board from time to time, in their sole
discretion, may establish for reasons of administrative convenience; and
(f) The approval of the Plan by the holders of a majority of
the shares of Common Shares of the Company represented at an annual or special
meeting of the shareholders of the Company.
Nothing herein contained shall be construed as imposing any
obligation on the Board or the Company to undertake or complete any act with
respect to subparagraphs (a), (b), (c) or (f) of this Paragraph 13.
14. Severability. The invalidity or enforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of this Agreement shall be
severable and enforceable to the extent permitted by law.
15. Waiver. Any provision contained in this Agreement may be waived,
either generally or in any particular instance, by the Board provided that such
waiver shall be effective only if in writing and confirmed by a writing executed
and delivered with the same formality as this Agreement.
16. Binding Effect. This Agreement shall be binding upon, and inure to
the benefit of, the Company and the Participant and their respective heirs,
executors, administrators, legal representatives, successors, and assigns, as
provided in this Agreement.
17. No Rights to Employment. Nothing contained in this Agreement shall
be construed as giving the Participant any right to be retained, in any
position, as an employee of the Company.
18. Notice. All notices required or permitted hereunder shall be in
writing and deemed effectively given upon personal delivery or three (3)
business days following deposit in the United States Post Office, by registered
or certified mail, postage prepaid, addressed to the other party at the address
shown above, or at such other address or addresses as either party shall
designate to the other in accordance with this Paragraph 18.
19. Pronouns. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine, or neuter
forms. The singular form of nouns and pronouns shall include the plural, and the
plural form of nouns and pronouns shall include the singular.
20. Entire Agreement. This Agreement constitutes the entire agreement
between the parties, and supersedes all prior agreements and understandings
relating to the subject matter of this Agreement.
21. Amendment. This Agreement may be amended or modified only by a
written instrument executed with the same formality as this Agreement.
22. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same instrument, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to all the other parties.
23. Headings. The headings contained in this Agreement are for
reference only and shall not under any circumstances be deemed to affect the
meaning or interpretation of this Agreement.
24. Recitals. The recitals are deemed a part of this Agreement.
25. Litigation. This Agreement shall be governed and interpreted in
accordance with the laws of the State of New York and, regardless of the order
in which the signatures of the parties are affixed, it shall be deemed executed
at the Company's address, as above. The parties consent to the jurisdiction and
venue of any state or federal court located within the State of New York, the
County of New York or the Southern District of the U.S. District Court and agree
that all actions or proceedings arising, directly or indirectly, from this
Agreement shall be litigated only in courts having such situs and in any such
action or proceeding, the parties waive trial by jury and the successful party
shall be entitled to recover reasonable counsel fees and the expenses of such
litigation. In any such action or legal proceeding, the court shall apply such
rule of law of the State of New York including any conflicts of law rule, which
shall have the affect of sustaining the validity of all the terms and provisions
of this Agreement.
26. Receipt of Plan. The Participant hereby acknowledges that prior to
execution of this Agreement, Participant has received, read and fully
understands all of the terms and provisions of the Plan.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
JACO ELECTRONICS, INC.
By:
ATTEST:
PARTICIPANT:
Name:
ATTEST:
