RESTRICTED STOCK AWARD AGREEMENT
THIS AGREEMENT is entered into and effective as of this 3rd day of
November, 1998 (the "Date of Grant"), by and between Tricord Systems, Inc. (the
"Company") and Xx. Xxxxxxxxx X. Xxxx (the "Grantee").
A. The Company has adopted the 1998 Stock Incentive Plan (the
"Plan) authorizing the Board of Directors of the Company, or a
committee as provided for in the Plan (the Board or such a committee to
be referred to as the "Committee"), to grant restricted stock awards to
employees and non-employee consultants and independent contractors of
the Company and its Subsidiaries (as defined in the Plan).
B. The Company desires to give the Grantee a proprietary
interest in the Company and an added incentive to advance the interests
of the Company by granting to the Grantee a restricted award of shares
of common stock of the Company pursuant to the Plan.
Accordingly, the parties agree as follows:
1. GRANT OF AWARD
The Company hereby grants to the Grantee a restricted stock award (the
"Award") consisting of 150,000 Shares (the "Award Shares") of the
Company's common stock, $.01 par value (the "Common Stock"), according
to the terms and subject to the restrictions and conditions hereinafter
set forth and as set forth in the Plan. Reference to the Award Shares
in this Agreement will be deemed to include the Dividend Proceeds (as
defined in Section 3.3 of this Agreement) with respect to such Award
Shares that are retained and held by the Committee as provided in
Section 3.3 of this Agreement.
2. GRANT RESTRICTION
2.1 RESTRICTION AND FORFEITURE. The Grantee's right to retain
the Award Shares will be subject to the Grantee remaining in
the continuous employ of the Company or any Subsidiary for a
period from the Date of Grant through December 1, 2000 (the
"Restriction Period"); provided, however, that such employment
period restrictions (the "Restrictions") will lapse and
terminate prior to end of the Restriction Period with respect
to installments of Award Shares to the extent and on such
dates as follows:
Date of Number of Award Shares for
Restriction Lapse Which Restrictions Lapse
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December 1, 1999 75,000
December 1, 2000 75,000
2.2 TERMINATION OF EMPLOYMENT
(a) TERMINATION DUE TO DEATH OR DISABILITY.
In the event that the Grantee's employment with the
Company and all Subsidiaries is terminated by reason
of the Grantee's death or Disability (as such term is
defined in the Plan), the Restrictions applicable to
the Award Shares will immediately lapse and
terminate.
(b) VOLUNTARY TERMINATION AND TERMINATION FOR CAUSE.
In the event the Grantee's employment with the
Company and all Subsidiaries is terminated
voluntarily by the Grantee or is terminated by the
Company for Cause (as such term is defined in the
Plan), all rights of the Grantee under the Plan and
this Agreement will terminate immediately without
notice of any kind, and this Award will be terminated
and all Award Shares with respect to which the
Restrictions have not lapsed will be forfeited.
(c) (c) TERMINATION WITHOUT CAUSE. In the
event the Grantee's employment with the Company and
all Subsidiaries is terminated by the Company without
Cause, the Restrictions applicable to the Award
Shares will immediately lapse and terminate.
2.3 CHANGE IN CONTROL
(a) IMPACT OF CHANGE IN CONTROL. If any events
constituting a Change in Control (as defined
in the Plan) of the Company occur, the Restrictions
will immediately lapse and terminate with respect to
all Award Shares that have been held for at least six
months from the Date of Grant.
(b) LIMITATION ON CHANGE IN CONTROL PAYMENTS.
Notwithstanding anything in this Section 2.3 to the
contrary, if, with respect to the Grantee,
acceleration of the vesting of the Award Shares as
provided above (which acceleration could be deemed a
"payment" within the meaning of Section 280G(b)(2) of
the Internal Revenue Code of 1986, as amended (the
"Code")), together with any other payments which the
Grantee has the right to receive from the Company or
any corporation which is a member of an "affiliated
group" (as defined in Section 1504(a) of the Code
without regard to Section 1504(b) of the Code) of
which the Company is a member, would constitute a
"parachute payment" (as defined in Section 280G(b)(2)
of the Code), the payments to the Grantee as set
forth herein will be reduced to the largest amount as
will result in no portion of such payments being
subject to the excise tax imposed by Section 4999 of
the Code; provided, however, that if the Grantee is
subject to a separate agreement with the Company or a
Subsidiary that specifically provides that payments
to the Grantee will not be reduced even if such
payments would constitute excess parachute payments
or provides that the Grantee will have the discretion
to determine which payments will be reduced in order
to avoid excess parachute payments (regardless of
whether such separate agreement specifically
references Award Shares under this Agreement), then
the limitations of this Section 2.3(b) will, to that
extent, not apply.
3. ISSUANCE OF AWARD SHARES
3.1 PRIVILEGES OF A SHAREHOLDER: TRANSFERABILITY. As
soon as practicable after the execution and delivery of this
Agreement and the satisfaction of any conditions to the
effective issuance of such Award Shares (including, without
limitation, the conditions set forth in Section 3 of this
Agreement and Section 15 of the Plan), the Grantee will be
recorded on the books of the Company as the owner of the Award
Shares, and the Company will issue one or more duly issued and
executed stock certificates evidencing the Award Shares. The
Grantee will have all voting, dividend, liquidation and other
rights with respect to the Award Shares in accordance with
their terms upon becoming the holder of record of such Award
Shares; provided, however, that, prior to the lapse or other
termination of the Restrictions applicable to Award Shares,
such Award Shares will not be assignable or transferable by
the Grantee, either voluntarily or involuntarily, and may not
be subjected to any lien, directly or indirectly, by operation
of law or otherwise. Any attempt to transfer, assign or
encumber the Award Shares other than in accordance with this
Agreement and the Plan will be null and void and will void the
Award, and all Award Shares for which the Restrictions have
not lapsed will be forfeited and immediately returned to the
Company.
3.2 ENFORCEMENT OF RESTRICTIONS. To enforce the
Restrictions imposed by this Agreement and the Plan, the
Committee may place a legend on the stock certificates
referring to the Restrictions and may require the Grantee,
until the Restrictions have lapsed with respect to Award
Shares, to keep the stock certificates evidencing such Award
Shares, together with duly endorsed stock powers, in the
custody of the Company or its transfer agent or to maintain
evidence of stock ownership of such Award Shares, together
with duly endorsed stock powers, in a certificateless
book-entry stock account with the Company's transfer agent.
3.3 DIVIDENDS AND OTHER DISTRIBUTIONS. Unless the
Committee determines otherwise in its sole discretion, the
Grantee will have no right to receive dividends or
distributions with respect to Award Shares, including cash
dividends, stock dividends or dividends in kind, the proceeds
of any stock split or the proceeds resulting from any changes
or exchanges described in Section 6 of this Agreement (all of
which will collectively be referred to as "Dividend
Proceeds"). The Committee may, in its sole discretion,
distribute such Dividend Proceeds to the Grantee or it may
retain and hold such Dividend Proceeds subject to the
Restrictions and the other terms and conditions of this
Agreement. In addition, the Committee may, in its sole
discretion, cause such Dividend Proceeds to be paid to the
Company pursuant to Section 5 of this Agreement in order to
satisfy any federal, state or local withholding or other
employment-related tax requirements attributable to such
dividends or distributions or to the Grantee's receipt of the
Award or the lapse or termination of the Restrictions
applicable to Award Shares.
4. RIGHTS OF GRANTEE
4.1 EMPLOYMENT. Nothing in this Agreement will interfere with
or limit in any way the right of the Company or any Subsidiary
to terminate the employment of the Grantee at any time, nor
confer upon the Grantee any right to continue in the employ of
the Company or any Subsidiary at any particular position or
rate of pay or for any particular period of time.
4.2 RIGHTS AS A SHAREHOLDER. The Grantee will have no rights
as a shareholder until the Grantee becomes the holder of
record of such Award Shares, and no adjustment will be made
for dividends or distributions with respect to the Award
Shares as to which there is a record date proceeding the date
the Grantee becomes the holder of record of the Award Shares,
except as may otherwise be provided in the Plan or determined
by the Committee in its sole discretion.
5. WITHHOLDING TAXES
The Company is entitled to (a) withhold and deduct from future wages of
the Grantee (or from other amounts that may be due and owing to the
Grantee from the Company), or cause to be paid to the Company out of
Dividend Proceeds, or make other arrangements for the collection of,
all legally required amounts necessary to satisfy any federal, state or
local withholding and employment-related tax requirements attributable
to the receipt of the Award, the receipt of dividends or distributions
on Award Shares, or the lapse or termination of the Restrictions
applicable to Award Shares, or (b) require the Grantee promptly to
remit the amount of such withholding to the Company. In the event that
the Company is unable to withhold such amounts, for whatever reason,
the Grantee agrees to pay to the Company an amount equal to the amount
the Company would otherwise be required to withhold under federal,
state or local law.
6. ADJUSTMENTS
In the event of any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock
split, combination of shares, rights offering or divestiture (including
a spin-off) or any other change in the corporate structure or shares of
the Company, the Committee (or, if the Company is not the surviving
corporation in any such transaction, the board of directors of the
surviving corporation), in order to prevent dilution or enlargement of
the rights of the Grantee, will make appropriate adjustment (which
determination will be conclusive) as to the number and kind of
securities subject to this Award.
7. SUBJECT TO PLAN
The Award and the Award Shares granted pursuant to this Agreement have
been granted under, and are subject to the terms of, the Plan. Terms of
the Plan are incorporated by reference in this Agreement in their
entirety, and the Grantee, by execution hereof, acknowledges having
received a copy of the Plan. The provisions of this Agreement will be
interpreted as to be consistent with the Plan, and any ambiguities in
this Agreement will be interpreted by reference to the Plan. In the
event that any provision of this Agreement in
inconsistent with the terms of the Plan, as amended or modified from
time to time, the terms of the Plan will prevail.
8. MISCELLANEOUS
8.1 BINDING EFFECT. This Agreement will be binding upon the
heirs, executors, administrators and successors of the parties
to this Agreement.
8.2 GOVERNING LAW. This Agreement and all rights and
obligations under this Agreement will be construed in
accordance with the Plan and governed by the laws of the State
of Delaware, without regard to conflicts of laws provisions.
Any legal proceeding related to this Agreement will be brought
in an appropriate Delaware court, and the parties to this
Agreement consent to the exclusive jurisdiction of the court
for this purpose.
8.3 ENTIRE AGREEMENT. This Agreement and the Plan set forth
the entire agreement and understanding of the parties to this
Agreement with respect to the grant and vesting of this Award
and the administration of the Plan and supersede all prior
agreements, arrangements, plans and understandings relating to
the grant and vesting of this Award and the administration of
the Plan.
8.4 AMENDMENT AND WAIVER. Other than as provided in the Plan,
this Agreement may be amended, waived, modified or canceled
only by a written instrument executed by the parties to this
Agreement or, in the case of a waiver, by the party waiving
compliance.
The parties hereto have executed this Agreement effective the day and year first
above written.
TRICORD SYSTEMS, INC.
By /s/ Xxxx X. Xxxxxxx
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Its Chairman/CEO
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By execution of this Agreement, GRANTEE
The Grantee acknowledges having
Received a copy of the Plan /s/ Xxxxxxxxx X. Xxxx
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(Signature)
Xxxxxxxxx X. Xxxx
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(Name and Address)
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