METROPOLITAN HEALTH NETWORKS, INC. Restricted Stock Award Agreement for Independent Directors
Grant
No.: ______
METROPOLITAN
HEALTH NETWORKS, INC.
Restricted Stock Award
Agreement for Independent Directors
_________
Shares of Restricted Stock
THIS AGREEMENT (this
“Agreement”) dated as of the ______ day of __________, 2007, between METROPOLITAN HEALTH NETWORKS,
INC., a Florida corporation (the “Company”) and
_________________________________ (“Participant”) is made pursuant and subject
to the provisions of the Company’s Omnibus Equity Compensation Plan (the
“Plan”), a copy of which has been made available to Participant. All
terms used herein that are defined in the Plan have the same meaning given them
in the Plan.
1. Award of
Stock. Pursuant to the Plan, the Company, on [___________]
(the “Date of Grant”) granted to Participant, subject to the terms and
conditions of the Plan and subject further to the terms and conditions herein
set forth, an Award of ______ shares of Restricted Stock.
2. Restrictions. The shares of
Restricted Stock are nontransferable and are subject to forfeiture until
vested.
3. Vesting. Subject
to paragraph 4 through 6 below, Participant’s interest in the shares of
Restricted Stock shall become transferable and nonforfeitable (“Vested”) on the
one (1) year anniversary of the Date of Grant.
4. Death or
Disability. In the event of
Participant’s death or Disability (as defined in the Plan) while serving as a
member of the Board of Directors (a “Director”) of the Company and prior to the
forfeiture of the shares of Restricted Stock under paragraph 6, all shares of
Restricted Stock that are not then Vested shall become Vested as of the date of
Participant’s termination of service as a Director of the Company on account of
death or Disability.
5. Change in
Control. Notwithstanding any other provision of this
Agreement, all shares of Restricted Stock not previously forfeited shall become
Vested upon a Change in Control (as such term is defined in Section 13.2 of the
Plan).
6. Forfeiture. Upon
the Participant’s termination of service as a Director of the Company (and all
affiliates) for any reason (other than on account of the Participant’s death or
becoming Permanently and Totally Disabled or in connection with a Change in
Control), all non-Vested shares of Restricted Stock granted under this Agreement
shall be forfeited as of the date of termination and the escrow shall be
terminated.
7. Escrow
for Restricted Shares.
(a) Until the
Restricted Stock is Vested, the underlying shares shall be held by the Company
in escrow. Upon becoming vested, a share certificate for the newly
vested shares shall be delivered to the Participant as soon as administratively
feasible after the date of vesting.
(b) Subject
to the requirements of Paragraph 8, the Participant shall have all the rights of
a shareholder with respect to the shares held in escrow, including the right to
vote the shares and to receive all dividends and other distributions paid with
respect to the shares.
(c) Any
shares held in escrow under this Agreement shall be held, and a certificate
shall be issued, in the name of the Participant. The Participant does
hereby irrevocably constitute and appoint the Company’s Chief Financial Officer
and Controller as Participant’s attorney to transfer any forfeited shares on the
books of the Company with full power of substitution in the
premises. The Chief Financial Officer and/or the Controller shall use
the authority granted in this paragraph 7 to cancel any shares of Restricted
Stock that are forfeited.
8. Share
Distributions and Dividends. If a dividend or
other distribution declared with respect to Company shares is payable in shares,
any shares distributed with respect to the shares of Restricted Stock held in
escrow hereunder also shall be held in escrow subject to the same terms and
restrictions applicable to the escrowed shares to which such distribution
relates. If the Shares held in escrow shall be changed into or
exchangeable for a different number or kind of stock or other securities of the
Company or other corporation (whether through reorganization, reclassification,
recapitalization, stock split-up, merger or otherwise), such substituted stock
or other securities shall be held in escrow subject to the same terms and
restrictions as were applicable to the replaced shares of Restricted
Stock.
9. Confidentiality
and Non-Competition. Notwithstanding
any other provision of this Agreement, any Restricted Stock granted pursuant to
this Agreement or the proceeds from the sale of any shares of Vested Restricted
Stock shall be forfeited by you if you engage in any conduct that violates any
non-competition, confidentiality or non-solicitation obligation owed by you to
the Company (or any of its affiliates or subsidiaries) whether pursuant to an
agreement, policy, common law, statute or otherwise. You acknowledge
that this grant constitutes good, valuable and sufficient consideration for your
performance of those provisions.
10. Fractional
Shares. A fractional share shall not be issued hereunder, and
when any provision hereof may cause a fractional share to be issued, any such
fractional share shall be disregarded.
11. No Right
to Continued Participation as Director of the Company. Neither
the Plan nor this Agreement shall confer upon you any right to continue serving
as a Director of (or any other relationship with) the Company or any subsidiary,
affiliate, or parent thereof, or limit in any respect the right of the Company
or any subsidiary, affiliate, or parent thereof to terminate your services as a
Director of, or other relationship with, the Company or any subsidiary,
affiliate, or parent thereof, as the case may be, at any time.
12. Financial Restatements Due
to Intentional Misconduct or Gross Negligence
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(a) In
the event that the disinterested and independent (as determined in accordance
with the NYSE AMEX listing standards) members of the Board of Directors
determine (the “Board Determination”) that the Participant’s intentional
misconduct or gross negligence directly or indirectly caused or contributed to a
restatement of the Company’s consolidated financial statements due to the
material non-compliance of the Company with any financial reporting requirement
under the U.S. federal securities laws, whether such restatement is required by
law or the Board of Directors determines, in its discretion, such restatement is
necessary or desirable to serve the best interests of the Company, then any
shares of Restricted Stock that are not yet Vested that were granted during the
three month period prior to or the nine month period following the first public
issuance or filing with the Securities Exchange Commission (whichever occurs
first) of the incorrect financial statements shall be immediately and
irrevocably forfeited without any payment therefor. In addition, for any shares
of Restricted Stock that became vested during the nine month period following
the first public issuance or filing with the Securities Exchange Commission
(whichever occurs first) of the incorrect financial statements (“Covered Vested
Shares”):
(i) to
the extent that such Covered Vested Shares have not been sold or otherwise
transferred by the Participant at the time the Company demand is made, such
Covered Vested Shares shall be immediately and irrevocably forfeited without any
payment therefor;
(ii) to
the extent that such Covered Vested Shares have been sold, the Participant shall
be required to repay or otherwise reimburse the Company, upon demand, an amount
in cash or Common Stock equal to the aggregate proceeds received from such sale
of such Covered Vested Shares; and
(iii) to
the extent that such Covered Vested Shares have been transferred otherwise than
for value (ex. a transfer by gift, a transfer upon death), the Participant shall
be required to repay or otherwise reimburse the Company, upon demand, an amount
in cash or Common Stock equal to the greatest of (a) the Fair Market Value (as
defined in the Plan) of such Covered Vested Shares on the date the Covered
Vested Shares became vested, (b) the Fair Market Value of such Covered Vested
Shares on the date the Covered Vested Shares were transferred and (c) the Fair
Market Value of such Covered Vested Shares on the date of the Board
Determination.
(b) This
section does not constitute the Company’s exclusive remedy for the Participant’s
commission of intentional misconduct or gross negligence. The Company
may seek any additional legal or equitable remedy, including injunctive relief,
for any such violations. The provisions in this section are essential economic
conditions to the Company’s grant of Restricted Stock to the Participant. By
receiving the grant of Restricted Stock hereunder, the Participant agrees that
the Company may deduct from any amounts it owes the Participant from time to
time (such as wages or other compensation, deferred compensation credits,
vacation pay, any severance or other payments owed following a Termination of
Employment, as well as any other amounts owed to the Participant by the Company)
to the extent of any amounts the Participant owes the Company under this
section. The provisions of this section and any amounts repayable by the
Optionee hereunder are intended to be in addition to any rights to repayment the
Company may have under Section 304 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and other
applicable law.
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13. Adjustments. In
the event that, after the date hereof, the outstanding shares of the Company's
common stock shall be increased or decreased or changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company
or of another corporation through reorganization, merger or consolidation,
recapitalization, reclassification, stock split, split-up, combination or
exchange of shares or declaration of any dividends payable in common stock, the
Committee shall appropriately adjust the number of shares of Restricted Stock
(to the nearest possible full share), and such adjustment shall be effective and
binding for all purposes of this Agreement and the Plan.
14. Governing
Law. Except as otherwise required by applicable law, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Florida, but without regard to the principle of conflict of laws
thereof. If any one or more provisions of this Agreement shall be
found to be illegal or unenforceable in any respect, the validity and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby.
15. Plan
Documents. This Agreement is qualified in its entirety by
reference to the provisions of the Plan, as amended from time to time, which are
hereby incorporated herein by reference. Capitalized terms not
defined herein shall have the meaning ascribed to them in the
Plan. However, notwithstanding the above, no Plan amendment may
deprive you of any Restricted Stock theretofore granted under the Plan without
your consent, and no Plan amendment requiring shareholder approval (if any) may
be made without such shareholder approval. The interpretation and
construction by the Committee of the Plan, this Agreement, the Restricted Stock
granted hereunder, and such rules and regulations as may be adopted by the
Committee for the purpose of administering the Plan, shall be final and binding
upon you. Until the Restricted Stock shall expire, terminate, or Vest
in full, the Company shall, upon written request therefore, send a copy of the
Plan, in its then-current form, to you or any other person or entity then
entitled to the Restricted Stock.
16. Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company and upon the legal
representatives, executors, administrators, heirs, legatees and any permitted
assignee of the Participant.
17. Section
83(b) Election. The Participant
may make a Section 83(b) election to treat the shares of Restricted Stock
granted to him under Paragraph 1 as taxable income at the time of transfer under
this Agreement. A section 83(b) election form (with accompanying
instructions) which may be used for this purpose is attached to this Agreement
as Exhibit
A.
18. Tax
Withholding. Participant shall make arrangements, satisfactory
to the Company, for the satisfaction of income and employment tax withholding
requirements related to the Restricted Stock. In accordance with such
procedures as may be established by the Committee, Participant may surrender
shares of common stock, including shares of Vested Restricted Stock, in
satisfaction of the tax withholding requirement; provided, however, that the
number of shares to be surrendered or withheld shall be determined using the
minimum rate at which income and employment taxes must be withheld and the Fair
Market Value of common stock as of the date of withholding.
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19. Notices. All notices and
other communications required or permitted hereunder shall be in writing and
deemed to have been received on the date of delivery if delivered by hand or
overnight express, or three days after the date of posting if mailed by
registered or certified mail, postage prepaid, addressed to the Company, c/o
General Counsel, at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, and to Participant at Participant’s address as set forth on the
signature page hereto (or such other address to which the Company or you hereby
notify the other party hereto to send such notices and
communications). Such notices and other communications shall not be
considered delivered until actually received or deemed received pursuant to this
Section 19.
20. Further
Assurances. The parties agree to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement.
21. Entire
Agreement. This Agreement constitutes the entire agreement between the
Company and Participant and supersedes any prior agreements and understandings,
oral or written, between the Company and you concerning the subject matter of
this Agreement.
22. Construction. The section
headings contained in this Agreement are for reference only and shall have no
effect on the interpretation of any of the provisions of this
Agreement.
23. Amendment. This Agreement
may (except as provided in the Plan) only be amended, altered or modified by a
written instrument signed by the parties hereto, or their respective successors,
and it may not be terminated (except as provided herein or in the
Plan).
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IN WITNESS WHEREOF, the
Company has caused this Agreement to be signed by a duly authorized officer, and
Participant has affixed his signature hereto.
METROPOLITAN HEALTH NETWORKS,
INC.
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chairman
DIRECTOR
________________________________
Address:
Social
Security Number:
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Grant No.: ______
EXHIBIT
A
ELECTION
TO INCLUDE VALUE OF RESTRICTED PROPERTY
IN GROSS INCOME IN YEAR OF
TRANSFER UNDER SECTION 83(b)
Pursuant
to Section 83(b) of the Internal Revenue Code of 1986, as amended, I hereby
elect to include in my gross income at the time of transfer the amount
includible under Section 83(b) with respect to the restricted property described
below, in accordance with applicable regulations:
1. The name, address and taxpayer
information number of the undersigned are:
Name: __________________________________
Address:
Taxpayer
Identification Number:
2. Description of property with respect
to which the election is being made:
__________________________
shares of common stock, $.001 par value, of Metropolitan Health Networks,
Inc.
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3.
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Date on which the property was
transferred and taxable year for which the election is
made:
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Date of
transfer:
Taxable
year for which election made: Calendar year ______
4. The nature of the restriction(s) to
which the property is subject:
Forfeiture
in the event that the undersigned terminates his/her services as a member of the
Board of Directors of Metropolitan Health Networks, Inc. before the restricted
shares becomes vested in accordance with the terms of the Restricted Stock Award
Agreement.
5. Fair market value at time of
transfer:
The fair
market value at the time of transfer (determined without regard to any
restrictions other than restrictions which by their terms will never lapse) of
the property with respect to which this election is being made is ______ per
share, for an aggregate fair market value of $_____________.
6. Amount paid for the
property:
No amount
has been paid by the undersigned for said property.
7. Furnishing statement to
company:
A copy of
this statement has been furnished to Metropolitan Health Networks,
Inc.
Dated:
Signature:
Name:
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INSTRUCTIONS FOR SECTION
83(b) ELECTION FORM:
1. Review
and complete all items on this form, including:
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Address
and taxpayer identification number (i.e., Social Security number) (Item
1)
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Date
of transfer (Item 3)
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§
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Fair
market value per share and in the aggregate (Item
5)
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§
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Signature
and date (bottom)
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2. Provide
a copy of this form within 30 days of the date of the agreement to:
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the
CFO or Controller for Metropolitan Health Networks,
Inc.
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Director,
Internal Revenue Service Center, of the Service Center where you expect to
file your income tax return
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3.
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Attach
a copy of this form to your Federal income tax return for the calendar
year involved.
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