EXHIBIT 10.16B
RESTRICTED STOCK AGREEMENT
RESTRICTED STOCK AGREEMENT dated as of _____________ (the
"Agreement") between SMG-II HOLDINGS CORPORATION (the "Company"), and the other
party signatory hereto (the "Participant").
WHEREAS, pursuant to the SMG-II Holdings Corporation 1997 Restricted
Stock Plan (as the same may be amended from time to time, the "Plan"), the
Company desires to provide the Participant with an incentive to remain in its
employ and to increase the Participant's interest in the success of the Company
by granting to the Participant shares of Class A Common Stock, par value $.01
per share, of the Company (the "Restricted Common Stock") and shares of Class C
Convertible Preferred Stock of the Company (the "Restricted Preferred Stock")
(together, the "Restricted Shares"), subject to the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the covenants and agreements
herein contained, the parties hereto agree as follows:
1. Definitions; Incorporation of Plan Terms. Capitalized terms used
herein without definition shall have the meanings assigned to them in the Plan,
a copy of which has been delivered to the Participant. This Agreement and the
Restricted Shares shall be subject to the Plan, the terms of which are hereby
incorporated herein by reference, and in the event of any conflict or
inconsistency between the Plan and this Agreement, the Plan shall govern. The
"Date of Grant" with respect to the Restricted Shares shall be the date of this
Agreement as specified above.
2. Grant of Restricted Shares. Subject to the terms and conditions
contained herein and in the Plan, the Company hereby grants to the Participant,
effective as of the Date of Grant, the number of Restricted Shares specified on
the signature page hereof (the "Award"). The Participant shall not be required
to pay any additional consideration for the issuance of the Restricted Shares
granted pursuant to this Agreement.
3. Non-Transferability. No Restricted Common Stock or Restricted
Preferred Stock or any rights or interests therein shall be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of except by will or by
the laws of descent and distribution or pursuant to a "qualified domestic
relations order" as defined in the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, and the rules and regulations
thereunder; provided, however, that, with the written authorization of the
Committee, the Participant may transfer Restricted Shares to the Participant's
immediate family members or to one or more trusts established in whole or in
part for the benefit of one or more of such family members; and provided further
that the restrictions in this sentence shall not apply to the Restricted Shares
after the date that the restrictions on transferability of such shares as set
forth herein have lapsed. Written authorization by the Committee of any such
transfer to one or more
members of the Participant's immediate family shall be conditioned upon the
written agreement of such family member or members to be bound by the terms of
this Agreement, including, without limitation, the execution of the agreement to
become party to the Stockholders Agreement described in Section 9 hereof.
4. Vesting. The Award will become nonforfeitable upon the earlier of
(i) the seventh anniversary of the Date of Grant and (ii) thirty days prior to
the occurrence of a Realization Event, provided that either (i) the Participant
is an employee of the Company or a Subsidiary at the time such anniversary or
Realization Event occurs or (ii) an Extension Event occurs during the
Post-Termination Period as set forth in Section 8 below. "Realization Event"
shall mean either (i) the acquisition of an aggregate of at least 50% of the
outstanding shares of Common Stock or the outstanding shares of common stock of
any Subsidiary by any entity or group of entities that was not a stockholder of
record in the Company on the effective date of the Plan, (ii) a Minimum IPO,
(iii) a sale of all or substantially all of the assets of the Company or any
Subsidiary to any entity or group of entities that is not affiliated with the
Company on the effective date of the Plan, (iv) a merger of the Company with any
entity or group of entities that is not affiliated with the Company on the
effective date of the Plan or (v) a liquidation or dissolution of the Company.
"Minimum IPO" means a Public Offering after the effective date of the Plan at
the conclusion of which, as determined in good faith by the Committee, the
aggregate price for all shares of Common Stock, or common stock of a Subsidiary,
having been sold to the public in such Public Offering, plus the aggregate
offering price for all shares of Common Stock, or common stock of a Subsidiary,
sold in all prior Public Offerings of Common Stock occurring after the date of
any such award, exceeds $50 million. "Public Offering" means a public offering
of Common Stock, or common stock of any Subsidiary, pursuant to an effective
registration statement under the Securities Act of 1933, as amended.
5. Rights as Shareholder. The Participant shall have, with respect
to the shares of Restricted Preferred Stock and Restricted Common Stock received
pursuant to the Award, all of the rights of a shareholder of the Company,
including the right to vote the shares and the right to receive any cash
dividends at the time such cash dividends are paid. Stock dividends issued with
respect to shares covered by the Award shall be treated as additional shares
under the Award and shall be subject to the same restrictions and other terms
and conditions that apply to the shares with respect to which such dividends are
issued.
6. Evidence of Ownership. A certificate shall be issued in the name
of the Participant with respect to the shares of Restricted Common Stock and
Restricted Preferred Stock granted pursuant to the Award. Such certificate shall
be registered in the name of such Participant, and shall bear an appropriate
legend referring to the terms, conditions and restrictions applicable to the
Award. Such certificate shall be held in custody by the Company until such time
as the Participant makes a valid disposition of such shares in accordance with
the terms and provisions set forth herein and in the Stockholders Agreement. In
addition, as a
condition to the Award, the Participant shall deliver to the Company a stock
power, endorsed in blank, relating to the Restricted Common Stock and Restricted
Preferred Stock covered by the Award.
7. Tag-Along Rights; Registration Rights. In the event that the
Participant becomes entitled to any tag-along rights under Section 5.6 of the
Stockholders Agreement or registration rights under Section 6.2 of the
Stockholders Agreement, and the occurrence that triggers such tag-along or
registration rights does not constitute a Realization Event, the Participant
will be permitted to exercise his or her sale or transfer rights with respect to
the Award and such portion of the Award that becomes saleable or transferrable
pursuant to such tag-along or registration rights shall be considered
nonforfeitable with respect to the exercise of such rights; provided, however,
that if the Participant does not exercise his or her tag-along or registration
rights under the Stockholders Agreement, any portion of the Award that would
have become nonforfeitable for purposes of the exercise of such rights will
remain forfeitable and restricted for all other purposes. For purposes of
Section 5.6(b) of the Stockholders Agreement, 100 percent of the Award will be
considered vested in order to determine the number of shares to be included
under Section 5.6(b) of the Stockholders Agreement.
8. Termination of Employment. (a) If the Participant's employment
with the Company and its Subsidiaries terminates without Cause or by reason of
death, retirement or disability and such termination is prior to both (i) a
Realization Event and (ii) the seventh anniversary of the Date of Grant, the
Participant shall forfeit the Award 180 days after such termination of
employment (the "Post-Termination Period"); provided, however, that in the event
that, during the Post-Termination Period, either (i) a preliminary registration
statement in connection with a Minimum IPO is submitted to the Securities and
Exchange Commission or (ii) a written agreement to effect a Realization Event is
executed (each, an "Extension Event"), the Award shall remain in effect until
either (i) such Extension Event results in a Realization Event, in which case
the Award shall vest according to the terms herein, (ii) the Minimum IPO is
withdrawn, in which case the Award shall be forfeited by the Participant or
(iii) the written agreement to effect a Realization Event terminates without the
consummation of such Realization Event, in which case the Award shall be
forfeited by the Participant.
(b) In the event that the Participant's employment with the Company
and its Subsidiaries terminates for Cause or the Participant resigns from such
employment prior to a Realization Event and prior to the seventh anniversary of
the Date of Grant, the Participant shall immediately forfeit the Award.
(c) Upon termination of the Participant's employment with the
Company and its Subsidiaries for any reason after the occurrence of a
Realization Event or after the seventh anniversary of the Date of Grant, the
Participant shall retain all Common Stock and Preferred Stock that the
Participant was granted pursuant to the Award.
9. Agreement to Become Party to and Abide by the Terms of the
Stockholders Agreement. The Participant hereby acknowledges and agrees that the
Award described herein is contingent upon the Participant's execution of the
agreement attached hereto as Exhibit A by and through which the Participant
shall become a party to and agree to abide by the terms and conditions of the
Stockholders Agreement. All shares of Common Stock and Preferred Stock acquired
by the Participant will be subject to the terms of the Stockholders Agreement.
The Participant shall hold and transfer the shares of Common Stock and Preferred
Stock such Participant may receive under the Plan subject to, and in accordance
with, the terms, conditions and restrictions applicable to shares of Common
Stock or Preferred Stock owned by Management Investors (as defined in the
Stockholder Agreement) as provided in the Stockholders Agreement.
10. Miscellaneous. (a) Representation by the Participant. The
Participant hereby represents and agrees with the Company that the Participant
is acquiring the Restricted Shares without a view to distribution or other
disposition thereof.
(b) No Rights to Grants or Continued Employment. The Participant
shall not have any claim or right to receive grants of Restricted Shares under
the Plan. Neither the Plan nor this Agreement nor any action taken or omitted to
be taken hereunder or thereunder shall be deemed to create or confer on the
Participant any right to be retained in the employ of the Company or any
Subsidiary, or to interfere with or to limit in any way the right of the Company
or any Subsidiary to terminate the employment of the Participant at any time.
(c) Tax Withholding. No later than the date as of which an amount
first becomes includable in the gross income of the Participant for applicable
income tax purposes with respect to the Restricted Shares, the Participant shall
pay to the Company or make arrangements satisfactory to the Board regarding the
payment of any federal, state or local taxes of any kind required by law to be
withheld with respect to such amount. Unless otherwise determined by the Board,
in accordance with rules and procedures established by the Board, the minimum
required withholding obligations may be settled with Common Stock, including
Common Stock that is part of the award that gives rise to the withholding
requirement. The obligation of the Company under this Agreement shall be
conditional upon such payment or arrangements and the Company shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Participant.
(d) Applicable Law. This Agreement shall be governed by and subject
to the laws of the State of Delaware and to all applicable laws and to the
approval of any governmental or regulatory agency as may be required.
(e) Severability. If any provision of this Agreement shall be held
illegal or
invalid for any reason, such illegality or invalidity shall not affect the
remaining provisions of this Agreement, but this Agreement shall be construed
and enforced as if such illegal or invalid provision had never been included
herein.
11. Survival; Assignment. (a)All agreements, representations and
warranties made herein and in any certificates delivered pursuant hereto shall
survive the issuance to the Participant of the Restricted Shares and,
notwithstanding any investigation heretofore or hereafter made by the
Participant or the Company or on the Participant's or the Company's behalf,
shall continue in full force and effect.
(b) The Company shall have the right to assign to any of its
affiliates any of its rights, or to delegate to any of its affiliates any of its
obligations, under this Agreement.
12. Notices. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or sent by certified
or registered mail, return receipt requested, postage prepaid, addressed, if to
the Participant, to his attention at the mailing address set forth at the foot
of this Agreement (or to such other address as the Participant shall have
specified to the Company in writing) and, if to the Company, to it at its
principal offices which are currently located at 000 Xxxxx Xx., Xxxxxxxx, Xxx
Xxxxxx, 00000, telecopier: (000) 000-0000, Attention: Secretary. All such
notices shall be conclusively deemed to be received and shall be effective, if
sent by hand delivery, upon receipt, or if sent by registered or certified mail,
on the fifth day after the day on which such notice is mailed.
13. Waiver. The waiver by either party of compliance with any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any other provision of this Agreement, or of any subsequent
breach by such party of a provision of this Agreement.
14. Entire Agreement. This Agreement and the Plan set forth the
entire agreement and understanding between the parties hereto with respect to
the matters covered herein, and supersede all prior agreements and
understandings concerning such matters. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same agreement. The headings
of sections and subsections herein are included solely for convenience of
reference and shall not affect the meaning of any of the provisions of this
Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Participant has executed this
Agreement, both as of the day and year first above written.
SMG-II HOLDINGS CORPORATION
By:
Name:
Title:
PARTICIPANT
_________________________________
Name:
Address:
Restricted Shares Granted Hereby:
Restricted Common Stock: _______________________ Shares
Restricted Preferred Stock: _______________________ Shares
EXHIBIT A
AGREEMENT
AGREEMENT, dated as of this ______th day of _____________, 1998
between SMG-II Holdings Corporation, a Delaware corporation ("Holdings"), and
____________ ("Participant").
W I T N E S S E T H:
WHEREAS, Holdings and Participant are parties to a restricted stock
agreement, dated ________________ (the "Restricted Stock Agreement") pursuant to
the SMG-II Holdings Corporation 1997 Restricted Stock Plan (the "Plan"), which
contemplates that Holdings will grant to Participant an equity interest in
Holdings consisting of a specified number of shares of restricted Class C
Convertible Preferred Stock of Holdings, with a stated value of $200 and a
specified number of restricted shares of Holdings Class A Common Stock, par
value $0.01 per share (together, the "Restricted Stock"); and
WHEREAS, the award of the Restricted Stock pursuant to the
Restricted Stock Agreement is contingent upon the execution by Participant of
this Agreement; and
WHEREAS, Holdings now desires to award Participant the Restricted
Stock and Participant desires to accept such award; and
WHEREAS, the Stockholders Agreement between Holdings and its
stockholders dated as of February 4, 1991 (the "Stockholders Agreement") was
amended prior to the adoption of the Plan to permit awards of Restricted Stock
pursuant to the Plan; and
WHEREAS, according to the terms of the Stockholders Agreement, in
order to receive the Restricted Stock, Participant must agree to become subject
to the terms, conditions, rights, responsibilities and all other provisions of
the Stockholders Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants hereinafter set forth, and for good and valuable consideration, the
parties hereto hereby agree as follows:
1. Defined Terms. Any capitalized words which are not otherwise
defined herein shall have the meanings assigned to such words in the
Stockholders Agreement.
2. Management Investor. The parties hereby agree that Participant
shall become a Management Investor upon his receipt of the Restricted Stock.
3. Agreement to Become Party to and Abide by the Terms of the
Stockholders Agreement. The parties hereby irrevocably agree that Participant
shall be subject to the terms and conditions of the Stockholders Agreement in
its entirety. The parties further agree that all shares of Restricted Stock,
Class C Convertible Preferred Stock of Holdings ("Preferred Stock") or Holdings
Class A Common Stock ("Common Stock") awarded to or
acquired by Participant pursuant to the Restricted Stock Agreement will be
subject to the terms of the Stockholders Agreement. Participant shall hold and
transfer all shares of Common Stock and Preferred Stock that he receives
pursuant to the Restricted Stock Agreement subject to, and in accordance with,
the terms, conditions and restrictions applicable to shares of Common Stock and
Preferred Stock owned by Management Investors as provided in the Stockholders
Agreement for as long as such terms, conditions and restrictions contained in
the Stockholders Agreement are then still in effect, and the agreements and
restrictions contained therein will apply to the shares of Common Stock and
Preferred Stock awarded pursuant to the Restricted Stock Agreement without any
other action on the part of Holdings or Participant.
4. All Provisions of the Stockholders Agreement. The parties agree
that all the provisions of the Stockholders Agreement shall apply to this
Agreement, including, without limitation, the notice provisions and the
governing law provisions.
IN WITNESS WHEREOF, Holdings has caused this Agreement to be
executed by its duly authorized officers and Participant has executed this
Agreement, both as of the day and year first above written.
SMG-II HOLDINGS CORPORATION
By:
---------------------------------
Title:
--------------------------------
[PARTICIPANT]
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