RESTRICTED STOCK AGREEMENT FOR JIM B. DAVIS
FOR
XXX
X. XXXXX
This
RESTRICTED STOCK
AGREEMENT (the “Agreement”) is made and
entered into effective as of October 1, 2008 (the “Effective Date”) by and
between ABC FUNDING, INC., a Nevada corporation (“Company”), and XXX X. XXXXX,
an individual resident in the State of Texas (“Xx. Xxxxx”).
W I T N E S S E T
H:
WHEREAS, the Board of
Directors of the Company (the “Board”) has determined that it
is in the best interests of the Company and its shareholders to appoint Xx.
Xxxxx as the Senior Vice President of Operations of the Company and to provide
incentive to Xx. Xxxxx to remain with the Company by making this grant of common
stock in accordance with the terms and subject to the conditions provided in
this Agreement;
NOW, THEREFORE, for and in
consideration of the mutual premises, covenants and agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Award of Restricted
Stock. Upon the effectiveness of the Charter Amendment
(defined below), the Board shall grant to Xx. Xxxxx, Seven Hundred Fifty
Thousand (750,000) shares of common stock, par value $0.001 per share (the
"Common
Stock"), of the Company (collectively the "Restricted Stock"),
which shares are and shall be subject to the terms, provisions and restrictions
set forth in this Agreement.
2. Vesting of Restricted
Stock.
(a) Except
as otherwise provided in Sections 2(b), 2(c), 2(d) and 4 hereof, the shares of
Restricted Stock shall become vested in the following amounts and at the
following times, provided that the Continuous Service (as defined in Section
2(d)(iii) below) of Xx. Xxxxx continues through and on the applicable Vesting
Date:
|
Number of Shares
|
Vesting Date
|
|
|
250,000
|
Date
Charter Amendment (defined below) is effective in the State of
Nevada
|
|
|
250,000
|
First
anniversary of the Effective Date
|
|
|
250,000
|
Second
anniversary of the Effective Date
|
|
1
The term
“Charter Amendment” shall mean the filing by the Company, of an amendment to its
Articles of Incorporation, increasing the number of shares of common stock that
the Company is authorized to issue to 149,000,000 shares. There shall
be no proportionate or partial vesting of shares of Restricted Stock in or
during the months, days or periods prior to each of the respective Vesting
Dates, and all vesting of shares of Restricted Stock shall occur only on the
respective Vesting Dates. Upon the termination or cessation of Xx.
Xxxxx’ Continuous Service, any portion of the Restricted Stock that is not yet
then vested, and which does not then become vested pursuant to this Section 2,
shall be subject to re-purchase by the Company from Xx. Xxxxx as provided in
Section 4, below.
(b) Notwithstanding
any other term or provision of this Agreement, in the event that (i) a “Change
in Control” (as defined in Section 2(e)(i) below) of the Company occurs during
Xx. Xxxxx’ Continuous Service, or (ii) Xxxxx’ Continuous Service is terminated
by the Company without cause or pursuant to a resignation for good reason (as
defined in that employment agreement of even date herewith between Xx. Xxxxx and
the Company), the shares of Restricted Stock subject to this Agreement shall
become immediately vested as of the date of the Change in Control or such
termination without cause or resignation for good reason.
(c) Notwithstanding
any other term or provision of this Agreement, the Board shall be authorized, in
its sole discretion, based upon its review and evaluation of the performance of
Xx. Xxxxx and of the Company, to accelerate the vesting of any shares of
Restricted Stock under this Agreement, at such times and upon such terms and
conditions as the Board shall deem advisable.
(d) For
purposes of this Agreement, the following terms shall have the meanings
indicated:
(i) “Change in Control” shall mean
any of the following events:
(1) a
merger or consolidation to which the Company is a party if the individuals and
entities who were stockholders of the Company immediately prior to the effective
date of such merger or consolidation have beneficial ownership (as defined in
Rule 13d-3 under the Exchange Act) of less than 50% of the total combined voting
power for election of directors of the surviving corporation following the
effective date of such merger or consolidation;
(2) the
acquisition or holding of direct or indirect beneficial ownership (as defined
under Rule 13d-3 of the Exchange Act) of securities of the Company representing
in the aggregate 30% or more of the total combined voting power of the Company's
then issued and outstanding voting securities by any person, entity or group of
associated persons or entities acting in concert, other than any employee
benefit plan of the Company or of any subsidiary of the Company, or any entity
holding such securities for or pursuant to the terms of any such
plan;
(3) the
sale of all or substantially all of the assets of the Company to any person or
entity that is not a wholly-owned subsidiary of the Company; or
2
(4) the
approval by the stockholders of the Company of any plan or proposal for the
liquidation of the Company or its material subsidiaries, other than into the
Company.
(ii) “Continuous Service” shall mean
the continuous service to the Company or a Related Entity, without interruption,
of Xx. Xxxxx, in Xx. Xxxxx’ capacity as the Senior Vice President of Operations
of the Company or of any Related Entity. Continuous Service shall not
be considered interrupted (or to have ceased or terminated) in the case of (1)
any approved leave of absence, (2) transfers among the Company, any Related
Entity, or any successor thereto, so long as Xx. Xxxxx continues in his capacity
as the Senior Vice President of Operations thereof, or (3) any change in status
(e.g., from Senior Vice
President of Operations to Vice-President), if and so long as (x) Xx. Xxxxx
remains in the service of the Company or a Related Entity in the capacity of
Senior Vice President of Operations (except as otherwise provided herein), and
(y) which change in status is approved in writing by the Company or a Related
Entity in its sole discretion (with an express acknowledgement that such change
in status continues, and does not cease or terminate, “Continuous Service” for
purposes of this Agreement). An approved leave of absence shall
include sick leave or any other authorized personal leave approved by the
Company in writing.
(iii) “Non-Vested Shares” means any
portion of the Restricted Stock subject to this Agreement that has not become
vested pursuant to this Section 2.
(iv) “Related Entity” shall mean any
Subsidiary, and any business, corporation, partnership, limited liability
company, trust or other entity in which the Company or a Subsidiary holds a
substantial ownership interest, directly or indirectly.
(v) “Subsidiary” shall mean any
corporation or other entity in which the Company has a direct or indirect
ownership interest of 50% or more of the total combined voting power of the then
outstanding securities or interests of such corporation or other entity entitled
to vote generally in the election of directors or in which the Company has the
right to receive 50% or more of the distribution of profits or 50% or more of
the assets on liquidation or dissolution.
(vi) “Vested Shares” shall mean any
portion of the Restricted Stock subject to this Agreement that is and has become
vested pursuant to this Section 2.
3. Delivery of Restricted
Stock.
(a) One
or more stock certificates evidencing the Restricted Stock shall be issued in
the name of Xx. Xxxxx but shall be held and retained by the Secretary of the
Company until the latest date on which the shares subject to this Restricted
Stock award become Vested Shares pursuant to Section 2 hereof (the “Applicable
Date”). All such stock certificates shall bear the following
legends, along with such other legends that the Board shall deem necessary and
appropriate or which are otherwise required or indicated pursuant to any
applicable stockholders agreement:
3
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR UNDER THE SECURITIES
LAWS OF ANY STATE, AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION UNDER THE 1933 ACT AND SUCH OTHER APPLICABLE LAWS
(AS APPLICABLE) IS IN EFFECT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
SAID ACT AND LAWS AS CONFIRMED TO THE ISSUER BY AN OPINION (IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER) OF COUNSEL (SATISFACTORY TO THE
ISSUER).
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO SUBSTANTIAL VESTING AND
OTHER RESTRICTIONS AS SET FORTH IN THE RESTRICTED STOCK AGREEMENT BETWEEN THE
ISSUER AND THE ORIGINAL HOLDER OF THE SHARES, A COPY OF WHICH MAY BE OBTAINED AT
THE PRINCIPAL OFFICE OF THE ISSUER. SUCH RESTRICTIONS ARE BINDING ON
TRANSFEREES OF THESE SHARES, AND INCLUDE VESTING CONDITIONS WHICH MAY RESULT IN
THE COMPLETE FORFEITURE OF THE SHARES.
(b) Xx.
Xxxxx shall deposit with the Company stock powers or other instruments of
transfer or assignment, duly endorsed in blank with signature(s) guaranteed,
corresponding to each certificate representing shares of Restricted Stock until
such shares become Vested Shares. If Xx. Xxxxx shall fail to provide
the Company with any such stock power or other instrument of transfer or
assignment, Xx. Xxxxx hereby irrevocably appoints the Secretary of the Company
as his attorney-in-fact, with full power of appointment and substitution, to
execute and deliver any such power or other instrument which may be necessary to
effectuate the transfer of the Restricted Stock (or assignment of distributions
thereon) on the books and records of the Company.
(c) On
the Applicable Date (as defined in Section 3(a) above) or as soon as
administratively practicable thereafter, the Company shall promptly cause a new
certificate or certificates to be issued for and with respect to all Vested
Shares and shall deliver the new certificate or certificates, to Xx.
Xxxxx. The new certificate or certificates shall continue to bear
those legends and endorsements that the Company shall deem necessary or
appropriate (including those relating to restrictions on transferability and/or
obligations and restrictions under the Securities Laws).
4. Termination or Cessation of
Continuous Service. Upon the termination or cessation of Xx.
Xxxxx’ Continuous Service, any portion of the Restricted Stock that is not yet
then vested, and which does not then become vested pursuant to Section 2, shall
be subject to re-purchase by the Company from Xx. Xxxxx, and Xx. Xxxxx shall
sell to the Company upon the exercise of such right by the Company, at a
purchase price per share of $0.01, the number of shares of Restricted Stock
(rounded up to the nearest whole share) not yet then vested. The
number of shares of Xx. Xxxxx’ Shares subject to repurchase, at the time of any
stock dividend or other distribution made on or in respect of Xx. Xxxxx’ Shares
or any subdivision, combination, redemption or reclassification of the
outstanding capital stock of the Company or received in exchange for Xx. Xxxxx’
Shares or any part thereof, shall be adjusted to give effect to such stock
dividend, other distribution, subdivision, combination, redemption or
reclassification. The Board shall have the power and authority to
enforce on behalf of the Company any and all rights of the Company under this
Agreement in the event of Xx. Xxxxx’ forfeiture of Non-Vested Shares pursuant to
this Section 4.
4
5. Rights with Respect to
Restricted Stock.
(a) Except
as otherwise provided in this Agreement, Xx. Xxxxx shall have, with respect to
all of the shares of Restricted Stock, whether Vested Shares or Non-Vested
Shares, all of the rights of a holder of shares of common stock of the Company,
including without limitation (i) the right to vote such Restricted Stock, (ii)
the right to receive cash dividends, if any, as may be declared on the
Restricted Stock from time to time, and (iii) the rights available to all
holders of shares of common stock of the Company upon any merger, consolidation,
reorganization, liquidation or dissolution, stock split-up, stock dividend or
recapitalization undertaken by the Company; provided, however, that all of
such rights shall be subject to the terms, provisions, conditions and
restrictions set forth in this Agreement (including without limitation
conditions under which all such rights shall be forfeited).
(b) Notwithstanding
any term or provision of this Agreement to the contrary, the existence of this
Agreement, or of any outstanding Restricted Stock awarded hereunder, shall not
affect in any manner the right, power or authority of the Company to make,
authorize or consummate: (i) any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business; (ii) any merger, consolidation or similar transaction by or of the
Company; (iii) any offer, issue or sale by the Company of any capital stock of
the Company, including any equity or debt securities, or preferred or preference
stock that would rank prior to or on parity with the Restricted Stock and/or
that would include, have or possess other rights, benefits and/or preferences
superior to those that the Restricted Stock includes, has or possesses, or any
warrants, options or rights with respect to any of the foregoing; (iv) the
dissolution or liquidation of the Company; (v) any sale, transfer or assignment
of all or any part of the stock, assets or business of the Company; or (vi) any
other corporate transaction, act or proceeding (whether of a similar character
or otherwise).
6. Transferability. The
shares of Restricted Stock are not transferable until and unless they become
Vested Shares in accordance with this Agreement. The terms of this
Agreement shall be binding upon the executors, administrators, heirs, successors
and assigns of Xx. Xxxxx. Any attempt to effect a Transfer of any
shares of Restricted Stock prior to the date on which the shares become Vested
Shares shall be void ab
initio. For purposes of this Agreement, “Transfer” shall mean
any sale, transfer, encumbrance, gift, donation, assignment, pledge,
hypothecation, or other disposition, whether similar or dissimilar to those
previously enumerated, whether voluntary or involuntary, and including, but not
limited to, any disposition by operation of law, by court order, by judicial
process, or by foreclosure, levy or attachment. Notwithstanding the
foregoing, the shares of restricted Stock may be Transferred to any member of
Xx. Xxxxx’ immediate family, to any trust or other entity of which Xx. Xxxxx and
members of his family are the sole beneficiaries or the beneficial holders of
all equity interests.
5
7. Amendment, Modification
& Assignment; Non-Transferability. This Agreement may only
be modified or amended in a writing signed by the parties hereto. No
promises, assurances, commitments, agreements, undertakings or representations,
whether oral, written, electronic or otherwise, and whether express or implied,
with respect to the subject matter hereof, have been made by either party which
are not set forth expressly in this Agreement. Unless otherwise
consented to in writing by the Company, in its sole discretion, this Agreement
(and Xx. Xxxxx’ rights hereunder) may not be assigned by Xx. Xxxxx, and the
obligations of Xx. Xxxxx hereunder may not be delegated, in whole or in
part. The rights and obligations created hereunder shall be binding
on Xx. Xxxxx and his heirs and legal representatives and on the successors and
assigns of the Company.
8. Complete
Agreement. This Agreement (together with those agreements and
documents expressly referred to herein, for the purposes referred to herein)
embody the complete and entire agreement and understanding between the parties
with respect to the subject matter hereof, and supersede any and all prior
promises, assurances, commitments, agreements, undertakings or representations,
whether oral, written, electronic or otherwise, and whether express or implied,
which may relate to the subject matter hereof in any way.
9. Miscellaneous.
(a) No Right to Continued
Employment or Service. This Agreement and the grant of
Restricted Stock hereunder shall not confer, or be construed to confer, upon Xx.
Xxxxx any right to employment or service, or continued employment or service,
with the Company or any Related Entity.
(b) No Limit on Other
Compensation Arrangements. Nothing contained in this Agreement
shall preclude the Company or any Related Entity from adopting or continuing in
effect other or additional compensation plans, agreements or arrangements, and
any such plans, agreements and arrangements may be either generally applicable
or applicable only in specific cases or to specific persons.
(c) Severability. If
any term or provision of this Agreement is or becomes or is deemed to be
invalid, illegal or unenforceable in any jurisdiction or under any applicable
law, rule or regulation, then such provision shall be construed or deemed
amended to conform to applicable law (or if such provision cannot be so
construed or deemed amended without materially altering the purpose or intent of
this Agreement and the grant of Restricted Stock hereunder, such provision shall
be stricken as to such jurisdiction and the remainder of this Agreement and the
award hereunder shall remain in full force and effect).
6
(d) No Trust or Fund
Created. Neither this Agreement nor the grant of Restricted
Stock hereunder shall create or be construed to create a trust or separate fund
of any kind or a fiduciary relationship between the Company or any Related
Entity and Xx. Xxxxx or any other person. To the extent that Xx.
Xxxxx or any other person acquires a right to receive payments from the Company
pursuant to this Agreement, such right shall be no greater than the right of any
unsecured general creditor of the Company.
(e) Law
Governing. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Texas (without
reference to the conflict of laws rules or principles thereof).
(f) Interpretation. Xx.
Xxxxx accepts the Restricted Stock subject to all of the terms, provisions and
restrictions of this Agreement. The undersigned Xx. Xxxxx hereby
accepts as binding, conclusive and final all decisions or interpretations of the
Board upon any questions arising under this Agreement.
(g) Headings. Section,
paragraph and other headings and captions are provided solely as a convenience
to facilitate reference. Such headings and captions shall not be
deemed in any way material or relevant to the construction, meaning or
interpretation of this Agreement or any term or provision hereof.
(h) Notices. All
notices or other communications which are required or permitted hereunder shall
be in writing and sufficient if delivered personally or sent by air courier or
first class certified or registered mail, return receipt requested and postage
prepaid, addressed as follows:
If to Xx.
Xxxxx,
to: to
his address on file with the Company
If to the
Company,
to: ABC Funding, Inc.
Attn: Corporate
Secretary
0000 XX
0000 Xxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
or to
such other address as the party to whom notice is to be given may have furnished
to the other party in writing in accordance herewith. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of delivery if
personally delivered; on the business day after the date when sent if sent by
air courier; and on the third business day after the date when sent if sent by
mail, in each case addressed to such party as provided in this Section or in
accordance with the latest written direction from such party.
7
(i) Non-Waiver of
Breach. The waiver by any party hereto of the other party's
prompt and complete performance, or breach or violation, of any term or
provision of this Agreement shall be effected solely in a writing signed by such
party, and shall not operate nor be construed as a waiver of any subsequent
breach or violation, and the waiver by any party hereto to exercise any right or
remedy which he or it may possess shall not operate nor be construed as the
waiver of such right or remedy by such party, or as a bar to the exercise of
such right or remedy by such party, upon the occurrence of any subsequent breach
or violation.
(j) Counterparts. This
Agreement may be executed in two or more separate counterparts, each of which
shall be an original, and all of which together shall constitute one and the
same agreement.
IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
executed this Agreement as of the date first written above.
| ABC FUNDING, INC. | |||
|
|
By:
|
/s/ Xxxx X. Xxxxx | |
| Xxxx X. Xxxxx | |||
| Chief Financial Officer | |||
| AGREED AND ACCEPTED | |||
|
|
By:
|
/s/ Xxx X. Xxxxx | |
| Xxx X. Xxxxx | |||
