EXHIBIT 10.32
GEOWORKS CORPORATION
1994 STOCK PLAN
RESTRICTED STOCK BONUS AGREEMENT
This Agreement is made and entered into as of June 27th, 2001 (the
"Effective Date") by and between Geoworks Corporation, a Delaware corporation
(the "Company"), and the Recipient named below (the "Recipient"). Capitalized
terms not defined below have the meaning ascribed to them in the Company's 1994
Stock Plan (the "Plan").
Recipient:
Social Security Number:
Address:
Total Number of Shares: (a)______________________or
(with cash withholding election) (b)________________________
Purchase Price Per Share: $1.50
Total Purchase Price: (a)______________________or
(with cash withholding election) (b)$_______________________
1. Grant of Shares.
1.1 Grant of Shares. On the Effective Date and subject to the terms and
conditions of this Agreement and the Plan, Recipient hereby accepts from the
Company, and the Company hereby grants to Recipient, the total number of shares
set forth above (the "Shares") of the Company's Common Stock at the purchase
price per share as set forth above (the "Purchase Price Per Share") for a total
purchase price as set forth above (the "Purchase Price"). As used in this
Agreement, the term "Shares" refers to the Shares purchased under this Agreement
and includes all securities received (a) in replacement of the Shares, (b) as a
result of stock dividends or stock splits in respect of the Shares, and (c) in
replacement of the Shares in a merger, recapitalization, reorganization or
similar corporate transaction.
1.2 Cash Withholding Election. By making the cash withholding election
above, Recipient elects to receive a portion of Recipient's grant under this
Agreement in cash, rather than in Shares, to be applied for state and federal
income tax withholding purposes by the Company. This portion is an approximation
only and there may be additional income tax due from Recipient generally or in
connection with making a Section 83(b) election under the Internal Revenue Code.
Recipient acknowledges Recipient's responsibility to satisfy such obligations
and understands that the Company is not responsible for them. By making this
election, Recipient waives any right to receive those Shares that Recipient
otherwise would have received pursuant to this grant if Recipient has not made
such election. In any event, the Company is not liable for any taxes due in
connection with the grant or the disposition of the shares other than to apply
the cash portion referred to above for tax withholding purposes.
2. Delivery.
2.1 Deliveries by Recipient. Recipient hereby delivers to the Company
this executed Agreement.
2.2 Deliveries by the Company. Within thirty days after receipt of the
executed Agreement, the Company will issue a duly executed stock certificate
evidencing the Shares in the name of Recipient. [See my comment below in Section
7.]
3. Recipient Acknowledgement. Recipient has received a copy of the Plan and
this Agreement, has read and understands the terms of the Plan and this
Agreement, and agrees to be bound by their terms and conditions. Recipient
acknowledges that there may be adverse tax consequences upon receipt, vesting
and disposition of the Shares, and that Recipient should consult a tax adviser.
4. Restrictions on Transfers. Except as otherwise approved by the
Committee, Recipient shall not transfer, assign, xxxxx x xxxx or security
interest in, pledge, hypothecate, encumber or otherwise dispose of any of the
Shares which are Unvested Shares as defined in Section 6. Any such transfer by
Recipient in violation of this Section shall be void and of no force and effect,
and shall result in the immediate forfeiture of all Unvested Shares. After the
Shares have become Vested Shares, Recipient will not assign, encumber or dispose
of any interest in the Shares except in compliance with the provisions of this
Agreement, the Plan and applicable securities laws.
5. Market Standoff Agreement. Recipient agrees in connection with any
registration of the Company's securities that, upon the request of the Company
or the underwriters managing any registered public offering of the Company's
securities, Recipient will not sell or otherwise dispose of any Shares without
the prior written consent of the Company or such managing underwriters, as the
case may be, for a period of time (not to exceed 180 days) after the effective
date of such registration requested by such managing underwriters and subject
to all restrictions as the Company or the managing underwriters may specify for
employee-shareholders generally.
6. Vesting of Shares.
6.1 Unvested and Vested Shares. On the Effective Date, all of the Shares
will be "Unvested Shares". For each thirty-day period following the Effective
Date that Recipient continuously provides services to the Company or any
Affiliate, then 4.2% (four and two/tenths percent) of the Shares will become
"Vested Shares", so that after twenty-four such thirty-day periods all Shares
would become Vested Shares. Despite the foregoing, in the event of a "Change In
Control" prior to the Termination Date, all of the Shares will become Vested
Shares. A "Change in Control" is: the occurrence of (i) any consolidation or
merger of the Company with or into any other corporation or other entity or
person (whether or not the Company is the surviving corporation), or any other
corporate reorganization or transaction or series of related transactions in
which in excess of 50% of the Company's voting power is transferred through a
merger, consolidation, tender offer or similar transaction; or (ii) any person
(as defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended), together with its affiliates and associates (as such terms are defined
in Rule 405 under the Securities Act of 1933, as amended), beneficially owns or
is deemed to beneficially own (as described in Rule 13d-3 under the Exchange Act
without regard to the 60-day exercise period) in excess of 50% of the Company's
voting power; (iii) there is a replacement of more than one-half of the members
of the Company's Board of Directors which is not approved by those individuals
who are members of the Company's Board of Directors on the date thereof; (iv) in
one or a series of related transactions there is a sale or transfer of all or
substantially all of the assets of the Company to a third party, determined on a
consolidated basis, or (v) the Company enters into an agreement to effect a
transaction described in (i), (ii), (iii) or (iv) above. No Shares will become
Vested Shares after the Termination Date (as defined in Section 6.2 hereof). The
number of Shares that are Vested Shares or Unvested Shares will be
proportionally adjusted to reflect any stock dividend, stock split, reverse
stock split or recapitalization of the Common Stock of the Company occurring
after the Effective Date.
6.2 Forfeiture of Unvested Shares. If Recipient's Continuous Status as
an Employee, Consultant or Outside Director is terminated or interrupted (as
defined in the Plan) for any reason, or no reason, including without limitation
Recipient's death, disability (as defined in Section 22(e)(3) of the Internal
Revenue Code), voluntary resignation or termination by the Company with or
without cause (individually and collectively -- "Terminated"), then all Unvested
Shares shall be automatically forfeited, without notice, on the Termination Date
and without any further action of any kind by the Company. In case of any
dispute as to whether Recipient is Terminated, the Committee shall have sole
discretion to determine whether Recipient has been Terminated and the effective
date of such Termination (the "Termination Date"). Unvested Shares that are
forfeited shall be immediately transferred to the Company without any payment
from the Company, and the Company shall have full right to cancel any evidence
of Recipient's ownership of such forfeited Shares automatically upon such
forfeiture. Following such forfeiture, Recipient shall have no further rights
with respect to such forfeited Shares. Vested Shares are not subject to
cancellation.
6.3 Right of Termination Unaffected. Nothing in this Agreement shall be
construed to limit or otherwise affect in any manner whatsoever the right or
power of the Company (or any Parent, Subsidiary or Affiliate of the Company) to
terminate Recipient's employment or other relationship with the Company (or any
Parent, Subsidiary or Affiliate of the Company) at any time for any reason or no
reason, with or without cause.
7. Rights as Stockholder. Subject to the terms and conditions of this
Agreement, Recipient will have all of the rights of a stockholder of the Company
with respect to the Shares from and after the date that Recipient receives the
share certificate until such time as Recipient disposes of the Shares or the
shares are forfeited pursuant to Section 6. Upon forfeiture, Recipient will have
no further rights as a holder of the Unvested Shares, will have no right to
receive payment for the forfeited Shares and will promptly surrender the stock
certificate(s) evidencing the forfeited Shares to the Company. However, the
forfeiture of Unvested Shares pursuant to Section 6 hereof shall not invalidate
any votes given by Recipient with respect to such Shares prior to forfeiture.
8. Restrictive Legends and Stop-Transfer Orders.
8.1 Legends. Recipient understands and agrees that the Company will
place the legend set forth below or similar legends on any stock certificate(s)
evidencing the Shares, together with any other legends that may be required by
state or federal securities laws, the Company's Certificate of Incorporation or
Bylaws, any other agreement between Recipient and the Company or any agreement
between Recipient and any third party:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER, INCLUDING THE POSSIBLITY OF FORFEITURE, AS SET
FORTH IN A RESTRICTED STOCK BONUS AGREEMENT DATED JUNE 27, 2001 BETWEEN THE
ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE
OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER.
8.2 Stop-Transfer Instructions. Recipient agrees that, to ensure
compliance with the restrictions imposed by this Agreement, the Company may
issue appropriate "stop-transfer" instructions to its transfer agent, if any,
and if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
8.3 Refusal to Transfer. The Company will not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares, or to accord the right to vote or pay dividends to any Recipient
or other transferee to whom such Shares have been so transferred.
9. Tax Consequences. Recipient understands that Section 83(b) of the
Internal Revenue Code taxes as ordinary income the difference between the amount
paid for the Shares and the fair market value of the Shares as of the date any
restrictions on the Shares lapse. In this context, "restriction" means the risk
of forfeiture pursuant to Section 6 of this Agreement. Recipient understands
that Recipient may elect to be taxed at the time the Shares are granted, rather
than when and as the Shares vest (and the risk of forfeiture lapses), by filing
an election under Section 83(b) (an "83(b) election") of the Code within 30 days
from the grant date. Recipient understands that failure to file such an election
in a timely manner may result in adverse tax consequences for Recipient.
Recipient further acknowledges that an additional copy of this election form
should be filed with his or her federal income tax return for the calendar year
in which the date of this Agreement falls. Recipient acknowledges that the
foregoing and the discussion of Section 83(b) attached hereto as Exhibit A are
only a summary of the effect of United States federal income taxation with
respect to the grant of Shares hereunder, and do not purport to be complete.
Recipient further acknowledges that the Company has directed Recipient to seek
independent advice regarding the applicable provisions of the Code, the income
tax laws of any municipality, state or foreign country in which Recipient may
reside, the tax consequences of Recipient's death and the decision whether or
not to file an 83(b) Election in connection with the acquisition of the Shares.
Recipient agrees that Recipient will execute and deliver to the Company
with this executed Agreement a copy of the Acknowledgement and Statement of
Decision Regarding 83(b) Election (the "Acknowledgement"), attached hereto as
Exhibit B. Recipient further agrees that Recipient will execute and submit with
the acknowledgement a copy of the 83(b) Election, attached hereto Exhibit C, if
Recipient has indicated in the Acknowledgement his or her decision to make such
election.
RECIPIENT HEREBY ASSUMES ALL RESPONSIBILITY FOR FILING AN 83(B) ELECTION AND
PAYING ANY TAXES RESULTING FROM SUCH ELECTION (EXCEPT TO THE EXTENT OF THE CASH
WITHHOLDING ELECTION MADE BY RECIPIENT) OR FROM FAILURE TO FILE THE 83(B)
ELECTION AND PAYING TAXES RESULTING FROM THE LAPSE OF THE TRANSFER RESTRICTIONS
ON THE UNVESTED SHARES.
10. Compliance with Laws and Regulations. The issuance and transfer of the
Shares will be subject to and conditioned upon compliance by the Company and
Recipient with all applicable state and federal laws and regulations and with
all applicable requirements of any stock exchange or automated quotation system
on which the Company's Common Stock may be listed or quoted at the time of such
issuance or transfer.
11. Successors and Assigns. The Company may assign any of its rights under
this Agreement. This Agreement shall be binding upon and inure to the benefit of
the successors and assigns of the Company. Subject to the restrictions on
transfer herein set forth, this
Agreement will be binding upon Recipient and Recipient's heirs, executors,
administrators, legal representatives, successors and assigns.
12. Governing Law; Severability. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of California as
such laws are applied to agreements between California residents entered into
and to be performed entirely within California, excluding that body of laws
pertaining to conflict of laws. If any provision of this Agreement is determined
by a court of law to be illegal or unenforceable, then such provision will be
enforced to the maximum extent possible and the other provisions will remain
fully effective and enforceable.
13. Notices. Any notice required to be given or delivered to the Company
shall be in writing and addressed to the Corporate Secretary of the Company at
its principal corporate offices. Any notice required to be given or delivered to
Recipient shall be in writing and addressed to Recipient at the address
indicated above or to such other address as Recipient may designate in writing
from time to time to the Company. All notices shall be deemed effectively given
upon personal delivery, three (3) days after deposit in the United States mail
by certified or registered mail (return receipt requested), one (1) business day
after its deposit with any return receipt express courier (prepaid), or one (1)
business day after transmission by fax or telecopier.
14. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
15. Headings. The captions and headings of this Agreement are included for
ease of reference only and will be disregarded in interpreting or construing
this Agreement. All references herein to Sections will refer to Sections of this
Agreement.
16. Entire Agreement. The Plan and this Agreement, together with all its
Exhibits, constitute the entire agreement and understanding of the parties with
respect to the subject matter of this Agreement, and supersede all prior
understandings and agreements, whether oral or written, between the parties
hereto with respect to the specific subject matter hereof. No modification or
amendment to this Agreement shall be effective unless in writing signed by the
parties to this Agreement. The failure by either party to enforce any rights
under this Agreement shall not be construed as a waiver of any rights of such
party.
17. Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, the parties agree to negotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision then, (i) such
provision shall be excluded from this Agreement; (ii) the balance of this
Agreement shall be interpreted as if such provision were so included and (iii)
the balance of this Agreement shall be enforceable in accordance with its terms.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
19. Nature of Payments. Any and all grants or deliveries of Shares
hereunder shall constitute special incentive payments to Recipient and shall not
be taken into account in computing the amount of salary or compensation of
Recipient for the purpose of determining any retirement, death or other benefits
under (a) any retirement, bonus, life insurance or other employee benefit plan
of the Company, or (b) any agreement between the Company on the one hand, and
the Recipient on the other hand, except as such plan or agreement shall
otherwise expressly provide.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
duplicate by its duly authorized representative and Recipient has executed this
Agreement in duplicate as of the Effective Date.
RECIPIENT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO SECTION
6 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE AT THE WILL OF THE
COMPANY. RECIPIENT FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
AGREEMENT SHALL CONFER UPON RECIPIENT ANY RIGHT WITH RESPECT TO CONTINUATION OF
EMPLOYMENT WITH THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH RECIPIENT'S
RIGHT OR THE COMPANY'S RIGHT TO TERMINATE RECIPIENT'S EMPLOYMENT RELATIONSHIP AT
ANY TIME, WITH OR WITHOUT CAUSE.
GEOWORKS CORPORATION RECIPIENT
By:
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(Signature)
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(Please print name) (Please print name)
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(Please print title)
Exhibit A
Election Under Section 83(b) of the Internal Revenue Code
The undersigned Taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code, to include in gross income for the Taxpayer's current
taxable year the amount of any compensation taxable to taxpayer in connection
with taxpayer's receipt of the property described below.
1. TAXPAYER'S NAME:
SOCIAL SECURITY NUMBER:
TAXPAYER'S ADDRESS:
2. The property with respect to which the election is made is described as
follows:______ shares of Common Stock of Geoworks Corporation, a California
corporation (the "Company"), which is Taxpayer's employer or the
corporation for whom the Taxpayer performs services.
3. The date on which the shares were transferred was June 27, 2001 and this
election is made for calendar year 2001.
4. The shares are subject to the following restrictions: the shares are
subject to forfeiture at the time of Taxpayer's termination of employment
or services.
5. The fair market value of the shares (without regard to restrictions other
than restrictions which by their terms will never lapse) was $1.50 per
share at the time of transfer.
6. The amount, if any, paid for such shares was $0 per share.
7. The Taxpayer has submitted a copy of this statement to the Company.
THIS ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE ("IRS"), AT THE
OFFICE WHERE THE TAXPAYER FILES ANNUAL INCOME TAX RETURNS, WITHIN 30 DAYS AFTER
THE DATE OF TRANSFER OF THE PROPERTY, AND MUST ALSO BE FILED WITH THE TAXPAYER'S
INCOME TAX RETURNS FOR THE CALENDAR YEAR. THE ELECTION IS IRREVOCABLE.
Dated: , 2001
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Taxpayer's Signature
{Form of transmittal letter for most recipients}
July 13, 2001
REGISTERED MAIL NO. ____________________
RETURN RECEIPT REQUESTED
Internal Revenue Service
Re: Section 83(b) Election
Dear Sir/Madam:
Enclosed please find the original and one copy of a Section 83(b) Election
which we are filing on behalf of the taxpayers identified on the forms.
Please acknowledge your receipt of this filing by signing or stamping and
dating the copy of each Election Form and returning it to us. A self-addressed,
stamped envelope is provided for your convenience.
Very truly yours,
Xxxxxxx Xxxxxx, CFO
Enclosures
cc: all recipients
EXHIBIT B
Brief Explanation of Section 83(b)
As you know, the Agreement provides that the shares you are receiving under
the Agreement will be subject to cancellation, if your employment or service
with the Company terminates for certain reasons within a stated period of time.
This "vesting" restriction should be considered a "substantial risk of
forfeiture" within the meaning of Section 83 of the Internal Revenue Code of
1986, as amended ("IRC").
As a result of this restriction on your shares, you would normally be
taxed, when the restriction lapses on each portion of the shares (i.e. when they
"vest"), on an amount equal to the excess of the fair market value of the shares
that vest free of the restriction (with such fair market value being measured as
of the date the restriction lapses) over the amount you paid for those shares.
This could result in an unexpected (and possibly substantial) tax to you in
future years. If the shares appreciate in value between now and the time the
restriction lapses, you would be required to include the appreciation in your
federal and California, if applicable, taxable gross income. This amount would
be taxable at the full ordinary rates as compensation, when the restriction
lapses -- even if you continue to hold the shares.
However, under IRC Section 83(b) you may elect instead to be taxed this
year on the excess, if any, of the fair market value of the shares (determined
without regard to the restrictions mentioned above) on the date you buy them
over the amount you paid for the shares. If you file such an election, any
subsequent appreciation (or decline) in the value of the shares would, provided
you hold the shares for at least twelve months, be taxed as long-term capital
gain (or loss) when you eventually dispose of the shares.
IF YOU MAKE AN 83(B) ELECTION WITH RESPECT TO THE SHARES, SUCH ELECTION
WILL BE IRREVOCABLE. IF ALL OR A PORTION OF THE SHARES LATER BECOME SUBJECT TO
FORFEITURE, YOU WILL NEVERTHELESS BE TAXED BASED ON THE ENTIRE AMOUNT COVERED BY
THE 83(B) ELECTION.
You must file the election with the Internal Revenue Service (at the same
office with which you file your annual tax return) within 30 days of your
purchase of the shares. TIMELY FILING OF THE ELECTION FORM IS VERY IMPORTANT!
You must also file a copy of the election with your tax return for this year and
deliver a copy of the election to the Company. You should keep the fourth copy
for your records.
EXHIBIT C
ACKNOWLEDGMENT REGARDING SECTION 83(b) ELECTION
The undersigned has entered a Restricted Stock Bonus Agreement with
Geoworks Corporation, a Delaware corporation (the "Company"), pursuant to which
the undersigned was granted shares of Common Stock of the Company (the"Shares")
pursuant to the Company's 1994 Stock Plan. In connection with the grant of the
Shares, the undersigned hereby represents as follows:
1. The undersigned has carefully reviewed the Agreement pursuant to which
the undersigned is granted the Shares.
2. The undersigned either [check and complete as applicable]:
(a) [_] has consulted, and has been fully advised by, the
undersigned's own tax advisor, _____________________________,
whose business address is _____________________________________,
regarding the federal, state and local tax consequences of being
granted the Shares, and particularly regarding the advisability
of making elections pursuant to Section 83(b) of the Internal
Revenue Code of 1986, as amended (the "Code") and pursuant to the
corresponding provisions, if any, of applicable state law; or
(b) [_] has knowingly chosen not to consult such a tax advisor.
3. The undersigned hereby states that the undersigned has decided [check as
applicable]:
(a) [_] to make an election pursuant to Section 83(b) of the Code,
and is submitting to the Company, together with the undersigned's
executed Agreement, an executed form entitled "Election Under
Section 83(b) of the Internal Revenue Code of 1986"; or
(b) [_] not to make an election pursuant to Section 83(b) of the
Code.
4. Neither the Company nor any subsidiary or representative of the Company
has made any warranty or representation to the undersigned with respect to the
tax consequences of the undersigned's grant of the Shares or of the making or
failure to make an election pursuant to Section 83(b) of the Code or the
corresponding provisions, if any, of applicable state law.
Date:
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Recipient:
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