Exhibit 10.1
FORM OF RESTRICTED STOCK AGREEMENT
ASPECT MEDICAL SYSTEMS, INC.
Restricted Stock Agreement
Granted Under 2001 Stock Incentive Plan
AGREEMENT made this [ ]th day of [month] 200_, between Aspect Medical
Systems, Inc., a Delaware corporation (the "Company"), and [name of officer]
(the "Participant").
For valuable consideration, receipt of which is acknowledged, the parties
hereto agree as follows:
1. Purchase of Shares.
The Company shall issue and sell to the Participant, and the Participant
shall purchase from the Company, subject to the terms and conditions set forth
in this Agreement and in the Company's 2001 Stock Incentive Plan (the "Plan"),
[number of shares granted] shares (the "Shares") of common stock, $0.01 par
value, of the Company ("Common Stock"), at a purchase price of $0.01 per share.
The aggregate purchase price for the Shares shall be paid by the Participant by
check payable to the order of the Company or such other method as may be
acceptable to the Company. Upon receipt by the Company of payment for the
Shares, the Company shall issue to the Participant one or more certificates in
the name of the Participant for that number of Shares purchased by the
Participant. The Participant agrees that the Shares shall be subject to the
purchase options set forth in Section 2 of this Agreement and the restrictions
on transfer set forth in Section 4 of this Agreement.
2. Purchase Option.
(a) In the event that the Participant ceases to be employed by the
Company for any reason or no reason, with or without cause, prior to [four years
from vesting start date], the Company shall have the right and option (the
"Purchase Option") to purchase from the Participant, for a sum of $0.01 per
share (the "Option Price"), some or all of the Unvested Shares (as defined
below).
"Unvested Shares" means the total number of Shares multiplied by the
Applicable Percentage at the time the Purchase Option becomes exercisable by the
Company. The "Applicable Percentage" shall be (i) 100% during the 6-month period
ending [six months from date vesting begins] (ii) 87.5% less 6.25% for each
three months of employment completed by the Participant with the Company from
and after [six months from date vesting begins] and (iii) zero on or after [four
years from grant date].
(b) In the event that the Participant's employment with the Company
is terminated by reason of death or disability, the number of the Shares for
which the Purchase Option
becomes exercisable shall be one hundred percent (100%) of the number of
Unvested Shares for which the Purchase Option would otherwise become
exercisable. For this purpose, "disability" shall mean the inability of the
Participant, due to a medical reason, to carry out his duties as an employee of
the Company for a period of six consecutive months.
(c) For purposes of this Agreement, employment with the Company
shall include employment with a parent or subsidiary of the Company.
3. Exercise of Purchase Option and Closing.
(a) The Company may exercise the Purchase Option by delivering or
mailing to the Participant (or his estate), within 90 days after the termination
of the employment of the Participant with the Company, a written notice of
exercise of the Purchase Option. Such notice shall specify the number of Shares
to be purchased. If and to the extent the Purchase Option is not so exercised by
the giving of such a notice within such 90-day period, the Purchase Option shall
automatically expire and terminate effective upon the expiration of such 90-day
period.
(b) Within 10 days after delivery to the Participant of the
Company's notice of the exercise of the Purchase Option pursuant to subsection
(a) above, the Participant (or his estate) shall, pursuant to the provisions of
the Joint Escrow Instructions referred to in Section 6 below, tender to the
Company at its principal offices the certificate or certificates representing
the Shares which the Company has elected to purchase in accordance with the
terms of this Agreement, duly endorsed in blank or with duly endorsed stock
powers attached thereto, all in form suitable for the transfer of such Shares to
the Company. Promptly following its receipt of such certificate or certificates,
the Company shall pay to the Participant the aggregate Option Price for such
Shares (provided that any delay in making such payment shall not invalidate the
Company's exercise of the Purchase Option with respect to such Shares).
(c) After the time at which any Shares are required to be delivered
to the Company for transfer to the Company pursuant to subsection (b) above, the
Company shall not pay any dividend to the Participant on account of such Shares
or permit the Participant to exercise any of the privileges or rights of a
stockholder with respect to such Shares, but shall, in so far as permitted by
law, treat the Company as the owner of such Shares.
(d) The Option Price may be payable, at the option of the Company,
in cancellation of all or a portion of any outstanding indebtedness of the
Participant to the Company or in cash (by check) or both.
(e) The Company shall not purchase any fraction of a Share upon
exercise of the Purchase Option, and any fraction of a Share resulting from a
computation made pursuant to Section 2 of this Agreement shall be rounded to the
nearest whole Share (with any one-half Share being rounded upward).
(f) The Company may assign its Purchase Option to one or more
persons or entities.
2
5. Restrictions on Transfer.
(a) The Participant shall not sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively "transfer") any Shares, or any interest therein, that are subject
to the Purchase Option, except that the Participant may transfer such Shares (i)
to or for the benefit of any spouse, children, parents, uncles, aunts, siblings,
grandchildren and any other relatives approved by the Board of Directors
(collectively, "Approved Relatives") or to a trust established solely for the
benefit of the Participant and/or Approved Relatives, provided that such Shares
shall remain subject to this Agreement (including without limitation the
restrictions on transfer set forth in this Section 5 and the Purchase Option)
and such permitted transferee shall, as a condition to such transfer, deliver to
the Company a written instrument confirming that such transferee shall be bound
by all of the terms and conditions of this Agreement or (ii) in connection with
a Reorganization Event (as defined in the Plan), provided that, in accordance
with the Plan, the securities or other property received by the Participant in
connection with such transaction shall remain subject to this Agreement in the
same manner and to the same extent as applied to the Shares.
(b) The Company shall not be required (i) to transfer on its books
any of the Shares which have been transferred in violation of any of the
provisions set forth in this Agreement or (ii) to treat as owner of such Shares
or to pay dividends to any transferee to whom such Shares have been transferred
in violation of any of the provisions of this Agreement.
6. Escrow.
The Participant shall, upon the execution of this Agreement, execute Joint
Escrow Instructions in the form attached to this Agreement as Exhibit A. The
Joint Escrow Instructions shall be delivered to the Secretary of the Company, as
escrow agent thereunder. The Participant shall deliver to such escrow agent a
stock assignment duly endorsed in blank, in the form attached to this Agreement
as Exhibit B, and hereby instructs the Company to deliver to such escrow agent,
on behalf of the Participant, the certificate(s) evidencing the Shares issued
hereunder. Such materials shall be held by such escrow agent pursuant to the
terms of such Joint Escrow Instructions.
7. Restrictive Legends.
All certificates representing Shares shall have affixed thereto a legend
in substantially the following form, in addition to any other legends that may
be required under federal or state securities laws:
"The shares of stock represented by this certificate are subject to
restrictions on transfer and an option to purchase set forth in a certain
Restricted Stock Agreement between the corporation and the registered
owner of these shares (or his predecessor in interest), and such Agreement
is available for inspection without charge at the office of the Secretary
of the corporation."
8. Provisions of the Plan.
(a) This Agreement is subject to the provisions of the Plan, a copy
of which is furnished to the Participant with this Agreement.
3
(b) As provided in the Plan, upon the occurrence of a Reorganization
Event (as defined in the Plan), the repurchase and other rights of the Company
hereunder shall inure to the benefit of the Company's successor and shall apply
to the cash, securities or other property which the Shares were converted into
or exchanged for pursuant to such Reorganization Event in the same manner and to
the same extent as they applied to the Shares under this Agreement. If, in
connection with a Reorganization Event, a portion of the cash, securities and/or
other property received upon the conversion or exchange of the Shares is to be
placed into escrow to secure indemnification or similar obligations, the mix
between the vested and unvested portion of such cash, securities and/or other
property that is placed into escrow shall be the same as the mix between the
vested and unvested portion of such cash, securities and/or other property that
is not subject to escrow.
9. Withholding Taxes; Section 83(b) Election.
(a) The Participant acknowledges and agrees that the Company has the
right to deduct from payments of any kind otherwise due to the Participant any
federal, state or local taxes of any kind required by law to be withheld with
respect to the purchase of the Shares by the Participant or the lapse of the
Purchase Option.
(b) The Participant has reviewed with the Participant's own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. The Participant
is relying solely on such advisors and not on any statements or representations
of the Company or any of its agents. The Participant understands that the
Participant (and not the Company) shall be responsible for the Participant's own
tax liability that may arise as a result of this investment or the transactions
contemplated by this Agreement. The Participant understands that it may be
beneficial in many circumstances to elect to be taxed at the time the Shares are
purchased rather than when and as the Company's Purchase Option expires by
filing an election under Section 83(b) of the Code with the I.R.S. within 30
days from the date of purchase.
THE PARTICIPANT ACKNOWLEDGES THAT IT IS THE PARTICIPANT'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b), EVEN IF THE PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO
MAKE THIS FILING ON THE PARTICIPANT'S BEHALF.
10. Miscellaneous.
(a) No Rights to Employment. The Participant acknowledges and agrees
that the vesting of the Shares pursuant to Section 2 hereof is earned only by
continuing service as an employee at the will of the Company (not through the
act of being hired or purchasing shares hereunder). The Participant further
acknowledges and agrees that the transactions contemplated hereunder and the
vesting schedule set forth herein do not constitute an express or implied
promise of continued engagement as an employee or consultant for the vesting
period, for any period, or at all.
4
(b) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, and each other provision of this
Agreement shall be severable and enforceable to the extent permitted by law.
(c) Waiver. Any provision for the benefit of the Company contained
in this Agreement may be waived, either generally or in any particular instance,
by the Board of Directors of the Company.
(d) Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the Company and the Participant and their respective heirs,
executors, administrators, legal representatives, successors and assigns,
subject to the restrictions on transfer set forth in Section 4 of this
Agreement.
(e) Notice. All notices required or permitted hereunder shall be in
writing and deemed effectively given upon personal delivery or five days after
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party hereto at the address shown
beneath his or its respective signature to this Agreement, or at such other
address or addresses as either party shall designate to the other in accordance
with this Section 9(e).
(f) Pronouns. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.
(g) Entire Agreement. This Agreement and the Plan constitute the
entire agreement between the parties, and supersedes all prior agreements and
understandings, relating to the subject matter of this Agreement.
(h) Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Participant.
(i) Governing Law. This Agreement shall be construed, interpreted
and enforced in accordance with the internal laws of the State of Delaware
without regard to any applicable conflicts of laws.
(j) Participant's Acknowledgments. The Participant acknowledges that
he or she: (i) has read this Agreement; (ii) has been represented in the
preparation, negotiation, and execution of this Agreement by legal counsel of
the Participant's own choice or has voluntarily declined to seek such counsel;
(iii) understands the terms and consequences of this Agreement; (iv) is fully
aware of the legal and binding effect of this Agreement; and (v) understands
that the law firm of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, is acting as
counsel to the Company in connection with the transactions contemplated by the
Agreement, and is not acting as counsel for the Participant.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
5
ASPECT MEDICAL SYSTEMS, INC.
By: _______________________________
Title: ________________________
Address: 000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
___________________________________
[Name of Participant]
Address: __________________________
__________________________
6
Exhibit A
ASPECT MEDICAL SYSTEMS, INC.
Joint Escrow Instructions
__________, 2005
____________________
[Secretary]
Aspect Medical Systems, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Dear Sir:
As Escrow Agent for Aspect Medical Systems, Inc., a Delaware corporation,
and its successors in interest under the Restricted Stock Agreement (the
"Agreement") of even date herewith, to which a copy of these Joint Escrow
Instructions is attached (the "Company"), and the undersigned person ("Holder"),
you are hereby authorized and directed to hold the documents delivered to you
pursuant to the terms of the Agreement in accordance with the following
instructions:
1. Appointment. Holder irrevocably authorizes the Company to deposit with
you any certificates evidencing Shares (as defined in the Agreement) to be held
by you hereunder and any additions and substitutions to said Shares. For
purposes of these Joint Escrow Instructions, "Shares" shall be deemed to include
any additional or substitute property. Holder does hereby irrevocably constitute
and appoint you as his attorney-in-fact and agent for the term of this escrow to
execute with respect to such Shares all documents necessary or appropriate to
make such Shares negotiable and to complete any transaction herein contemplated.
Subject to the provisions of this Section 1 and the terms of the Agreement,
Holder shall exercise all rights and privileges of a stockholder of the Company
while the Shares are held by you.
2. Closing of Purchase.
(a) Upon any purchase by the Company of the Shares pursuant to the
Agreement, the Company shall give to Holder and you a written notice specifying
the purchase price for the Shares, as determined pursuant to the Agreement, and
the time for a closing hereunder (the "Closing") at the principal office of the
Company. Holder and the Company hereby irrevocably authorize and direct you to
close the transaction contemplated by such notice in accordance with the terms
of said notice.
(b) At the Closing, you are directed (i) to date the stock
assignment form or forms necessary for the transfer of the Shares, (ii) to fill
in on such form or forms the number of Shares being transferred, and (iii) to
deliver same, together with the certificate or certificates evidencing the
Shares to be transferred, to the Company against the simultaneous delivery to
you of the purchase price for the Shares being purchased pursuant to the
Agreement.
3. Withdrawal. The Holder shall have the right to withdraw from this
escrow any Shares as to which the Purchase Option (as defined in the Agreement)
has terminated or expired.
4. Duties of Escrow Agent.
(a) Your duties hereunder may be altered, amended, modified or
revoked only by a writing signed by all of the parties hereto.
(b) You shall be obligated only for the performance of such duties
as are specifically set forth herein and may rely and shall be protected in
relying or refraining from acting on any instrument reasonably believed by you
to be genuine and to have been signed or presented by the proper party or
parties. You shall not be personally liable for any act you may do or omit to do
hereunder as Escrow Agent or as attorney-in-fact of Holder while acting in good
faith and in the exercise of your own good judgment, and any act done or omitted
by you pursuant to the advice of your own attorneys shall be conclusive evidence
of such good faith.
(c) You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or entity,
excepting only orders or process of courts of law, and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court. If
you are uncertain of any actions to be taken or instructions to be followed, you
may refuse to act in the absence of an order, judgment or decrees of a court. In
case you obey or comply with any such order, judgment or decree of any court,
you shall not be liable to any of the parties hereto or to any other person or
entity, by reason of such compliance, notwithstanding any such order, judgment
or decree being subsequently reversed, modified, annulled, set aside, vacated or
found to have been entered without jurisdiction.
(d) You shall not be liable in any respect on account of the
identity, authority or rights of the parties executing or delivering or
purporting to execute or deliver the Agreement or any documents or papers
deposited or called for hereunder.
(e) You shall be entitled to employ such legal counsel and other
experts as you may deem necessary properly to advise you in connection with your
obligations hereunder and may rely upon the advice of such counsel.
(f) Your rights and responsibilities as Escrow Agent hereunder shall
terminate if (i) you cease to be [Secretary] of the Company or (ii) you resign
by written notice to each party. In the event of a termination under clause (i),
your successor as [Secretary] shall become Escrow Agent hereunder; in the event
of a termination under clause (ii), the Company shall appoint a successor Escrow
Agent hereunder.
(g) If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
2
(h) It is understood and agreed that if you believe a dispute has
arisen with respect to the delivery and/or ownership or right of possession of
the securities held by you hereunder, you are authorized and directed to retain
in your possession without liability to anyone all or any part of said
securities until such dispute shall have been settled either by mutual written
agreement of the parties concerned or by a final order, decree or judgment of a
court of competent jurisdiction after the time for appeal has expired and no
appeal has been perfected, but you shall be under no duty whatsoever to
institute or defend any such proceedings.
(i) These Joint Escrow Instructions set forth your sole duties with
respect to any and all matters pertinent hereto and no implied duties or
obligations shall be read into these Joint Escrow Instructions against you.
(j) The Company shall indemnify you and hold you harmless against
any and all damages, losses, liabilities, costs, and expenses, including
attorneys' fees and disbursements, (including without limitation the fees of
counsel retained pursuant to Section 4(e) above, for anything done or omitted to
be done by you as Escrow Agent in connection with this Agreement or the
performance of your duties hereunder, except such as shall result from your
gross negligence or willful misconduct.
5. Notice. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties thereunto
entitled at the following addresses, or at such other addresses as a party may
designate by ten days' advance written notice to each of the other parties
hereto.
COMPANY: Notices to the Company shall be sent to the
address set forth in the salutation hereto, Attn:
President
HOLDER: Notices to Holder shall be sent to the address set
forth below Holder's signature below.
ESCROW AGENT: Notices to the Escrow Agent shall be sent
to the address set forth in the salutation hereto.
6. Miscellaneous.
(a) By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions, and you do not
become a party to the Agreement.
(b) This instrument shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
3
Very truly yours,
ASPECT MEDICAL SYSTEMS, INC.
By: ___________________________
Title: ________________________
HOLDER:
_______________________________
(Signature)
_______________________________
Print Name
Address: _______________________________
_______________________________
Date Signed:___________________
ESCROW AGENT:
_____________________________
4
Exhibit B
(STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE)
FOR VALUE RECEIVED, I hereby sell, assign and transfer unto
__________________ (_________) shares of Common Stock, $0.01 par value per
share, of Aspect Medical Systems, Inc. (the "Corporation") standing in my name
on the books of the Corporation represented by Certificate(s) Number __________
herewith, and do hereby irrevocably constitute and appoint
______________________ attorney to transfer the said stock on the books of the
Corporation with full power of substitution in the premises.
Dated: ____________________
IN PRESENCE OF _____________________________________
_____________________________________
NOTICE: The signature(s) to this assignment must correspond with the name
as written upon the face of the certificate, in every particular, without
alteration, enlargement, or any change whatever and must be guaranteed by a
commercial bank, trust company or member firm of the Boston, New York or Midwest
Stock Exchange.
