ITEX CORPORATION EXECUTIVE RESTRICTED STOCK AGREEMENT
ITEX
CORPORATION
This
Agreement is made as of the Grant Date (as defined in section 1.0), by and
between the Participant (as defined in section 1.0) and ITEX Corporation, a
Nevada corporation (the “Company”).
Whereas, the Company maintains the ITEX
Corporation 2004 Equity Incentive Plan (the “Plan”), which is incorporated into
and forms a part of this Agreement, and the Participant has been selected by the
Compensation Committee administering the Plan (the “Committee”) to receive a
Restricted Stock award under the Plan;
NOW, THEREFORE, IT IS AGREED, by and
between the Company and the Participant, as follows:
1.0 Terms of
Award
1.1 The
following terms used in this Agreement shall have the meanings set forth in this
paragraph 1.0:
(a) The
“Participant” is _____________.
(b) The
“Grant Date” is _____________.
|
|
(c)
|
The
“Restricted Period” is the period beginning on the Grant Date and ending
on ____________, subject to the vesting schedule in Section 5.0
below.
|
|
|
(d)
|
The
number of shares of “Restricted Stock” awarded under this Agreement shall
be ___________ shares. Shares of “Restricted Stock” are shares
of Stock granted under this Agreement and are subject to the terms of this
Agreement and the Plan.
|
Other
terms used in this Agreement are defined pursuant to paragraph 6 or elsewhere in
this Agreement. Unless otherwise defined in this Agreement, the terms
defined in the Plan shall have the same defined meanings in this
Agreement.
2.0 Award
2.1 The
Participant is hereby granted the number of shares of Restricted Stock set forth
in paragraph 1.0.
3.0 Dividends and Voting
Rights
3.1 The
Participant shall be entitled to receive any dividends paid with respect to
shares of Restricted Stock that become payable during the Restricted Period;
provided, however, that
no dividends shall be payable to or for the benefit of the Participant for
shares of Restricted Stock with respect to record dates occurring prior to the
Grant Date, or with respect to record dates occurring on or after the date, if
any, on which the Participant has forfeited those shares of Restricted
Stock. The Participant shall be entitled to vote the shares of
Restricted Stock during the Restricted Period to the same extent as would have
been applicable to the Participant if the Participant was then vested in the
shares; provided,
however, that the Participant shall not be entitled to vote the shares
with respect to record dates for such voting rights arising prior to the Grant
Date, or with respect to record dates occurring on or after the date, if any, on
which the Participant has forfeited the shares of Restricted
Stock.
-1-
4.0 Deposit of Shares of
Restricted Stock
4.1 Each
certificate issued in respect of shares of Restricted Stock granted under this
Agreement shall be registered in the name of the Participant and shall be
deposited in escrow with the Secretary of the Company or with outside counsel
for the Company. The grant of Restricted Stock is conditioned upon
the Participant endorsing in blank an Assignment Separate from Certificate for
the Restricted Stock in the form of Exhibit A. The deposited
certificates, together with any other assets or securities from time to time
deposited with the Company pursuant to the requirements of this Agreement, shall
remain in escrow until such time or times as the certificates (or other assets
and securities) are to be released or otherwise surrendered for cancellation in
accordance with Section 5. Upon delivery of the certificates (or
other assets and securities) to the Company, the Owner shall be issued an
instrument of deposit acknowledging the number of shares of Restricted Stock (or
other assets and securities) delivered in escrow to the Secretary of the
Company.
5.0 Vesting; Transfer and
Forfeiture of Shares
5.1 If
the Participant’s Date of Termination (as defined below) does not occur during
the Restricted Period with respect to any shares of Restricted Stock, then, at
the end of the Restricted Period for such shares, the Participant shall become
fully vested in those shares of Restricted Stock, and shall own the shares free
of all restrictions otherwise imposed by this Agreement. Provided the
Participant continues to be an Eligible Recipient, Participant shall become
vested in the shares of Restricted Stock, and become owner of the shares free of
all restrictions otherwise imposed by this Agreement, prior to the end of the
Restricted Period, in accordance with the following provisions:
|
|
(a)
|
The
Participant shall not acquire any vested interest in any shares of
Restricted Stock during the initial _______ month period measured from the
Grant Date.
|
|
|
(b)
|
Upon
the expiration of the initial ______ month period measured from the Grant
Date (“Initial Vesting Date”), the Participant shall acquire a vested
interest in that number of shares of Restricted Stock equal to ____
percent (__%) of the Restricted
Stock.
|
|
|
(c)
|
From
and after the Initial Vesting Date, the Participant shall acquire a vested
interest in ____ percent (__%) of the remaining shares of Restricted Stock
on each anniversary of the Initial Vesting Date. The table
below sets forth the vesting dates for the Restricted
Stock:
|
|
Number
of Shares
of
Common Stock
|
Vesting
Date
|
|
|
|
(d)
|
The
Participant shall become vested in the shares of Restricted Stock prior to
the date the Restricted Stock would otherwise become vested as of the
Participant’s Date of Termination, if the Participant’s Date of
Termination occurs by reason of the Participant’s death or Disability, or
if the Participant’s Date of Termination occurs by reason of the
Participant’s termination by the Company other than for Good Cause (as
defined below).
|
|
|
(c)
|
The
Participant shall become vested in the shares of Restricted Stock as of
the date of a Change in Control (as defined below), if the Change in
Control occurs prior to the end of the Restricted Period, and the
Participant’s Date of Termination does not occur before the Change in
Control date.
|
-2-
5.2 Shares
of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise
encumbered until the expiration of the Restricted Period or, if earlier, until
the Participant is vested in the shares. Except as otherwise provided
in this paragraph 5, if the Participant’s Date of Termination occurs during the
Restricted Period, the Participant shall forfeit the Restricted Stock as of the
Participant’s Date of Termination.
6.0 Definitions
6.1 For
purposes of this Agreement, the terms used in this Agreement shall be subject to
the following:
(a) Change in
Control. The term “Change in Control” means an event involving
one transaction or a related series of transactions in which one of
the following occurs: (i) the Company issues securities equal to 50%
or more of the Company’s issued and outstanding voting securities, determined as
a single class, to any individual, firm, partnership or other entity, including
a “group” within the meaning of section 13(d)(3) of the Securities Exchange Act
of 1934; (ii) the Company issues securities equal to 50% or more of
the issued and outstanding common stock of the Company in connection with a
merger, consolidation or other business combination; (iii)
the Company is acquired in a merger or other business combination transaction in
which the Company is not the surviving company; (iv) all or substantially all of
the Company’s assets are sold or transferred; or (v) there is a change in the
majority of the members of the Board of Directors as a result of one or more
contested elections for board membership.
(b) Date of
Termination. The Participant’s “Date of Termination” shall be
the first day occurring on or after the Grant Date on which the Participant is
either: (a) not employed by the Company or any Subsidiary, or (b) is no longer
an Eligible Person under the Plan who, in the opinion of the Committee, is
rendering valuable services to the Company or any Subsidiary, regardless of the
reason for the termination of employment or services; provided that a
termination of employment shall not be deemed to occur (i) if the Participant
voluntarily left the Company for any reason other than retirement, disability or
“Good Reason,” or (ii) by reason of a transfer of the Participant
between the Company and a Subsidiary or between two Subsidiaries; and further
provided that the Participant’s employment shall not be considered terminated
while the Participant is on a leave of absence from the Company or a Subsidiary
approved by the Participant’s employer. If, as a result of a sale or
other transaction, the Participant’s employer ceases to be a Subsidiary (and the
Participant’s employer is or becomes an entity that is separate from the
Company), and the Participant is not, at the end of the 30-day period following
the transaction, employed by the Company or an entity that is then a Subsidiary,
then the occurrence of such transaction shall be treated as the Participant’s
Date of Termination caused by the Participant being discharged by the
employer.
(c) Disability. Except
as otherwise provided by the Committee, the Participant shall be considered to
have a “Disability” during the period in which the Participant is unable, by
reason of a medically determinable physical or mental impairment, to engage in
any substantial gainful activity, which condition, in the opinion of a physician
selected by the Committee, is expected to have a duration of not less than 120
days.
(d) Good
Cause. The term “Good Cause” means that the Participant is
terminated by majority vote of (excluding Participant) the Board of Directors as
a result of (1) the occurrence of one of the following: (i) serious misconduct,
dishonesty or disloyalty, directly related to the performance of duties for the
Company, which results from a willful act or omission or from gross negligence,
and which is materially or potentially materially injurious to the operations,
financial condition or business reputation of the Company or any significant
subsidiary thereof; (ii) Participant being convicted (or entering into a plea
bargain admitting criminal guilt) in any criminal proceeding that may have a
material adverse impact on the Company’s reputation and standing in the
community; (iii) drug or alcohol abuse, but only to the extent that such abuse
has an obvious and material effect on the Company’s reputation and/or on the
performance of Participant’s duties and responsibilities; or (iv) willful and
continued failure to substantially perform Participant’s duties; and (2) such
event, conduct or condition that may result in termination for Good Cause is not
cured within thirty days after written notice is delivered to Participant from
the Company. For these purposes, no act or failure to act shall be
considered “willful” unless it is done, or omitted to be done, in bad faith
without reasonable belief that the action or omission was in the best interest
of the Company.
-3-
(e) Good
Reason. The term “Good Reason” means that the Participant,
without Participant’s consent has either:
|
|
·
|
incurred
a material reduction in Participant’s title, status, authority or
responsibility as CEO at the Company;
or
|
|
|
·
|
failed
to be re-elected to the Board and continue as the CEO/Chairman and been
able to nominate one officer to the Board;
or
|
|
|
·
|
incurred
a reduction in the Participant’s base compensation from the Company;
or
|
|
|
·
|
been
notified that Participant’s principal place of work will be relocated by a
distance of fifty (50) miles or more;
or
|
|
|
·
|
been
required to work more than ten (10) days per month outside of
Participant’s principal offices for a six (6) month continuous
period.
|
(f) Plan
Definitions. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in this Agreement.
7.0 Heirs and
Successors
7.1 This
Agreement shall be binding upon, and inure to the benefit of, the Company and
its successors and assigns, and upon any person acquiring, whether by merger,
consolidation, purchase of assets or otherwise, all or substantially all of the
Company’s assets and business. If any rights of the Participant or
benefits distributable to the Participant under this Agreement have not been
exercised or distributed, respectively, at the time of the Participant’s death,
such rights shall be exercisable by the Designated Beneficiary, and such
benefits shall be distributed to the Designated Beneficiary, in accordance with
the provisions of this Agreement and the Plan. The “Designated
Beneficiary” shall be the beneficiary or beneficiaries designated by the
Participant in a writing filed with the Committee in such form and at such time
as the Committee shall require. If a deceased Participant fails to designate a
beneficiary, or if the Designated Beneficiary does not survive the Participant,
any rights that would have been exercisable by the Participant and any benefits
distributable to the Participant shall be exercised by or distributed to the
legal representative of the estate of the Participant. If a deceased
Participant designates a beneficiary and the Designated Beneficiary survives the
Participant but dies before the Designated Beneficiary’s exercise of all rights
under this Agreement or before the complete distribution of benefits to the
Designated Beneficiary under this Agreement, then any rights that would have
been exercisable by the Designated Beneficiary shall be exercised by the legal
representative of the estate of the Designated Beneficiary, and any benefits
distributable to the Designated Beneficiary shall be distributed to the legal
representative of the estate of the Designated Beneficiary.
-4-
8.0 Administration
8.1 The
authority to manage and control the operation and administration of this
Agreement shall be vested in the Committee, and the Committee shall have all
powers with respect to this Agreement as it has with respect to the
Plan. Any interpretation of the Agreement by the Committee and any
decision made by it with respect to the Agreement is final and
binding.
9.0 Plan
Governs
9.1 Notwithstanding
anything in this Agreement to the contrary, the terms of this Agreement shall be
subject to the terms of the Plan, a copy of which may be obtained by the
Participant from the office of the Secretary of the Company.
10.0 Amendment
10.1 This
Agreement may be amended by written agreement of the Participant and the
Company, without the consent of any other person.
IN
WITNESS WHEREOF, the Participant has executed this Agreement, and the Company
has caused this Agreement to be executed in its name and on its behalf, all as
of the Grant Date.
|
ITEX
Corporation
|
PARTICIPANT
|
|
|
By:
|
||
|
Printed
Name
|
||
|
Address:
|
||
-5-
EXHIBIT
A
Assignment
Separate from Certificate
FOR VALUE
RECEIVED and pursuant to that certain Restricted Stock Agreement (the
“Agreement”), _____________ hereby sells, assigns and transfers unto
ITEX Corporation, a Nevada corporation (“Assignee”), _______________ (___)
shares of the Common Stock of the Assignee, standing in the undersigned’s name
on the books of said corporation represented by Certificate No. herewith and does hereby
irrevocably constitute and appoint the Secretary and/or the transfer agent of
the Assignee as attorney-in-fact to transfer the said stock on the books of the
within named company with full power of substitution in the
premises. This Assignment may be used only in accordance with and
subject to the terms and conditions of the Agreement, in connection with the
forfeiture of shares of Common Stock of said corporation issued to the
undersigned pursuant to the Agreement, and only to the extent that such shares
remain unvested and subject to forfeiture under the Agreement.
|
Dated: ________________________
|
|
|
Signature
_____________________________________
|
|
|
Signature
_____________________________________
|