Spectrum Group International, Inc. Employee Restricted Stock Grant Agreement
Exhibit 10.7
THIS AGREEMENT, made as of [DATE], between Spectrum Group International, Inc. (the “Company”)
and [NAME] (the “Participant”).
WHEREAS, the Company has adopted and maintains its 1997 Stock Incentive Plan (the “Plan”) to
provide for officers, other employees and directors of, and consultants to, the Company and its
subsidiaries an incentive (a) to enter into and remain in the service of the Company, (b) to
enhance the long-term performance of the Company, and (c) to acquire a proprietary interest in the
success of the Company;
WHEREAS, the Plan provides that the Board of Directors of the Company (the “Board”) shall
administer the Plan and determine the key persons to whom awards shall be granted and the mount and
type of such awards; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set
forth, the parties hereto hereby agree as follows:
1. Grant of Restricted Stock. Pursuant to, and subject to, the terms and conditions
set forth herein and in the Plan, the Board hereby grants to the Participant [NUMBER] restricted
shares (the “Restricted Stock”) of common stock of the Company (“Common Stock”).
2. Grant Date. The grant date of the Restricted Stock is [DATE], which was the date
the Board approved the grant (the “Grant Date”).
3. Incorporation of Plan. All terms, conditions and restrictions of the Plan are
incorporated herein and made part hereof as if stated herein. If there is any conflict between the
terms and conditions of the Plan and this Agreement, the terms and conditions of the Plan, as
interpreted by the Board, shall govern. Except as otherwise provided herein, all capitalized terms
used herein shall have the meaning given to such terms in the Plan.
4. Vesting. Subject to the further provisions of this Agreement, the Restricted Stock
shall vest on the following dates, each of which shall be referred to as a “Vesting Date:”
| Number of shares of Restricted | ||
| Vesting Date | Stock vesting on such date | |
[DATE]
|
[NUMBER OF SHARES] |
Notwithstanding the foregoing, in the event that the Participant’s employment with the Company
terminates by reason of the Participant’s death or becoming “Totally Disabled”, or is terminated by
the Company without “Cause” or by the Participant for “Good Reason” (as each such term is
defined in the Employment Agreement), then the Restricted Stock shall automatically and immediately
vest and the effective date of such event shall be deemed a “Vesting Date”.
5. Restrictions on Transferability of Unvested Shares. Until a share of Restricted
Stock vests, the Participant shall not transfer the Participant’s rights to such share of
Restricted Stock or to any rights related thereto. Any attempt to transfer unvested shares of
Restricted Stock or any rights related thereto, whether by transfer, pledge, hypothecation or
otherwise and whether voluntary or involuntary, by operation of law or otherwise, shall not vest
the transferee with any interest or right in or with respect to such shares of Restricted Stock or
such related rights.
6. Termination of Service. In the event that the Participant’s employment with the
Company is terminated by the Company for “Cause” or by the Participant without “Good Reason” before
all the shares of Restricted Stock are vested, all unvested shares of Restricted Stock, together
with any property received in respect of such shares, as set forth in Section 10 hereof, shall be
forfeited as of the date Participant’s employment terminates, and the Participant promptly shall
return to the Company any certificates evidencing such shares, together with any cash dividends or
other property received in respect of such shares.
7. Issuance of Certificates.
(a) Reasonably promptly after the Grant Date, the Company shall issue stock certificates,
registered in the name of the Participant, evidencing the shares of Restricted Stock or shall
instruct its transfer agent to issue shares of Restricted Stock which shall be maintained in book
entry form on the books of the transfer agent. The Restricted Stock, if certificated, shall bear
the following legend:
“THE SALE, TRANSFER, ASSIGNMENT, PLEDGE, HYPOTHECATION ENCUMBRANCE OR OTHER DISPOSAL
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF THE
SPECTRUM GROUP INTERNATIONAL, INC.’S 1997 STOCK INCENTIVE PLAN AND A RESTRICTED
STOCK GRANT AGREEMENT BETWEEN SPECTRUM GROUP INTERNATIONAL, INC. AND THE HOLDER OF
RECORD OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE. NO TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE IN CONTRAVENTION OF SUCH PLAN AND
RESTRICTED STOCK GRANT AGREEMENT SHALL BE VALID OR EFFECTIVE. COPIES OF SUCH
AGREEMENT MAY BE OBTAINED BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THE
CERTIFICATE TO THE SECRETARY OF SPECTRUM GROUP INTERNATIONAL, INC.”
If the Restricted Stock is in book entry form, it shall be subject to electronic coding or stop
order indicating that such shares of Restricted Stock are restricted by the terms of this Agreement
and the Plan. Such legend, electronic coding or stop order shall not be removed until such shares
of Restricted Stock vest.
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(b) Each certificate issued pursuant to Section 7(a) hereof, together with the stock powers
relating to such shares of Restricted Stock, shall be held in escrow by the Company. The Company
shall issue to the Participant a receipt evidencing the certificates held by it which are
registered in the name of the Participant.
(c) Reasonably promptly after the Restricted Stock vests pursuant to Section 4 hereof, (i) in
the case of certificated shares, in exchange for the surrender to the Company of the certificate
evidencing the Restricted Stock, delivered to the Participant under Section 7(a) hereof, and the
certificates evidencing any other securities received in respect of such shares, if any, the
Company shall issue and deliver to the Participant (or the Participant’s legal representative,
beneficiary or heir) a certificate evidencing the Restricted Stock and such other securities, free
of the legend provided in Section 7(a) hereof and (ii) in the case of book entry shares, the
Company shall cause to be lifted and removed any electronic coding or stop order established
pursuant to Section 7(a) hereof, provided that the Company may require that such legend, coding or
stop order remain to the extent it deems appropriate in light of the restrictions provided in
Section 9.
(d) The Company may require as a condition of the delivery of stock certificates or the
lifting or removal of any electronic coding or stop order with respect to book entry shares
pursuant to Section 7(b) hereof that the Participant remit to the Company an amount sufficient in
the opinion of the Company to satisfy any federal, state and other governmental tax withholding
requirements related to the vesting of the shares represented by such certificate. The Board, in
its sole discretion, may permit the Participant to satisfy such obligation by delivering shares of
Common Stock or by directing the Company to withhold from delivery shares of Common Stock, in
either case valued at their Fair Market Value on the Vesting Date with fractional shares being
settled in cash.
(e) The Participant shall not be deemed for any purpose to be, or have rights as, a
shareholder of the Company by virtue of the grant of Restricted Stock, except to the extent a stock
certificate is issued therefor or an appropriate book entry is made on the books of the transfer
agent reflecting the issuance thereof pursuant to Section 7(a) hereof, and then only from the date
such certificate is issued or such book entry is made. Upon the issuance of a stock certificate or
the making of an appropriate book entry on the books of the transfer agent, the Participant shall
have the rights of a shareholder with respect to the Restricted Stock, including the right to vote
the shares, subject to the restrictions on transferability and the forfeiture provisions, as set
forth in this Agreement.
8. Representations, Warranties and Covenants of the Participant. The Participant
hereby represents and warrants to, and agrees with, the Company as follows:
(a) (i) If Participant is a U.S. resident, then the Participant is an “Accredited Investor” as
that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933,
as amended (the “1933 Act”), and as specifically indicated in Exhibit A to this Agreement.
(ii) If the Participant is not a U.S. resident, then the Participant is acquiring shares for
his own account and not for the account or benefit of any other person or entity, as specifically
indicated on Exhibit A to this Agreement.
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(b) The Participant understands that (i) the Restricted Stock has not been registered under
the 1933 Act by reason of specific exemptions from registration thereunder and under similar
exemptions under certain state securities laws; (ii) that this transaction has not been reviewed
by, passed on or submitted to any United States Federal or state agency or self-regulatory
organization where an exemption is being relied upon; (iii) that the Company’s reliance thereon is
based in part upon the representations made by the Participant in this Agreement; and (iv) that the
Restricted Stock must be held indefinitely, unless such Restricted Stock is subsequently registered
under the 1933 Act or the Participant obtains an opinion of counsel, in form and substance
satisfactory to the Company and its counsel, that such registration is not required. The
Participant further acknowledges and understands that unless otherwise agreed to between the
Participant and the Company, the Company is under no obligation to register the Restricted Stock.
(c) The Participant is aware of the adoption of Rule 144 by the Securities and Exchange
Commission under the 1933 Act, which permits limited public resales of securities acquired in a
non-public offering, subject only to the satisfaction of certain conditions. The Participant
acknowledges and understands that the conditions for resale set forth in Rule 144 have not been
satisfied.
(d) The Participant will not sell, transfer or otherwise dispose of the Restricted Stock in
violation of the 1933 Act, the Securities Exchange Act of 1934, as amended (the “1934 Act”), or the
rules promulgated thereunder, including Rule 144 under the 1933 Act. The Participant agrees that
he or she will not dispose of the Restricted Stock unless and until he or she has complied with all
requirements of this Agreement applicable to the disposition of Restricted Stock and he or she has
provided the Company with written assurances, in substance and form satisfactory to the Company,
that (A) the proposed disposition does not require registration of the Restricted Stock under the
1933 Act or all appropriate action necessary for compliance with the registration requirements of
the 1933 Act or with any exemption from registration available under the 1933 Act (including Rule
144) has been taken and (B) the proposed disposition will not result in the contravention of any
transfer restrictions applicable to the Restricted Stock under Delaware law.
9. Securities Legend; Transfers. The Participant acknowledges that the Restricted
Stock (including any Common Stock issuable upon vesting of the Restricted Stock) will be subject to
a stop order, and any certificate or certificates evidencing any such shares shall bear the
following or a substantially similar legend and such other legends as may be required by state blue
sky laws:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES
LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO SUCH SECURITIES UNDER THE SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. ANY SUCH TRANSFER MAY ALSO BE
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SUBJECT TO COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS.”
The Participant acknowledges that the Restricted Stock (including any Common Stock
issuable upon vesting of the Restricted Stock) may only be transferred in compliance with
the Company’s ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Policy and agrees that the Company may and generally will
prohibit transfer until such time as the Company is current in its reporting pursuant to
the 1934 Act.
10. Dividends, etc. Unless the Board otherwise determines, any property, including
cash dividends, received by the Participant with respect to a share of Restricted Stock as a result
of any dividend, recapitalization, merger, consolidation, combination, exchange of shares or
otherwise, will not vest until such share of Restricted Stock vests, and shall be held in escrow by
the Company. The Company shall issue to the Participant a receipt evidencing the property held by
it in respect of the Restricted Stock. Any cash dividends or other property (but not including
securities) received by a Participant with respect to a share of Restricted Stock shall be returned
to the Company in the event such share of Restricted Stock is forfeited. Any securities received
by a Participant with respect to a share of Restricted Stock as a result of any dividend,
recapitalization, merger, consolidation, combination, exchange of shares or otherwise will not vest
until such share of Restricted Stock vests and shall be forfeited if such share of Restricted Stock
is forfeited. Unless the Board otherwise determines, such securities shall bear a legend or be
subject to an electronic coding or stop order, as set forth in Section 7(a) hereof.
11. Delays or Omissions. No delay or omission to exercise any right, power or remedy
accruing to any party hereto upon any breach or default of any party under this Agreement, shall
impair any such right, power or remedy of such party, nor shall it be construed to be a waiver of
any such breach or default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of
any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party or any provisions or conditions of this
Agreement, must be in a writing signed by such party and shall be effective only to the extent
specifically set forth in such writing.
12. Right of Discharge Preserved. Nothing in this Agreement shall confer upon the
Participant the right to continue in the employ or other service of the Company, or affect any
right which the Company may have to terminate such employment or service.
13. Integration. This Agreement contains the entire understanding of the parties with
respect to its subject matter. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof other than those
expressly set forth herein. This Agreement, including, without limitation, the Plan, supersedes
all prior agreements and understandings between the parties with respect to its subject matter.
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14. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the same instrument.
15. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without regard to the provisions governing
conflict of laws.
16. Obligation to Notify. If the Participant makes the election permitted under
Section 83(b) of the Internal Revenue Code of 1986, as amended (that is, an election to include in
gross income in the year of transfer the amounts specified in Section 83(b)), the Participant shall
notify the Company of such election within 10 days of filing notice of the election with the
Internal Revenue Service and shall within the same 10-day period remit to the Company an amount
sufficient in the opinion of the Company to satisfy any federal, state and other governmental tax
withholding requirements related to such inclusion in Participant’s income. The Participant should
consult with his or her tax advisor to determine the tax consequences of acquiring the Restricted
Stock and the advantages and disadvantages of filing the Section 83(b) election. The Participant
acknowledges that it is his or her sole responsibility, and not the Company’s, to file a timely
election under Section 83(b), even if the Participant requests the Company or its representatives
to make this filing on his or her behalf.
17. Participant Acknowledgment. The Participant hereby acknowledges receipt of a copy
of the Plan. The Participant hereby acknowledges that all decisions, determinations and
interpretations of the Board in respect of the Plan, this Agreement and the Restricted Stock shall
be final and conclusive.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly
authorized officer, and the Participant has hereunto signed this Agreement on his or her own
behalf, thereby representing that he or she has carefully read and understands this Agreement and
the Plan as of the day and year first written above.
| SPECTRUM GROUP INTERNATIONAL, INC. | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| [EMPLOYEE] | ||||
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EXHIBIT A
FOR U.S. RESIDENTS ONLY
Accredited Investor Status
Please indicate below whether, as of the Grant Date, you meet any of the following criteria
or, alternatively, whether you do not meet any of the following criteria (please check one):
___(i) A director or executive officer of the Company.
___(ii) A natural person whose individual net worth, or joint net worth with that person’s
spouse, exceeds $1,000,000.
___(iii) A natural person who had an individual income in excess of $200,000 in each of the
two most recent years or joint income with that person’s spouse in excess of $300,000 in each of
those years and has a reasonable expectation of reaching the same income level in the current year.
___(iv) I do not meet any of the criteria above.
| Signature: | ||||||
| Print Name: | ||||||
| Date: | ||||||
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FOR NON-U.S. RESIDENTS ONLY
1. I hereby certify that I am an individual who does not reside in the United States and am
not acquiring shares of Spectrum Group International, Inc. for the account or benefit of any other
person or entity.
2. I agree not to engage in hedging transactions with regard to the Common Stock of Spectrum
Group International, Inc. unless in compliance with the Securities Act of 1933, as amended.
| Signature: | ||||||
| Print Name: | ||||||
| Date: | ||||||
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