EXHIBIT 10.21
PICIS, INC.
DEFERRED STOCK AWARD AGREEMENT
This Defend Stock Award Agreement (this "Agreement") is executed as of
March 15, 2005, by and between PICIS, Inc., a Delaware corporation (the
"Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company wants to award Executive 100,000 fully-vested
shares of deferred stock of the Company in recognition of the Executive's
past services for the Company, and as an incentive for the Executive to work
for the continued success of the Company.
NOW, THEREFORE, in consideration of the benefits that the Company will
derive in connection with the services to be rendered by the Executive, i he
Company and the Executive hereby agree as follows:
1. DEFERRED STOCK; NUMBER OF SHARES. The Executive is hereby
granted 100,000 shares of Deferred Stock. Each share of Deferred Stock
represents the right to receive one share of the Company's common stock (a
"Share") at such future time as is set forth in this Agreement.
Notwithstanding anything contained in this Agreement to the contrary, in the
event of any stock dividend, stock split, recapitalization, merger,
consolidation, combination or exchange of shares, or the like, as a result of
which shares of any class shall be issued in respect of the outstanding
Shares, or the Shares shall be changed into the same or a different number of
the same or another class of stock, or into securities of another person,
cash' or other property (not including a regular cash dividend), the amount
distributed to the Executive in exchange for the 100,000 shares of Deferred
Stock shall be appropriately adjusted as determined by the Company's
Compensation Committee, or if there is no such committee, the Board of
Directors of the Company.
2. DIVIDENDS AND DISTRIBUTIONS. As of each record date for the
payment of dividends on the Company's Shares, each Executive shall be granted
a number of additional shares of Deferred Stock equal to the quotient of the
amount of dividends which would have been received by a shareholder of record
of a number of Shares equal to the number of shares of Deferred Stock held by
such Executive immediately before such dividend, divided by the Fair Market
Value on such date. In the event of any distribution with respect to Shares
other than a cash dividend, then each Executive shall be granted a number of
additional shares of Deferred Stock which could have been purchased at the
Fair Market Value as of the date of such distribution with an amount equal-to
the Fair Market Value of the consideration which would have been received on
such date by a shareholder of record of a number of Shares equal to the
number of shares of Deferred Stock then held by such Executive. "Fair Market
Value" means the value of a Share as determined in good faith by the
Company's Compensation Committee, or if there is no such committee, the
Company's Board of Directors, with the Committee's determination being
binding on the Company and the Executive for all purposes.
3. VESTING PROVISIONS. The Deferred Stock granted to the Executive
hereunder shall be fully vested on the date of grant.
4. PROHIBITION AGAINST TRANSFER OF DEFERRED STOCK. Except as
provided herein, Deferred Stock may not be sold, assigned, conveyed, donated,
pledged, transferred or otherwise disposed of or encumbered or subjected to
execution, attachment, or similar process. The Executive shall have the
right to transfer Deferred Stock upon his death, either to his designated
beneficiary (such designation to be made in writing at such time and in such
manner as the Company shall prescribe or approve), or, he dies without a
surviving designated beneficiary, by the terms of the Executive's will or
under the laws of descent and distribution.
5. DISTRIBUTION OF DEFERRED STOCK. The Shares represented by the
Deferred Stock shall be distributed to the Executive within 30 days after the
first to occur of (a) the date the Executive's employment with the Company
terminates for any reason, (b) the occurrence of an initial public offering
of the Company's Shares (an "IPO") or (c) a Change in Control Notwithstanding
the foregoing, (i) if the Executive's employment terminates during calendar
year 2005, the Shares will not be distributed to the Executive prior to
January 1, 2006, (ii) the distribution of the Shares will be delayed to the
minimum extent necessary to avoid a penalty to the Executive under
Section 409A of the Internal Revenue Code, and (iii) if payment of the
Deferred Stock in Shares would cause an anti-dilution adjustment in under the
Company's Certificate of Incorporation, the Deferred Stock will be paid to
the Executive in cash based on the Fair Market Value of the Shares at the
date of distribution. A Change in Control has the same meaning as set forth
in the Company's 2000 Stock Option Plan (as amended and restated effective
February 15, 2005). The Company shall have the right to delay the issue or
delivery of any Shares to be delivered hereunder until (i) the completion of
such registration or qualification of such Shares under federal, state or
foreign law, ruling or regulation as the Company shall deem to be necessary
or advisable, or (ii) receipt from the Executive of such documents and
information as the Company may deem necessary or appropriate in connection
with such registration or qualification or the issuance of Shares hereunder.
6. EXECUTIVE'S REPRESENTATIONS. The Executive acknowledges that he
or she shall have no interest in any fund or in any specific asset or assets
of the Company by reason of any Deferred Stock granted hereunder, nor any
right to exercise any of the rights or privileges of a shareholder with
respect to any Deferred Stock or any Shares distributable with respect to any
Deferred Stock until such Shares are so distributed. This will continue to
be the case even if the Company establishes a trust to hold the Shares (a
so-called "Rabbi Trust"). The Executive further acknowledges that the award
of the Deferred Stock, in and of itself, is not a guaranty of continued
employment by the Company, and does not interfere in any way with the right
of the Company to terminate the Executive's employment at any time. In the
event the Shares have not been registered under the Securities Act of 1933,
as amended (the "Securities Act", at the time the Shares are distributed to
the Executive in accordance with Paragraph 5, above, the Executive shall, if
required by the Company, concurrently with the delivery of the Shares,
deliver to the Company his Investment Representation Statement, in the form
attached hereto as EXHIBIT A, and in such other form as is then acceptable to
the Company's securities counsel.
7. RIGHT OF FIRST OFFER FOR SHARES. The following provisions of
this Section 7 apply after a distribution of the Shares to the Executive
pursuant to Section 4 hereof, but only for the
2
period prior to an IPO. In addition, any transfer of Shares by the Executive
to a purchaser in a Change of Control is not governed by this Section 7.
(a) NOTICE OF TRANSFER. Except in the case of a transfer to a
Permitted Transferee or an Involuntary Transfer, as defined below, if the
Executive intends to transfer all or any portion of his Shares, he must send
a Notice of Transfer to the Company, and the applicable provisions of this
Section 7 must be complied with, before a transfer will be effective and the
transferee will be considered a shareholder of the Company. Subject to
subsection (c) below, the Notice of Transfer shall constitute an irrevocable
and exclusive offer to the Company to purchase all the Executive's Shares
proposed to be transferred at the price and on the terms and conditions
specified in the Notice of Transfer.
(b) OPTIONS TO PURCHASE. The Company shall have 30 days from
the date of receipt of the Notice of Transfer to exercise its right to
purchase contained in this Section 7 by providing written notice of such
exercise to the Executive. If exercised, the Executive shall be obligated to
sell, and the Company shall be obligated to purchase, all of the Executive's
Shares being offered upon the same terms, conditions and price as described
in the Notice of Transfer.
(c) TRANSFER TO THIRD PARTY. If all of the Executive's Shares
designated in the Notice of transfer are not purchased as provided in
Section 7(b), the Executive may transfer Shares pursuant to this
Section 7(c), provided the following conditions are met:
(i) The Executive may transfer all (but not less than
all) of the Shares identified in the Notice of Transfer to a transferee
third party at the same (or a greater) price and on the same (or less
favorable to the transferee) terms of payment specified in the Notice
of Transfer, provided that the transfer is made within 120 days after
the date of the Notice of Transfer.
(ii) The transferee must, as part of the closing of the
transfer, take all actions and execute all instruments required by the
Company in order for the transfer to comply with any applicable federal
or state laws and regulations relating to the transfer of Shares.
If the Shares proposed to be transferred pursuant to the Notice of
Transfer are not transferred within the applicable periods and in accordance
with the foregoing provisions of this Section 7(c), the shares shall again be
subject to the restrictions of this Section 7.
(d) DEFINITIONS.
(i) "Permitted Transferee" means (1) the spouse or lineal
descendants of the Executive, (2) a custodian or guardian for such
person, such person's spouse, or such person's lineal descendants ,
(3) a trust solely for the benefit of the Executive or the persons
referenced in (1) or (2), (4) a corporation or other entity 100% owned
by the Executive or any of the persons listed in (1), (2) or (3), if,
in all cases, such person(s) and/or the transferee entity agree to
restrictions that put the Company in the same position as if the Shares
were still held by the Executive.
3
(ii) "Involuntary Transfer" means a transfer as a result
of the Executive's death or by operation of law, including the
Executive's bankruptcy.
8. LOCK-UP PERIOD. If so requested by the Company or any
representative of the underwriters (the "Managing Underwriter") in connection
with any registration of the offering of any securities of the Company under
the Securities Act, the Executive shall not sell or otherwise transfer any
Shares or other securities of the Company during the 180-day period (or such
other period as may be requested in writing by the Managing Underwriter and
agreed to in writing by the Company) (the "Market Standoff Period") following
the effective date of a registration statement of the Company filed under the
Securities Act. Such restriction shall apply only to the first registration
statement of the Company to, become effective under the Securities Act that
includes securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Securities Act. The Company may
impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such Market Standoff Period.
9. TAXES. The Company may require payment or reimbursement of, or
may withhold, any tax that it believes is required as a result of the grant
or distribution of the Shares, and the Company may defer making delivery with
respect to Shares payable hereunder or otherwise until arrangements
satisfactory to the Company have been made with respect to such withholding
obligations. The tax withheld will not exceed the minimum required by law in
each instance. The Executive may, at his election, satisfy his obligation
for withholding taxes on the distribution of the Shares by having the Company
withhold a number of Shares having an aggregate Fair Market Value on the date
the Shares are withheld equal to the amount of the required withholding tax
at the minimum rate required by law.
10. RIGHTS OF EXECUTIVE. The Deferred Stock, and any payments or
other benefits received by the Executive pursuant to the Deferred Stock, is
discretionary and shall not be deemed a part of the Executive's regular,
recurring compensation for any purpose and shall not be included in, nor have
any effect on, the determination of benefits under any other employee benefit
plan, contract or similar arrangement provided to the Executive unless
expressly so provided by such other plan, contract or arrangement, or unless
the Administrator expressly determines otherwise.
11. GOVERNING LAW. This Agreement and all questions arising
hereunder or in connection herewith shall be determined in accordance with
the laws of the State of Delaware, without giving effect to the principles of
conflicts of laws.
12. ADOPTION OF A SUBSEQUENT PLAN. If the Company adopts an equity
incentive plan which contains provisions governing Deferred Stock, the
Executive agrees that the Company may amend this award agreement to be
consistent with the provisions of that plan; PROVIDED, HOWEVER, that the
amount of Deferred Stock awarded hereunder, the fact that it is fully vested,
the dates for distribution of the Deferred Stock, and the fact that Shares
can be used to pay withholding taxes on the distribution of the Shares shall
not be changed in any amended award agreement.
4
IN WITNESS WHEREOF, the Company has caused these presents to be
executed as of the date and year first above written, which is the date of
the granting of the Deferred Stock evidenced hereby.
PICIS, INC.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
The undersigned Executive hereby accepts the foregoing Deferred Stock
and agrees to the several terms and conditions hereof.
/S/ R. ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
5
EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
PARTICIPANT: _____________________________
COMPANY: PICIS, INC.
SECURITY: COMMON STOCK
AMOUNT: _____________________________
DATE: _____________________________
In connection with the receipt of the above-listed common stock, the
undersigned Participant represents to the Company the following:
(a) Participant is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company
to reach an informed and knowledgeable decision to acquire the Securities.
Participant is acquiring these Securities for investment for Participant's
own account only and not with a view to, or for resale in connection with,
any "distribution" thereof within the meaning of the Securities Act of 1933,
as amended (the "Securities Act").
(b) Participant acknowledges and understands that the
Securities constitute "restricted securities" under the Securities Act and
have not been registered (nor is registration contemplated) under the
Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of
Participant's investment intent as expressed herein. In this connection,
Participant understands that, in the view of the Securities and Exchange
Commission, the statutory basis for such exemption may be unavailable if
Participant's representation was predicated solely upon a present intention
to hold these Securities for the minimum capital gains period specified under
tax statutes, for a deferred sale, for or until an increase or decrease in
the market price of the Securities, or for a period of one year or any other
fixed period in the future. Participant further understands that the
Securities are not freely tradable and must be held indefinitely unless they
are subsequently registered under the Securities Act or an exemption from
such registration is available. Participant further acknowledges and
understands that the Company is under no obligation to register the
Securities, or to publicly disseminate information concerning the Company
pursuant to the Securities Exchange Act of 1934, as amended. Participant
understands that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the Company, and any other legend required under applicable
state securities laws.
Signature of Participant:
------------------------------
Date:
------------------------
6