EXHIBIT 7A
[NETLOJIX LOGO]
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
TO: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ AGREEMENT NO. 98RS - 10003
SOCIAL SECURITY NO:
ADDRESS: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SUBJECT: NO. OF SHARES 100,000; DATE OF GRANT: APRIL 30, 2001
1998 STOCK INCENTIVE PLAN (THE "PLAN"); RESTRICTED STOCK AGREEMENT
================================================================================
Dear ▇▇▇:
Congratulations, you have been granted a Restricted Stock Award under
the 1998 Stock Incentive Plan of NetLojix Communications, Inc. (the "Company').
This letter is the Restricted Stock Agreement ("Agreement") dated as of the Date
of Grant set forth above by and between the Company and you ("Participant").
PLEASE NOTE:
- A copy of the Plan is attached or has previously been furnished to
you. Unless otherwise explained, the definitions (noted by
capitalized words) that are used in the Plan are the same as those
in this Agreement. If there is any conflict between this Agreement
and the Plan, the terms of the Plan shall control.
- Two sets of this Agreement are provided. You must SIGN BOTH, without
making any changes, and RETURN ONE to the Company within thirty (30)
days following receipt; the other should be kept by you with your
other important personal records.
- The details of this grant are as follows:
GRANT AMOUNT: 100,000 Shares.
VESTING: Refer to Section 7, below.
1. RESTRICTED STOCK GRANT. The Company hereby grants to you 100,000 shares
of Restricted Stock.
2. ISSUANCE OF CERTIFICATES. Upon (i) the execution and return of this
Agreement by you, and (ii) your payment to the Company of $1,000
(representing the aggregate par value of such shares, the "Initial
Payment") or as soon thereafter as is practicable, the Company
shall issue certificates(s) evidencing the number of shares set forth
in Section 1, registered in your name and bearing such legends as may
be required by any federal or state securities law, rule or regulation
and, if applicable, a legend referring to the restrictions provided
under the Plan.
3. DELIVERY AND CUSTODY OF RESTRICTED STOCK CERTIFICATES. You agree that,
as a matter of convenience to you and the Company, all share
certificates representing Restricted Stock shall be held in custody by
the Company's Secretary until vesting or forfeiture of the Restricted
Stock, pursuant to the Plan and this Agreement. You authorize the
Company to cancel the certificates(s) and reissue new certificate(s)
pursuant to the Power of Attorney immediately following the signature
page of this Agreement which is to be executed and delivered by you
upon your acceptance of this Agreement and which is deemed to include
the power and authority to give effect to the immediately following two
sentences. Upon vesting, share certificate(s) representing the proper
number of vested shares, without restriction under this Agreement,
shall be delivered by the Company to you. Upon forfeiture of Restricted
Stock, share certificates representing such forfeiture shall, at the
Company's sole discretion, be canceled and reissued to such person,
plan or entity as the Company determines, held or otherwise disposed of
by the Company in such manner as it determines.
4. FORFEITURE. Your Restricted Stock is subject to forfeiture in
accordance with the provisions of the Plan and this Agreement. If you
do not meeting the vesting requirements set forth in Section 7, below,
the Restricted Stock shall be completely and irrevocably forfeited, you
shall have no further or continuing rights or interest under this
Agreement with respect to such forfeited shares, and you hereby
authorize the Company to have such certificates representing such
Restricted Stock canceled in accordance with the terms of Section 3
above. In the event of such forfeiture, the Company will reimburse you
the amount of the Initial Payment (or pro rata portion thereof if not
all the shares of Restricted Stock are forfeited).
5. RESTRICTIONS ON TRANSFER OF SHARES. You agree that no shares of
Restricted Stock issued to you under this Agreement and no interest in
such shares shall be sold, transferred, assigned, pledged, hypothecated
or encumbered until they have vested in accordance with the terms of
the Plan and this Agreement. Stock certificate(s) representing
Restricted Stock shall bear restrictive legends as determined by the
Company to be consistent with these restrictions.
6. REMOVAL OF PARTICIPANT. Nothing in the Plan or this Agreement shall be
construed in any manner to limit the rights of the Company to terminate
the Participant's employment at any time, with or without cause.
7. VESTING. For purposes of this Agreement, Participant shall become
vested in the specified percentage of the shares of Restricted Stock
awarded to him under this Agreement on the dates specified below,
provided that the Participant has continued without break to serve as
an employee of the Company or one of its subsidiaries from the Date of
Grant up to and including the relevant vesting date shown below:
Page 2
VESTING DATE VESTED PERCENTAGE
April 30, 2002 30%
April 30, 2003 60%
April 30, 2004 100%
In the event of a Change in Control, Participant shall immediately
become fully vested in the shares of Restricted Stock awarded to him
under this Agreement.
8. TERMINATION.
8.1 TERMINATION OTHER THAN DEATH OR DISABILITY AND OTHER MATTERS.
If Participant ceases to be an employee of the Company (other
than because of death, disability or retirement with the
consent of the Board, all non-vested Restricted Stock held by
him shall be forfeited to the Company.
8.2 TERMINATION BECAUSE OF DEATH OR DISABILITY. If the
Participant's service as an employee of the Company is
terminated because of the Participant's death or disability,
all Restricted Stock shall be vested as of the date of the
Participant's death or disability (as determined by the Board
or Committee).
8.3 REMOVAL WITHOUT CAUSE. If Participant is terminated as an
employee by the Company without cause, all Restricted Stock
shall become vested as of the date of the Participant's
termination.
9. TAX CONSEQUENCES. Set forth below is a brief summary, as of the Date of
Grant, of some of the federal and California tax consequences of the
grant of the Restricted Stock. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PARTICIPANT
SHOULD CONSULT A TAX ADVISER BEFORE SIGNING THIS AGREEMENT:
9.1 RESTRICTED STOCK GRANTS. Share of the Company's common stock
are "granted" or issued to participants who do not have to pay
for such shares (other than the Initial Payment). The shares
are subject to restrictions, described above, which will not be
removed until vesting. Restricted Stock consists of shares of
Common Stock issued under the Plan which remain outstanding and
as to which restrictions have not yet been removed or expired.
Participant normally will not realize taxable income upon an
award of Restricted Stock, and the Company will not be entitled
to a deduction, until vesting, when the Participant will
realize ordinary income in an amount equal to the Fair Market
Value of the Shares at that time, less the Initial Payment.
However, Participant may elect, in the manner described in
Section 9.3, to realize taxable ordinary income in the year the
Restricted Stock is awarded in an amount equal to its Fair
Market Value at that time, determined without regard to the
restrictions. The Company will be entitled to a deduction in
the same amount and at the same time as the Participant
realizes income.
9.2 TAX WITHHOLDING. When and to the extent that the grant of
shares of Restricted Stock or the Vesting of such Shares
becomes reportable as ordinary income to
Page 3
Participant, Participant must pay or provide for any applicable
federal or state withholding obligations of the Company.
9.3 SECTION 83(b) ELECTION. Participant understand that under Code
Section 83 the excess of the Fair Market Value of the Shares on
the date of vesting over the Initial Payment will be reportable
as ordinary income on the vesting date. Participant understands
that he/she may elect under Code Section 83(b) to be taxed at
the time the Shares of Restricted Stock are acquired hereunder,
rather than when and as such Restricted Stock ceases to be
subject to such forfeiture restrictions. Such election must be
filed with the Internal Revenue Service within thirty (30) days
after the date of this Agreement. PARTICIPANT UNDERSTANDS THAT
FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY (30)
DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME BY
PARTICIPANT AS THE FORFEITURE RESTRICTIONS LAPSE.
10. INTERPRETATION. Any dispute regarding the interpretation of this
Agreement shall be submitted by Participant or the Company to the
Committee for review. The resolution of such a dispute by the Committee
shall be final and binding on the Company and Participant.
11. ENTIRE AGREEMENT. The Plan is incorporated herein by reference. This
Agreement and the Plan constitute the entire agreement of the parties
and supersede all prior undertakings and agreements with respect to the
subject matter hereof.
12. NOTICES. Any notice required to be given or delivered to the Company
under the terms of this Agreement 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 Participant
shall be in writing and addressed to Participant at the address
indicated above or to such other address as Participant may designate
in writing to the company. All notices shall be deemed to have been
given or delivered as follows: (a) upon receipt if by personal
delivery; (b) if by mail, three (3) days after deposit in the United
States mail by certified or registered mail (return receipt requested);
or (c) if by express courier, one (1) business day after deposit with
any return receipt express courier (prepaid).
13. 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 set forth herein, this Agreement shall be
binding upon Participant and Participant's heirs, executors,
administrators, legal representatives, successors and assigns.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
This Agreement has been executed in duplicate by the parties as of the
Date of Grant.
Page 4
NETLOJIX COMMUNICATIONS, INC. PARTICIPANT
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------- ---------------------------------
Its: Chairman and Chief Executive Officer ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
POWER OF ATTORNEY ATTACHED
Page 5