METALICO, INC. DEFERRED STOCK AWARD AGREEMENT
Exhibit 10.16
METALICO, INC.
DEFERRED STOCK
AWARD AGREEMENT
DEFERRED STOCK
AWARD AGREEMENT
This Deferred Stock Award Agreement (this “Agreement”) is
made as of
,
20 (the “Date of
Grant”) between Metalico, Inc. (the “Company”), and
(“Grantee”). This Agreement is made
pursuant to the Company’s 2006 Long-Term Incentive Plan (the
“Plan”), the terms and provisions of which are
incorporated herein by reference.
1. Deferred Stock Award: The Company hereby grants to Grantee and Grantee hereby accepts, on
the terms and conditions hereinafter set forth, the right (the “Award”) to receive
_________________________ (___________) shares (“Shares”)
of the Company’s Stock (as defined in Section 2 of the Plan) (the “Deferred Stock”) on the terms
and conditions of the Plan and this Agreement, to be issued in three equal tranches as follows:
| • | 1/3 of the Shares (“Tranche 1”) to be issued __________, 20__ (“Settlement Date 1”) | ||
| • | 1/3 of the Shares (“Tranche 2”) to be issued __________, 20__ (“Settlement Date 2”) | ||
| • | 1/3 of the Shares (“Tranche 3”) to be issued __________, 20__ (“Settlement Date 3”) |
Notwithstanding anything in this Agreement to the contrary, this grant shall be rescinded and no
longer of any force or effect if the Grantee does not execute and return this Agreement to the
Company by ___________, 20_.
2. Vesting: Subject to the terms and restrictions set forth in the Plan and Sections 5 and 6
of this Agreement, the Shares in Tranche 1 (with Tranche 2 and Tranche 3, each a “Tranche”) will
become vested on Settlement Date 1 (with Settlement Date 2 and Settlement Date 3, each a
“Settlement Date”), the Shares in Tranche 2 will become vested on Settlement Date 2, and the Shares
in Tranche 3 will become vested on Settlement Date 3. Grantee will have the rights of a
shareholder only as to shares actually issued to Grantee and not with respect to Shares subject to
the Award but not issued to Grantee.
3. Certificates; Book Entry: As soon as practicable after each Settlement Date and subject to
the terms of the Plan and this Agreement, the Company will issue the Shares in the applicable
Tranche and either (i) cause a certificate evidencing such Shares to be issued and registered in
Grantee’s name on the stock transfer books of the Company and delivered to Grantee at Grantee’s
last address filed with the Company, or (ii) if directed by Grantee, cause such Shares to be
transferred to and registered electronically by book entry in a brokerage account designated by
Grantee.
4. Employment with the Company: Except as may otherwise be provided in Section 5 of this
Agreement, each Tranche of the Deferred Stock granted hereunder is granted on the condition that
Grantee remains an employee of the Company or a subsidiary of the Company during the period from
the Date of Grant through (and including) the applicable Settlement Date. By way of illustration:
(a) if Grantee’s employment terminates before Settlement Date 1, Grantee will not be entitled to
any of the Deferred Stock; (b) if Grantee’s employment terminates after Settlement Date 1 but
before Settlement Date 2, Grantee will be entitled to all Shares of Deferred Stock in Tranche 1 but
no Shares in Tranche 2 or Tranche 3; and (c) if Grantee’s employment terminates after Settlement
Date 2 but before Settlement Date 3, Grantee will be entitled to all Shares of Deferred Stock in
Tranche 1 and Tranche 2 but no Shares in Tranche 3. For purposes of this Agreement, the term
“employee” is understood to include any “Eligible Person” (as that term is defined in the Plan)
granted an Award hereunder regardless of status as an employee, consultant, or otherwise as
permitted under the Plan, and the term “employment” is understood to include any arrangement for
the provision of services to the Company or its subsidiaries as contemplated under the eligibility
provisions of the Plan.
5. Acceleration of Vesting:
(a) Termination of Employment Due to Death or Disability. If Grantee’s employment
termination occurs due to Grantee’s death or Disability (as defined in Section 2 of the
Plan), all remaining Tranches of Deferred Stock awarded to Grantee on the date of such
employment termination will immediately become vested as of such date without regard to any
deferral and such date will be deemed a Settlement Date for purposes of Section 3 of this
Agreement.
(b) Change in Control. In accordance with the terms and restrictions of Section 9 of
the Plan, if there is a Change in Control of the Company (as defined in Section 9(c) of the
Plan), all remaining Tranches of Deferred Stock awarded to Grantee will become fully vested
as of the time of the Change in Control, subject to applicable restrictions set forth in
Section 11(a) of the Plan, without regard to any termination of employment or service by
Grantee other than a termination for Cause and without regard to any deferral. The date of
such Change in Control will be deemed a Settlement Date for purposes of Section 3 of this
Agreement.
6. Forfeiture:
(a) Termination of Employment for Cause or Upon Occurrence of Forfeiture Event. In
accordance with the terms and restrictions of Section 10 of the Plan, if Grantee’s
employment is terminated for Cause (as defined in Section 2 of the Plan), or if any other
Forfeiture Event occurs (as defined in Section 10 of the Plan), including but not limited to
Grantee’s violation of the material terms of any employment or other agreement entered into
with the Company, the Deferred Stock, whether or not vested or issued, will be immediately
forfeited and canceled. Furthermore, Grantee will be subject to the forfeiture provisions
of Section 10 of the Plan and, in accordance therewith, will be obligated to repay the
Company the total amount of Award Gain (as defined in Section 10(a)(ii) of the Plan)
realized by Grantee.
(b) Termination of Employment for Other Than Cause, Death or Disability. If Grantee’s
employment with the Company is terminated for other than Cause, death or Disability,
Grantee’s right to any Tranche which is not vested as of Grantee’s employment termination
date will become immediately cancelled and of no further force or effect upon the date of
the termination of Grantee’s employment.
7. Non-Transferable: Subject to the terms and restrictions of Section 11(b) of the Plan,
Grantee may not transfer rights in or to any unvested Shares of the Deferred Stock except by will
or the laws of descent and distribution. Rights in or to unvested Shares will not be otherwise
transferred, assigned, pledged, hypothecated or encumbered or subject to any lien, obligation or
liability of Grantee to any party (other than the Company or a subsidiary or affiliate thereof),
whether by operation of law or otherwise. Any attempted transfer, assignment, pledge,
hypothecation or other disposition of unvested Shares contrary to the provisions of the Plan or
this Agreement, or the levy of any execution, attachment or similar process upon unvested Shares,
will be null and void and without effect. Vested Shares of Deferred Stock issued hereunder will
not be subject to any additional transfer restrictions.
8. Adjustments and Corporate Reorganizations: In the event that any large, special and
non-recurring dividend or other recapitalization, forward or reverse split, stock dividend,
reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange,
liquidation, dissolution or other similar corporate transaction or event affects the unvested
Deferred Stock such that an adjustment is determined by the Committee (as defined in the Plan) to
be appropriate under the Plan, then the Committee will, in such manner as it may deem equitable,
make certain adjustments in accordance with the terms of Section 11(c) of the Plan, including but
not necessarily limited to any or all of the following: (a) adjustment to the number and kind of
shares of Deferred Stock, and (b) if deemed appropriate, the Committee may make provision for a
payment of cash or property to the holder of unvested Shares of Deferred Stock (subject to Section
11(k) of the Plan). The Committee’s determinations as to what adjustments will be made, and the
extent thereof, will be final, binding and conclusive.
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9. Taxes:
(a) Withholding. Grantee will be liable for any and all taxes, including withholding
taxes, arising out of the Award and the vesting and issuance of Shares of Deferred Stock
hereunder. Grantee will pay to the Company promptly upon request, and in any event at the
time Grantee recognizes taxable income in respect of all or any Tranche of the Deferred
Stock, an amount equal to the taxes the Company determines it is required to withhold under
applicable tax laws with respect to such Deferred Stock. Such payment will be made in the
form of cash in an amount equal to such withholding liability, provided that the Committee
may, in its sole discretion, to the extent permitted by applicable law, allow such
withholding obligation to be satisfied by any other method described in Section 11(d) of the
Plan.
(b) Section 83(b) Election. Grantee may elect to be immediately taxed on the Deferred
Stock provided in the Award under Internal Revenue Code (“Code”) Section 83(b), “Property
transferred in connection with performance of services/Election to include in gross income
in year of transfer.” Grantee will notify the Company of such election within thirty (30)
days of the Date of Grant.
(c) Section 409A. To the extent applicable, this Agreement will be interpreted in
accordance with Section 409A of the Code and Department of Treasury regulations and other
interpretive guidance issued thereunder, including without limitation any such regulations
or guidance that may be issued after the Date of Grant. Without limiting the authority of
the Committee under the terms of the Plan to make modifications to the Award of Deferred
Stock hereunder by reason of changes in law or circumstances that would result in any
substantial dilution or enlargement of the rights granted to, or available for, Grantee in
respect of this Award or otherwise as a participant in the Plan or which otherwise warrants
equitable adjustment to the terms and conditions of this Award because such event interferes
with the operation of the Plan, and notwithstanding any provision of this Agreement to the
contrary, in the event that the Committee or an authorized officer of the Company determines
that any amounts will be immediately taxable to Grantee under Section 409A of the Code and
related Department of Treasury guidance (or subject Grantee to a penalty tax) in connection
with the Award or vesting of Deferred Stock hereunder or any other provision of this
Agreement or the Plan, the Company may (a) adopt such amendments to the Award, including
amendments to this Agreement (having prospective or retroactive effect), that the Committee
or such authorized officer determines to be necessary or appropriate to preserve the
intended tax treatment of the Award hereunder and/or (b) take such other actions as the
Committee or such authorized officer determines to be necessary or appropriate to comply
with the requirements of Section 409A of the Code and related Department of Treasury
guidance, including such Department of Treasury guidance and other interpretive materials as
may be issued after the Date of Grant.
10. No Rights as Grantee: This Agreement is not an employment agreement and no provisions
hereof should be interpreted as such. No provisions of this Agreement will provide Grantee with
any guarantee of future employment or confer any right to continue as an employee of the Company.
Nothing in this Agreement will interfere in any way with the right of the Company to terminate
Grantee’s employment at any time. All matters concerning the employment relationship between the
Company and Grantee will be governed by applicable law and the terms of a separate employment
agreement, if any, between the parties.
11. Requirements of Law and of Stock Exchanges: The Board of Directors of the Company (the
“Board”) will have the right to impose such restrictions on any shares granted pursuant to this
Agreement as it may deem advisable, including restrictions under applicable federal securities law,
under the requirements of any stock exchange or market upon which such shares are then listed
and/or traded, and under any blue sky or state securities laws applicable to such shares. Grantee
agrees to take all steps necessary to comply with all applicable provisions of federal and state
securities laws in exercising his or her rights under this Agreement. This Agreement will be
subject to all applicable laws, rules and regulations and to such approvals by any governmental
agencies or national securities exchanges as may be required.
12. Miscellaneous:
(a) Further Assurances. The parties agree to execute such further instruments and to
take such action as may reasonably be necessary to carry out the intent of this Agreement.
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(b) Confidentiality of the Agreement. Grantee agrees to keep confidential the terms of
this Agreement, unless and until such terms have been disclosed publicly other than through
a breach by Grantee of this covenant, provided that this provision will not prohibit Grantee
from providing this information on a confidential and privileged basis to Grantee’s
attorneys or accountants for purposes of obtaining legal or tax advice or as otherwise
required by law.
(c) Waiver. Any right of the Company contained in this Agreement may be waived in
writing by the Board. No waiver of any right hereunder by any party will operate as a waiver
of any other right, or as a waiver of the same right with respect to any subsequent occasion
for its exercise, or as a waiver of any right to damages. No waiver by any party of any
breach of this Agreement will be held to constitute a waiver of any other breach or a waiver
of the continuation of the same breach.
(d) Notices. Any notice hereunder by Grantee will be given to the Company in writing
and such notice will be deemed duly given only upon receipt thereof at the Company’s
principal offices located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, or at such
other address as the Company may designate by notice to Grantee. Any notice hereunder by
the Company will be given to Grantee in writing and such notice will be deemed duly given
only upon receipt thereof at the address set forth below Grantee’s signature to this
Agreement or at such other address as Grantee may designate by notice to the Company.
(e) Construction. The construction of this Agreement is vested in the Board or the
Committee, as applicable, and their respective construction will be final and conclusive.
(f) Severability. The invalidity or unenforceability of any provision of this
Agreement will not affect the validity or enforceability of any other provision of this
Agreement, and each other provision of this Agreement will be severable and enforceable to
the extent permitted by law.
(g) Entire Agreement. This Agreement and the Plan contain all of the understandings
and agreements between the Company and Grantee concerning this Award and supersede all
earlier agreements, negotiations and understandings, whether written or oral, between the
parties with respect thereto. The Company and Grantee have made no promises, agreements,
conditions or understandings, either orally or in writing, that are not included in this
Agreement or the Plan.
(h) Governing Law. This Agreement will be construed and enforced in accordance with
the laws of the State of Delaware, without reference to the conflicts of laws principles
thereof.
(i) Counterparts. This Agreement may be executed in two or more counterparts, each one
of which will be deemed an original, but all of which together will constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.
| METALICO, INC. | GRANTEE | ||||||||
By: |
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Name:
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Name: |
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Title:
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Address: | ||||||||
| Soc. Sec. No.: | |||||||||
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