EXHIBIT 10.2
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PACIFIC BIOMETRICS, INC.
-- RESTRICTED STOCK PURCHASE AGREEMENT --
No. 2007-____
This Restricted Stock Purchase Agreement ("AGREEMENT") is made and
entered into as of the date of award set forth below ("DATE OF AWARD") by and
between Pacific Biometrics, Inc., a Delaware corporation ("COMPANY"), and the
participant named below ("PARTICIPANT"). Capitalized terms not defined herein
shall have the respective meanings ascribed to them in the Company's 2005 Stock
Incentive Plan ("PLAN"). A copy of the Plan has been provided to Participant.
Participant's Name: _____________
Participant's Address: _____________
Total Number of Shares: _____________
Purchase Price per Share: _____________
Date of Award: _____________
Vesting Commencement Date: _____________
1. PURCHASE AND SALE OF THE SHARES. Subject to the terms and conditions
of this Agreement, the Company agrees to sell to Participant and Participant
agrees to purchase from the Company at the Closing (as defined below) the total
number of shares of Common Stock of the Company set forth above ("SHARES") at
the purchase price per share set forth above ("PURCHASE PRICE"). All references
to the number of Shares and the Purchase Price of the Shares in this Agreement
shall be adjusted to reflect any stock split, stock dividend or other similar
change in the Shares which may be made after the date of this Agreement.
2. CLOSING.
(a) The purchase and sale of the Shares shall occur at a
closing (the "CLOSING") to be held on the date first set forth above, or at any
other time mutually agreed upon by the Company and Participant. The Closing will
take place at the principal office of the Company or at such other place as
shall be designated by the Company. At the Closing, Participant shall deliver
the aggregate Purchase Price set forth above to the Company by cash or personal
or cashiers' check payable to the Company, and the Company will issue, as
promptly thereafter as practicable, a stock certificate, registered in the name
of the Participant, reflecting the Shares. Notwithstanding the foregoing,
Participant may not purchase any Shares under this Award unless such sale and
issuance complies with all relevant provisions of applicable laws and
regulations and the requirements of any stock exchange upon which the Company
common stock is then listed.
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(b) In addition, at Closing Participant shall execute and
deliver to the Company (i) two copies of the Assignment Separate From
Certificate (with the date and the number of Shares left blank) substantially in
the form attached to this Agreement as Exhibit A and (ii) one copy of the Joint
Escrow Instructions substantially in the form attached to this Agreement as
Exhibit B.
3. REPURCHASE OPTION / FORFEITURE OF UNVESTED SHARES.
(a) In the event that (i) Participant ceases to be an employee
or consultant of the Company as a result of his or her termination for Cause or
resignation, or (b) Participant, if a non-employee director on the Board of
Directors of the Company, is not re-elected or resigns as a director of the
Company (in either case other than upon Change of Control) (each such event, a
"TERMINATION") the Company shall have the right, but not the obligation (the
"REPURCHASE OPTION"), for a period of 90 days from the date of such termination
(as reasonably fixed and determined by the Company) (or such longer period as
may be agreed to by Participant and the Company) to repurchase any Shares which
have not yet vested as of the termination date (the "UNVESTED SHARES"). In the
event that the Purchase Price for the Shares is $0.00, then upon any termination
(as set forth in Section 3(a)) the Unvested Shares shall immediately as of the
date of termination and automatically, without any additional action by Company
or Participant, be forfeited and promptly returned to the Company
("FORFEITURE"). Notwithstanding anything to the contrary contained in this
Section 3(a), the Company's Repurchase Option and Forfeiture shall not apply to
a termination by reason of Participant's death, Disability, termination of
employment by the Company without Cause or upon a Change of Control.
(b) The Company may exercise its Repurchase Option and
repurchase all or any of the Unvested Shares at a price per share equal to the
lesser of (x) the fair market value of the shares at the time the Repurchase
Option is exercised, as determined by the Company's board of directors and (y)
the Purchase Price (the "REPURCHASE PRICE"). The Repurchase Option shall be
exercised by the Company by delivering written notice to the Participant or, in
the event of the Participant's death or disability, Participant's executor,
which shall identify the number of Unvested Shares to be repurchased and shall
notify Participant of the time, place and date for settlement of such purchase,
which shall be scheduled by the Company within the term of the Repurchase
Option. The Company shall be entitled to pay for any Unvested Shares repurchased
pursuant to its Repurchase Option at the Company's option by check or by offset
against any indebtedness owing to the Company by Participant, or by a
combination of both. Upon delivery of such notice and the payment of the
aggregate Repurchase Price, the Company shall become the legal and beneficial
owner of the Unvested Shares being repurchased and all rights and interests
therein or relating thereto and the Company shall have the right to retain and
transfer to its own name the number of Unvested Shares being repurchased by the
Company.
(c) The Company in its sole discretion may designate and
assign one or more employees, officers, directors, stockholders, affiliates,
successors or assigns of the Company or other persons or organizations to
exercise all or a part of the Company's Repurchase Option to purchase all or a
part of the Unvested Shares.
4. VESTING; RELEASE OF SHARES FROM REPURCHASE OPTION / FORFEITURE.
Except as provided in Section 5 for acceleration of vesting, so long as there
has been no termination of Participant's status as an employee, consultant or
director, the Shares will vest and will be
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released from the Repurchase Option and Forfeiture upon the third anniversary of
the Vesting Commencement Date and no Shares shall vest prior to such date.
5. ACCELERATION OF VESTING UPON CHANGE OF CONTROL, DEATH, DISABILITY,
OR TERMINATION WITHOUT Cause. In the event of a Change of Control (as defined in
the Plan), death, Disability or termination of employment by the Company without
Cause, unless otherwise determined by the Board or Committee at the time of
grant or by amendment (with the Participant's consent), all outstanding Unvested
Shares shall become fully vested and released from the Repurchase Option and
Forfeiture.
6. INVESTMENT REPRESENTATIONS. In connection with the purchase of the
Shares, 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 Shares. Participant
is acquiring the Shares for investment for his / her 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.
(b) Participant can properly evaluate the merits and risks of
an investment in the Shares and can protect his / her own interests in this
regard, whether by reason of his / her own business and financial expertise, the
business and financial expertise of his / her professional advisors, or his /
her preexisting business or personal relationship with the Company or any of its
officers, doctors or controlling persons. Participant realizes that the purchase
of the Shares involves a high degree of risk, and that the Company's future
prospects are uncertain. Participant is able to hold the Shares indefinitely if
required, and is able to hear the loss of his / her entire investment in the
Shares.
(c) Participant acknowledges that unless and until the Company
files a registration statement under the Securities Act with respect to the
Shares, the Shares are "restricted securities" and the Shares may not be resold
unless such proposed resale is registered or pursuant to an available exemption
under the Securities Act. The Company is under no obligation to register the
Shares or any subsequent proposed resale of the shares. The certificate
evidencing the Shares will be imprinted with a legend which prohibits the
transfer of the Shares unless such transfer is registered or such registration
is not required in the opinion of counsel for the Company.
7. RESTRICTIONS ON TRANSFER.
(a) Restrictive Legends. Participant understands and agrees
that the Company shall cause the legends set forth below, or substantially
equivalent legends, to be placed upon any certificate(s) evidencing ownership of
the Shares, together with any other legends that may be required by the Company
or by applicable state or federal securities laws:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A REPURCHASE
OPTION HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE
RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL
HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. ANY
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TRANSFER OR ATTEMPTED TRANSFER OF ANY SHARES SUBJECT TO SUCH OPTION IS
VOID WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF THE COMPANY."
(b) Stop-Transfer Notices. Participant agrees that to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent.
(c) Refusal to Transfer. The Company shall not be required (i)
to transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Agreement or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to
Participant or other transferee to whom such Shares shall have been so
transferred.
(d) Unvested Shares. Notwithstanding anything to the contrary
in this Agreement, neither any Unvested Shares nor any beneficial interest in
such Unvested Shares shall be sold, gifted, transferred, encumbered or otherwise
disposed of in any way (whether by operation of law or otherwise) by the
Participant.
8. ESCROW. As security for the faithful performance of this Agreement,
Participant agrees to deliver, immediately upon receipt of the certificate(s)
evidencing the Shares, and authorizes and directs the Company to cause the stock
certificates evidencing the Shares to be delivered, to the Secretary of the
Company or its designee (the "ESCROW AGENT"). These documents shall be held by
the Escrow Agent pursuant to the Joint Escrow Instructions of the Company and
Participant set forth in Exhibit B to this Agreement, which instructions are
incorporated into this Agreement by this reference, and which instructions shall
also be delivered to the Escrow Agent after the Closing Date.
9. RIGHTS AS STOCKHOLDER. Subject to the provisions of this Agreement,
Participant shall exercise all rights and privileges of a stockholder of the
Company with respect to the Shares from and after the date that Participant
delivers a fully executed copy of this Agreement (including all exhibits and
attachments hereto) and full payment for the Shares to the Company, including
the right to vote the Shares, even if some or all of the Shares have not yet
vested and been released from the Company's Repurchase Option. From the date of
the Company's exercise of its Repurchase Option or Forfeiture, Participant shall
have no further rights as a holder of the Unvested Shares repurchased by the
Company, other than the right to receive payment for the Unvested Shares so
repurchased in accordance with the provisions of this Agreement.
10. TAX CONSEQUENCES. Participant has reviewed with his / her own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. Participant is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents. Participant understands that Participant (and
not the Company) shall be responsible for any tax liability that may arise as a
result of the transactions contemplated by this Agreement. Participant
understands that Code Section 83 taxes as ordinary income the difference between
the Purchase Price for the Shares and the fair market value of the Shares as of
the date any restrictions on the Shares lapse. In this context, "restriction"
includes the right of the Company to repurchase the Shares pursuant to the
Repurchase Option. Participant understands that Participant may elect to be
taxed at the time the
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Shares are purchased, rather than when and as the Shares vest, by filing with
the IRS an election under Code Section 83(b) within 30 days from the date of
purchase. THE FORM FOR MAKING THIS SECTION 83(b) ELECTION IS ATTACHED TO THIS
AGREEMENT AS EXHIBIT C AND PARTICIPANT (AND NOT THE COMPANY OR ANY OF ITS
AGENTS) SHALL BE SOLELY RESPONSIBLE FOR APPROPRIATELY FILING SUCH FORM, EVEN IF
PARTICIPANT REQUESTS THE COMPANY OR ITS AGENTS TO MAKE THIS FILING ON
PARTICIPANT'S BEHALF.
11. PAYMENT OF WITHHOLDINGS TAXES. Purchaser acknowledges that he / she
is responsible for paying or providing for any applicable federal or state tax
withholdings as a result of this Award. Accordingly, at the time this Award is
granted, or at any time thereafter as requested by the Company, Participant
hereby authorizes withholding from payroll and any other amounts payable to
Participant, and Participant otherwise agrees to make adequate provision for,
any sums required to satisfy the federal, state, local and foreign tax
withholding obligations of the Company, which arise in connection with this
Award. Unless the tax withholding obligations of the Company are satisfied, the
Company shall have no obligation to issue a certificate for such Shares or
release such Shares from any escrow provided for herein.
12. EMPLOYMENT AT WILL; NO EMPLOYMENT OR SERVICE CONTRACT. Participant
acknowledges and agrees that the vesting of Shares pursuant to this Agreement is
earned only by continuing service as an employee, director or consultant of the
Company. Neither this Award nor anything in this Agreement (including the
vesting schedule) constitutes an express or implied promise of continued
engagement as an employee, director or consultant, and shall not interfere with
Participant's right or the Company's right to terminate Participant's
relationship with the Company at any time, with or without Cause.
13. 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.
14. 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 such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon the earlier of: (a)
when received; (b) when delivered personally; (c) four days after deposit in the
U.S. mail, first class with postage prepaid and properly addressed; (d) one
business day after deposit with any return receipt express courier (prepaid); or
(e) one business day after transmission by facsimile (transmission confirmed).
15. 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. The rights granted to the
Participant under this Agreement are not assignable by the Participant under any
circumstances. Subject to the restrictions on transfer set forth herein, this
Agreement shall be binding upon Participant and Participant's heirs, executors,
administrators, legal representatives and successors.
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16. ENTIRE AGREEMENT. The Plan is incorporated herein by reference.
This Agreement and the Plan constitute the entire agreement of the parties with
respect to the purchase of the Shares by the Participant and supersede all prior
written or oral undertakings and agreements, including, but not limited to, any
representations made during any interviews, discussions or negotiations whether
written or oral.
17. SEVERABILITY. Should any provision of this Agreement be found to be
illegal or unenforceable, the other provisions shall nevertheless remain
effective and shall remain enforceable to the greatest extent permitted by law.
18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington, without regard to its
provisions regarding conflicts of laws.
20. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same agreement. Facsimile copies of signed
signature pages shall be binding originals.
DATED as of the Date of Award set forth above.
PACIFIC BIOMETRICS, INC.
By:
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Its:
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Name:
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ACCEPTANCE BY PARTICIPANT:
Participant acknowledges receipt of a copy of the Plan. Participant has reviewed
the Plan and this Agreement in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing this Agreement and fully understands
all provisions of the Plan and this Agreement. Participant acknowledges that
there may be adverse tax consequences upon purchase or disposition of the Shares
and that Participant should consult a tax adviser prior to any such exercise or
disposition. Participant accepts this Agreement subject to all of the terms and
provisions of the Plan and this Agreement.
Date signed:
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(Signature)
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(Print Name)
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EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
For value received and pursuant to that certain Restricted Stock
Purchase Agreement (the "Agreement"), the undersigned Participant hereby sells,
assigns and transfers to Pacific Biometrics, Inc., a Delaware corporation
("Company"), ________________________ (__________) shares of the Common Stock of
the Company, standing in the undersigned's name on the books of said corporation
represented by Certificate No. _____ herewith and do hereby irrevocably
constitute and appoint ____________________________ as attorney-in-fact to
transfer the said stock on the books of the 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 reacquisition of shares of Common Stock of the Company issued to the
undersigned Participant pursuant to the Agreement, and only to the extent that
such Shares remain subject to the Company's Repurchase Option / Forfeiture under
the Agreement.
Dated:
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Participant's Signature:
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Participant's Name:
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(please print)
EXHIBIT B
JOINT ESCROW INSTRUCTIONS
___________________, 20__
Corporate Secretary
Pacific Biometrics, Inc.
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Dear Sir/Madam:
As Escrow Agent for both Pacific Biometrics, Inc., a Delaware
corporation (the "Company"), and the undersigned recipient of stock of the
Company ("Recipient"), you are hereby authorized and directed to hold the
documents delivered to you pursuant to the terms of that certain Restricted
Stock Purchase Agreement ("Agreement"), in accordance with the following
instructions:
1. In the event Recipient ceases to render services to the Company or
an affiliate of the Company during the vesting period set forth in the
Agreement, the Company or its assignee will give to Recipient and you a written
notice specifying that the shares of stock shall be transferred to the Company.
Recipient and the Company hereby irrevocably authorize and direct you to close
the transaction contemplated by such notice in accordance with the terms of said
notice.
2. At the closing you are directed (a) to date any stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company.
3. Recipient irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as specified in the Agreement.
Recipient hereby irrevocably constitutes and appoints you as Recipient's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities and other property all documents of assignment and/or
transfer and all stock certificates necessary or appropriate to make all
securities negotiable and complete any transaction herein contemplated.
4. This escrow shall terminate upon vesting of the shares or upon the
earlier return of the shares to the Company. From time to time, upon written
request of Recipient, duly confirmed by the Company, you will deliver to
Recipient a certificate representing the shares that have vested and that have
been released from the Company's repurchase option.
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5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Recipient,
you shall deliver all of same to Recipient and shall be discharged of all
further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties or
their assignees. You shall not be personally liable for any act you may do or
omit to do hereunder as Escrow Agent or as attorney-in-fact for Recipient while
acting in good faith and any act done or omitted by you pursuant to the advice
of your own attorneys shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law, and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree of any
court, you shall not be liable to any of the parties hereto or to any other
person, firm or corporation by reason of such compliance, notwithstanding any
such order, judgment or decree being subsequently reversed, modified, annulled,
set aside, vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity,
authority or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
10. You shall not be liable for the outlawing of any rights under any
statute of limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
11. You shall be entitled to employ such legal counsel, including but
not limited to Cairncross & Hempelmann P.S., and other experts as you may deem
necessary properly to advise you in connection with your obligations hereunder,
may rely upon the advice of such counsel, and may pay such counsel reasonable
compensation therefor.
12. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be Secretary of the Company or if you shall resign by written
notice to each party. In the event of any such termination, the Company may
appoint any officer or assistant officer of the Company as successor Escrow
Agent and Recipient hereby confirms the appointment of such successor or
successors as his attorney-in-fact and agent to the full extent of your
appointment.
13. If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
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14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities, you may (but are not obligated to) retain in your possession without
liability to anyone all or any part of said securities until such dispute shall
have been settled either by mutual written agreement of the parties concerned or
by a final order, decree or judgment of a court of competent jurisdiction after
the time for appeal has expired and no appeal has been perfected, but you shall
be under no duty whatsoever to institute or defend any such proceedings.
15. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the U.S. mail, by registered or certified mail with postage and fees
prepaid, addressed to each of the other parties hereunto entitled at the
following addresses, or at such other addresses as a party may designate by ten
days' written notice to each of the other parties hereto:
Company: Pacific Biometrics, Inc.
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Attn: Chief Executive Officer
Recipient:
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Escrow Agent: Pacific Biometrics, Inc.
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Attn: Corporate Secretary
16. By signing these Joint Escrow Instructions you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.
17. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns. It is
understood and agreed that references to "you" or "your" herein refer to the
original Escrow Agent and to any and all successor Escrow Agents. It is
understood and agreed that the Company may at any time or from time to time
assign its rights under the Grant Notice and these Joint Escrow Instructions in
whole or in part.
Very truly yours,
PACIFIC BIOMETRICS, INC. RECIPIENT:
By: Signature:
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Name:
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Title: Name:
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Agreed and Accepted:
ESCROW AGENT:
By:
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Name:
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Title:
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EXHIBIT C
SECTION 83(b) ELECTION
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in his or her gross income
for the current taxable year, the amount of any compensation taxable to him or
her in connection with his or her receipt of the property described below:
(1) The taxpayer who performed the services is:
Name:
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Address:
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Social Security No.:
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(2) The property with respect to which the election is made is ___________
shares ("Shares") of common stock of Pacific Biometrics, Inc. (the
"Company").
(3) The Shares were transferred to the undersigned on ______________, 20__.
(4) The taxable year for which the election is made is the calendar year
20__.
(5) The Shares may be repurchased by the Company, or its assignee, if for
any reason taxpayer's service with the Company is terminated. The
Company's repurchase right lapses with respect to a portion of the
Shares over time.
(6) The fair market value of such Shares at the time of transfer
(determined without regard to any restriction other than a restriction
which by its terms will never lapse) is $_________.
(7) The amount, if any, paid for such Shares is $__________.
(8) A copy of this statement was furnished to the Company, for whom
taxpayer rendered the services underlying the transfer of such
property.
(9) The foregoing election may not be revoked except with the consent of
the Commissioner.
Dated: _______________, 200__.
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Spouse (if any) Taxpayer
THIS ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE CENTER WITH WHICH
THE EMPLOYEE FILES HIS OR HER FEDERAL INCOME TAX RETURNS AND MUST BE FILED
WITHIN 30 DAYS AFTER THE DATE OF PURCHASE. THIS FILING SHOULD BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED. THE EMPLOYEE MUST RETAIN
TWO COPIES OF THE COMPLETED FORM FOR FILING WITH HIS OR HER FEDERAL AND STATE
TAX RETURNS FOR THE CURRENT TAX YEAR AND AN ADDITIONAL COPY FOR HIS OR HER
RECORDS.