Restricted Stock Grant Agreement Under The TeleCommunication Systems, Inc. Amended and Restated Stock Incentive Plan
EXHIBIT 99.5
Under The
TeleCommunication Systems, Inc. Amended and Restated Stock Incentive Plan
The Restricted Stock Award Certificate that is attached hereto constitutes a part of this
Restricted Stock Grant Agreement.
1. Terminology. All capitalized words that are not defined in this Agreement have the
meanings ascribed to them in the Plan or the Restricted Stock Award Certificate. All of the
provisions of the Plan are expressly incorporated into this Agreement. For purposes of this
Agreement, the terms below have the following meanings:
(a) “Cause” has the meaning ascribed to such term or words of similar import in the Employee’s
written employment or service contract with the Company and, in the absence of such agreement or
definition, means: (i) the willful commission by the Employee of a criminal or other act that
causes or is likely to cause substantial economic damage to the Company or substantial injury to
the business reputation of the Company; (ii) the commission by the Employee of an act of fraud in
the performance of such Employee’s duties on behalf of the Company; or (iii) the continuing willful
failure of the Employee to perform the duties of such Employee to the Company (other than such
failure resulting from the Employee’s incapacity due to physical or mental illness), all as
determined by the Administrator, which determination will be conclusive. For purposes of this
Agreement, no act, or failure to act, on the Employee’s part shall be considered “willful” unless
done or omitted to be done by the Employee not in good faith with the reasonable belief that the
Employee’s action or omission was in the best interest of the Company.
(b) “Change in Control” means: (i) an acquisition (other than from the Company) in a
transaction, or a series of related transactions, by any person, entity or “group,” within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange
Act”), (excluding for this purpose, (A) the Company or its subsidiaries, (B) any employee benefit
plan of the Company or its subsidiaries which acquires beneficial ownership of voting securities of
the Company, (C) an underwriter temporarily holding securities pursuant to an offering of such
securities, or (D) any corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of the then outstanding voting
securities of the Company entitled to vote generally in the election of directors) of beneficial
ownership, within the meaning of Rule 13d-3 promulgated under the Exchange Act, of 50% or more of
either the then outstanding shares of common stock or the combined voting power of the Company’s
then outstanding voting securities entitled to vote generally in the election of directors (the
“Company Voting Stock”); (ii) the effective time of any merger, share exchange, consolidation or
other reorganization or business combination of the Company if immediately after such transaction
persons who hold a majority of the outstanding voting securities entitled to vote generally in the
election of directors of the surviving entity (or the entity owning 100% of such surviving entity)
are not persons who held the Company Voting Stock immediately prior to such transaction; (iii) the
closing of a sale or conveyance of all or substantially all of the assets of the Company;
(iv) individuals who were the Board’s nominees for election as directors immediately prior to a
meeting of the stockholders of the Company involving an actual or threatened election contest
relating to the election of the directors of the Company, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange
Act, cease to constitute a majority of the Board following the election; or (v) the
dissolution or liquidation of the Company; provided, however, that the term “Change
in Control” does not include a public offering of capital stock of the Company that is effected
pursuant to a registration statement filed with, and declared effective by, the Securities and
Exchange Commission under the Securities Act of 1933.
(c) “Company” means TeleCommunication Systems, Inc. and its Affiliates, except where the
context otherwise requires. For purposes of determining whether a Change in Control has occurred,
Company shall mean only TeleCommunication Systems, Inc.
(d) “Restricted Shares” means Award Shares that are not vested as provided in Section 2 on the
relevant date.
(e) “Total and Permanent Disability” means the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a continuous period
of not less than twelve months. The Administrator may require such proof of Total and Permanent
Disability as the Administrator in its sole discretion deems appropriate and the Administrator’s
good faith determination as to whether the Employee is totally and permanently disabled will be
final and binding on all parties concerned.
2. Vesting. The Award Shares vest and become nonforfeitable in accordance with the
vesting schedule identified in the Restricted Stock Award Certificate (the “Vesting Schedule”) so
long as the Employee is in the continuous employ of, or in a service relationship with, the Company
from the Grant Date through the applicable date upon which vesting is scheduled to occur. No
vesting will accrue to any Award Shares after the Employee ceases to be in either an employment or
other service relationship with the Company.
3. Termination of Employment or Service. If the Employee ceases to be employed by, or
in a service relationship with, the Company for any reason, all Restricted Shares, after giving
effect to the provisions of Section 2 of this Agreement, will be immediately forfeited to the
Company upon such cessation for no consideration.
4. Restrictions on Transfer.
(a) Restricted Shares may not be assigned, transferred, pledged, hypothecated or disposed of
in any way (whether by operation of law or otherwise) and shall not be subject to execution,
attachment or similar process.
(b) The Company, at its discretion, may impose restrictions upon the sale, pledge or other
transfer of the Award Shares (including the placement of appropriate legends on stock certificates
or the imposition of stop-transfer instructions) if, in the judgment of the Company, such
restrictions are necessary or desirable in order to achieve compliance with the Securities Act, the
securities laws of any state or any other law.
(c) Notwithstanding the vesting of the Award Shares or the delivery of one or more stock
certificates for such Award Shares, the Award Shares shall be subject to applicable restrictions on
transfer or liquidation, if any, as set forth in the Employee’s written employment or service
contract with the Company or pursuant to any policy adopted by the Company, now or hereafter
existing, that imposes stock ownership requirements, stock holding requirements or stock
liquidation restrictions on the
Employee. The Company may place legends reflecting the requirements and restrictions
described in the immediately foregoing sentence on any stock certificates for the Award Shares.
(d) The Company shall not be required to (i) transfer on its books any Award Shares that have
been sold or transferred in contravention of this Agreement or (ii) treat as the owner of Award
Shares, or otherwise to accord voting, dividend or liquidation rights to, any transferee to whom
Award Shares have been transferred in contravention of this Agreement.
5. Stock Certificates.
(a) The stock certificates evidencing the Award Shares shall be registered on the Company’s
books in the name of the Employee as of the Grant Date. Physical possession or custody of such
stock certificates shall be retained by the Company until such time as the shares are vested and,
thereafter, the Company shall either deliver to the Employee one or more certificates in the name
of the Employee for that number of vested shares owned by the Employee or provide for
uncertificated, book entry issuance of those shares. If requested, the Employee shall deliver to
the Company a stock power, endorsed in blank, with respect to any Restricted Shares. All regular
cash dividends on Restricted Shares shall be paid directly to the Employee and shall not be held by
the Company.
(b) The stock certificate evidencing the Award Shares shall bear a legend restricting
transferability of such shares, unless such Award Shares are registered or an exemption from
registration is available under applicable federal and state law. If required by the authorities
of any state in connection with the issuance of the Award Shares, the legend or legends required by
such state authorities shall also be endorsed on all such certificates.
6. Tax Election and Tax Withholding.
(a) The Employee hereby acknowledges that he has been advised by the Company to seek
independent tax advice regarding the availability and advisability of making an election under
Section 83(b) of the Internal Revenue Code of 1986, as amended, and that any such election, if
made, must be made within 30 days of the Grant Date. The Employee is not relying on the Company or
any of its officers, directors or employees for tax advice regarding this award. The Employee
expressly acknowledges that he is solely responsible for filing any such Section 83(b) election
with the appropriate governmental authorities, irrespective of the fact that such election is also
delivered to the Company.
(b) The Company or any Affiliate shall have the right to deduct from any compensation or any
other payment of any kind (including withholding the issuance of shares of Common Stock) due the
Employee the amount of any federal, state, local or foreign taxes required by law to be withheld as
a result of the grant or vesting of the Award Shares in whole or in part; provided, however, that
the value of the shares of Common Stock withheld may not exceed the statutory minimum withholding
amount required by law. In lieu of such deduction, the Company may require the Employee to make a
cash payment to the Company or an Affiliate equal to the amount required to be withheld. If the
Employee does not make such payment when requested, the Company may refuse to issue any Common
Stock certificate under this Agreement until arrangements satisfactory to the Administrator for
such payment have been made.
7. Adjustments for Corporate Transactions and Other Events.
(a) Stock Dividend, Stock Split and Reverse Stock Split. Upon a stock dividend of, or
stock split or reverse stock split affecting, the Common Stock, the number of Award Shares and the
number of such Award Shares that constitute Restricted Shares shall, without further action of the
Board, be adjusted to reflect such event, unless, the Board determines, at the time it approves
such stock dividend, stock split, or reverse stock split, that no such adjustment shall be made.
The Administrator may make adjustments, in its discretion, to address the treatment of fractional
shares with respect to the Award Shares as a result of the stock dividend, stock split or reverse
stock split.
(b) Non-Change in Control Transactions. Except with respect to the transactions set
forth in Section 7(a), in the event of any change affecting the Common Stock, the Company or its
capitalization, by reason of a spin-off, split-up, dividend, recapitalization, merger,
consolidation or share exchange, other than any such change that is part of a transaction resulting
in a Change in Control, the Administrator, in its discretion and without the consent of the
Employee, shall make any adjustments in the Award Shares, including but not limited to reducing the
number and kind of securities subject to the Award Shares.
(c) Change in Control Transactions. In the event of any transaction resulting in a
Change in Control, the Restricted Shares will be forfeited upon the effective time of any such
Change in Control unless provision is made in connection with the transaction in the sole
discretion of the parties thereto for the continuation or assumption of the Restricted Shares, or
the substitution of the Restricted Shares with new shares of the surviving or successor entity or a
parent thereof.
(d) Adjustments for Unusual Events. The Administrator is authorized to make, in its
discretion and without the consent of the Employee, adjustments in the terms and conditions of, and
the criteria included in, the Award Shares in recognition of unusual or nonrecurring events
affecting the Company, or the financial statements of the Company or any Affiliate, or of changes
in applicable laws, regulations, or accounting principles, whenever the Administrator determines
that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits
or potential benefits intended to be made available pursuant to the Award Shares or the Plan.
(e) Binding Nature of Adjustments. Adjustments under this Section 7 will be made by
the Administrator, whose determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive. No fractional Award Shares will result from any
such adjustments.
(f) Binding Nature of Agreement. The terms and conditions of this Agreement shall
apply with equal force to any additional and/or substitute securities received by the Employee in
exchange for, or by virtue of the Employee’s ownership of, the Award Shares, whether as a result of
any spin-off, stock split-up, stock dividend, stock distribution or other reclassification of the
Common Stock of the Company, except as otherwise determined by the Administrator. If the Award
Shares are converted into or exchanged for, or stockholders of the Company receive by reason of any
distribution in total or partial liquidation or pursuant to any merger of the Company or
acquisition of its assets, securities of another entity, or other property (including cash), then
the rights of the Company under this Agreement shall inure to the benefit of the Company’s
successor, and this Agreement shall apply to the securities or other property received upon such
conversion, exchange or distribution in the same manner and to the same extent as the Award Shares.
8. Confidential Information. In consideration of the Award Shares granted to the
Employee pursuant to this Agreement, the Employee agrees and covenants that, except as specifically
authorized by the Company, the Employee will keep confidential any trade secrets or confidential or
proprietary information of the Company which are now or which hereafter may become known to the
Employee as a result of the Employee’s employment by or other service relationship with the
Company, and shall not at any time, directly or indirectly, disclose any such information to any
person, firm, Company or other entity, or use the same in any way other than in connection with the
business of the Company, at all times during and after the Employee’s employment or other service
relationship. The provisions of this Section 8 shall not narrow or otherwise limit the obligations
and responsibilities of the Employee set forth in any agreement of similar import entered into
between the Employee and the Company.
9. Non-Guarantee of Employment or Service Relationship. Nothing in the Plan or this
Agreement shall alter the at-will or other employment status or other service relationship of the
Employee, nor be construed as a contract of employment or service relationship between the Company
and the Employee, or as a contractual right of the Employee to continue in the employ of, or in a
service relationship with, the Company for any period of time, or as a limitation of the right of
the Company to discharge the Employee at any time with or without cause or notice and whether or
not such discharge results in the failure of any Award Shares to vest or any other adverse effect
on the Employee’s interests under the Plan.
10. Rights as Stockholder. Except as otherwise provided in this Agreement with
respect to the Restricted Shares, the Employee shall be entitled to all rights of a stockholder of
the Company, including the right to vote the shares and receive dividends and/or other
distributions declared on the Award Shares.
11. The Company’s Rights. The existence of the Award Shares shall not affect in any
way the right or power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure
or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures,
preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the
Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale
or transfer of all or any part of the Company’s assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
12. Employee. Whenever the word “Employee” is used in any provision of this Agreement
under circumstances where the provision should logically be construed, as determined by the
Administrator, to apply to the estate, personal representative, beneficiary to whom the Award
Shares may be transferred by will or by the laws of descent and distribution, or another permitted
transferee, if any, the word “Employee” shall be deemed to include such person.
13. Notices. All notices and other communications made or given pursuant to this
Agreement shall be in writing and shall be sufficiently made or given if hand delivered or mailed
by certified mail, addressed to the Employee at the address contained in the records of the
Company, or addressed to the Administrator, care of the Company for the attention of its Corporate
Secretary at its principal executive office or, if the receiving party consents in advance,
transmitted and received via telecopy or via such other electronic transmission mechanism as may be
available to the parties.
14. Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the Award Shares granted hereunder. Any oral or written agreements,
representations,
warranties, written inducements, or other communications made prior to the execution of this
Agreement with respect to the Award Shares granted hereunder shall be void and ineffective for all
purposes.
15. Amendment. This Agreement may be amended from time to time by the Administrator
in its discretion; provided, however, that this Agreement may not be modified in a
manner that would have a materially adverse effect on the Award Shares as determined in the
discretion of the Administrator, except as provided in the Plan or in a written document signed by
each of the parties hereto.
16. Conformity with Plan. This Agreement is intended to conform in all respects with,
and is subject to all applicable provisions of, the Plan. Inconsistencies between this Agreement
and the Plan shall be resolved in accordance with the terms of the Plan. In the event of any
ambiguity in this Agreement or any matters as to which this Agreement is silent, the Plan shall
govern. A copy of the Plan is available upon request to the Administrator.
17. Governing Law. The validity, construction and effect of this Agreement, and of
any determinations or decisions made by the Administrator relating to this Agreement, and the
rights of any and all persons having or claiming to have any interest under this Agreement, shall
be determined exclusively in accordance with the laws of the State of Maryland, without regard to
its provisions concerning the applicability of laws of other jurisdictions. Any suit with respect
hereto will be brought in the federal or state courts in the districts which include Annapolis,
Maryland, and the Employee hereby agrees and submits to the personal jurisdiction and venue
thereof.
18. Electronic Delivery of Documents. The Employee (i) consents to the electronic
delivery of this Agreement, all information with respect to the Plan and the Award Shares and any
reports of the Company provided generally to the Company’s stockholders; (ii) acknowledge that the
Employee may receive from the Company a paper copy of any documents delivered electronically at no
cost to the Employee by contacting the Company by telephone or in writing; (iii) further
acknowledges that the Employee may revoke his or her consent to the electronic delivery of
documents at any time by notifying the Company of such revoked consent by telephone, postal service
or electronic mail; and (iv) further acknowledges that the Employee understands that he or she is
not required to consent to electronic delivery of documents.
19. No Future Entitlement. The Employee acknowledges and agrees that: (i) the grant
of these Award Shares is a one-time benefit which does not create any contractual or other right to
receive future grants of stock, or compensation in lieu of stock grants, even if stock grants have
been granted repeatedly in the past; (ii) all determinations with respect to any such future
grants, including, but not limited to, the times when stock grants shall be granted, the maximum
number of shares subject to each stock grant, and the times or conditions under which restrictions
on such stock grants shall lapse, will be at the sole discretion of the Administrator; (iii) the
value of this stock grant is an extraordinary item of compensation which is outside the scope of
the Employee’s employment contract, if any; (iv) the value of this stock grant is not part of
normal or expected compensation or salary for any purpose, including, but not limited to,
calculating any termination, severance, resignation, redundancy, end of service payments or similar
payments, or bonuses, long-service awards, pension or retirement benefits; (v) the vesting of these
Award Shares ceases upon termination of employment with the Company or transfer of employment from
the Company, or other cessation of eligibility for any reason, except as may otherwise be
explicitly provided in this Agreement; (vi) the Company does not guarantee any future value of
these Award Shares; and (vii) no claim or entitlement to compensation or damages arises if these
Award Shares do not increase in value and the Employee irrevocably releases the Company from any
such claim that does arise.
20. Personal Data. For the exclusive purpose of implementing, administering and
managing this stock grant, the Employee consents to the collection, receipt, use, retention and
transfer, in electronic or other form, of the Employee’s personal data by and among the Company and
its third party vendors. The Employee understands that personal data (including but not limited
to, name, home address, telephone number, employee number, employment status, social security
number, tax identification number, date of birth, nationality, job and payroll location, data for
tax withholding purposes and shares awarded, cancelled, exercised, vested and unvested) may be
transferred to third parties assisting in the implementation, administration and management of this
stock grant and the Plan and the Employee expressly authorizes such transfer as well as the
retention, use, and the subsequent transfer of the data by the recipient(s). The Employee
understands that these recipients may be located in the Employee’s home country or elsewhere, and
that the recipient’s country may have different data privacy laws and protections than the
Employee’s home country. The Employee understands that data will be held only as long as is
necessary to implement, administer and manage this stock grant. The Employee understands that the
Employee may, at any time, request a list with the names and addresses of any potential recipients
of the personal data, view data, request additional information about the storage and processing of
data, require any necessary amendments to data or refuse or withdraw the consents herein, in any
case without cost, by contacting in writing the Company’s Secretary. The Employee understands,
however, that refusing or withdrawing his or her consent may affect the Employee’s ability to
accept a stock grant.
21. Headings. The headings in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.
Enclosure: Prospectus of the TeleCommunication Systems, Inc. Amended and Restated
Stock Incentive Plan
RESTRICTED STOCK AWARD CERTIFICATE
[Date]
[Address]
[Address]
[Address]
[Address]
[Address]
[Address]
[Address]
Dear _________________:
Pursuant to the terms and conditions of the TeleCommunication Systems, Inc. Amended and Restated
Stock Incentive Plan (the “Plan”), you have been granted a restricted stock award (each share an
“Award Share,” collectively, the “Award Shares”) of the Class A Common Stock, par value $0.01 per
share (the “Common Stock”) of TeleCommunication Systems, Inc. (the “Company”) as outlined below.
This Certificate constitutes part of and is subject to the terms and provisions of the attached
Restricted Stock Grant Agreement (the “Agreement”) which is incorporated herein by reference.
| Granted To: | _________________ | |||
| Grant Date: | «Grant_Date» | |||
| Granted: | _________________ Award Shares | |||
| Vesting Schedule: | <Vesting Schedule Name> | |||
| [___] on [___] | ||||
| [___] on [___] | ||||
| [___] on [___] | ||||
| [___] on [___] | ||||
| [___] on [___] |
By my signature below, I hereby acknowledge receipt of these Award Shares granted on the date shown
above, which have been issued to me under the terms and conditions of the Agreement and the Plan.
I further acknowledge receipt of the Agreement and the Plan Prospectus and agree to be bound by all
of the terms and conditions of the Award Shares, as evidenced in the Agreement and the Plan. I
understand that I must be an employee of, or otherwise providing service to TCS on the date on
which the Award Shares are scheduled to vest in order to become vested in those Award Shares and
that I may forfeit all unvested Award Shares on my last day of employment or service with TCS as
further described in the Agreement. I also consent to electronic delivery, including via email or
posting on the Company’s web site, of all future notices or other information with respect to this
grant, the Plan, and the Common Stock of the Company.
Signature: ______________________________________
|
Date: ________________ |