Restricted Share Agreement between Metatec International, Inc. and Christopher A. Munro

Contract Categories: Business Finance Stock Agreements
Summary

Metatec International, Inc. agrees to award 40,000 restricted common shares to Christopher A. Munro as part of his employment. The shares are subject to forfeiture if Munro leaves the company within one year, or partially if he leaves within two years. The shares cannot be transferred before the first anniversary, and are held in escrow until then. Munro is responsible for any tax consequences. He must also confirm the shares are for investment purposes and acknowledge the shares are unregistered and subject to transfer restrictions under securities laws.

EX-10.AA 3 l86740aex10-aa.txt EXHIBIT 10(AA) 1 EXHIBIT 10(aa) RESTRICTED SHARE AGREEMENT This agreement is made effective January 2, 2001 (the "Effective Date"), between Metatec International, Inc., an Ohio Corporation (the "Company"), and Christopher A. Munro ("Mr. Munro"). BACKGROUND INFORMATION The Company and Mr. Munro (the "Parties") are parties to an Employment Agreement dated November 22, 2000 (the "Employment Agreement"). Pursuant to the Employment Agreement, and as an inducement essential to Mr. Munro's agreement to become an employee of the Company, the Company agreed to award and issue to Mr. Munro 40,000 common shares, without par value, of the Company (the "Shares"). The Parties are entering into this agreement to establish the terms and conditions relating to the issuance of the Shares. STATEMENT OF AGREEMENT The Parties acknowledge the accuracy of the foregoing Background Information and hereby agree as follows: SECTION 1. AWARD OF SHARES. In connection with and as additional consideration for his employment by the Company, the Company hereby awards the Shares to Mr. Munro subject to the following terms and conditions of this agreement. Following the execution of this agreement by both Parties, the Company shall cause a share certificate evidencing the Shares to be issued in Mr. Munro's name (the "Share Certificate"). SECTION 2. FORFEITURE. All of the Shares shall be forfeited to the Company if Mr. Munro's employment with the Company terminates for any reason prior to the first anniversary of the Effective Date (the "Lapse Date"), or if Mr. Munro violates any provision of this agreement. One-half, or 20,000 of the shares, shall be forfeited to the company if Mr. Munro's employment with the company terminates for any reason prior to the second anniversary but after the first anniversary of the Effective Date, or if Mr. Munro violates any provision of this agreement. SECTION 3. TRANSFER RESTRICTIONS. None of the Shares, nor any beneficial interest therein, shall be sold, assigned, pledged or otherwise transferred, voluntarily or involuntarily, prior to the Lapse date. Thereafter, the Shares may be transferred only in compliance with this agreement and all applicable federal and state securities laws. Any transfer or attempted transfer in violation of the foregoing restrictions shall be null and void. SECTION 4. RIGHTS AS A SHAREHOLDER. Subject to the terms of this agreement, Mr. Munro shall be entitled to all of the rights of a shareholder with respect to the Shares, including the right to vote the Shares. However, nothing in this agreement shall be construed as conferring upon Mr. Munro the right to continued employment with the Company for any period, and Mr. Munro acknowledges that such employment is "at will" and may be terminated by the Company at any time, with or without cause. 2 SECTION 5. ESCROW OF SHARES. Until the Lapse Date the Share Certificate shall be held by the Company, together with a stock power endorsed in blank, which shall be executed by Mr. Munro concurrently with his execution of this agreement. If the Shares are forfeited to the Company under Section 2, above, the Company shall cause the Shares to be transferred to the Company. If the Shares are not so forfeited to the Company, the Company shall deliver the Share Certificate and such stock power to Mr. Munro. SECTION 6. TAX CONSEQUENCES. Mr. Munro understands that he (and not the Company) shall be responsible for his own federal, state, local or foreign tax liability and any of his other tax consequences that may arise as a result of the transactions contemplated by this agreement, including without limitation filing an election under Section 83(b) of the Internal Revenue Code of 1986, as amended (the "83(b) Election"), if he deems it to be appropriate. Mr. Munro shall rely solely on the determinations of his tax advisors or his own determinations, and not on any statements or representations by the Company or any of its agents, with regard to all such tax matters. Mr. Munro shall notify the Company in writing if Mr. Munro files the 83(b) Election with the Internal Revenue Service within 30 days from the Effective Date. The Company intends, in the event it does not receive from Mr. Munro evidence of the 83(b) Election filing by Mr. Munro, to claim a tax deduction for any amount which would be taxable to Mr. Munro in the absence of such an election. If the Company is required to withhold or pay any taxes with respect to the issuance or vesting of the Shares, Mr. Munro shall pay to the Company the amount of such required withholding or payment promptly following the Company's request. SECTION 7. INVESTMENT REPRESENTATIONS. Mr. Munro hereby: (a) Acknowledges that he has been advised that the Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), in reliance upon certain exemptions contained in the Act and rules and regulations promulgated thereunder. (b) Understands and agrees that because the Company is relying upon the exemptions contained in the Act and the rules and regulations promulgated thereunder, the Shares must be held indefinitely unless they are subsequently registered under the Act or an exemption from registration is determined by counsel for or satisfactory to the Company to be available; that the requirement that such counsel determine whether an exemption from registration is available will apply to any transfer of the Shares, including routine sales; that the Company is under no obligation, and has no present intention to attempt to secure an exemption for any subsequent sales of the Shares; that the provisions of Rule 144, promulgated under the Act, which, in certain circumstances, permit routine sales of securities, are not presently available for sales of the Shares; and that the Company has no present intention of providing the undersigned with information which may be necessary to effectuate sales thereunder. (c) Represents to the Company that he is acquiring the Shares for his own account for investment purposes and not with a view to distribution or resale in connection with any distribution of securities within the meaning of the Act, and that no transfer of the Shares will be made that will jeopardize the exemptions from federal registration referred to in section (a) above. -2- 3 (d) Represents to the Company that he has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of his investment in the Company. (e) Represents to the Company that he is presently a resident of the State of Ohio. (f) Acknowledges that he has been advised to seek expert legal, tax and accounting advice in connection with his investment decision. (g) Represents to the Company that to his satisfaction he has been provided the opportunity to ask questions and receive answers concerning the terms and conditions of the granting of the Shares, has had all such questions answered to his satisfaction and has been supplied all additional information deemed necessary by him to verify the accuracy of all information furnished to him; that he is familiar with the condition of the Company, has had access to adequate information to make this investment decision and has had access during the course of this transaction and prior to this grant to such information as he deems material to his investment decision to the extent that the Company possesses such information or has been able to acquire it without unreasonable effort or expense; that he believes that the securities covered hereby are securities of the kind he wishes to be granted and hold for investment and that the nature and amount of such securities are consistent with his investment program. (h) Represents to the Company that he is willing and able to bear the economic risk of an investment in the Shares and that his net worth is such that the loss of his entire investment would not materially and adversely affect his standard of living. In making this statement, consideration has been given to whether the undersigned could afford to hold the Shares for an indefinite period and whether, at this time, he could afford a complete loss of his investment. (i) Represents to the Company that his financial condition is such that he has no need for liquidity with respect to his investment in the Shares and he has no need to dispose of any portion of the Shares to satisfy any existing or contemplated undertaking or indebtedness. (j) Acknowledges that he understands that in addition to the federal securities restrictions on transfer, the transfer of the Shares is further restricted by applicable state securities laws and, notwithstanding any compliance with federal requirements, no transfer will be permitted which is not in compliance with applicable state securities laws. (k) Represents to the Company that he is an accredited investor within the meaning of Regulation D, Rule 501 promulgated under the Act. (l) Agrees that any certificate or certificates delivered to him evidencing the Shares or any substitute therefor will contain a legend stating that the Shares have not been registered under the Act and may set forth the limitations on resale contained in or contemplated by this agreement. (m) Agrees and understands that stop transfer instructions prohibiting transfer of the Shares in violation of the restrictions referred to in this agreement will be filed with the Company and its transfer agent. -3- 4 Mr. Munro recognizes that the issuing of the Shares to him is based upon his representations and warranties contained in this agreement, and Mr. Munro shall indemnify the Company and anyone acting on behalf of it with respect to the issuing of the Shares, and to hold the Company and any such persons harmless against all liabilities, costs, or expenses (including reasonable attorneys' fees) arising by reason of or in connection with any misrepresentation or any breach of such warranties by Mr. Munro or in connection with any resulting violation of the Act, applicable state securities laws and any other applicable law, or his failure to fulfill any of his covenants or agreements set forth herein. SECTION 8. LEGENDS. All certificates evidencing the Shares shall be endorsed with the following legends (in addition to any legend required by applicable law): THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("THE ACT"), OR STATE SECURITIES LAWS, AND CANNOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT THE SALE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE ACT AND ALL APPLICABLE STATE SECURITIES LAWS. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF THE RESTRICTED SHARE AGREEMENT DATED January 2, 2001 BETWEEN THE COMPANY AND THE HOLDER OF SUCH SHARES, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. SECTION 9. GENERAL PROVISIONS (a) This agreement shall be governed by the internal laws of the State of Ohio. Except to the extent addressed in the Employment Agreement, this agreement represents the entire agreement between the Parties with respect to the issuing of the Shares to Mr. Munro, may only be modified or amended in writing signed by both Parties and satisfies all of the Company's obligations to Mr. Munro with regard to the granting of securities. (b) The captions of the various sections of this agreement are not part of the context of this agreement, are only guides to assist in locating those sections, and shall be ignored in construing this agreement. (c) Where permitted by the context, each pronoun used in this agreement includes the same pronoun in other genders and numbers, and each noun used in this agreement includes the same noun in other numbers. (d) All notices and other communications required or permitted hereunder shall, for all purposes of this agreement, be treated as effective or having been given (i) if delivered personally (including by overnight express or messenger), when received, (ii) if delivered by facsimile, the first business day after the date of confirmation that the facsimile has been successfully transmitted to the facsimile number for the party notified, (iii) if sent by mail to an address in the United States, at the earlier of its receipt or three days after the same has been -4- 5 deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iv) if sent by mail to an address outside of the United States, seven days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Each such notice shall be addressed to the Parties at the addresses of the Parties set forth at the end of this agreement or such other address as a Party may request by notifying the other in writing. (e) The rights and benefits of the Company under this agreement shall be transferable to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company's successors and assigns. (f) This agreement shall be personal to Mr. Munro, and neither this agreement nor any rights or obligations of Mr. Munro under this agreement may be assigned by Mr. Munro to any third party. Any assignment or attempted assignment by Mr. Munro in violation of the preceding sentence shall be null and void. Subject to the foregoing, this agreement shall be binding upon, inure to the benefit of, and be enforceable by and against the heirs, personal representatives, successors, and assigns of each Party. (g) Either Party's failure to enforce any provision or provisions of this agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent that Party thereafter from enforcing each and every other provision of this agreement. The rights granted both Parties herein are cumulative and shall not constitute a waiver of either Party's right to assert all other legal remedies available to it under the circumstances. (h) Mr. Munro agrees upon request to execute any further documents or instruments necessary or desirable to carry out the purposes or intent of this agreement. METATEC INTERNATIONAL, INC. By /s/ Jeffrey M. Wilkins /s/ Christopher A. Munro ------------------------------------------ ------------------------ Jeffrey M. Wilkins, Christopher A. Munro Chief Executive Office -5-