Restricted Stock Award Agreement between New Visual Corporation and John Howell under 2000 Omnibus Securities Plan

Summary

New Visual Corporation has entered into an agreement with John Howell granting him the right to purchase up to 500,000 shares of restricted common stock at $0.001 per share, subject to vesting over four dates between April 2002 and January 2003. The shares are subject to repurchase and escrow provisions until vested. If Howell’s employment ends before vesting, unvested shares may be repurchased by the company. In the event of a change in control, all unvested shares may immediately vest. The agreement is governed by the company’s 2000 Omnibus Securities Plan.

EX-10.12 10 newvis_ex10-12.txt EXHIBIT 10.12 RESTRICTED STOCK AWARD - HOWELL RESTRICTED STOCK AWARD AGREEMENT PURSUANT TO THE NEW VISUAL CORPORATION 2000 OMNIBUS SECURITIES PLAN THIS RESTRICTED STOCK AWARD AGREEMENT (this "Agreement") is made and entered into by and between NEW VISUAL CORPORATION, a Utah corporation (the "Company"), and JOHN HOWELL (the "Recipient"), effective as of February 25, 2002 (the "Date of Award"). 1. GRANT AND EXERCISE OF RESTRICTED STOCK AWARD. The Company hereby awards (the "Award") to the Recipient and the Recipient hereby accepts, subject to the terms and conditions hereof including the repurchase rights, escrow provisions and restrictions set forth in SECTIONS 8, 9 and 10 below, the right to purchase up to 500,000 shares (the "Restricted Stock") of the Company's common stock, par value $.001 per share (the "Common Stock"), for the Purchase Price per share set forth in Section 4 below. 2. GOVERNING PLAN. This Agreement is granted pursuant to the Company's 2000 Omnibus Securities Plan (the "Plan"), a copy of which is attached as ANNEX 1 and incorporated herein for all purposes. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Plan. The Recipient agrees to be bound by the terms and conditions of the Plan, which control in case of any conflict with this Agreement, except as otherwise specifically provided for in the Plan. 3. EXPIRATION OF THE AWARD. The Award terminates upon termination of the Recipient's employment or other business relationship with the Company and/or any Affiliated Entity, as set forth in SECTIONS 5.13 and 5.14 of the Plan. The Award may not be purchased by Recipient after its termination. 4. PURCHASE PRICE. The "Purchase Price" of the Restricted Stock is one one-thousandth of one cent ($.001) per share of Common Stock. If the Restricted Stock is not immediately purchased, the Purchase Price is subject to adjustment or amendment as set forth in the Plan, including SECTION 3.4 and SECTION 4.5(B) of the Plan. 5. VESTING. (a) On each Measurement Date set forth in Column 1 below, the repurchase rights, escrow provisions and restrictions imposed in SECTIONS 8, 9 and 10 below shall terminate with respect to the corresponding number of shares of Restricted Stock set forth in Column 2 below if the Recipient's employment or other business relationship with the Company and/or any Affiliated Entity has not terminated. The "Vested Portion" of the Award as of any particular date shall be the cumulative total of all shares for which the repurchase rights, escrow provisions and restrictions imposed in SECTIONS 8, 9 and 10 below shall have lapsed as of that date. - --------------------------------------------------------- ---------------------- COLUMN 1 COLUMN 2 - --------------------------------------------------------- ---------------------- VESTED PORTION OF MEASUREMENT DATE THE AWARD - --------------------------------------------------------- ---------------------- April 30, 2002 125,000 shares July 31, 2002 125,000 shares October 31, 2002 125,000 shares January 31, 2003 125,000 shares - --------------------------------------------------------- ---------------------- (b) Notwithstanding anything to the contrary contained herein or in the Plan, (i) in the event of a Change in Control, if provision is not made in the applicable agreements or instruments effecting the Change in Control to assume the Plan and Award, then, immediately prior to such Change in Control, this Award, and all portions of the Award that remain outstanding, shall become fully vested (if not already vested). (c) In addition, upon a Change in Control, the securities subject to this Award shall be automatically converted into the right to receive, and thereafter shall constitute, in accordance with the Plan and this Agreement, the securities, cash and/or other consideration that a holder of the Company's securities shall be entitled to receive upon the consummation of the Change of Control. 6. PURCHASE OF RESTRICTED STOCK; CERTIFICATES; ESCROW. (a) The Award may be purchased, to the extent not previously purchased, in whole or in part, at any time or from time to time prior to the expiration or termination of the Award, except that no Award shall be purchased except in respect to whole shares, and not less than 100 shares may be purchased at one time unless the number purchased is the total number at the time available for purchase under the terms of the Award. The purchase shall be accomplished by providing the Company with written notice in the form of EXHIBIT A, which notice shall be irrevocable when delivered and effective upon payment in full of the Purchase Price in accordance with SECTION 4 and SECTION 5.4 of the Plan and any amounts required in accordance with SECTION 5.11 of the Plan for withholding taxes, and the satisfaction of all other conditions to purchase imposed under the Plan. (b) As soon as practicable after the purchase of Restricted Stock hereunder, the Company shall issue one or more stock certificates in the Recipient's name evidencing the Restricted Stock granted hereby. Until a share of Restricted Stock vests, such stock certificate or certificates (together with any shares received by the holder with respect to such share of Restricted Stock as a result of stock dividends, stock splits or other forms of recapitalization) shall be held in escrow in the custody of the Secretary of the Company. When a share of Restricted Stock vests, the Company shall deliver to the Recipient a stock certificate evidencing such share. Upon request of the Administering Body, the Recipient shall execute and deliver to the Company a stock power, endorsed in blank, relating to any Restricted Stock that has not vested prior to such time. 2 (c) Each certificate representing shares acquired as a result of the Award shall be endorsed with all legends, if any, required by applicable federal and state securities and other laws to be placed on the certificate. The determination of which legends, if any, shall be placed upon such certificates shall be made by the Administering Body in its sole discretion and such decision shall be final and binding. 7. PAYMENT OF PURCHASE PRICE. Upon any purchase of shares of Restricted Stock under this Award, the total Purchase Price for the number of shares of Restricted Stock which are then being purchased and the amount of any federal, state and local withholding taxes, if any, shall be paid in full to the Company in cash, or in such other form permitted by applicable law and the Plan as the Administering Body deems acceptable at the time of purchase. 8. REPURCHASE OF RESTRICTED STOCK. Until a share of Restricted Stock vests as set forth in this Agreement, including vesting relating to a Change of Control under SECTION 5(B), the Company shall have the right to repurchase from the Recipient (or his or her legal representative(s), guardian(s) or permitted transferee) the unvested shares of Restricted Stock (including any shares received by the holder with respect to such share of Restricted Stock as a result of stock dividends, stock splits or other forms of recapitalization) within 30 days following a termination of employment or, if applicable, upon a termination of any other business relationship between the Recipient and the Company and/or an Affiliated Entity, at two times the Purchase Price. Recipient agrees to execute any further documentation reasonably requested by the Company with respect to a repurchase by the Company of Restricted Stock covered by this Award. 9. ESCROW. Until a share of Restricted Stock vests, the stock certificate representing such share of Restricted Stock (together with any shares received by the holder with respect to such share of Restricted Stock as a result of stock dividends, stock splits or other forms of recapitalization) shall be held in escrow in the custody of the Secretary of the Company. 10. RESTRICTIONS. (a) Until a share of Restricted Stock vests, such share of Restricted Stock (including any shares received by the holder with respect to such share of Restricted Stock as a result of stock dividends, stock splits or any other forms of recapitalization) may not be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner; (b) Until a share of Restricted Stock vests, the Recipient shall not be entitled to exercise voting rights with respect to such share of Restricted Stock (including any shares received by the holder with respect to such share of Restricted Stock as a result of stock dividends, stock splits or other forms of recapitalization). (c) Until a share of Restricted Stock vests, the Recipient shall not be entitled to receive any dividends and other distributions paid or made with respect to such share of Restricted Stock, which dividends or other distributions (including any shares received by the holder with respect to such share of Restricted Stock as a result of stock dividends, stock splits or other forms of recapitalization) shall be deposited with the Secretary of the Company. 3 (d) No share of Restricted Stock granted to a person subject to Section 16 of the Securities Exchange Act of 1934 shall be sold, assigned or otherwise transferred until at least six months and one day have elapsed from the date on which the Restricted Stock was issued. 11. NON-TRANSFERABILITY OF AWARD. The Award shall not be transferable or assignable by the Recipient, other than in accordance with SECTION 5.9 of the Plan or by will or the laws of descent and distribution (or as otherwise permitted by the Administering Body in its sole discretion), and shall be exercisable during the Recipient's lifetime only by him or her or by his or her legal representative(s) or guardian(s) or any permitted transferee. 12. ADMINISTRATION. The Plan and this Agreement shall be administered and may be definitively interpreted by the Administering Body, and the Recipient agrees that the decisions of such Administering Body concerning administration and interpretation of the Plan and this Agreement shall be final, binding and conclusive on all persons. 13. NOTICES. All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if (i) personally delivered, (ii) sent by nationally-recognized overnight courier or (iii) sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: (a) if to Recipient, at the address set forth on the signature page hereto; or (b) if to the Company, at the address set forth in the signature page hereto, or in either case, to such other address as the party to whom notice is to be given may have furnished to each other party in writing in accordance herewith. Any such communication shall be deemed to have been given (i) when delivered, if personally delivered, (ii) on the first Business Day (as hereinafter defined) after dispatch, if sent by nationally-recognized overnight courier and (iii) on the third Business Day following the date on which the piece of mail containing such communication is posted, if sent by mail. As used herein, "Business Day" means a day that is not a Saturday, Sunday or a day on which banking institutions in the city to which the notice or communication is to be sent are not required to be open. 14. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. (SIGNATURE PAGE FOLLOWS) 4 IN WITNESS WHEREOF, this Agreement has been executed on behalf of the Company by its duly authorized officer, and by the Recipient in acceptance of the above-mentioned Award, subject to the terms and conditions of the Plan and of this Agreement, all as of the day and year first above written. COMPANY: NEW VISUAL CORPORATION By: /S/ RAY WILLENBERG, JR. Name: Ray Willenberg, Jr. Title: CEO Address: 5920 Friars Road Suite 104 San Diego, California 92108 Telephone No.: 619 ###-###-#### OPTIONEE: /s/ John Howell Name: John Howell Address: ___________________________________ ___________________________________ ___________________________________ Telephone No.: _____________________________ 5 EXHIBIT A --------- NOTICE OF PURCHASE UNDER RESTRICTED STOCK AWARD AGREEMENT ISSUED PURSUANT TO THE NEW VISUAL CORPORATION 2001 OMNIBUS SECURITIES PLAN To: New Visual Corporation (the "Company") From: John Howell Date: February 25, 2002 Pursuant to the New Visual Corporation 2000 Omnibus Securities Plan (the "Plan") and the Restricted Stock Award Agreement (the "Agreement") (capitalized terms used without definition herein have the meanings given such terms in the Agreement or the Plan) between the Company and myself effective this date, I hereby purchase shares of Common Stock as follows: - -------------------------------------------------------------------------------- Number of shares of Common Stock I desire to purchase under the Award 500,000 - -------------------------------------------------------------------------------- Purchase Price per Share $0.001 - -------------------------------------------------------------------------------- Total Purchase Price $500.00 - -------------------------------------------------------------------------------- "Vested Portion" of Award (see definition in Section 5 of the Agreement) 0 - -------------------------------------------------------------------------------- Number of shares I have previously purchased under the Award 0 - -------------------------------------------------------------------------------- I hereby represent, warrant, and covenant to the Company that: a. I am acquiring the Common Stock for my own account, for investment, and not for distribution or resale, and I will make no transfer of such Common Stock except in compliance with applicable federal and state securities laws and in accordance with the provisions of the Plan. b. I can bear the economic risk of the investment in the Common Stock resulting from this purchase, including a total loss of my investment. c. I am experienced in business and financial matters and am capable of (i) evaluating the merits and risks of an investment in the Common Stock; (ii) making an informed investment decision regarding an investment in the Company; and (iii) protecting my interests in connection therewith. d. Any subsequent offer for sale or distribution of any of the shares of Common Stock shall be made only pursuant to (i) a registration statement on an appropriate form under the Securities Act, which registration statement has become effective and is current with regard to the shares being offered or sold, or (ii) a specific exemption from the registration requirements of the Securities Act, it being understood that to the extent any such exemption is claimed, I shall, prior to any offer for sale or sale of such shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Administering Body, from counsel for or approved by the Administering Body, as to the applicability of such exemption thereto. e. The shares of Common Stock are being sold subject to the terms and conditions of the Agreement including the repurchase rights, escrow provisions and restrictions imposed under SECTIONS 8, 9 and 10 therein. OPTIONEE: ________________________________________ Name:___________________________________ Address: _______________________________ _______________________________ _______________________________ Telephone No.:__________________________ RECEIVED BY THE COMPANY: NEW VISUAL CORPORATION By:_____________________________________ Name:___________________________________ Title:__________________________________ Address:________________________________ ________________________________ ________________________________ Telephone No.:__________________________ Date:___________________________________ A-2 ANNEX 1 ------- COPY OF NEW VISUAL CORPORATION 2000 OMNIBUS SECURITIES PLAN (SEE ATTACHED)