Exhibit 10.5

 

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Hercules Capital, Inc.

2018 Non-employee Director Plan

 

Restricted Stock Award Agreement

 

[__________] (the “Participant”) (i) acknowledges receipt of an award (the
“Award”) of restricted stock from Hercules Capital, Inc. (the “Company”) under
the 2018 Non-employee Director Plan (the “Plan”), subject to the terms set forth
below and in the Plan; (ii) further acknowledges receipt of a copy of the Plan
as in effect on the date hereof and the currently effective prospectus relating
to such Plan; and (iii) agrees with the Company as follows:

 

 

1.

Effective Date. This Restricted Stock Award Agreement (the “Agreement”) shall
take effect as of [       ], which is the date of grant of the Award as
specified in Section 11 of the Plan and as approved by the Securities and
Exchange Commission in the applicable Exemptive Order.

 

 

2.

Shares Subject to Award. The Award consists of an award of [        ] shares
(the “Shares”) of common stock of the Company (“Stock”). The Participant’s
rights to the Shares are subject to the restrictions described in this Agreement
and in the Plan (which is incorporated herein by reference with the same effect
as if set forth herein in full) in addition to such other restrictions, if any,
as may be imposed by law.

 

 

3.

Meaning of Certain Terms; Plan Controls. The Award is subject to the applicable
terms and conditions of the Plan, which are incorporated herein by reference,
and in the event of any contradiction, distinction or difference between this
letter and the terms of the Plan, the terms of the Plan will control. Unless
otherwise stated herein, capitalized terms used herein have the meanings set
forth in the Plan. The term "vest" as used herein with respect to any Share
means the lapsing of the forfeiture restrictions described herein with respect
to such Share.

 

 

4.

Nontransferability of Shares. The Shares acquired by the Participant pursuant to
this Agreement shall not be sold, transferred, pledged, assigned or otherwise
encumbered or disposed of except as provided below and in the Plan.

 

 

5.

Forfeiture Risk. If the Participant ceases to be a Non-employee Director of the
Company and its subsidiaries for any reason, including death, any then
outstanding and unvested Shares acquired by the Participant hereunder shall be
automatically and immediately forfeited. The Participant hereby (i) appoints the
Company as the attorney-in-fact of the Participant to take such actions as may
be necessary or appropriate to effectuate a transfer of the record ownership of
any such shares that are unvested and forfeited hereunder, (ii) agrees to
deliver to the Company, as a precondition to the issuance of any certificate or
certificates with respect to unvested Shares hereunder, one or more stock
powers, endorsed in blank, with respect to such Shares, and (iii) agrees to sign
such other powers and take such other actions as the Company may reasonably
request to accomplish the transfer or forfeiture of any unvested Shares that are
forfeited hereunder.

 

 

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6.

Retention of Certificates. Any certificates representing unvested Shares shall
be held by the Company. If unvested Shares are held in book entry form, the
Participant agrees that the Company may give stop transfer instructions to the
depository to ensure compliance with the provisions hereof.

 

 

7.

Vesting of Shares. With respect to an Initial Grant or a Periodic Grant, as
defined in the Plan, as the case may be, the shares acquired hereunder shall
vest, subject to the terms of this Agreement, in accordance with the provisions
of this Paragraph 7 and Section 6 of the Plan.

          Notwithstanding the foregoing, no shares shall vest on any vesting
date specified above unless the Participant is then, and since the date of grant
has continuously been, a Non-employee Director of the Company. In the event of a
Covered Transaction, as defined in the Plan, the administrator of the Plan (the
“Administrator”) may require that any amounts delivered, exchanged or otherwise
paid in respect of outstanding and then unvested Shares be placed in escrow or
otherwise made subject to such restrictions as the Administrator deems
appropriate to carry out the intent of the Plan. References in this Agreement to
the Shares shall refer, mutatis mutandis, to any such restricted amounts.

 

 

8.

Legend. Any certificates representing unvested Shares shall be held by the
Company, and any such certificate shall contain a legend substantially in the
following form:

 

THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED
HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF the
2018 NON-EMPLOYEE DIRECTOR PLAN AND A RESTRICTED STOCK AWARD AGREEMENT ENTERED
INTO BETWEEN THE REGISTERED OWNER AND HERCULES CAPITAL, INC. COPIES OF SUCH PLAN
AND AGREEMENT ARE ON FILE IN THE OFFICES OF HERCULES CAPITAL, INC.

 

    As soon as practicable following the vesting of any such Shares, the Company
shall cause a certificate or certificates covering such Shares, without the
aforesaid legend, to be issued and delivered to the Participant. If any Shares
are held in book-entry form, the Company may take such steps as it deems
necessary or appropriate to record and manifest the restrictions applicable to
such Shares.        

9.

Dividends, etc. The Participant shall be entitled to (i) receive any and all
dividends or other distributions paid with respect to those Shares of which the
Participant is the record owner on the record date for such dividend or other
distribution, and (ii) vote any Shares of which the Participant is the record
owner on the record date for such vote; provided, however, that any property
(other than cash) distributed with respect to a share of Stock (the "associated
share") acquired hereunder, including without limitation a distribution of Stock
by reason of a stock dividend, stock split or otherwise, or a distribution of
other securities with respect to an associated share, shall be subject to the
restrictions of this Agreement in the same manner and for so long as the
associated share remains subject to such restrictions, and shall be promptly
forfeited if and when the associated share is so forfeited; and further
provided, that the Administrator may require that any cash distribution with
respect to the Shares other than a normal cash dividend be placed in escrow or
otherwise made subject to such restrictions as the Administrator deems
appropriate to carry out the intent of the Plan. References in this Agreement to
the Shares shall refer, mutatis mutandis, to any such restricted amounts.

 

 

10.

Sale of Vested Shares. The Participant shall be free to sell any Share once it
has vested, subject to (i) satisfaction of any applicable tax withholding
requirements with respect to the vesting or transfer of such Share; (ii) the
completion of any administrative steps (for example, but without limitation, the
transfer of certificates) that the Company may reasonably impose; and (iii)
applicable requirements of federal and state securities laws.

 

 

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11.

Certain Tax Matters. The Participant expressly acknowledges the following:

 

 

a.

The Participant has been advised to confer promptly with a professional tax
advisor to consider whether the Participant should make a so-called “83(b)
election” with respect to the Shares. Any such election, to be effective, must
be made in accordance with applicable regulations and within thirty (30) days
following the date of this Award. The Company has made no recommendation to the
Participant with respect to the advisability of making such an election.

 

 

b.

The award or vesting of the Shares acquired hereunder, and the payment of
dividends with respect to such Shares, may give rise to "wages" subject to
withholding. The Participant expressly acknowledges and agrees that the rights
hereunder are subject to the Participant promptly paying to the Company in cash
(or by such other means as may be acceptable to the Company’s Compensation
Committee (the “Committee”) in its discretion, including by the delivery of
previously acquired Stock or shares of Stock acquired hereunder or by the
withholding of amounts from any payment hereunder) all taxes required to be
withheld in connection with such award, vesting or payment.

 

 

12.

Investment Company Act of 1940. The Participant hereby acknowledges and agrees
that, pursuant to Sections 4(F) and 12 of the Plan, the Award of Shares
hereunder may be cancelled or modified by the Company if such Award, at any time
and for any reason, would cause the Company to violate or contravene any
applicable provision of the Investment Company Act of 1940, as amended (and/or
the applicable rules and regulations promulgated thereunder). Any such
cancellation or modification shall be effective and binding on the Participant
immediately upon notification thereof.

 

 

13.

Certain Changes; Rights as a Stockholder. The number and class of shares of
Stock or other securities which are distributable to the Participant with
respect to this Award shall be adjusted proportionately or as otherwise
appropriate to reflect any increase or decrease in the number of issued shares
of Stock resulting from a stock split, spin-off, split-off, recapitalization,
capital reorganization, reclassification of shares of Stock, merger or
consolidation, or any like capital adjustment, or the payment of any Stock
dividend, and/or to reflect a change in the character or class of shares covered
by the Plan arising from a readjustment or recapitalization of the Company’s
capital stock, in each case as determined by the Company’s Board of Directors
(the “Board”) or the Committee.

 

 

14.

Additional Restrictions; Amendments; No Right to Continuous Service. The Company
may impose additional conditions or restrictions on the Award as it deems
necessary or advisable to ensure that all rights granted under the Plan satisfy
the requirements of applicable securities laws. The Company shall not be
obligated to issue or deliver any Stock if such action violates any provision of
any law or regulation of any governmental authority or national securities
exchange. The Company may amend the terms of this Award to the extent that it
deems appropriate to carry out the terms of the Plan. The construction and
interpretation of any provision of this Award or the Plan shall be final and
conclusive when made by the Board or the Committee. Nothing in this Award shall
confer on the Participant the right, express or implied, to continued Continuous
Service, as defined in the Plan, or interfere in any way with the absolute right
of the Company or its Affiliates (“Affiliates”) to terminate the Participant’s
Continuous Service at any time.

 

 

15.

Cooperation Following Termination of Continuous Service. The Participant agrees
to cooperate with the Company and its Affiliates following the termination of
the Participant’s Continuous Service for any reason by making himself/herself
reasonably available to testify on behalf of the Company and its Affiliates in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, and to assist the Company and its Affiliates in any such action,
suit or proceeding by providing information and meeting and consulting with the
Company’s and its Affiliates’ representatives or counsel as requested; provided,
however, that such cooperation or participation does not materially interfere
with the Participant’s then current professional activities. The Company agrees
to reimburse the Participant, on an after-tax basis, for all reasonable expenses
actually incurred in connection with his or her provision of testimony or
assistance.