Exhibit 10.2

 

STOCK UNIT AWARD AGREEMENT

 

(Granted under the Psychemedics Corporation 2006 Incentive Plan)

 

1.          Award of Stock Unit Awards.   Psychemedics Corporation (hereinafter
the “Company”), in the exercise of its sole discretion pursuant to the
Psychemedics Corporation 2006 Incentive Plan (the “Plan” ), does on
_____________, 2016 (the “Award Date”) hereby award to ________________________
(the “Awardee”) __________ Stock Unit Awards (“SUAs”) upon the terms and subject
to the conditions hereinafter contained. Capitalized terms used but not defined
herein shall have the meanings assigned to them in the Plan. SUAs represent the
Company’s unfunded and unsecured promise to issue shares of Common Stock at a
future date, subject to the terms of this Award Agreement and the Plan. Awardee
has no rights under the SUA s other than the rights of a general unsecured
creditor of the Company.

 

2.          Vesting Schedule and Conversion of SUAs.  

 

(a)          Subject to the terms of this Award Agreement and the Plan and
provided that Awardee remains continuously employed throughout the vesting
periods set out below, the SUAs shall vest and be converted into an equivalent
number of shares of Common Stock that will be distributed to the Awardee as
follows; provided that fractional SUAs shall be converted into shares of Common
Stock as set out in Section 8 of this Award Agreement:

 

Vesting Date  Percentage
of SUAs        One (1) year from the Award Date   25%        Two (2) years from
the Award Date   25%        Three (3) years from the Award Date   25%       
Four (4) years from the Award Date   25%

 

 

 

 

(b)          Notwithstanding the vesting schedule set forth in subsection (a)
above, if there is a Change in Control of the Company (as defined below), then
subject to Awardee’s Continuous Status as a Participant (as defined below)
through the date which is one day prior to the actual closing date of the
transaction giving rise to such Change in Control (the “Acceleration Date”), all
of the SUA’s that are unvested on the Acceleration Date shall immediately become
vested in full on the Acceleration Date, subject, however, to the provisions of
Section 20 of this Award Agreement. For the purpose of this Agreement, a “Change
in Control” shall mean (i) the consummation of a reorganization, merger or
consolidation or sale or disposition of all or substantially all of the assets
of the Company (a “Business Combination”), unless, in each case following such
Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners of the Common Stock of the Company
immediately before the consummation of such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation that as a result of
the transaction owns the Company or all or substantially all of the assets of
the Company either directly or indirectly through one or more subsidiaries); and
(B) no person or group (as defined in Section 13(d) or 14(d)(2) of the
Securities Exchange Act of 1934) of the Company or the corporation resulting
from the Business Combination) beneficially owns, directly or indirectly, more
than 30% of the then outstanding shares of the common stock of the corporation
resulting from the Business Combination; (ii) Individuals who, as of the date of
this Agreement, constitute the Board of Directors of the Company (the "Incumbent
Board") cease for any reason to constitute at least a majority of the Board of
Directors of the Company, provided, however, that any individual's becoming a
director after the date of this Agreement whose election, or nomination for
election by the stockholders of the Company, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board will be
considered as though the individual were a member of the Incumbent Board, but
excluding, for this purpose, any individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board; or
(iii) any person (as defined in Section 13(d) or 14(d)(2) of the Securities
Exchange Act of 1934) shall become at any time or in any manner the beneficial
owner of capital stock of the Company representing more than 30% of the voting
power of the Company.

 

3.          Termination.   Unless terminated earlier under Section 4, 5 or 6
below, an Awardee’s rights under this Award Agreement with respect to the SUAs
issued under this Award Agreement shall terminate at the time such SUAs are
converted into shares of Common Stock.

 

4.          Termination of Awardee’s Status as a Participant.   Except as
otherwise specified in Section 5 and 6 below, in the event of termination of
Awardee’s Continuous Status as a Participant (as defined below), Awardee’s
rights under this Award Agreement in any unvested SUAs shall terminate. For
purposes of this Award Agreement, an Awardee’s Continuous Status as a
Participant shall mean (1) for employees of the Company, the absence of any
interruption or termination of service as an employee, and (2) for consultants
of the Company, the absence of any interruption, expiration, or termination of
such person’s consulting or advisory relationship with the Company or the
occurrence of any termination event as set forth in such person’s Award
Agreement. Continuous Status as a Participant shall not be considered
interrupted (i) for an Employee in the case of sick leave or leave of absence
for which Continuous Status is not considered interrupted as determined by the
Company in its sole discretion, and (ii) for a consultant of the Company, in the
case of any temporary interruption in such person’s availability to provide
services to the Company which has been authorized in writing by the President or
a Vice President of the Company prior to its commencement.

 

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5.          Disability of Awardee.   Notwithstanding the provisions of Section 4
above, in the event of termination of Awardee’s Continuous Status as a
Participant as a result of disability (within the meaning of Section 409A of the
Internal Revenue Code , and hereinafter referred to as “Disability”), the SUAs
which would have vested during the twelve (12) months following the date of such
termination, set out in Section 2(a) above, shall become vested as of the date
of such termination, subject, however, to the provisions of Section 20 of this
Award Agreement. If Awardee’s Disability originally required him or her to take
a short-term disability leave which was later converted into long-term
disability, then for the purposes of the preceding sentence the date on which
Awardee ceased performing services shall be deemed to be the date of
commencement of the short-term disability leave. The Awardee’s rights in any
unvested SUAs that remain unvested after the application of this Section 5 shall
terminate at the time Awardee ceases to be in Continuous Status as a
Participant.

 

6.          Death of Awardee.   Notwithstanding the provisions of Section 4
above, in the event of the death of Awardee:

 

(a)          If Awardee is, at the time of death, in Continuous Status as a
Participant, the SUAs which would have vested during the twelve (12) months
following the date of death of Awardee, set out in Section 2(a) above, shall
become vested as of the date of death.

 

(b)          The Awardee’s rights in any unvested SUAs that remain after the
application of Section 6(a) shall terminate at the time of the Awardee’s death.

 

7.          Value of Unvested SUAs.   In consideration of the award of these
SUAs, Awardee agrees that upon and following termination of Awardee’s Continuous
Status as a Participant for any reason (whether or not in breach of applicable
laws), and regardless of whether Awardee is terminated with or without cause,
notice, or pre-termination procedure or whether Awardee asserts or prevails on a
claim that Awardee’s employment was terminable only for cause or only with
notice or pre-termination procedure, any unvested SUAs under this Award
Agreement shall be deemed to have a value of zero dollars ($0.00).

 

8.          Conversion of SUAs to shares of Common Stock; Responsibility for
Taxes.  

 

(a)          Provided Awardee has satisfied the requirements of Section 8(b)
below, and subject to the provisions of Section 20 below, on the vesting of any
SUAs, such vested SUAs shall be converted into an equivalent number of shares of
Common Stock that will be distributed to Awardee or, in the event of Awardee’s
death, to Awardee’s legal representative, as soon as practicable. The
distribution to the Awardee, or in the case of the Awardee’s death, to the
Awardee’s legal representative, of shares of Common Stock in respect of the
vested SUAs shall be evidenced by a stock certificate, appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company, or
other appropriate means as determined by the Company.

 

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(b)          Regardless of any action the Company takes with respect to any or
all income tax (including federal, state and local taxes), social security,
payroll tax or other tax-related withholding (“Tax Related Items”), Awardee
acknowledges that the ultimate liability for all Tax Related Items legally due
by Awardee is and remains Awardee’s responsibility and that the Company (i)
makes no representations or undertakings regarding the treatment of any Tax
Related Items in connection with any aspect of the SUAs, including the grant of
the SUAs, the vesting of SUAs, the conversion of the SUAs into shares of Common
Stock, the subsequent sale of any shares of Common Stock acquired at vesting and
the receipt of any dividends; and (ii) does not commit to structure the terms of
the grant or any aspect of the SUAs to reduce or eliminate the Awardee’s
liability for Tax Related Items. Prior to the issuance of shares of Common Stock
upon vesting of SUAs as provided in Section 8(a) above, Awardee shall pay, or
make adequate arrangements satisfactory to the Company (in its sole discretion)
to satisfy all withholding obligations of the Company. In this regard, Awardee
authorizes the Company to withhold all applicable Tax Related Items legally
payable by Awardee from Awardee’s wages or other cash compensation payable to
Awardee by the Company. Alternatively, or in addition, if permissible under
applicable law, the Company may, in its sole discretion, (1) sell or arrange for
the sale of shares of Common Stock to be issued on the vesting of SUAs to
satisfy the withholding obligation, and/or (2) withhold in shares of Common
Stock, provided that the Company shall withhold only the amount of shares
necessary to satisfy the minimum withholding amount. Awardee shall pay to the
Company any amount of Tax Related Items that the Company may be required to
withhold as a result of the conversion of vested SUAs to shares of Common Stock
that cannot be satisfied by the means previously described. Except where
applicable legal or regulatory provisions prohibit, the standard process for the
payment of an Awardee’s Tax Related Items shall be for the Company to withhold
in shares of Common Stock only to the amount of shares necessary to satisfy the
minimum withholding amount. The Company may refuse to deliver shares of Common
Stock to Awardee if Awardee fails to comply with Awardee’s obligation in
connection with the Tax Related Items as described herein.

 

(c)          In lieu of issuing fractional shares of Common Stock, on the
vesting of a fraction of a SUA, the Company shall round the shares to the
nearest whole share and any such share which represents a fraction of a SUA will
be included in a subsequent vest date.

 

(d)          Until the distribution to Awardee of the shares of Common Stock in
respect to the vested SUAs is evidenced by a stock certificate, appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company, or other appropriate means, Awardee shall have no right to vote or
receive dividends or any other rights as a shareholder with respect to such
shares of Common Stock, notwithstanding the vesting of SUAs. Subject to the
provisions of Section 20 below, the Company shall cause such distribution to
Awardee to occur promptly upon the vesting of SUAs. No adjustment will be made
for a dividend or other right for which the record date is prior to the date
Awardee is recorded as the owner of the shares of Common Stock, except as
provided in Section 10 of the Plan.

 

(e)          By accepting the Award of SUAs evidenced by this Award Agreement,
Awardee agrees not to sell any of the shares of Common Stock received on account
of vested SUAs at a time when applicable laws or Company policies prohibit a
sale. This restriction shall apply so long as Awardee is an Employee, Consultant
or outside director of the Company or a Subsidiary of the Company.

 

(f)           Adjustments and other matters relating to stock dividends, stock
splits, recapitalizations, reorganizations, Corporate Events and the like shall
be made and determined in accordance with Section 7 of the Plan, as in effect on
the date of this Agreement.

 

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9.          Non-Transferability of SUAs.   Awardee’s right in the SUAs awarded
under this Award Agreement and any interest therein may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner, other than by
will or by the laws of descent or distribution, prior to the distribution of the
shares of Common Stock in respect of such SUAs. SUAs shall not be subject to
execution, attachment or other process.

 

10.        Acknowledgment of Nature of Plan and SUAs.   In accepting the Award,
Awardee acknowledges that:

 

(a)          the Plan is established voluntarily by the Company, it is
discretionary in nature and may be modified, amended, suspended or terminated by
the Company at any time, as provided in the Plan;

 

(b)          the Award of SUAs is voluntary and occasional and does not create
any contractual or other right to receive future awards of SUAs, or benefits in
lieu of SUAs even if SUAs have been awarded repeatedly in the past;

 

(c)          all decisions with respect to future awards, if any, will be at the
sole discretion of the Company;

 

(d)          Awardee’s participation in the Plan is voluntary;

 

(e)          the future value of the underlying shares of Common Stock is
unknown and cannot be predicted with certainty;

 

(f)           if Awardee receives shares of Common Stock, the value of such
shares of Common Stock acquired on vesting of SUAs may increase or decrease in
value;

 

(g)          notwithstanding any terms or conditions of the Plan to the contrary
and consistent with Section 4 and Section 7 above, in the event of involuntary
termination of Awardee’s employment (whether or not in breach of applicable
laws), Awardee’s right to receive SUAs and vest under the Plan, if any, will
terminate effective as of the date that Awardee is no longer actively employed
and will not be extended by any notice period mandated under applicable law;
furthermore, in the event of involuntary termination of employment (whether or
not in breach of applicable laws), Awardee’s right to receive shares of Common
Stock pursuant to the SUAs after termination of employment, if any, will be
measured by the date of termination of Awardee’s active employment and will not
be extended by any notice period mandated under applicable law . The Committee
(as such term is defined in Section 1 of the Plan) shall have the exclusive
discretion to determine when Awardee is no longer actively employed for purposes
of the award of SUAs; and

 

(h)          Awardee acknowledges and agrees that, regardless of whether Awardee
is terminated with or without cause, notice or pre-termination procedure or
whether Awardee asserts or prevails on a claim that Awardee’s employment was
terminable only for cause or only with notice or pre-termination procedure,
Awardee has no right to, and will not bring any legal claim or action for, (i)
any damages for any portion of the SUAs that have been vested and converted into
Common Shares, or (ii) termination of any unvested SUAs under this Award
Agreement.

 

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11.         No Employment Right.   Awardee acknowledges that neither the fact of
this Award of SUAs nor any provision of this Award Agreement or the Plan or the
policies adopted pursuant to the Plan shall confer upon Awardee any right with
respect to employment or continuation of current employment with the Company, or
to employment that is not terminable at will. Awardee further acknowledges and
agrees that neither the Plan nor this Award of SUAs makes Awardee’s employment
with the Company for any minimum or fixed period, and that such employment is
subject to the mutual consent of Awardee and the Company, and may be terminated
by either Awardee or the Company at any time, for any reason or no reason, with
or without cause or notice or any kind of pre- or post-termination warning,
discipline or procedure.

 

12.         Administration.   The authority to manage and control the operation
and administration of this Award Agreement shall be vested in the Committee, and
the Committee shall have all powers and discretion with respect to this Award
Agreement as it has with respect to the Plan. Any interpretation of the Award
Agreement by the Committee and any decision made by the Committee with respect
to the Award Agreement shall be final and binding on all parties.

 

13.         Plan Governs.   Notwithstanding anything in this Award Agreement to
the contrary, the terms of this Award Agreement shall be subject to the terms of
the Plan, and this Award Agreement is subject to all interpretations,
amendments, rules and regulations promulgated by the Committee from time to time
pursuant to the Plan.

 

14.         Notices.   Any written notices provided for in this Award Agreement
which are sent by mail shall be deemed received three business days after
mailing, but not later than the date of actual receipt. Notices shall be
directed, if to Awardee, at the Awardee’s address indicated by the Company’s
records and, if to the Company, at the Company’s principal executive office.

 

15.         Electronic Delivery.   The Company may, in its sole discretion,
decide to deliver any documents related to SUAs awarded under the Plan or future
SUAs that may be awarded under the Plan by electronic means or request Awardee’s
consent to participate in the Plan by electronic means. Awardee hereby consents
to receive such documents by electronic delivery and agrees to participate in
the Plan through an on-line or electronic system established and maintained by
the Company or another third party designated by the Company.

 

16.         Acknowledgment.   By Awardee’s acceptance as evidenced below,
Awardee further acknowledges that Awardee has received and has read, understood
and accepted all the terms, conditions and restrictions of this Award Agreement
and the Plan. Awardee understands and agrees that this Award Agreement is
subject to all the terms, conditions, and restrictions stated in this Award
Agreement and the Plan, as the latter may be amended from time to time in the
Company’s sole discretion. In addition, the Awardee acknowledges that the Award
and rights granted to the Awardee hereunder shall be subject to forfeiture to
the Company in accordance with any policy that may hereafter be promulgated by
the Company to comply with the requirements of Section 10D(b)(2) of the
Securities Exchange Act of 1934, as amended.

 

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17.         Governing Law.   This Award Agreement shall be governed by the laws
of the State of Delaware, without regard to Delaware laws that might cause other
law to govern under applicable principles of conflicts of law.

 

18.         Severability.   If one or more of the provisions of this Award
Agreement shall be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby and the invalid, illegal or
unenforceable provisions shall be deemed null and void; however, to the extent
permissible by law, any provisions which could be deemed null and void shall
first be construed, interpreted or revised retroactively to permit this Award
Agreement to be construed so as to foster the intent of this Award Agreement and
the Plan.

 

19.         Complete Award Agreement and Amendment.   This Award Agreement and
the Plan constitute the entire agreement between Awardee and the Company
regarding SUAs. Any prior agreements, commitments or negotiations concerning
these SUAs are superseded. This Award Agreement may be amended only by written
agreement of Awardee and the Company, without consent of any other person.
Awardee agrees not to rely on any oral information regarding this Award of SUAs
or any written materials not identified in this Section 19.

 

20.         Section 409A. This Award Agreement is intended to be in compliance
with the provisions of Section 409A of the Internal Revenue Code, as amended
(the “Code”), and the regulations thereunder to the extent applicable. Anything
in this Agreement to the contrary notwithstanding, if at the time of the
Awardee’s separation from service, within the meaning of Section 409A of the
Code, the Company determines that the Awardee is a “specified employee” within
the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any
payment or benefit that the Awardee becomes entitled to under this Agreement
would be considered deferred compensation subject to the 20 percent additional
tax imposed pursuant to Section 409A(a) of the Code as a result of the
application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be
payable and such benefit shall not be provided until the date that is the
earlier of (A) six months and one day after the Awardee’s separation from
service, or (B) the Awardee’s death. The determination of whether and when a
separation from service has occurred shall be made in accordance with the
presumptions set forth in Treasury Regulation Section 1.409A-1(h). To the extent
that any provision of this Agreement is ambiguous as to its compliance with
Section 409A of the Code, the provision shall be read in such a manner so that
all payments hereunder comply with Section 409A of the Code. The parties agree
that this Agreement may be amended, as reasonably requested by either party, and
as may be necessary to fully comply with Section 409A of the Code and all
related rules and regulations in order to preserve the payments and benefits
provided hereunder without additional cost to either party. Solely for the
purposes of Section 409A of the Code, the share increments issuable on each
vesting date on Schedule A shall be considered a separate payment. The Company
makes no representation or warranty and shall have no liability to the Awardee
or any other person if any provisions of this Agreement are determined to
constitute deferred compensation subject to Section 409A of the Code but do not
satisfy an exemption from, or the conditions of, such Section.

 

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EXECUTED as of the day and year first above written.

 

  PSYCHEMEDICS CORPORATION         By:  

 

AWARDEE’S ACCEPTANCE:

I have read and fully understood this Award Agreement and I accept and agree to
be bound by all of the terms, conditions and restrictions contained in this
Award Agreement and the other documents referenced in it.

 

   

 

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