EXHIBIT 10.21
 
STEELCLOUD, INC.
FORM OF
RESTRICTED STOCK AGREEMENT

Granted Under the Amended 2007 Stock Option and Restricted Stock Plan
 
THIS RESTRICTED STOCK AGREEMENT (the “Agreement”) is made as of    , by and
between SteelCloud, Inc., a Virginia corporation (the “Company”), and      (the
“Employee”).
The Board of Directors of the Company (the “Board”) has determined that it is in
the best interests of the Company and its shareholders to promote the success of
the Company by enhancing the ownership of the Company’s common stock by the
Employee through making this grant of restricted common stock in accordance with
the terms set forth below.
 
AGREEMENT
1.             Award of Restricted Shares.  The Board hereby grants, subject to
the terms and conditions set forth in this Agreement and in the Company’s
Amended 2007 Stock Option and Restricted Stock Plan, as of     (the “Grant
Date”), to Employee      shares of the Company’s common stock, par value $0.001
per share (the “Restricted Shares”).  The Restricted Shares will be held in book
entry form by the Company’s transfer agent in the name of the Employee and shall
be delivered to the Employee on the vesting dates set forth in Section 2(a). The
Employee agrees that the Restricted Shares shall be subject to the forfeiture
provisions set forth in Section 3 of this Agreement and the restrictions on
transfer set forth in Section 2(e) of this Agreement.
 
2.             Delivery of Restricted Shares
 
(a)           The Restricted Shares may not be transferred by the Employee until
such Restricted Shares have vested.  Except as otherwise provided in Section 3
hereof, the Restricted Shares shall vest, the restrictions on the Restricted
Shares shall lapse, and the Restricted Shares shall be delivered to the Employee
over the service period as set forth below:
 
Number of Shares
 
Vesting Date
-
 
MM/DD/YYYY
-
 
MM/DD/YYYY
-
 
MM/DD/YYYY
-
 
MM/DD/YYYY

 
(b)           Until such time as delivery of the Restricted Shares is made to
the Employee, or the Employee’s right to such Restricted Shares is terminated in
accordance with this Agreement, the Company’s stock transfer records shall
reflect the Employee’s status as holder of such Restricted Shares.
 
(c)           Notwithstanding any other provisions of this Agreement, the
Company’s Board of Directors (the “Board”) shall be authorized in its
discretion, based upon its review and evaluation of the performance of the
Employee and of the Company or its subsidiaries, to accelerate the lapse of any
restrictions under this Agreement upon the Restricted Shares, at such times and
upon such terms and conditions as the Board shall deem advisable.
 
(d)           Until the Restricted Shares vest and are delivered without
restrictions to the Employee in accordance with the terms of this Agreement, the
Employee hereby irrevocably appoints the Secretary of the Company as his
attorney-in-fact to execute and deliver any stock power or other instrument
which may be necessary to effectuate the transfer of the Restricted Shares (or
assignment of distributions thereon) on the books and records of the Company.

 
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(e)           The Employee shall not effect a Disposition (as defined below) of
any Restricted Shares unless, until and to the extent the Restricted Shares have
vested in accordance with this Agreement.  Any attempt to effect a Disposition
of any Restricted Shares prior to the date on which the Restricted Shares have
vested and the restrictions have lapsed, shall be void ab initio.  For purposes
of this Agreement, “Disposition” shall mean any sale, transfer, encumbrance,
gift, donation, assignment, pledge, hypothecation, or other disposition, whether
similar or dissimilar to those previously enumerated, whether voluntary or
involuntary, and including, but not limited to, any disposition by operation of
law, by court order, by judicial process, or by foreclosure, levy or attachment.
 
3.             Forfeiture.  If prior to the required service period set forth in
part 2 above, Employee’s employment with the Company or its subsidiaries is
terminated for any reason, any unvested Restricted Shares shall be deemed to
have been forfeited by the Employee.  The Board shall have the power and
authority to enforce on behalf of the Company any rights of the Company under
this Agreement in the event of the Employee’s forfeiture of the Restricted
Shares pursuant to this Section 3.
 
4.             Rights with Respect to Restricted Shares.
 
(a)           Except as otherwise provided in this Agreement, the Employee shall
have, with respect to all Restricted Shares, all the rights of a shareholder of
the Company, including the right to vote the Restricted Shares and the right to
receive cash dividends, if any, as may be declared by the Board from time to
time.  Any shares of the Company’s common stock issued to the Employee as a
dividend with respect to the Restricted Shares shall have the same status, be
subject to the same terms and conditions and shall be held on behalf of the
Employee by the Company (on a pro rata basis) as the unvested Restricted Shares,
unless otherwise determined by the Board.
 
(b)           In the event that the number of Restricted Shares, as a result of
a stock split or stock dividend or combination of shares or any other change or
exchange for other securities, by reclassification, reorganization or otherwise,
is increased or decreased or changed into or exchanged for a different number or
kind of shares of stock or other securities of the Company or of another
corporation, the number of unvested Restricted Shares shall be appropriately
adjusted to reflect such change.  If any such adjustment shall result in a
fractional share, such fraction shall be disregarded.
 
5.             Taxes.
 
(a)           If the Employee elects, within thirty (30) days of the date of
this Agreement, to include in gross income for federal income tax purposes an
amount equal to the fair market value (as of the Grant Date) of the Restricted
Shares pursuant to Section 83(b) of the Internal Revenue Code of 1986, as
amended (the “Code”), the Employee shall make arrangements satisfactory to the
Board to pay to the Company any federal, state or local income taxes required to
be withheld with respect to the Restricted Shares.  If the Employee shall fail
to make such tax payments as are required, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Employee any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Shares.
 
(b)           If the Employee does not make the election described in Subsection
5(a) above, the Employee shall, no later than the date as of which the
Restricted Shares vest, pay to the Company, or make arrangements satisfactory to
the board for payment of, any federal, state or local taxes of any kind required
by law to be withheld with respect to the Restricted Shares, and the Company
shall, to the extent permitted by law, have the right to deduct from any payment
of any kind otherwise due to Employee any federal, state, or local taxes of any
kind required by law to be withheld with respect to the Restricted Shares.
 
(c)           The Employee has reviewed with the Employee’s own tax advisors the
federal, state, local and other tax consequences of the grant of Restricted
Shares.  The Employee is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents.  The Employee
understands that the Employee (and not the Company) shall be responsible for the
Employee’s own tax liability that may arise directly or indirectly as a result
of the grant of the Restricted Shares.

 
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6.            Delivery upon Death.  If the Employee dies prior to all or any
portion of the Restricted Shares having vested, but while such Employee is
employed by the Company, all such unvested Restricted Shares shall be delivered,
free of any restrictions under this Agreement, to the beneficiary or
beneficiaries designated by the Employee, or if the Employee has not so
designated any beneficiary, or no designated beneficiary survives the Employee,
such Restricted Shares shall be delivered to the personal representative of the
Employee’s estate.
 
7.            Amendment, Modification and Assignment. No provision of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing signed by the Employee and the Chairman of
the Board or other duly authorized member of the Board.  No waiver by either
party of any breach by the other party hereto of any condition or provision of
this Agreement shall be deemed a waiver of any other conditions or provisions of
this Agreement.  No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.  This Agreement shall
not be assigned by the Employee in whole or in part.  The rights and obligations
created hereunder shall be binding on the Employee and his heirs and legal
representatives and on the successors and assigns of the Company.
 
8.            Miscellaneous.
 
(a)           No Right to Employment.  The grant of the Restricted Shares shall
not be construed as giving the Employee the right to be retained in the employ
of the Company.
 
(b)           No Limit on Other Compensation Arrangements.  Nothing contained in
this Agreement shall preclude the Company from adopting or continuing in effect
other or additional compensation arrangements, and such arrangements may be
either generally applicable or applicable only in specific cases.
 
(c)           Severability.  If any provision of this Agreement is or becomes or
is deemed to be invalid, illegal or unenforceable in any jurisdiction or would
disqualify this Agreement or the grant of Restricted Shares under any applicable
law, such provision shall be construed or deemed amended to conform to
applicable law (or if such provision cannot be so construed or deemed amended
without materially altering the purpose or intent of  this Agreement and the
grant of Restricted Shares, such provision shall be stricken as to such
jurisdiction and the remainder of this Agreement and the Award shall remain in
full force and effect).
 
(d)           No Trust or Fund Created.  Neither this Agreement nor the grant of
Restricted Shares shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company and the
Employee or any other person.  To the extent that the Employee or any other
person acquires a right to receive payments from the Company pursuant to this
Agreement, such right shall be no greater than the right of any unsecured
general creditor of the Company.
 
(e)           Governing Law.  The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the Commonwealth
of Virginia.
 
(f)           Headings.  Headings are given to the Paragraphs and Subparagraphs
of this Agreement solely as a convenience to facilitate reference.  Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of this Agreement or any provision thereof.
 
(g)           Employee’s Acknowledgments.  The Employee acknowledges that he or
she: (i) has read this Agreement; (ii) has been represented in the preparation,
negotiation, and execution of this Agreement by legal counsel of the Employee’s
own choice or has voluntarily declined to seek such counsel; (iii) understands
the terms and consequences of this Agreement; (iv) is fully aware of the legal
and binding effect of this Agreement; and (v) understands that the law firm of
Gersten Savage LLP has acted as counsel to the Company in connection with the
transactions contemplated by the Agreement, and not as counsel for the Employee.

 
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(h)           Delivery of Certificates.  The Employee may request that the
Company deliver the vested Restricted Shares in certificated form.
 
(i)            No Deferral.  Notwithstanding anything herein to the contrary,
neither the Company nor the Employee may defer the delivery of the Restricted
Shares.
 
9.            Complete Agreement.  This Agreement and those agreements and
documents expressly referred to herein embody the complete agreement and
understanding among the parties and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.
 
SteelCloud, Inc.
   
By
 
Name/Title:

Agreed and Accepted:
   
By:  
 

Name/Title:  
     
Address:
             
SSN #:
 

 
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