Geospatial Corporation 10-K [gsph-10k_123115.htm]

 

Exhibit 10.28

 

GEOSPATIAL CORPORATION

 

STOCK APPRECIATION RIGHTS AGREEMENT

 

This Stock Appreciation Rights Agreement (this “Agreement”) is made and entered
into as of October 23, 2015 by and between GEOSPATIAL CORPORATION, a Nevada
corporation (the “Company”) and Troy G. Taggart (the “Participant”).

 

  Grant Date:     October 23, 2015                     Number of SARs:    
100,000                     Exercise Price per SAR:     $0.15                  
  Expiration Date:     October 23, 2025    

 

1.           Grant of SARs.

 

1.1         Grant.   The Company hereby grants to the Participant an aggregate
of 100,000 stock appreciation rights (the “SARs”). Each SAR entitles the Grantee
to receive, upon exercise, an amount equal to the excess of (a) the Fair Market
Value of a share of Common Stock on the date of exercise, over (b) the Exercise
Price (the “Appreciation Value”). The SARs are being granted pursuant to the
terms of the Company’s 2013 Equity Incentive Plan (the “Plan”).

 

1.2         Consideration; Subject to Plan.   The grant of the SARs is made in
consideration of the services to be rendered by the Participant to the Company
and is subject to the terms and conditions of the Plan. Capitalized terms used
but not defined herein will have the meaning ascribed to them in the Plan.

 

2.           Vesting.

 

2.1         Vesting Schedule.   The SARs will vest and become exercisable in two
equal installments on the Grant Date and the first anniversary of the Grant
Date. Except as otherwise provided in this Agreement, the unvested SARs will not
be exercisable on or after the Participant’s termination of Continuous Service.

 

 

  

2.2         Expiration.   The SARs will expire on the Expiration Date set forth
above, or earlier as provided in this Agreement or the Plan.

 

3.           Termination of Continuous Service.

 

3.1         Termination for Reasons Other Than Cause, Death, Disability.   If
the Participant’s Continuous Service is terminated for any reason other than
Cause, death or Disability, the Participant may exercise the vested SARs, but
only within such period of time ending on the earlier of (a) the date three
months following the termination of the Participant’s Continuous Service or (b)
the Expiration Date.

 

3.2         Termination for Cause.   If the Participant’s Continuous Service is
terminated for Cause, the SARs (whether vested or unvested) shall immediately
terminate and cease to be exercisable.

 

3.3         Termination Due to Disability.   If the Participant’s Continuous
Service terminates as a result of the Participant’s Disability, the Participant
may exercise the vested SARs, but only within such period of time ending on the
earlier of (a) the date 12 months following the Participant’s termination of
Continuous Service or (b) the Expiration Date.

 

3.4         Termination Due to Death.   If the Participant’s Continuous Service
terminates as a result of the Participant’s death, the vested SARs may be
exercised by the Participant’s estate, by a person who acquired the right to
exercise the SARs by bequest or inheritance or by the person designated to
exercise the SARs upon the Participant’s death, but only within the time period
ending on the earlier of (a) the date 12 months following the Participant’s
termination of Continuous Service or (b) the Expiration Date.

 

4.           Manner of Exercise.

 

4.1         When to Exercise.   Except as otherwise provided in the Plan or this
Agreement, the Participant (or in the case of exercise after the Participant’s
death or incapacity, the Participant’s executor, administrator, heir or legatee,
as the case may be) may exercise his or her vested SARs, in whole or in part, at
any time after vesting and until the Expiration Date or earlier termination
pursuant to Section 3 hereof, by following the procedures set forth in this
Section 4. If partially exercised, the Participant may exercise the remaining
unexercised portion of the SARs at any time after vesting and until the
Expiration Date or earlier termination pursuant to Section 3 hereof. No SARs
shall be exercisable after the Expiration Date.

 

4.2         Election to Exercise.   To exercise the SARs, the Participant (or in
the case of exercise after the Participant’s death or incapacity, the
Participant’s executor, administrator, heir or legatee, as the case may be) must
deliver to the Company a written notice (or notice through another previously
approved method, which could include a web-based or e-mail system) to the Chief
Financial Officer of the Company which sets forth the number of SARs being
exercised, together with any additional documents as the Company may require.
Each such notice must satisfy whatever then-current procedures apply to the SARs
and must contain such representations as the Company requires.

 

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4.3         Documentation of Right to Exercise.   If someone other than the
Participant exercises the SARs, then such person must submit documentation
reasonably acceptable to the Company verifying that such person has the legal
right to exercise the SARs.

 

4.4         Date of Exercise.   The SARs shall be deemed to be exercised on the
business day that the Company receives a fully executed exercise notice. If the
notice is received after business hours on such date, then the SAR shall be
deemed to be exercised on the business date immediately following the business
date such notice is received by the Company.

 

5.           Withholding.   Prior to the payment of the Appreciation Value in
connection with the exercise of the SARs, the Participant must make arrangements
satisfactory to the Company to pay or provide for any applicable federal, state
and local withholding obligations of the Company. If approved by the Committee
in its discretion, the minimum required withholding obligations may be settled
by the delivery to the Company of previously owned and unencumbered shares of
Common Stock.

 

6.           Form of Payment.   Upon the exercise of all or a portion of the
SARs, the Participant shall be entitled to a payment in cash or stock (solely at
the discretion of the Committee) equal to the Appreciation Value of the SARs
being exercised, less any amounts withheld pursuant to Section 5.

 

7.           Section 409A; No Deferral of Compensation.   Neither the Plan nor
this Agreement is intended to provide for the deferral of compensation within
the meaning of Section 409A of the Internal Revenue Code (the “Code”). The
Company reserves the right to unilaterally amend or modify the Plan or this
Agreement, to the extent the Company considers it necessary or advisable, in its
sole discretion, to comply with, or to ensure that the SARs granted hereunder
are not subject to, Section 409A of the Code.

 

8.           No Right to Continued Employment.   Neither the Plan nor this
Agreement shall confer upon the Participant any right to be retained in any
position, as an Employee, Consultant or Director of the Company. Further,
nothing in the Plan or this Agreement shall be construed to limit the discretion
of the Company to terminate the Participant’s Continuous Service at any time,
with or without Cause.

 

9.           Transferability.   The SARs are not transferable by the Participant
other than to a designated beneficiary upon the Participant’s death or by will
or the laws of descent and distribution, and are exercisable during the
Participant’s lifetime only by him or her. No assignment or transfer of the
SARs, or the rights represented thereby, whether voluntary or involuntary, by
operation of law or otherwise (except to a designated beneficiary upon death by
will or the laws of descent or distribution) will vest in the assignee or
transferee any interest or right herein whatsoever, but immediately upon such
assignment or transfer the SARs will terminate and become of no further effect.

 

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10.         Change in Control.

 

 

10.1       Effect on SARs.   In the event of a Change in Control,
notwithstanding any provision of the Plan or this Agreement to the contrary, the
SARs shall become immediately vested and exercisable.

 

10.2       Cash-out.   In the event of a Change in Control, the Committee may,
in its discretion and upon at least ten (10) days’ advance notice to the
Participant, cancel the SARs and pay to the Participant the Appreciation Value
of the SARs based upon the price per share of Common Stock received or to be
received by other shareholders of the Company in the event. Notwithstanding the
foregoing, if at the time of a Change in Control the Exercise Price of the SAR
equals or exceeds the price paid for a share of Common Stock in connection with
the Change in Control, the Committee may cancel the SAR without the payment of
consideration therefor.

 

11.         Adjustments.   The SARs may be adjusted or terminated in any manner
as contemplated by Section 11 of the Plan.

 

12.         Tax Liability and Withholding.   Notwithstanding any action the
Company takes with respect to any or all income tax, social insurance, payroll
tax, or other tax-related withholding (“Tax-Related Items”), the ultimate
liability for all Tax-Related Items is and remains the Participant’s
responsibility and the Company (a) makes no representation or undertakings
regarding the treatment of any Tax-Related Items in connection with the grant,
vesting, or exercise of the SARs and (b) does not commit to structure the SARs
to reduce or eliminate the Participant’s liability for Tax-Related Items.

 

13.         Non-competition and Non-solicitation.

 

13.1       In consideration of the SARs, the Participant agrees and covenants
not to:

 

(a)           contribute his or her knowledge, directly or indirectly, in whole
or in part, as an employee, officer, owner, manager, advisor, consultant, agent,
partner, director, shareholder, volunteer, intern or in any other similar
capacity to an entity engaged in the same or similar business as the Company and
its Affiliates, including those engaged in the business of Infrastructure
Mapping or Software Development for a period of 36 months following the
Participant’s termination of Continuous Service;

 

(b)          directly or indirectly, solicit, hire, recruit, attempt to hire or
recruit, or induce the termination of employment of any employee of the Company
or its Affiliates for 36 months following the Participant’s termination of
Continuous Service; or

 

(c)           directly or indirectly, solicit, contact (including, but not
limited to, e-mail, regular mail, express mail, telephone, fax, and instant
message), attempt to contact or meet with the current, former, or prospective
customers of the Company or any of its Affiliates for purposes of offering or
accepting goods or services similar to or competitive with those offered by the
Company or any of its Affiliates for a period of 36 months following the
Participant’s termination of Continuous Service.

 

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13.2       In the event of a breach or threatened breach of any of the covenants
contained in Section 13.1:

 

(a)           any unvested SARs shall be forfeited effective as of the date of
such breach, unless sooner terminated by operation of another term or condition
of this Agreement or the Plan; and

 

(b)           the Participant hereby consents and agrees that the Company shall
be entitled to seek, in addition to other available remedies, a temporary or
permanent injunction or other equitable relief against such breach or threatened
breach from any court of competent jurisdiction, without the necessity of
showing any actual damages or that money damages would not afford an adequate
remedy, and without the necessity of posting any bond or other security. The
aforementioned equitable relief shall be in addition to, not in lieu of, legal
remedies, monetary damages or other available forms of relief.

 

14.         Compliance with Law.   The exercise of the SARs shall be subject to
compliance by the Company and the Participant with all Applicable Laws,
including the requirements of any stock exchange on which the Company’s shares
of Common Stock may be listed. The Participant may not exercise the SARs if such
exercise would violate any applicable Federal or state securities laws or other
laws or regulations. The Participant understands that the Company is under no
obligation to register the shares of Common Stock with the Securities and
Exchange Commission, any state securities commission or any stock exchange to
effect such compliance.

 

15.         Notices.   Any notice required to be delivered to the Company under
this Agreement shall be in writing and addressed to the Chief Financial Officer
of the Company at the Company’s principal corporate offices. Any notice required
to be delivered to the Participant under this Agreement shall be in writing and
addressed to the Participant at the Participant’s address as shown in the
records of the Company. Either party may designate another address in writing
(or by such other method approved by the Company) from time to time.

 

16.         Governing Law.   This Agreement will be construed and interpreted in
accordance with the laws of the State of Nevada without regard to conflict of
law principles.

 

17.         Interpretation.   Any dispute regarding the interpretation of this
Agreement shall be submitted by the Participant or the Company to the Committee
for review. The resolution of such dispute by the Committee shall be final and
binding on the Participant and the Company.

 

18.         SARs Subject to Plan.   This Agreement is subject to the Plan as
approved by the Company’s shareholders. The terms and provisions of the Plan as
it may be amended from time to time are hereby incorporated herein by reference.
In the event of a conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and provisions of the Plan
will govern and prevail.

 

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19.         Successors and Assigns.   The Company may assign any of its rights
under this Agreement. This Agreement will be binding upon and inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement will be binding upon
the Participant and the Participant’s beneficiaries, executors, administrators
and the person(s) to whom the SARs may be transferred by will or the laws of
descent or distribution.

 

20.         Severability.   The invalidity or unenforceability of any provision
of the Plan or this Agreement shall not affect the validity or enforceability of
any other provision of the Plan or this Agreement, and each provision of the
Plan and this Agreement shall be severable and enforceable to the extent
permitted by law.

 

21.         Discretionary Nature of Plan.   The Plan is discretionary and may be
amended, cancelled or terminated by the Company at any time, in its discretion.
The grant of the SARs in this Agreement does not create any contractual right or
other right to receive any SARs or other Awards in the future. Future Awards, if
any, will be at the sole discretion of the Company. Any amendment, modification,
or termination of the Plan shall not constitute a change or impairment of the
terms and conditions of the Participant’s employment with the Company.

 

22.         Amendment.   The Committee has the right to amend, alter, suspend,
discontinue or cancel the SAR, prospectively or retroactively; provided, that,
no such amendment shall adversely affect the Participant’s material rights under
this Agreement without the Participant’s consent.

 

23.         No Impact on Other Benefits.   The value of the Participant’s SARs
is not part of his or her normal or expected compensation for purposes of
calculating any severance, retirement, welfare, insurance or similar employee
benefit.

 

24.         Counterparts.   This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which together will constitute
one and the same instrument. Counterpart signature pages to this Agreement
transmitted by facsimile transmission, by electronic mail in portable document
format (.pdf), or by any other electronic means intended to preserve the
original graphic and pictorial appearance of a document, will have the same
effect as physical delivery of the paper document bearing an original signature.

 

25.         Acceptance.   The Participant hereby acknowledges receipt of a copy
of the Plan and this Agreement. The Participant has read and understands the
terms and provisions thereof, and accepts the SARs subject to all of the terms
and conditions of the Plan and this Agreement. The Participant acknowledges that
there may be adverse tax consequences upon exercise of the SARs and that the
Participant should consult a tax advisor prior to such exercise.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

  GEOSPATIAL CORPORATION       By: /s/ Mark A. Smith   Name: Mark A. Smith  
Title: CEO

 

  Troy G. Taggart       By: /s/ Troy G. Taggart   Name: Troy G. Taggart