mstf10_4.htm


    Exhibit 10.4

     

     

    
      	
              Notice
                of Grant of Restricted Stock Award

            	
               

            	
              Monarch
                Staffing, Inc.

            
	
              and
                Award Agreement

            	
               

            	
              Tax
                ID:  88-0474056

            
	
               

            	
               

            	
              30950
                Rancho Viejo Rd #120

            
	
               

            	
               

            	
              San
                Juan Capistrano, CA  92675

            
	
               

            	
               

            	
               

            
	
              Name:  Matthew
                Szot

            	
               

            	
              Award
                Number:

            
	
              Address:  7013
                Cattail Place

            	
               

            	
              Plan: 
                2005 Stock Incentive Plan

            
	
              City,
                State, Zip:  Carlsbad, CA 92011

            	
               

            	
              Tax
                ID: ###-##-####

            


    

     

     

    Effective
      July 1, 2007 (the “Date of Grant”), you have been granted an award (the
“Award”) of 207,083 shares of common stock (the “Shares”) of Monarch
      Staffing, Inc. (the “Company”):

     

    These
      Shares are restricted until the Vesting Date(s) shown
      below.                  
..

     

    The
      Award
      will vest in increments on the date(s) shown (the “Vesting Dates”), unless
      a Termination of Service of Participant shall have occurred on or prior to
      such
      Vesting Date.

     

    
      	
              Shares

            	
               

            	
              Full Vest

            	
               

            
	
              All
                Shares

            	
               

            	
              June
                30, 2008

            	
               

            
	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            


    

     

     

    By
      your signature and the Company’s signature below, you and the Company agree that
      this Award is granted under and governed by the terms and conditions of the
      Company’s 2005 Stock Incentive Plan and the Award Agreement, all of which are
      attached and made a part of this document.

     

    
      	 	
               

            	
               

            
	
              Keith
                Moore

              Monarch
                Staffing, Inc.

            	
               

            	
              Date

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
              Matthew
                Szot

            	
               

            	
              Date

            


    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    MONARCH
      STAFFING, INC.

     

    RESTRICTED
      STOCK AWARD AGREEMENT

     

    Monarch
      Staffing, Inc. (the “Company”), pursuant to its 2005 Stock Incentive Plan (the
“Plan”), has awarded to Participant Shares of Restricted Stock.

     

    Defined
      terms not explicitly defined in this agreement shall have the same definitions
      as in the Plan or in the Notice of Grant of Restricted Stock and Award Agreement
      (“Notice of Grant”), to which this agreement is attached.

     

    The
      details of your Award are as follows:

     

    1.               
      TOTAL NUMBER OF SHARES SUBJECT TO THIS AWARD. The total number of
      Shares subject to this Award is set forth in the Notice of Grant.

     

    2.               
      FORFEITURE RESTRICTION. Subject to the terms of Section 3(a), in
      the event of Participant’s Termination of Service for any or no reason
      (including death or Disability) before the respective Vesting Dates (as set
      forth in the Notice of Grant), Participant shall forfeit the then Unreleased
      Shares (defined below) to the Company. Upon such forfeiture, the Company shall
      become the legal and beneficial owner of the Shares being forfeited and all
      rights and interests therein or relating thereto, and the Company shall have
      the
      right to retain and transfer to its own name the number of Shares being
      forfeited.

     

    3.               
      RELEASE OF SHARES FROM FORFEITURE RESTRICTION.

     

    (a)          
      Subject to the limitations contained herein, the Shares will vest (be released)
      as set forth in the Notice of Grant until either (i) the Shares become
      fully vested or (ii) a Termination of Service occurs with respect to
      Participant for any reason. Notwithstanding the foregoing, upon the occurrence
      of a Change in Control, all then Unreleased Shares shall be released from the
      forfeiture restriction. (The period beginning on the date of this Agreement
      and
      ending on each respective Vesting Date shall be referred to as the “Period of
      Restriction”).

     

    (b)          
      Until the Shares have been released from the forfeiture restriction, they
      may be referred to herein as “Unreleased Shares.”

     

    (c)          
      The Unreleased Shares may bear the following forfeiture restrictive
      legend:

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “THE
      SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FORFEITURE
      IN
      FAVOR OF THE COMPANY, AS SET FORTH IN A STOCK AGREEMENT BETWEEN THE ISSUER
      AND
      THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
      PRINCIPAL OFFICE OF THE ISSUER.”

     

    (d)          
      The Share certificates representing the Shares, when released from the
      forfeiture restriction, shall be delivered to Participant pursuant to
      Section 4 of this Agreement.

     

    4.               
      ISSUANCE OF SHARE CERTIFICATES.

     

    (a)          
      The certificates evidencing the Shares shall be held in escrow by the secretary
      of the Company until the end of the respective Period of Restrictions, at which
      time it shall be released to Participant by the Company in accordance with
      the
      provisions hereof.

     

    (b)          
      At the end of each Period of Restriction, the Company shall cause the
      appropriate certificate representing the Shares (then released from the
      forfeiture restriction) to be delivered to Participant; provided, however that
      prior to such delivery Participant shall remit to the Company an amount
      sufficient to satisfy any federal, state and/or local withholding tax
      requirements in connection with the Shares then to be released.

     

    (c)          
      Subject to the terms hereof, Participant shall have all the rights of a
      stockholder with respect to such Shares before the Shares are released from
      the
      forfeiture restriction, including without limitation, the right to vote the
      Shares and receive any cash dividends declared thereon. In the event of any
      dividend or other distribution (whether in the form of cash, Shares, other
      securities, or other property), recapitalization, stock split, reverse stock
      split, reorganization, merger, consolidation, split-up, spin-off, combination,
      repurchase, or exchange of Shares or other securities of the Company, or other
      change in the corporate structure of the Company affecting the Shares, the
      Unreleased Shares will be increased, reduced or otherwise changed, and by virtue
      of any such change Participant will in his or her capacity as owner of
      Unreleased Shares be entitled to new or additional or different shares of stock,
      cash or securities (other than rights or warrants to purchase securities);
      such
      new or additional or different shares, cash or securities will thereupon be
      considered to be Unreleased Shares and will be subject to all of the conditions
      and restrictions which were applicable to the Unreleased Shares pursuant to
      this
      Agreement. If Participant receives rights or warrants with respect to any
      Unreleased Shares, such rights or warrants may be held or exercised by
      Participant, provided that until such exercise any such rights or warrants
      and
      after such exercise any shares or other securities acquired by the exercise
      of
      such rights or warrants will be considered to be Unreleased Shares and will
      be
      subject to all of the conditions and restrictions which were applicable to
      the
      Unreleased Shares pursuant to this Agreement. The Company’s Board of Directors
      in its absolute discretion at any time may accelerate the vesting of all or
      any portion of such new or additional shares of stock, cash or securities,
      rights or warrants to purchase securities or shares or other securities acquired
      by the exercise of such rights or

     

    5.               
      ADJUSTMENTS. All references to the number of Shares in this Agreement
      shall be appropriately adjusted to reflect any dividend or other distribution
      (whether in the form of cash, Shares, other securities, or other property),
      recapitalization, stock split, reverse stock split, reorganization, merger,
      consolidation, split-up, spin-off, combination, repurchase, or exchange of
      Shares or other securities of the Company, or other change in the corporate
      structure of the Company affecting the Shares occurs after the date of this
      Agreement.

     

    6.               
      PARTICIPANT’S REPRESENTATIONS.

     

    (a)          
      Tax Consequences. Participant has reviewed with Participant’s
      own tax advisors the federal, state, local and foreign tax consequences of
      this
      investment and the transactions contemplated by this Agreement. Participant
      is
      relying solely on such advisors and not on any statements or representations
      of
      the Company or any of its agents. Participant understands that Participant
      (and
      not the Company) shall be responsible for Participant’s own tax liability that
      may arise as a result of this investment or the transactions contemplated
      by this Agreement.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)          
      Tax Withholding. Notwithstanding any contrary provision of this
      Agreement, no certificate representing the Shares of Restricted Stock
      may be released from the escrow established pursuant to Section 4,
      unless and until satisfactory arrangements (as determined by the Administrator)
      will have been made by Participant with respect to the payment of income,
      employment and other taxes which the Company determines must be withheld with
      respect to such Shares. To the extent determined appropriate by the Company
      in
      its discretion, it shall have the right (but not the obligation) to satisfy
      any
      tax withholding obligations by reducing the number of Shares otherwise
      deliverable to Participant. If Participant fails to make satisfactory
      arrangements for the payment of any required tax withholding obligations
      hereunder at the time any applicable Shares otherwise are scheduled to vest,
      Participant will permanently forfeit such Shares and the Shares will be returned
      to the Company at no cost to the Company.

     

    7.               
      AWARD NOT A SERVICE CONTRACT. This Award is not a guarantee of
      continued service and nothing in this Award shall be deemed to create in any
      way
      whatsoever any obligation on Participant’s part to continue in the service
      of the Company, or of the Company to continue Participant’s service with the
      Company. In addition, nothing in this Award shall obligate the Company or any
      Affiliate, or their respective stockholders, Board of Directors, officers or
      employees to continue any relationship which Participant might have as a service
      provider or otherwise for the Company or Affiliate.

     

    8.               
      GOVERNING PLAN DOCUMENT. This Award is subject to all the provisions of
      the Plan, a copy of which is attached hereto and its provisions are hereby
      made
      a part of this Award, including without limitation the provisions of
      Section 7 of the Plan relating to Restricted Stock provisions, and is
      further subject to all interpretations, amendments, rules and regulations
      which may from time to time be promulgated and adopted pursuant to the
      Plan. In the event of any conflict between the provisions of this Award and
      those of the Plan, the provisions of the Plan shall control.

     

    9.               
      ADDITIONAL CONDITIONS TO RELEASE FROM ESCROW. The Company will
      not be required to issue any certificate or certificates for Shares hereunder
      or
      release such Shares from the escrow established pursuant to Section 4 prior
      to fulfillment of all the following conditions: (a) the admission of such
      Shares to listing on all stock exchanges on which such class of stock is
      then listed; (b) the completion of any registration or other qualification
      of such Shares under any state or federal law or under the rulings or
      regulations of the Securities and Exchange Commission or any other governmental
      regulatory body, which the Company will, in its absolute discretion, deem
      necessary or advisable; (c) the obtaining of any approval or other
      clearance from any state or federal governmental agency, which the Company
      will,
      in its absolute discretion, determine to be necessary or advisable; and
      (d) the lapse of such reasonable period of time following the date of grant
      of the Shares as the Company may establish from time to time for reasons of
      administrative convenience.

    


    10.               
      GENERAL PROVISIONS.

     

    (a)          
      This Agreement shall be governed by the laws of the State of Nevada. This
      Agreement and the Plan represent the entire agreement between the parties with
      respect to the receipt of the Shares by Participant. Modifications to this
      Agreement or the Plan can be made only in an express written contract executed
      by a duly authorized officer of the Company. Notwithstanding anything to the
      contrary in the Plan or this Agreement, the Company reserves the right to revise
      this Agreement as it deems necessary or advisable, in its sole discretion and
      without the consent of Participant, to comply with Section 409A of the
      Internal Revenue Code of 1986, as amended (the “Code”) or to otherwise avoid
      imposition of any additional tax or income recognition under Section 409A
      of the Code in connection to this Award.

     

    (b)          
      The rights and benefits of the Company under this Agreement shall be
      transferable to any one or more persons or entities, and all covenants and
      agreements hereunder shall inure to the benefit of, and be enforceable by the
      Company’s successors and assigns. The rights and obligations of Participant
      under this Agreement may only be assigned with the prior written consent of
      the Company.

     

    (c)          
      Either party’s failure to enforce any provision or provisions of this Agreement
      shall not in any way be construed as a waiver of any such provision or
      provisions, nor prevent that party from thereafter enforcing each and every
      other provision of this Agreement. The rights granted both parties herein are
      cumulative and shall not constitute a waiver of either party’s right to assert
      all other legal remedies available to it under the circumstances.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)          
      Participant agrees upon request to execute any further documents or instruments
      necessary or desirable to carry out the purposes or intent of this
      Agreement.

     

    By
      Participant’s signature on the Notice of Grant, Participant represents that this
      Agreement in its entirety has been reviewed, has had an opportunity to obtain
      the advice of counsel prior to executing this Agreement and fully understands
      all provisions of this Agreement.