Unassociated Document


    EXHIBIT
      10.8

     

    EMPLOYEE
      RESTRICTED STOCK GRANT AGREEMENT

    


     

    This
      Restricted Stock Purchase Agreement dated as of August 4, 2006 (this
“Agreement”)
      is
      made by and between Technest Holdings, Inc., a Nevada corporation (including,
      as
      context requires, its subsidiaries the “Company”),
      and
      Joseph P. Mackin (the “Grantee”).

     

    1. Definitions.
      As used
      in this Agreement, the following terms shall have the following
      meanings:

     

    Cause:
      The
      Executive has (i) willfully or recklessly breached the provisions of the
      Employee Proprietary Information and Non-Competition Agreement between Grantee
      and the Company, in any material respect; (ii) engaged in willful misconduct
      which has resulted in material financial harm to the Company; (iii) committed
      fraud or embezzlement in connection with the Company’s business; or (iv) been
      convicted or has pleaded nolo contendere to a felony or a crime of moral
      turpitude.

     

    Qualified
      Sale:
      The
      sale of all or substantially all of assets or issued and outstanding capital
      stock of the Company, or merger or consolidation involving the Company in which
      stockholders of the Company immediately before such merger or consolidation
      do
      not own immediately after such merger or consolidation capital stock or other
      equity interests of surviving corporation or entity representing more than
      fifty
      percent in voting power of capital stock or other equity interests of such
      surviving corporation or entity outstanding immediately after such merger or
      consolidation.

     

    Service:
      Service
      as an employee, officer or director of, or a consultant or advisor to, the
      Company or its successors.

     

    Shares:
      The
      shares of Common Stock issued to Grantee hereunder and any other securities
      of
      the Company which may be issued in exchange for or in respect of such shares
      of
      Common Stock, whether by way of stock split, stock dividend, combination of
      shares, reclassification, recapitalization, reorganization or any other
      means.

     

    Unvested
      Shares:
      Any
      Shares that are not Vested Shares.

     

    Vested:
      Released from the Company’s Forfeiture Right (as defined in Section
      5(a)).

     

    Vested
      Shares:
      Any
      Shares that have vested in accordance with Section 5(b).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    2. Grant
      of Shares.
      The
      Company hereby grants to Grantee, and Grantee hereby accepts from the Company,
      that number of shares of the Company’s common stock, $0.001 par value per share
      (“Common
      Stock”),
      that
      equals $82,500 (which is twenty-five percent of Grantee’s assumed remaining debt
      with the Company1 )
      divided
      by the closing price of the Company’s Common Stock on the closing date of the
      Bank Financing (as defined below). After the date hereof, the exact number
      of
      shares granted pursuant to this Agreement shall be set forth in Schedule A,
      which shall be deemed to be part of this Agreement. Grantee and the Company
      hereby agree that such shares are granted as consideration for the Grantee
      agreeing to subordinate Grantee’s promissory note dated June 29, 2004 in
      connection with the Company’s bank financing with Silicon Valley Bank (the
“Bank
      Financing”).

     

    3. Representations
      of Grantee.
      Grantee
      understands that the Shares are not registered under the Securities Act of
      1933,
      as amended (the “Act”),
      and
      represents to the Company, and agrees that the Company is entitled to rely
      on
      such representations, as follows: 

     

    (a) Grantee
      understands that the Shares have not been registered under the Act, or
      registered or qualified under the securities or “Blue Sky” laws of any
      jurisdiction, and are being sold pursuant to exemptions contained in the Act
      and
      exemptions contained in other applicable securities or “Blue Sky” laws. Grantee
      understands further that the Company’s reliance on these exemptions is based in
      part on the representations made by Grantee in the Agreement. In this
      connection, Grantee represents and warrants that the offer and sale of the
      Shares were made solely in Virginia.

     

    (b) Grantee
      is acquiring the Shares for Grantee’s own account for investment, and not for,
      with a view to, or in connection with the resale or distribution thereof.
      Grantee has no present intention to sell, hypothecate, distribute or otherwise
      transfer the Shares or any portion thereof or any interest therein.


     

    (c) Grantee
      understands that the Shares will constitute “restricted securities” within the
      meaning of Rule 144 promulgated under the Act and that, as such, the Shares
      must
      be held indefinitely unless they are subsequently registered under the Act
      or
      unless an exemption from the registration requirements thereof is available.
      

     

    (d) In
      connection with Grantee’s acquisition of the Shares, Grantee accepts the
      condition that the Company may maintain “stop transfer” orders with respect to
      the Shares and that each certificate or other document evidencing the Shares
      will bear conspicuous legends in substantially the form set forth in Section
      7
      of this Agreement. 

     

    (e) Grantee
      has obtained all financial or legal advice as Grantee deems necessary with
      respect to Grantee’s acquisition of the Shares. Grantee has fully investigated
      the Company and its business and financial condition, to include a review of
      the
      Company’s pubic filings with the Securities and Exchange Commission, and has
      knowledge of the Company’s current activities. 

     

     

    
      

      
        1
          The
          amount of remaining debt with the Company assumes that a June 2006 principal
          payment of $305,620.47 was made, when, in fact, it was deferred until July
          2007.

        

          
            
               

            

            
              2

              
                

              

            

            
               

            

          

        

         

      

    

    4. Restrictions
      on Transfer.
      The
      following restrictions on transfer of the Shares shall apply:

     

    (a) Securities
      Laws.
      Except
      for the forfeiture of Unvested Shares to the Company as contemplated by Section
      5, no Shares, nor any interest therein, may be sold, assigned, pledged or
      otherwise transferred at any time or under any circumstances unless the Shares
      proposed to be transferred have been registered under the Act and qualified
      under applicable state securities laws, or (ii) the Company has received, or
      agreed to waive, an opinion of counsel acceptable to the Company to the effect
      that such transfer may be effected without registration under the Act or
      qualification under the securities laws of relevant states and the proposed
      transferee has made such representations and agreements as the Company shall
      require to assure compliance with the Act and such laws.

     

    (b) Unvested
      Shares.
      Except
      for forfeitures of Unvested Shares to the Company as contemplated by Section
      5,
      no Shares, nor any interest therein, may be sold, assigned, pledged or otherwise
      transferred until such Shares shall have Vested as defined in Section
      5.

     

    (c) Remedies.
      No
      sale, assignment, pledge or other transfer of Shares shall be effective or
      given
      effect on the books of the Company unless all of the applicable provisions
      of
      this Section 4 have been duly complied with. In addition to any other legal
      or
      equitable remedies which it may have, the Company may enforce its rights by
      actions for specific performance (to the extent permitted by law) and may refuse
      to recognize any transferee as one of its stockholders for any purpose,
      including, without limitation, for purposes of dividend and voting rights,
      until
      all applicable provisions hereof have been complied with.

     

    
      
        5.  Forfeiture
          of Unvested Shares. 

      

    

     

    (a) Forfeiture
      upon Termination.
      In the
      event of the termination of Grantee’s Service by Grantee voluntarily (other than
      through a planned retirement which the Company has been already notified of)
      or
      the termination of Grantee’s Service by the Company for Cause, upon the date of
      such termination (the “Termination
      Date”)
      all
      the Unvested Shares shall be forfeited to the Company. As a result of any
      forfeiture of Unvested Shares pursuant to this Section 5(a), the Company shall
      become the legal and beneficial owner of the Unvested Shares being forfeited
      and
      shall have all rights and interest therein or related thereto, and the Company
      shall have the right to transfer to its own name the number of Unvested Shares
      being forfeited to the Company, without further action by Grantee.

     

    (b) Vesting.
      

     

    (i) The
      Shares will become vested on the 18-month anniversary of the closing date of
      the
      Bank Financing, provided,
      however, that the vesting of Shares on any such vesting date shall be
      conditioned upon Grantee’s continuing Service with the Company from the date
      hereof through such vesting date in accordance with Section 5 (a).

     

    (ii) Notwithstanding
      Section 5(b)(i), all Shares shall be deemed to have vested immediately prior
      to
      the consummation of a Qualified Sale. 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    


    6. Custody
      of Certificates.
      In
      order to facilitate the exercise of Section 5(a), the Company or its counsel
      shall hold all certificates representing Unvested Shares, together with an
      adequate number of undated and otherwise blank stock powers executed by Grantee.
      The Company shall have the right to cause transfers of Unvested Shares to be
      effected pursuant to Section 5. After any Shares become Vested Shares, the
      Company shall, upon request of Grantee, deliver to Grantee a certificate or
      certificates representing such Vested Shares. 

     

    7. Legends.
      Each
      certificate representing Shares shall prominently bear legends in substantially
      the following forms, to the extent applicable:

     

    These
      securities have not been registered under the Securities Act of 1933. They
      may
      not be sold, offered for sale, pledged or hypothecated in the absence of a
      registration statement in effect with respect to the securities under such
      Act
      or an opinion of counsel satisfactory to the Company that such registration
      is
      not required.

     

    The
      Company is authorized to issue more than one class or series of stock. The
      powers, designations, preferences and relative participating, optional or other
      special rights, and the qualifications, limitations or restrictions of such
      preferences and/or rights of each class of stock or series of any class set
      forth in the Articles of Incorporation of the Company. The Company will furnish
      a copy of the Certificate of Incorporation of the Company to the holder of
      this
      certificate without charge upon request.

     

    The
      securities represented by this certificate are subject to restrictions on
      transfer and forfeiture rights pursuant to the terms of a Restricted Stock
      Grant
      Agreement, as amended from time to time, between the owner of this certificate
      and the Company. The Company will furnish a copy of this agreement to the holder
      hereof without charge upon written request.

     

    8. Miscellaneous.

     

    (a) Entire
      Agreement.
      This
      Agreement in conjunction with the Employment Agreement constitute the entire
      agreement between the parties with respect to the subject matter hereof, and
      supersedes all prior agreements, negotiations, representations and proposals,
      written or oral, relating to such subject matter.

     

    (b) Amendments.
      Neither
      this Agreement nor any provision hereof may be changed or modified except by
      an
      agreement in writing executed by Grantee and on behalf of the
      Company.

     

    (c) Binding
      Effect of the Agreement.
      This
      Agreement shall inure to the benefit of, and be binding upon, the Company,
      Grantee and their respective estates, heirs, executors, transferees, successors,
      assigns and legal representatives. 

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    


    (d) Provisions
      Severable.
      In the
      event that any provision of this Agreement shall be determined to be invalid,
      illegal or otherwise unenforceable by any court of competent jurisdiction,
      the
      validity, legality and enforceability of the other provisions of this Agreement
      shall not be affected thereby. Any invalid, illegal or unenforceable provision
      of this Agreement shall be severed, and after any such severance, all other
      provisions hereof shall remain in full force and effect.

     

    (e) Notices.
      All
      notices under this Agreement shall be effective (i) upon personal or facsimile
      delivery, (ii) two business days after deposit in the United States mail as
      registered or certified mail postage fully prepaid, or (iii) one business day
      after pickup by any overnight commercial courier service, in each case sent
      or
      addressed to the Company at its principal office and to Grantee at his record
      address as carried in the stock records of the Company or at such other address
      as he may from time to time designate in writing to the Company.

     

    (f)  Construction.
      A
      reference to a Section shall mean a Section of this Agreement unless otherwise
      expressly stated. The titles and headings herein are for reference purposes
      only
      and shall not in any manner limit the construction of this Agreement which
      shall
      be considered as a whole. The words “include,” “includes” and “including” when
      used herein shall be deemed in each case to be followed by the words “without
      limitation.” Whenever the context may require, any pronouns used herein shall
      include the corresponding masculine, feminine or neuter forms, and the singular
      form of names and pronouns shall include the plural and vice-versa.

     

    (g) No
      Employment Agreement.
      This
      Agreement shall not be construed as an agreement by the Company to employ
      Grantee, nor is the Company obligated to employ Grantee by reason of this
      Agreement or the issuance of the Shares to Grantee.

     

    (h) Section
      83(b) Election.
      Grantee
      will furnish to the Company a copy of any election made by Grantee under Section
      83(b) of the Internal Revenue Code of 1986, as amended, with respect to his
      acquisition of the Shares.

     

    (i) Applicable
      Law.
      This
      Agreement shall be construed and enforced in accordance with the laws of The
      Commonwealth of Virginia, without regard to its principles of conflicts of
      laws.
      Grantee consents to jurisdiction and venue in any state or federal court in
      The
      Commonwealth of Virginia for the purposes of any action relating to or arising
      out of this Agreement or any breach or alleged breach hereof, and to service
      of
      process in any such action by certified or registered mail, return receipt
      requested.

     

    (j) Disposition
      of Shares; Purchase by Nominee or Designee.
      Any
      Shares that the Company elects to purchase hereunder may be disposed of by
      it in
      such manner as it deems appropriate with or without restrictions on the transfer
      thereof, and the Company may require their transfer to a nominee or designee
      as
      part of any purchase of the Shares from Grantee.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    


    (k) Withholding
      Taxes.
      Grantee
      acknowledges and agrees that the Company has the right to deduct from payments
      of any kind otherwise due to Grantee any federal, state or local taxes of any
      kind required by law to be withheld with respect to the granting and vesting
      of
      the Shares to Grantee. Grantee agrees that he shall, no later than the date
      as
      of which the value of any portion of the Shares first becomes includable in
      the
      gross income of the Grantee for Federal income tax purposes, pay to the Company,
      or make arrangements satisfactory to the Company regarding payment of any
      Federal, state, local and/or payroll taxes of any kind required by law to be
      withheld with respect such income. The Company and its affiliates shall, to
      the
      extent permitted by law, have the right to deduct any such taxes from any
      payment of any kind otherwise due to the participant.

    


    (l) Arbitration.
      Any
      dispute or controversy arising in connection with this Agreement shall be
      determined and settled by arbitration in Boston, Massachusetts by a panel of
      three members who shall be selected, and such arbitration shall be conducted,
      in
      accordance with the commercial arbitration rules of the American Arbitration
      Association. Any award rendered therein shall be final and binding upon the
      parties hereto and their legal representatives and judgment upon any such award
      may be entered in any court having jurisdiction thereof. Each party shall bear
      its own expenses, including fees and disbursements of its attorneys,
      accountants, and financial experts, and the parties shall each pay 50% of all
      arbitration fees and expenses of the arbitrators.

    


    (j) Pursuant
      to Plan.
      This
      grant of Restricted Stock shall be subject in every respect to the provisions
      of
      the Company’s 2006 Stock Award Plan (the “Plan”),
      as
      amended from time to time, which is incorporated herein by reference and made
      a
      part hereof. The Grantee hereby accepts this grant of Restricted Stock subject
      to all the terms and provisions of the Plan and agrees that (i) in the event
      of
      any conflict between the terms hereof and those of the Plan, the latter shall
      prevail, and (ii) all decisions under and interpretations of the Plan by the
      Board of Directors of the Company or the Committee, as defined in the Plan,
      shall be final, binding and conclusive upon the Grantee and his heirs and legal
      representatives.


    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    


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

     

    Technest
      Holdings, Inc. 

     

    By:
      /s/
      Gino
      Pereira                               
  

    Name:
      Gino
      Pereira                                
  

    Title:
      Chief
      Financial
      Officer               
 

     

     

    GRANTEE:

     

     

    /s/
      Joseph P.
      Mackin                              

    Joseph
      P.
      Mackin

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    


    STOCK
      POWER

    ([____________])

     

     

    FOR
      VALUE
      RECEIVED, [____________] hereby sells, assigns and transfers to Technest
      Holdings, Inc., a Nevada corporation (the “Company”), a total of ______________
      shares of the Common Stock of the Company standing in his name on the books
      of
      the Company represented by stock certificate number ___ to be delivered
      herewith, and does hereby irrevocably constitute and appoint
      ______________________ as attorney to transfer said shares on the books of
      the
      Company with full power of substitution in the premises.

     

     

    Dated:
      ___________________

     

    ______________________________

    [____________]

     

    


    In
      the
      Presence of:

     

    _______________________________

    Name:

    


     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    


    SCHEDULE
      A

    


    Number
      of
      Shares of Common Stock: 23,913

     

     

    


    


    
      
        9