Document:

EXHIBIT 10.1

 

COMMON
STOCK PURCHASE AGREEMENT

This
Common Stock Purchase Agreement (this “Agreement”) is dated as of May 23, 2017, between EVINE Live Inc., a Minnesota
corporation (the “Company”), and the purchasers identified on the signature page hereto (including each purchaser’s
successors and assigns, individually, a “Purchaser”, in the aggregate, the “Purchasers”).

 

Recitals

 

Subject
to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities
Act of 1933, as amended (the “Securities Act”), the Company desires to issue and sell to the Purchasers, and
the Purchasers desires to purchase from the Company, securities of the Company as more fully described in this Agreement. 

 

Terms
and Conditions

 

In
consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers agree as follows: 

 

ARTICLE
I

Definitions

 

1.1           Definitions.
In addition to the terms defined elsewhere in this Agreement: the following terms have the meanings set forth in this Section 1.1:

 

“Closing”
means the closing of the purchase and sale of the Shares pursuant to Section 2.1. 

 

“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and
(ii) the Company’s obligations to deliver the Shares, in each case, have been satisfied or waived, but in no event later
than the third Trading Day following the date hereof. 

 

“Commission”
means the United States Securities and Exchange Commission. 

 

“Common
Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed. 

 

“Material
Adverse Effect” means a material adverse effect on the Company’s business, financial position or operations. 

 

“Per
Share Purchase Price” equals [ • ], subject to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement
but on or prior to the Closing Date.

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 

 

    	Stock Purchase Agreement	 	Page 1

     

    

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened. 

 

“Prospectus”
means the final prospectus filed for the Registration Statement. 

 

“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with
the Commission and delivered by the Company to the Purchasers at the Closing. 

 

“Registration
Statement” means the effective registration statement with Commission File No. 333-203209 that registers the sale
of the Shares to the Purchasers. 

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 

 

“Shares”
means the shares of Common Stock issued or issuable to the Purchasers pursuant to this Agreement. 

 

“Subscription
Amount” means the aggregate amount to be paid for the Shares purchased hereunder as specified below each Purchaser’s
name on the Signature Page of this Agreement and next to the heading “Subscription Amount” in United States dollars
and in immediately available funds. 

 

“Trading
Day” means a day on which the principal Trading Market is open for trading. 

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange or the OTCQB Venture Marketplace (or any successors to any of the foregoing). 

 

“Transaction
Documents” means this Agreement and any other documents or agreements executed in connection with the transactions contemplated
hereunder. 

 

“Transfer
Agent” means Wells Fargo Shareowner Services, Post Office Box 64854, St. Paul, MN 55164-854, and any successor transfer
agent of the Company. 

 

ARTICLE
II

Purchase and Sale

 

2.1           Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers agree to purchase, up to the
Shares identified on the Signature Pages hereto. The Purchasers shall deliver to the Company, via wire transfer or a certified
check, immediately available funds equal to each Purchaser’s Subscription Amount as set forth on the Signature Page hereto
executed by the Purchasers and the Company shall deliver to the Purchasers the Shares as determined pursuant to Section 2.3(a),
and the Company and the Purchasers shall deliver the other items set forth in Section 2.3 deliverable at the Closing. Upon
satisfaction of the conditions set forth in Sections 2.3 and 2.4, the Closing shall occur at the offices of the Company, 6740 Shady
Oak Road, Eden Prairie, MN 55344, or such other location or by electronic exchange of documents, as the parties shall mutually
agree. There is no placement agent or underwriter for this offering. The Shares are being issued directly by the Company to the
Purchasers.

 

2.2           Prospectus.
Each Purchaser represents to the Company that it has received (or otherwise had made available to it by the filing by the
Company of an electronic version thereof with the Commission) the prospectus contained in the Registration Statement filed by the
Company with the Commission, if applicable, certain “free writing prospectuses” (as that term is defined in Rule 405
under the Securities Act), that have been or will be filed with the Commission and delivered to the Purchaser on or prior to the
date hereof (the “Issuer Free Writing Prospectus”), containing certain supplemental information regarding the
Shares, the terms of the Offering and the Company, and a prospectus supplement relating thereto. The Purchaser acknowledges that,
prior to the delivery of this Agreement by the Purchaser to the Company, the Purchaser will receive certain additional information
regarding the Offering, including pricing information. Such information may be provided to the Purchaser by any means permitted
under the Securities Act, including the Prospectus Supplement, a free writing prospectus and oral communications.

 

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2.3          Deliveries.

 

(a)          On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Purchasers the following: 

 

(i)          this
Agreement duly executed by the Company; 

 

(ii)         a
copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver via The Depository Trust Company
Deposit or Withdrawal at Custodian system Shares equal to each Purchaser’s Share Subscription Amount, designated on the Signature
Page as “Share Subscription Amount,” divided by the Per Share Purchase Price for Common Stock, registered in the name
of the respective Purchaser; and

 

(iii)        the
Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act). 

 

(b)          On
or prior to the Closing Date, the Purchasers shall deliver or cause to be delivered to the Company the following: 

 

(i)          this
Agreement duly executed by the Purchasers; and 

 

(ii)         each
Purchaser’s Subscription Amount by wire transfer to the account specified in writing by the Company. 

 

2.4          Closing
Conditions. 

 

(a)          The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met: 

 

(i)          all
obligations and agreements of the Purchasers required to be performed at or prior to the Closing Date shall have been performed;
and 

 

(ii)         the
delivery by the Purchasers of the items set forth in Section 2.3(b) of this Agreement. 

 

(b)          The
obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met: 

 

(i)          all
obligations and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed; 

 

(ii)         the
delivery by the Company of the items set forth in Section 2.3(a) of this Agreement; 

 

(iii)        there
shall have been no Material Adverse Effect with respect to the Company since the date hereof; and 

 

(iv)        from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, from the date hereof and at any time prior to the Closing Date, trading in securities generally
as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities
whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by
the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities
or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, makes it reasonably impracticable or inadvisable to purchase the Shares at the Closing. 

 

    	Stock Purchase Agreement	 	Page 3

     

    

 

ARTICLE
III

Miscellaneous

 

3.1           Termination.
This Agreement may be terminated by the Purchasers or by the Company by written notice to the other party if the Closing has not
been consummated on or before May 31, 2017; provided, however, that no such termination will affect the right of either party to
sue for any breach by the other party. 

 

3.2           Fees
and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if
any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance
of this Agreement. The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with
the delivery of any Shares to the Purchasers. 

 

3.3           Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus
Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede
all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been
merged into such documents, exhibits and schedules. 

 

3.4           Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and the Purchasers, or, in the case of a waiver, by the party against whom
enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder
in any manner impair the exercise of any such right. 

 

3.5           Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of
the Purchasers. Following the Closing, the Purchasers may assign any or all of its rights under this Agreement to any Person to
whom the Purchaser assigns or transfers any Shares, provided that such transferee agrees in writing to be bound, with respect to
the transferred Shares, by the provisions of the Transaction Documents that apply to the Purchasers.

 

3.6           No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns only, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 

 

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3.7           Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of Minnesota, without regard
to the principles of conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the County of Hennepin, Minnesota. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the County of Hennepin, Minnesota, for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any
suit, action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or that such court
is an improper or inconvenient venue for such suit, action or Proceeding. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or Proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either
party shall commence a suit, action or Proceeding to enforce any provisions of the Transaction Documents, then the prevailing party
in such suit, action or Proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other reasonable
costs and expenses incurred with the investigation, preparation and prosecution of such suit, action or Proceeding. 

 

3.8           Execution.
This Agreement may be executed by electronic signature and in counterparts, all of which when taken together shall be considered
one and the same agreement and this Agreement shall become effective when each party has delivered its signature to the other party.
In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data
file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed),
with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof. 

 

3.9           Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable. 

 

3.10         Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Purchasers
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages
would not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents
and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy
at law would be adequate. 

 

3.11         Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document
are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the
performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein
or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by
the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including, without
limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for
any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented
by its own separate legal counsel in its review and negotiation of the Transaction Documents. The Company has elected to provide
all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required
or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement
and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers
collectively and not between and among the Purchasers.

 

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3.12         Liquidated
Damages. The Company’s obligation to pay any amounts owing under the Transaction Documents is a continuing obligation
of the Company and shall not terminate until all unpaid amounts have been paid, notwithstanding the fact that the instrument or
security pursuant to which such amounts are due and payable shall have been canceled. 

 

3.13         Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement. 

 

3.14         WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY EITHER PARTY AGAINST THE OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVE FOREVER TRIAL BY JURY. 

 

[Signature
Pages Follow]

 

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IN
WITNESS WHEREOF, the parties hereto have caused this Common Stock Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated above. 

 

	EVINE Live Inc.	Address for Notice:
	 	 
	By:	 	6740 Shady Oak Road
	Name:	 	Eden Prairie, MN 55344
	Its:	 	 

 

    	Stock Purchase Agreement	 	Company Signature Page

     

    

 

IN
WITNESS WHEREOF, the undersigned has caused this Common Stock Purchase Agreement to be duly executed by an authorized signatory
as of the date first indicated above. 

 

	Name of Purchaser: 	 	 
	 	 	 
	Signature of Authorized Signatory of Purchaser:	 	 
	 	 	 
	Name of Authorized Signatory: 	 	 
	 	 	 
	Title of Authorized Signatory: 	 	 
	 	 	 
	Email Address of Authorized Signatory: 	 	 
	 	 	 
	Address for Notice to Purchaser: 	 	 
	 	 	 
	 	 	 
	 	 	 
	DTC Participant Account Name:	 	 
	 	 	 
	DTC Participant Account Number:	 	 
	 	 	 
	Subscription Amount: 	 	$
	 	 	 
	Shares: 	 	 
	 	 	 
	EIN Number: 	 	 

 

    	Stock Purchase Agreement	 	 Signature PageExhibit 10.6

 

2008 NON-EMPLOYEE DIRECTOR LONG-TERM INCENTIVE PLAN

Section 1.    Establishment and Purposes of the Plan.

(a)           Purpose.  The purposes of this ePlus inc. 2008 Non-Employee Director Long-Term Incentive Plan (the "Plan") are to attract, retain and compensate for service as members of the Board of Directors of ePlus inc. (the "Company") highly qualified individuals who are not current employees of the Company and to enable them to increase their ownership in the Company's Common Stock.  The Plan will be beneficial to the Company and its stockholders since it will allow these Directors to have a greater personal financial stake in the Company through the ownership of Common Stock, in addition to underscoring their common interest with stockholders in increasing the long-term value of the Common Stock.

(b)           Effective Date; Shareholder Approval.  The Plan is effective September 15, 2008, subject to the approval by the Company's shareholders.

Section 2.    Definitions.

As used herein, the following definitions shall apply:

"Affiliate" shall mean (i) any entity that, directly or through one or more intermediaries, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest, as determined by the Committee.

"Applicable Laws" means the requirements relating to the administration of equity plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Restricted Shares are, or will be, granted under the Plan.

"Board" means the Board of Directors of the Company.

"Change in Control" means the occurrence of any of the following events with respect to the Company:

(i) the consummation of any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of Common Stock immediately prior to the merger own more than fifty percent (50%) of the outstanding common stock of the surviving corporation immediately after the merger; or

(ii) the consummation of any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, other than to a subsidiary or affiliate; or

(iii) any action pursuant to which any person (as such term is defined in Section 13(d) of the Exchange Act), corporation or other entity shall become the "beneficial owner" (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of shares of capital stock entitled to vote generally for the election of directors of the Company ("Voting Securities") representing more than fifty (50%) percent of the combined voting power of the Company's then outstanding Voting Securities (calculated as provided in Rule 13d-3(d) in the case of rights to acquire any such securities); or

(iv) the individuals (x) who, as of the Effective Date, constitute the Board (the "Original Directors") and (y) who thereafter are elected to the Board and whose election, or nomination for election, to the Board was approved by a vote of a majority of the Original Directors then still in office (such Directors being called "Additional Original Directors") and (z) who thereafter are elected to the Board and whose election or nomination for election to the Board was approved by a vote of a majority of the Original Directors and Additional Original Directors then still in office, cease for any reason to constitute a majority of the members of the Board; or

 

(v) the dissolution or liquidation of the Company.

"Code" means the Internal Revenue Code of 1986, as amended.

"Committee" means a committee designated by the Board and composed of not less than two "Non-Employee Directors" as defined in Rule 16b-3 under the Exchange Act, or any successor rule or definition adopted by the Securities and Exchange Commission.

"Common Stock" means the common stock, par value $0.01 per share, of the Company.

"Director" means a member of the Board.

"Disability" means any illness or other physical or mental condition of a Participant that renders the Participant incapable of performing his or her customary and usual duties for the Company (with or without a reasonable accommodation as required by law) and that in the judgment of the Committee is permanent and continuous in nature. The Committee may establish any process or procedure it deems appropriate for determining whether a Participant has a "Disability".

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Fair Market Value" means, as of any date, the value of Common Stock determined as follows:

(i) if the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq Global Select Market, Nasdaq Global Market or The Nasdaq Capital Market of The Nasdaq Stock Market, the fair market value of a share of Common Stock shall be the closing sales price of a share of Common Stock as quoted on such exchange or system for such date (or the most recent trading day preceding such date if there were no trades on such date), as reported in The Wall Street Journal or such other source as the Committee deems reliable;

(ii) if the Common Stock is regularly quoted by a recognized securities dealer but is not listed in the manner contemplated by clause (i) above, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable; or

(iii) if neither clause (i) above nor clause (ii) above applies, the fair market value of a share of Common Stock shall be determined in good faith by the Committee based on the reasonable application of a reasonable valuation method that complies with Code Section 409A and Code Section 422 if and to the extent required.

"Outside Director" means any Director who, on the date such person is to receive a grant of Restricted Shares hereunder is not a current employee of the Company or any of the Company's subsidiaries.

"Participant" shall mean any Outside Director who holds a Restricted Stock Award granted or issued pursuant to the Plan.

"Plan" means this ePlus inc. 2008 Non-Employee Director Long-Term Incentive Plan.

"Restricted Shares" means Shares subject to a Restricted Stock Award.

"Restricted Stock Agreement" means any written agreement, contract, or other instrument or document, including an electronic communication, evidencing the terms and conditions of a Restricted Stock Award.

"Restricted Stock Award" means a grant of Restricted Shares pursuant to Section 7 of the Plan.

"Share" means a share of Common Stock, as adjusted in accordance with Section 9 of the Plan.

Section 3.    Stock Subject to the Plan.

Subject to the provisions of Section 9 of the Plan, the maximum aggregate number of Shares that may be issued as Restricted Shares under the Plan is five hundred thousand (500,000) Shares.  The Shares may be authorized, but unissued, or treasury Shares.  Restricted Shares that have been transferred back to the Company shall be available for future grants of Restricted Shares under the Plan.

Section 4.    Administration of the Plan.

(a)            Administration.  The Plan shall be administered by the Committee.  The Committee shall have the authority, in its discretion:

(i)             to determine the Fair Market Value of Common Stock;

(ii)            to approve forms of agreement for use under the Plan;

(iii)           to determine the number of Shares that may be issued as Restricted Shares and the terms and conditions of such Restricted Shares;

(iv)           to construe and interpret the terms of the Plan;

(v)            to prescribe, amend and rescind rules and regulations relating to the Plan;

(vi)           to allow Participants to satisfy withholding tax obligations by having the Company withhold from the shares of Common Stock to be issued upon vesting of Restricted Shares that number of Shares having a Fair Market Value equal to the amount required to be withheld, provided that withholding is calculated at the minimum statutory withholding level.  The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined.  All determinations to have Shares withheld for this purpose shall be made by the Committee in its discretion;

(vii)          to instruct a corporate officer to execute on behalf of the Company any instrument required to effect the grant of a Restricted Stock Award granted by the Committee; and

(viii)         to make all other determinations deemed necessary or advisable for administering the Plan.

(b)           Effect of Committee's Decision.  The Committee's decisions, determinations and interpretations shall be final and binding on all Participants and anyone else who may claim an interest in Restricted Shares.

Section 5.    Eligibility.

The only persons who shall be eligible to receive Restricted Stock Awards under the Plan shall be persons who, on the date such Awards are granted, are Outside Directors.

Section 6.    Term of the Plan.

No Restricted Stock Award may be granted under the Plan after September 15, 2018.

 

Section 7.    Grants of Restricted Stock Awards.

 

(a)           Initial Grant.  Each individual who first becomes an Outside Director on or after the date of the approval of this Plan by the stockholders of the Company shall, upon first qualifying as an Outside Director, automatically be granted a number of Restricted Shares, on the terms and conditions set forth in Section 8 below, having a Fair Market Value on the date of grant (determined without regard to the restrictions applicable thereto) equal to the product of the amount of cash compensation earned by an individual Outside Director during the twelve months immediately prior to his becoming an Outside Director multiplied by the quotient of the number of days until the next Annual Grant Date (as defined below) divided by 365; provided, however, that grants of Restricted Shares under this Plan shall not be made until a Form S-8 registration statement in respect of the Shares is filed with, and declared effective by, the Securities and Exchange Commission.

 

(b)            Annual Grant.  On September 25th of each year (the "Annual Grant Date"), beginning with September 25, 2008, or the next following business day if September 25th is not a business day, each Outside Director shall automatically be granted a number of Restricted Shares, on the terms and conditions set forth in Section 8 below, having a Fair Market Value on the date of grant (determined without regard to the restrictions applicable thereto) equal to the aggregate dollar amount of cash compensation earned by an individual Outside Director who served on the board  during the Company's entire fiscal year ended immediately prior to the respective Annual Grant Date; provided, however, that grants of Restricted Shares under this Plan shall not be made until a Form S-8 registration statement in respect of the Shares is filed with, and declared effective by, the Securities and Exchange Commission.        

 

(c)            Special Grant.  On the date which is two business days after the date that a Form S-8 registration statement in respect of the Shares is filed with, and declared effective by, the Securities and Exchange Commission, each Outside Director who was serving as an Outside Director on the day prior to the date of the approval of this Plan by the stockholders of the Company shall automatically be granted a number of Restricted Shares, on the terms and conditions set forth in Section 8 below, having a Fair Market Value on the date of grant (determined without regard to the restrictions applicable thereto) equal to thirty-five thousand dollars ($35,000).

 

(d)            Stock Fee Election.   An Outside Director may make an election (a "Stock Fee Election") to receive Restricted Shares in lieu of all or any part of the cash compensation payable to him or her for service on the Board for a calendar year.  Any Stock Fee Election and any change or revocation thereof shall be made by delivering written notice thereof to the Committee prior to the end of the calendar year preceding the calendar year of service for which it is to be effective.   Such Stock Fee Election shall remain in effect for each subsequent calendar year of service unless changed.  An Outside Director may not elect to change his or her Stock Fee Election for a calendar year after the last day of the calendar year preceding the calendar year of service for which the election is made.  Any Restricted Stock that relates to a Stock Fee Election shall be treated as a Restricted Stock Award for purposes of this Plan.  The number of shares shall be determined by dividing the cash compensation deferred for a calendar quarter of service by the Fair Market Value as of the first business day of the following calendar quarter, and each such first business day shall be considered the grant date of the Restricted Stock Award.

 

Section 8.    Terms of Restricted Stock Awards.

Except as provided herein, Restricted Shares shall be subject to restrictions ("Restrictions") prohibiting such Restricted Shares from being sold, transferred, assigned, pledged or otherwise encumbered or disposed of.  The Restrictions with respect to each award of Restricted Shares shall lapse as to one-half of such Restricted Shares on each of the one-year and second-year anniversary date of the grant of such award; provided, however, that the Restrictions with respect to such Restricted Shares shall lapse immediately in the event that (i) the Participant is nominated for a new term as an Outside Director but is not elected by stockholders of the Company, or (ii) the Participant ceases to be a member of the Board due to death, disability or mandatory retirement (if any). Notwithstanding the foregoing, the Restrictions with respect to all of a Participant's Restricted Shares shall lapse immediately prior to a Change in Control provided that the Participant is a member of the Board immediately prior to such Change in Control.

The Company shall issue, in the name of each Participant to whom Restricted Shares have been granted, stock certificates (in tangible or electronic form) representing the total number of Restricted Shares granted to such Participant as soon as reasonably practicable after the grant.  However, the Company or its transfer agent shall hold such certificates, properly endorsed for transfer, for the Participant's benefit until such time as the Restriction Period applicable to such Restricted Shares lapses.  Upon the expiration or termination of the Restricted Period, the restrictions applicable to the Restricted Shares shall lapse and a stock certificate for the number of Restricted Shares with respect to which the restrictions have lapsed shall be delivered, free of all such restrictions, to the Participant or his or her beneficiary or estate, as the case may be.  Except as described in the above paragraph, in the event that a Participant ceases to be a member of the Board before the applicable Restriction Period has expired or under circumstances in which the Restriction Period does not otherwise lapse, the Restricted Shares granted to such Participant shall thereupon be forfeited and transferred back to the Company.

 

During the Restriction Period, a Participant shall have the right to vote his or her Restricted Shares.  At the end of the Restriction Period, the Participant shall have the right to receive any cash dividends, with respect to such Restricted Shares, that were paid during the Restriction Period.  All distributions, if any, received by a Participant with respect to Restricted Shares as a result of any stock split, stock distribution, combination of shares, or other similar transaction shall be subject to the same restrictions as are applicable to the Restricted Shares to which such distributions relate.

Section 9.    Adjustments Upon Changes in Capitalization.

Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each outstanding Restricted Stock Award, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Restricted Stock Awards have yet been granted or which have been returned to the Plan upon cancellation or expiration of a Restricted Stock Award, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive.  Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to a Restricted Stock Award.

Section 10.    Grant Agreement.

Each grant of a Restricted Stock Award under the Plan will be evidenced by a Restricted Stock Agreement.  Such document will contain such provisions as the Committee may in its discretion deem advisable, provided that such provisions are not inconsistent with any of the provisions of the Plan.

Section 11.    Amendment and Termination of the Plan.

(a)           Amendment and Termination.  The Board may at any time amend, alter, suspend or terminate the Plan.

(b)           Shareholder Approval.  The Company shall obtain shareholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.

(c)           Effect of Amendment or Termination.  No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Committee, which agreement must be in writing and signed by the Participant and the Company.  Termination of the Plan shall not affect the Committee's ability to exercise the powers granted to it hereunder with respect to Restricted Shares granted under the Plan prior to the date of such termination.

Section 12.    Conditions Upon Issuance of Shares.

(a)           Legal Compliance.  Shares shall not be issued pursuant to a Restricted Stock Award unless the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.

(b)           Investment Representations.  As a condition to the issuance of Restricted Shares, the Company may require the Participant to represent and warrant at the time of any such issuance that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.  Not in limitation of any of the foregoing, in any such case referred to in the preceding sentence the Committee may also require the Participant to execute and deliver documents containing such representations (including the investment representations described in this Section 12(b) of the Plan), warranties and agreements as the Committee or counsel to the Company shall deem necessary or advisable to comply with any exemption from registration under the Securities Act of 1933, as amended, any applicable State securities laws, and any other applicable law, regulation or rule.

(c)           Additional Conditions.  The Committee shall have the authority to condition the grant of any Restricted Shares in such other manner that the Committee determines to be appropriate, provided that such condition is not inconsistent with the terms of the Plan.

Section 13.    Inability to Obtain Authority.

The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

Section 14.    Reservation of Shares.

The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

Section 15.    Stockholder Approval.

The Plan shall be subject to approval by the stockholders of the Company.  Such stockholder approval shall be obtained in the manner and to the degree required under Applicable Laws.

Section 16.    Withholding; Notice of Sale.

Each Participant shall, no later than the date as of which the value of a Restricted Stock Award or of any Shares or other amounts received thereunder first becomes includable in the gross income of the Participant for Federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Committee regarding payment of, any Federal, state, or local taxes of any kind required by law to be withheld with respect to such income.  The Company 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.  The Company's obligation to deliver stock certificates to any Participant is subject to and conditioned on any such tax obligations being satisfied by the Participant.  Subject to approval by the Committee, a Participant may elect to have the minimum required tax withholding obligation satisfied, in whole or in part, by (i) authorizing the Company to withhold from Shares to be issued pursuant to any Restricted Stock Award a number of Shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due, or (ii) transferring to the Company Shares owned by the Participant with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the minimum withholding amount due.

Section 17.      Code Section 83(b) Elections

Neither the Company, any Affiliate, nor the Committee shall have any responsibility in connection with a Participant's election, or attempt to elect, under Code section 83(b) to include the value of a Restricted Stock Award in the Participant's gross income for the year of payment.  Any Participant who makes a Code section 83(b) election with respect to any such Restricted Stock Award shall promptly notify the Committee of such election and provide the Committee with a copy thereof.

 

Section 18.       No Right to Continue as a Director

Neither this Plan, nor the granting of a Restricted Stock Award under this Plan, nor any other action taken pursuant to this Plan shall constitute or be evidence of any agreement or understanding, express or implied, that the Company will retain a director for any period of time, or at any particular rate of compensation.

Section 19.    Successors.

All obligations of the Company under the Plan with respect to Restricted Stock Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business, stock and/or assets of the Company.

Section 20.    Governing Law.

This Plan shall be governed by the laws of the State of Delaware.

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