Document:

ex10_4.htm

Exhibit 10.4

GRAPHON CORPORATION

2012 EQUITY INCENTIVE PLAN

NOTICE OF GRANT

AND

RESTRICTED STOCK AGREEMENT

You have been granted the number of shares of Restricted Common Stock of GraphOn Corporation (the “Company”), as set forth below (“Common Shares”), subject to the terms and conditions of the GraphOn Corporation 2012 Equity Incentive Plan (“Plan”), and this Notice of Grant and Restricted Stock Agreement including the attachments hereto (collectively, “Notice and Agreement”).  Unless otherwise defined in the Notice and Agreement, terms with initial capital letters shall have the meanings set forth in the Plan.

	
Participant:

	
Robert Dixon

	 	 
	
Home Address:

	  
	  	  
	
Soc. Sec. No:

	  
	
Number of shares of Restricted Common Stock Granted:

	
414,500

	  	  
	
Grant Date:

	
08/15/12

	  	  
	
Period of Restriction and Release of Common Shares from Company’s Return Right (see Sections 2 and 3 of attached Agreement)

	
The Common shares granted hereunder shall be “released” and shall no longer be subject to the Company’s Return Right as provided in Exhibit D. However, notwithstanding the foregoing, in the event the Participant’s Continuous Status as an Employee, Consultant or Director is involuntarily terminated by the Company without Cause (as defined in the Plan), all Common Shares granted hereunder shall be “released” to Participant and shall no longer be subject to the Company’s Return Right.  For clarity, termination due to death or Disability is not considered an involuntary termination by the Company for this purpose.

By signing below, you accept this grant of Common Shares and you hereby represent that you: (i) agree to the terms and conditions of this Notice and Agreement and the Plan; (ii) have reviewed the Plan and the Notice and Agreement in their entirety, and have had an opportunity to obtain the advice of legal counsel and/or your tax advisor with respect thereto; (iii) fully understand and accept all provisions hereof; (iv) agree to accept as binding, conclusive, and final all of the Administrator’s decisions regarding, and all interpretations of, the Plan and the Notice and Agreement; and (v) agree to notify the Company upon any change in your home address indicated above.

 

	 	
AGREED AND ACCEPTED:

	 	 
	 	 
	 	
Signature:

	
/s/ Robert Dixon

	 	 	 
	 	
Print Name:

	
Robert Dixon

 

  

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GRAPHON CORPORATION

2012 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AGREEMENT

1.           Grant of Restricted Stock.  The Company has granted to you the number of shares of Restricted Common Stock specified in the Notice of Grant on the preceding page (“Notice of Grant”), subject to the following terms and conditions.  In consideration of such grant, you agree to be bound by the terms and conditions hereof, and by the terms and conditions of the Plan.

2.           Period of Restriction.  During the Period of Restriction specified in the Notice of Grant, the Common Shares shall remain subject to the Company’s Return Right (defined in Section 3).  The Period of Restriction shall expire and the Company’s Return Right shall lapse as to the Common Shares granted in the amount(s) and on the date(s) specified in the Notice of Grant (each, a “Release Date”); provided, however, that no Common Shares shall be released on any Release Date if the Participant has ceased Continuous Status as an Employee, Consultant or Non-Employee Director on or prior to such date.  Any and all Common Shares subject to the Company’s Return Right at any time shall be defined in this Notice and Agreement as “Unreleased Common Shares.”

3.           Return of Restricted Stock to Company.  If Participant ceases Continuous Status as an Employee, Consultant or Non-Employee Director for any reason (a “Return Event”), the Company shall become the legal and beneficial owner of the Unreleased Common Shares and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer such Unreleased Common Shares to its own name.  The Participant shall continue to own any Common Shares subject to the terms of the Plan and this Notice and Agreement with respect to which the Participant has Continuous Status as an Employee, Consultant or Non-Employee Director through the Release Date(s) specified in the Notice of Grant for such Common Shares.

4.           Restriction on Transfer. Except for the transfer of the Common Shares to the Company or its assignees contemplated by this Notice and Agreement, none of the Common Shares or any beneficial interest therein shall be transferred, encumbered or otherwise disposed of in any way until the Release Date for such Common Shares set forth in this Notice and Agreement. In addition, as a condition to any transfer of the Common Shares after such Release Date, the Company may, in its discretion, require: (i) that the Common Shares shall have been duly listed upon any national securities exchange or automated quotation system on which the Company's Common Stock may then be listed or quoted; (ii) that either (a) a registration statement under the Securities Act of 1933, as amended (“Securities Act”) with respect to the Common Shares shall be effective, or (b) in the opinion of counsel for the Company, the proposed purchase shall be exempt from registration under the Securities Act and the Participant shall have entered into agreements with the Company as reasonably required; and (iii) fulfillment of any other requirements deemed necessary by counsel for the Company to comply with Applicable Law.

5.           Retention of Common Shares.  To ensure the availability for delivery of the Participant’s Unreleased Common Shares upon their return to the Company pursuant to this Notice and Agreement, the Company shall retain possession of the share certificates representing the Unreleased Common Shares, together with a stock assignment duly endorsed in blank, attached hereto as Exhibit A.  The Company shall hold the Unreleased Common Shares and related stock assignment until the Release Date for such Common Shares. In addition, the Company may require the spouse of Participant, if any, to execute and deliver to the Company the Consent of Spouse in the form attached hereto as Exhibit B.  When a Return Event or Release Date occurs, the Company shall promptly deliver the certificate for the applicable Common Shares to the Company or to the Participant, as the case may be.

 

  

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6.           Stockholder Rights.  Subject to the terms hereof, the Participant shall have all the rights of a stockholder with respect to the Common Shares while they are retained by the Company pursuant to Section 5, including without limitation, the right to vote the Common Shares and to receive any cash dividends declared thereon. If, from time to time prior to the Release Date, there is (i) any stock dividend, stock split or other change in the Common Shares, or (ii) any merger or sale of all or substantially all of the assets or other acquisition of the Company, any and all new, substituted or additional securities to which the Participant shall be entitled by reason of the Participant’s ownership of the Common Shares shall be immediately subject to the terms of this Notice and Agreement and included thereafter as “Common Shares” for purposes of this Notice and Agreement.

7.           Legends.  The share certificate evidencing the Common Shares, if any, issued hereunder shall be endorsed with the following legend (in addition to any legend required under applicable state securities laws):

THE COMMON SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER AND OBLIGATIONS TO RETURN TO THE COMPANY, AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE HOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

8.           U.S. Tax Consequences.  The Participant has reviewed with the Participant’s own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Notice and Agreement.  The Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its employees or agents. The Participant understands that for U.S. taxpayers, Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”), taxes as ordinary income the difference between the purchase price for the Common Shares, if any, and the fair market value of the Common Shares as of the date any restrictions on the Common Shares lapse. In this context, “restriction” includes the right of the Company to the return of the Common Shares upon a Return Event. The Participant understands that if he/she is a U.S. taxpayer, the Participant may elect to be taxed at the time the Common Shares are awarded as Restricted Stock rather than when and as the Return Right expires by filing an election under Section 83(b) of the Code with the IRS within 30 days from the date of acquisition. The form for making this election is attached as Exhibit C hereto.  The Participant understands that the Company and its Subsidiaries shall have the right to require, prior to the release of Common Shares awarded hereunder, payment by Participant of any Federal, state, local or other taxes which may be required to be withheld or paid to the applicable tax authorities, as provided in the Plan.

THE PARTICIPANT ACKNOWLEDGES THAT IT IS THE PARTICIPANT'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), IF APPLICABLE, EVEN IF THE PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PARTICIPANT'S BEHALF.

9.           General.

(a)         This Notice and Agreement shall be governed by and construed under the laws of the State of Delaware.  The Notice and Agreement and the Plan, which is incorporated herein by reference, represents the entire agreement between the parties with respect to the shares of Restricted Common Stock granted to the Participant.  In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Notice and Agreement, the terms and conditions of the Plan shall prevail.

 

  

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(b)         Any notice, demand or request required or permitted to be delivered by either the Company or the Participant pursuant to the terms of this Notice and Agreement shall be in writing and shall be deemed given when delivered personally, deposited with a reputable courier service, or deposited in the U.S. Mail, First Class with postage prepaid, and addressed to the parties at the addresses set forth in the Notice of Grant, or such other address as a party may request by notifying the other in writing.

(c)         The rights of the Company under this Notice and Agreement and the Plan 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 the Participant under this Notice and Agreement may only be assigned with the prior written consent of the Company.

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

(e)         PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE RELEASE OF COMMON SHARES PURSUANT TO THIS AGREEMENT SHALL BE EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE, CONSULTANT OR NON-EMPLOYEE DIRECTOR, AND NOT THROUGH THE ACT OF BEING HIRED, APPOINTED OR OBTAINING COMMON SHARES HEREUNDER.

#####

 

  

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EXHIBIT A

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED I, __________________________, hereby sell, assign and transfer unto _______________________________________(__________) Common Shares of GraphOn Corporation standing in my name of the books of said corporation represented by Certificate No. ________ herewith and do hereby irrevocably constitute and appoint _____________________________ to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.

This Stock Assignment may be used only in accordance with the Notice of Grant and the Restricted Stock Agreement between GraphOn Corporation and the undersigned dated_____________, 20__.

	
Dated: _______________, 20___

	  
	  	  
	  	
Signature:   /s/ Robert Dixon

	  	  
	  	
Print Name:  Robert Dixon

	  	  
	
INSTRUCTIONS:

	  

Please DO NOT fill in any blanks other than the signature lines.

The purpose of this assignment is to enable the Company to receive the return of the Common Shares as set forth in the Notice and Agreement, without requiring additional signatures on the part of the Participant.

 

  

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EXHIBIT B

CONSENT OF SPOUSE

I,   Michelle Dixon   , spouse of    Robert Dixon   , have read and approve the foregoing Notice of Grant and Restricted Stock Agreement (the “Notice and Agreement”). In consideration of the Company's grant to my spouse of the Common Shares of GraphOn Corporation as set forth in the Notice and Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under the Notice and Agreement and agree to be bound by the provisions of the Notice and Agreement insofar as I may have any rights in said Notice and Agreement or any Common Shares issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state or country of our residence as of the date of the signing of the foregoing Notice and Agreement.

	
Dated: September 15, 2012

	  
	  	  
	  	
/s/ Michelle Dixon

	  	
Signature of Spouse

	  	  
	  	
Print Name: Michelle Dixon

 

  

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EXHIBIT C

ELECTION UNDER SECTION 83(b)

OF THE U.S. INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income for the current taxable year the amount of any compensation taxable to taxpayer in connection with his or her receipt of the property described below:

1.           The name, address, taxpayer identification number and taxable year of the undersigned are as follows:

	
Name:

	  
	
Spouse:

	  
	
Taxpayer I.D. No.:

	  
	
Address:

	  
	  	  
	
Tax Year:

	  

2.      The property with respect to which the election is made is described as follows: __________________(________) shares of the common stock (“Common Shares”) of GraphOn Corporation (the "Company").

3.      The date on which the property was transferred is ______________, 20__.

4.      The property is subject to the following restrictions:

The Common Shares are required to be returned to the Company in the event that the undersigned ceases to perform services for the Company through certain dates specified in the Notice of Grant and Restricted Stock Agreement between me and the Company dated as of ___________, 20__. This right lapses with regard to a portion of the Common Shares based on my Continued Status as an Employee, Consultant  or Non-Employee Director over time.

5.      The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is:  $______________________.

6.      The amount (if any) paid for such property is: none.

The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned's receipt of the above-described property. The transferee of such property is the person performing the services in connection with the transfer of said property.  The undersigned understands that the foregoing election may not be revoked except with the consent of the Commissioner.

	
Dated:   ___________________, 20__

	 	
 

	  	
Signature of Taxpayer

	  	  
	
The undersigned spouse of taxpayer joins in this election.

	  	  
	
Dated:   ___________________, 20__

	 	
 

	  	
Spouse of Taxpayer

 

  

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EXHIBIT D

VESTING SCHEDULE

	
Month

	
Date

	
Shares

Vesting

	
Cumulative

Shares

Vested

	
Forfeitable

Shares

	
1

	
09/15/12

	
—

	
—

	
414,500

	
2

	
10/15/12

	
—

	
—

	
414,500

	
3

	
11/15/12

	
—

	
—

	
414,500

	
4

	
12/15/12

	
12,560

	
12,560

	
401,940

	
5

	
01/15/13

	
12,560

	
25,120

	
389,380

	
6

	
02/15/13

	
12,560

	
37,680

	
376,820

	
7

	
03/15/13

	
12,560

	
50,240

	
364,260

	
8

	
04/15/13

	
12,560

	
62,800

	
351,700

	
9

	
05/15/13

	
12,560

	
75,360

	
339,140

	
10

	
06/15/13

	
12,560

	
87,920

	
326,580

	
11

	
07/15/13

	
12,560

	
100,480

	
314,020

	
12

	
08/15/13

	
12,560

	
113,040

	
301,460

	
13

	
09/15/13

	
12,560

	
125,600

	
288,900

	
14

	
10/15/13

	
12,560

	
138,160

	
276,340

	
15

	
11/15/13

	
12,560

	
150,720

	
263,780

	
16

	
12/15/13

	
12,560

	
163,280

	
251,220

	
17

	
01/15/14

	
12,560

	
175,840

	
238,660

	
18

	
02/15/14

	
12,560

	
188,400

	
226,100

	
19

	
03/15/14

	
12,560

	
200,960

	
213,540

	
20

	
04/15/14

	
12,560

	
213,520

	
200,980

	
21

	
05/15/14

	
12,560

	
226,080

	
188,420

	
22

	
06/15/14

	
12,560

	
238,640

	
175,860

	
23

	
07/15/14

	
12,560

	
251,200

	
163,300

	
24

	
08/15/14

	
12,560

	
263,760

	
150,740

	
25

	
09/15/14

	
12,560

	
276,320

	
138,180

	
26

	
10/15/14

	
12,560

	
288,880

	
125,620

	
27

	
11/15/14

	
12,560

	
301,440

	
113,060

	
28

	
12/15/14

	
12,560

	
314,000

	
100,500

	
29

	
01/15/15

	
12,560

	
326,560

	
87,940

	
30

	
02/15/15

	
12,560

	
339,120

	
75,380

	
31

	
03/15/15

	
12,560

	
351,680

	
62,820

	
32

	
04/15/15

	
12,560

	
364,240

	
50,260

	
33

	
05/15/15

	
12,560

	
376,800

	
37,700

	
34

	
06/15/15

	
12,560

	
389,360

	
25,140

	
35

	
07/15/15

	
12,560

	
401,920

	
12,580

	
36

	
08/15/15

	
12,580

	
414,500

	
—

	  	  	
414,500

	  	  

 

 

- 8 -Loan Contract

(Unofficial Summary English Translation Solely for Convenience)

 

 

 

 

Zhejiang Chouzhou Commercial Bank

 

 

 

 

 

 

 

 

Ref. No.: 156160100730035

 

Loan Contract

 

 

 

	Borrower:	Yiwu Yong Xin Communication Limited
	Legal Representative: 	Zhenggang Wang
	Legal Address: 	368 HuShu Nan Road, HangZhou City, Zhejiang Province, China 310014
	Correspondence Address:  	Same as above
	Lender:  	Zhejiang Chouzhou Commercial Bank

 

 

 

Both parties agree to the following
terms:

	1	Loan amount: RMB 15,000,000
	 	 
	2	Purpose of loan:
	 	The proceeds of the loan under this contract shall be used for purchasing cell phones, computers and other electronics inventory.

	 	 
	3	Term: Commencing from July 16, 2012, to July 15, 2013.
	 	 
	4	Interest Rate and Computation of Interest
	 	Interest rate: The annual fixed interest rate is 6.6%. In the circumstance that the People’s Bank of China announces any adjustment in prime interest rate after the execution date of this loan contract, but before the date of loan disbursement, the fixed annual interest rate will be adjusted up by 10% compared the fixed benchmark interest rate announced by the People’s Bank of China on the date of loan disbursement.

	 	 
	5	Repayment of interest: Interest settlement is set on the 20th day of each month. On the maturity date, the interest shall be paid in full together with the principal.
	 	 

    	 

    	 	

    
 

	6	Interest penalty: In the circumstance that the loan fund is not expended for the purpose as set forth in this loan contract, the bank will have the right to assess a penalty interest rate equal to the loan interest rate set forth in this Contract plus 100% of such interest rate, calculated on the appropriated loan amount. In the circumstance when the loan is overdue, the penalty interest rate is equal to the loan interest rate set forth in this Contract plus 50% of such loan interest rate. 

	 
	7	Disbursements: The loan shall be disbursed to the bank account designated by the borrower. 

	 
	8	Repayment of Loan: The principal of the loan shall be paid in full on the date of maturity.
	 	 
	9	Guarantee: The loan is guaranteed by Zhenggang Wang, CEO of China 3C Group and five other non related individuals. 
	 	 

 

 

 

IN WITNESS WHEREOF, the parties hereto
have executed this Contract as of the day and year first set forth below.

 

 

 

	 July 16, 2012	 July 16, 2012
	 	 
	 Borrower (seal):  	 Lender (seal):
	 	 
	 Yiwu Yong Xin Communication Limited	 Zhejiang Chouzhou Commercial Bank
	 	 
	 Legal Representative or Authorized Person	 Responsible Person or Authorized Person
	 	 
	 Zhenggang Wang	 Liming Liu
	 	 
	 (signature or seal) 	 (signature or seal)

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