Exhibit 10.3
FORM OF RESTRICTED STOCK
AGREEMENT
ASPECT MEDICAL SYSTEMS, INC.
Restricted Stock Agreement
Granted Under Amended and Restated 1998 Director Equity Incentive
Plan
AGREEMENT made
this [ ] day of
[ ],
between Aspect Medical Systems, Inc., a Delaware corporation (the
“Company”), and [insert name of director] (the
“Participant”).
For
valuable consideration, receipt of which is acknowledged, the
parties hereto agree as follows:
1.
Purchase of Shares .
The
Company shall issue and sell to the Participant, and the
Participant shall purchase from the Company, subject to the terms
and conditions set forth in this Agreement and in the
Company’s Amended and Restated 1998 Director Equity Incentive
Plan (the “Plan”), [insert number of shares granted]
shares (the “Shares”) of common stock, $0.01 par value,
of the Company (“Common Stock”), at a purchase price of
$[insert price per share] per share. The aggregate purchase price
for the Shares shall be paid by the Participant by check payable to
the order of the Company or such other method as may be acceptable
to the Company. Upon receipt by the Company of payment for the
Shares, the Company shall issue to the Participant one or more
certificates in the name of the Participant for that number of
Shares purchased by the Participant. The Participant agrees that
the Shares shall be subject to the purchase options set forth in
Section 2 of this Agreement and the restrictions on transfer
set forth in Section 4 of this Agreement.
2.
Purchase Option .
(a) In
the event that the Participant ceases to serve as a director of the
Company for any reason or no reason, with or without cause, prior
to [three years from grant date], the Company shall have the right
and option (the “Purchase Option”) to purchase from the
Participant, for a sum of $[insert price per share] per share (the
“Option Price”), some or all of the Unvested Shares (as
defined below).
“Unvested
Shares” means the total number of Shares multiplied by the
Applicable Percentage at the time the Purchase Option becomes
exercisable by the Company. The “Applicable Percentage”
shall be (i) 100% during the [12-month] period ending
[12 months from date vesting begins] (ii) 100% less
[33.3]% for each completed [one year] period of service as a
director by the Participant with the Company from and after [date
vesting begins] and (iii) zero on or after [three years from
grant date].
3.
Exercise of Purchase Option and Closing .
(a) The
Company may exercise the Purchase Option by delivering or mailing
to the Participant (or his estate), within 90 days after the
termination of service as a director of the Company, a written
notice of exercise of the Purchase Option. Such notice shall
specify the number of Shares to be purchased. If and to the extent
the Purchase Option is not so exercised by the giving of such a
notice within such 90-day period, the Purchase Option shall
automatically expire and terminate effective upon the expiration of
such 90-day period.
(b) Within
10 days after delivery to the Participant of the
Company’s notice of the exercise of the Purchase Option
pursuant to subsection (a) above, the Participant (or his
estate) shall, pursuant to the provisions of the Joint Escrow
Instructions referred to in Section 5 below, tender to the
Company at its principal offices the certificate or certificates
representing the Shares which the Company has elected to purchase
in accordance with the terms of this Agreement, duly endorsed in
blank or with duly endorsed stock powers attached thereto, all in
form suitable for the transfer of such Shares to the Company.
Promptly following its receipt of such certificate or certificates,
the Company shall pay to the Participant the aggregate Option Price
for such Shares (provided that any delay in making such payment
shall not invalidate the Company’s exercise of the Purchase
Option with respect to such Shares).
(c) After
the time at which any Shares are required to be delivered to the
Company for transfer to the Company pursuant to subsection
(b) above, the Company shall not pay any dividend to the
Participant on account of such Shares or permit the Participant to
exercise any of the privileges or rights of a stockholder with
respect to such Shares, but shall, in so far as permitted by law,
treat the Company as the owner of such Shares.
(d) The
Option Price may be payable, at the option of the Company, in
cancellation of all or a portion of any outstanding indebtedness of
the Participant to the Company or in cash (by check) or
both.
(e) The
Company shall not purchase any fraction of a Share upon exercise of
the Purchase Option, and any fraction of a Share resulting from a
computation made pursuant to Section 2 of this Agreement shall
be rounded to the nearest whole Share (with any one-half Share
being rounded upward).
(f) The
Company may assign its Purchase Option to one or more persons or
entities.
4.
Restrictions on Transfer .
(a) The
Participant shall not sell, assign, transfer, pledge, hypothecate
or otherwise dispose of, by operation of law or otherwise
(collectively “transfer”) any Shares, or any interest
therein, that are subject to the Purchase Option, except that the
Participant may transfer such Shares to or for the benefit of any
spouse, children, parents, uncles, aunts, siblings, grandchildren
and any other relatives approved by the Board of Directors
(collectively, “Approved Relatives”) or to a trust
established solely for the benefit of the Participant and/or
Approved Relatives, provided
that such Shares shall remain
subject to this Agreement (including without limitation the
restrictions on transfer set forth in this Section 4 and the
Purchase Option) and such permitted transferee shall, as a
condition to such transfer, deliver to the Company a written
instrument confirming that such transferee shall be bound by all of
the terms and conditions of this Agreement.
(b) The
Company shall not be required (i) to transfer on its books any
of the Shares which have been transferred in violation of any of
the provisions set forth in this Agreement or (ii) to treat as
owner of such Shares or to pay dividends to any transferee to whom
such Shares have been transferred in violation of any of the
provisions of this Agreement.
5.
Escrow .
The
Participant shall, upon the execution of this Agreement, execute
Joint Escrow Instructions in the form attached to this Agreement as
Exhibit A. The Joint Escrow Instructions shall be delivered to
the Secretary of the Company, as escrow agent thereunder. The
Participant shall deliver to such escrow agent a stock assignment
duly endorsed in blank, in the form attached to this Agreement as
Exhibit B, and hereby instructs the Company to deliver to such
escrow agent, on behalf of the Participant, the certificate(s)
evidencing the Shares issued hereunder. Such materials shall be
held by such escrow agent pursuant to the terms of such Joint
Escrow Instructions.
6.
Restrictive Legends .
All
certificates representing Shares shall have affixed thereto a
legend in substantially the following form, in addition to any
other legends that may be required under federal or state
securities laws:
“The shares of stock represented by this
certificate are subject to restrictions on transfer and an option
to purchase set forth in a certain Restricted Stock Agreement
between the corporation and the registered owner of these shares
(or his predecessor in interest), and such Agreement is available
for inspection without charge at the office of the Secretary of the
corporation.”
7.
Provisions of the Plan . This Agreement is subject to the
provisions of the Plan, a copy of which is furnished to the
Participant with this Agreement.
8.
Withholding Taxes; Section 83(b) Election .
(a) The
Participant acknowledges and agrees that the Company has the right
to deduct from payments of any kind otherwise due to the
Participant any federal, state or local taxes of any kind required
by law to be withheld with respect to the purchase of the Shares by
the Participant or the lapse of the Purchase Option.
(b) 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
Agreement. The Participant is relying solely on such advisors and
not on any statements or representations of the Company or any of
its agents. The Participant understands that
