Exhibit 10.4
LINCARE HOLDINGS
INC.
RESTRICTED STOCK
AGREEMENT
THIS AGREEMENT made this 1st day of
October, 2009, between Lincare Holdings Inc., a Delaware
corporation (the “Company”), and John P. Byrnes (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 2007 Stock Plan (the
“Plan”), 440,000 shares (the “Shares”) of
Common Stock, $.01 par value, of the Company (“Common
Stock”), at a purchase price of $0.01 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 option 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 be employed by the Company for any reason or
no reason, with or without cause, prior to November 1, 2012,
the Company shall have the right and option (the “Purchase
Option”) to purchase from the Participant, for a sum of $0.01
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 period commencing on the date hereof and ending on
October 31, 2012 and (ii) zero, on or after
November 1, 2012; provided , however, that
the
Applicable Percentage shall be zero if the
Participant’s employment with the Company is terminated
pursuant to Section 7(a)(i), (ii), (iv), (vi) or
(vii) of the Third Amended Employment Agreement, dated as of
October 1, 2009 (the “Employment Agreement”),
between the Company and the Participant. The Compensation Committee
of the Board of Directors, in its sole discretion, may at any time
accelerate the time set forth herein for the vesting of the
Shares.
(b) For purposes of this Agreement,
employment with the Company shall include employment with a parent
or subsidiary of the Company.
3. Exercise of Purchase Option
and Closing .
(a) The Company may exercise the
Purchase Option by delivering or mailing to the Participant, within
90 days after the termination of the employment of the Participant
with 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 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 that 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.
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(d) The Option Price may be payable,
at the option of the Company, 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
.
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 (i) 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, the Purchase Option and
the right of first refusal set forth in Section 5) 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 or (ii) as part of the sale of all or
substantially all of the shares of capital stock of the Company
(including pursuant to a merger or consolidation), provided
that, in accordance with the Plan, the securities or other property
received by the Participant in connection with such transaction
shall remain subject to this Agreement unless such transaction is a
Change of Control (as defined in the Employment
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 Director –
Employee Relations of the Company, as escrow agent thereunder.
The
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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 Legend
.
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
.
(a) This Agreement is subject to the
provisions of the Plan, a copy of which is furnished to the
Participant with this Agreement.
(b) As provided in the Plan, upon
the occurrence of a merger, consolidation or similar corporate
reorganization (a “Reorganization Event”) that is not a
Change of Control, the repurchase and other rights of the Company
hereunder shall inure to the benefit of the Company’s
successor and shall apply to the cash, securities or other property
which the Shares were converted into or exchanged for pursuant to
such Reorganization Event that is not a Change of Control in the
same manner and to the same extent as they applied to the Shares
under this Agreement.
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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
and local 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
the Participant (and not the Company) shall be responsible for the
Participant’s own tax liability that may arise as a result of
this investment or the transactions contemplated by this Agreement.
The Participant understands that it may be beneficial in many
circumstances to elect to be taxed at the time the Shares are
purchased rather than when and as the Company’s Purchase
Option expires by filing an election under Section 83(b) of
the Code with the I.R.S. within 30 days from the date of
purchase.
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),
EVEN IF THE PARTICIPANT REQUES
