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Exhibit 10.9
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (this "Agreement") is made as
of
August 4, 2006, by and between CompBenefits Corporation, a Delaware
corporation
(together with its successors, the "Company"), and
<<Name>> (the "Executive").
Capitalized terms used but not otherwise defined herein are defined
in Section 8
hereof.
WHEREAS, pursuant to the Company's Amended and Restated Stock
Option
Plan (the "Plan"), the Executive desires to purchase, and the
Company desires to
issue <<Number_of_Shares>> shares of the Company's
Common Stock, par value $.01
per share (or, in the event the outstanding Common Stock is
hereafter changed
into or exchanged for different stock or securities of the Company,
such other
securities) (the "Common Stock") on the terms and subject to the
conditions
contained in this Agreement. All of such shares of Common Stock are
referred to
herein as the "Restricted Stock."
NOW, THEREFORE, in consideration of the mutual covenants
contained
herein and other good and valuable consideration, the receipt and
sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
1. Purchase and Sale of the Restricted Stock.
(a) Pursuant to the Plan, upon execution of this Agreement, the
Executive will purchase, and the Company will issue and sell
<<Number_of_Shares>> shares of Common Stock, at a price
of $0.01 per share. The
Company will deliver to the Executive copies of the certificates
representing
the Restricted Stock, and the Executive will deliver to the
Company
<<Purchase_price>>.
(b) In connection with the purchase and sale of Restricted
Stock
hereunder, the Executive represents and warrants to the Company
that:
(i) The Restricted Stock to be acquired by the Executive
pursuant
to this Agreement will be acquired for the Executive's own account
and not
with a view to, or intention of, distribution thereof in violation
of the
Securities Act of 1933, as amended from time to time (the
"Securities
Act"), or any applicable state securities laws, and the Restricted
Stock
will not be disposed of in contravention of the Securities Act or
any
applicable state securities laws.
(ii) The Executive is sophisticated in financial matters and is
able to evaluate the risks and benefits of the investment in the
Restricted
Stock.
(iii) The Executive is able to bear the economic risk of his
investment in the Restricted Stock for an indefinite period of time
because
the Restricted Stock has not been registered under the Securities
Act and,
therefore, cannot be sold unless subsequently registered under
the
Securities Act or an exemption from such registration is
available.
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(iv) The Executive has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering
of the
Restricted Stock and has had full access to such other
information
concerning the Company as he has requested.
(v) This Agreement constitutes the legal, valid and binding
obligation of the Executive, enforceable in accordance with its
terms, and
the execution, delivery and performance of this Agreement by the
Executive
does not and will not conflict with, violate or cause a breach of
any
agreement, contract or instrument to which the Executive is a party
or any
judgment, order or decree to which the Executive is subject.
(c) Within 30 days after the Executive purchases any Restricted
Stock
from the Company, the Executive will make an effective election
with the
Internal Revenue Service under Section 83(b) of the Internal
Revenue Code and
the regulations promulgated thereunder in the form of Annex A
attached hereto.
(d) Concurrently with the execution of this Agreement, the
Executive
will execute in blank stock transfer powers in the form of Annex B
attached
hereto (the "Stock Powers") with respect to the Restricted Stock
and shall
deliver such Stock Powers to the Company. The Stock Powers shall
authorize the
Company to assign, transfer and deliver the securities subject to
such Stock
Powers to an acquiror in the event the Repurchase Option (as
defined below) is
exercised and under no other circumstances.
2. Vesting of Restricted Stock.
(a) Except as otherwise provided in Sections 2(b), 2(c), 2(d) and
2(e)
below, the Restricted Stock purchased hereunder will become vested
in accordance
with the schedule set forth on Annex C attached hereto.
(b) If the Executive ceases to be employed by the Company and
its
Subsidiaries on a date other than a vesting date prior to the final
vesting
date, the cumulative percentage of Restricted Stock to become
vested will be
determined on a pro rata basis according to the number of days
elapsed since the
prior vesting date.
(c) Upon the occurrence of a Sale of the Company, if as of such
date
the Executive is still employed by the Company or any of its
Subsidiaries, all
shares of Restricted Stock which have not yet become vested shall
become vested
at the time of such event.
(d) Upon the occurrence of the Company's first Qualified Public
Offering, if as of such date the Executive is still employed by the
Company or
any of its Subsidiaries, fifty percent (50%) of all shares of
Restricted Stock
which have not yet become vested shall become vested at the time of
such event.
Such 50% vesting shall be applied on a tranche-by-tranche basis,
with the
remaining 50% of each unvested tranche remaining subject to the
vesting
provisions of this Section 2.
(e) Any shares of Restricted Stock which have not been designated
as
subject to repurchase pursuant to a Repurchase Notice or
Supplemental Repurchase
Notice on the date which
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is six months and one day following the Termination and which have
not yet
become vested shall become vested on such date.
Shares of Restricted Stock which have become vested pursuant to
Sections 2(a),
2(b), 2(c), 2(d) or 2(e) above are referred to herein as "Vested
Shares," and
all other shares of Restricted Stock are referred to herein as
"Unvested
Shares."
3. Repurchase Option.
(a) In the event the Executive ceases to be employed by the
Company
and its Subsidiaries for any reason (the "Termination"), the
Restricted Stock
(whether held by the Executive or one or more of the Executive's
transferees,
other than the Company) will be subject to repurchase by the
Company pursuant to
the terms and conditions set forth in this Section 3 (the
"Repurchase Option");
provided that, notwithstanding anything herein to the contrary, in
the event the
Termination occurs as a result of (i) the Company's termination of
the
Executive's employment with the Company without Cause, (ii) the
Executive's
resignation from his employment with the Company for Good Reason,
or (iii) the
Executive's death or Disability, then the Repurchase Option shall
only apply
with respect to the Unvested Shares and shall not apply with
respect to any
Vested Shares.
(b) In the event of Termination, (i) the purchase price for
each
Unvested Share will be the Executive's Original Cost for such
share, and (ii)
subject to the proviso in Section 3(a) above, the purchase price
for each Vested
Share will be the Fair Market Value for such share; provided,
however, that if
the Executive's employment is terminated by the Company with Cause,
the purchase
price for each Vested Share will be the Executive's Original Cost
for such
share.
(c) The Company's board of directors (the "Board") may elect to
purchase all or any portion of any class of the Unvested Shares and
the Vested
Shares by delivering written notice (the "Repurchase Notice") to
the holder or
holders of the Restricted Stock within six months after the
Termination. The
Repurchase Notice will set forth the number of Unvested Shares and
Vested Shares
to be acquired from each holder, the aggregate consideration to be
paid for such
shares and the time and place for the closing of the transaction.
If for any
reason the Company does not elect to purchase all of the Restricted
Stock
pursuant to the Repurchase Option, the Significant Stockholders
shall be
entitled to exercise the Repurchase Option for the shares of
Restricted Stock
the Company has not elected to purchase (the "Available Shares").
As soon as
practicable after the Company has determined that there will be
Available
Shares, but in any event within six months after the Termination,
the Company
shall give written notice (the "Option Notice") to each Significant
Stockholder
setting forth the number of Available Shares and the purchase price
for the
Available Shares. Each Significant Stockholder may elect to
purchase any or all
of the Available Shares by giving written notice to the Company
within 30 days
after the Option Notice has been given to them by the Company. If
more than one
Significant Stockholder elects to purchase the Available Shares,
the Available
Shares will be allocated among such electing stockholders pro rata
according to
the number of Common Stockholder Shares (as defined in the
Stockholders
Agreement) owned by each such electing stockholder. As soon as
practicable, and
in any event within ten days, after the expiration of the 30-day
period set
forth above, the Company shall notify each holder of Restricted
Stock as to the
number of shares being purchased from such holder by the
Significant
Stockholders
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(the "Supplemental Repurchase Notice"). At the time the Company
delivers the
Supplemental Repurchase Notice to the holder(s) of Restricted
Stock, the Company
shall also deliver written notice to each Significant Stockholder
setting forth
the number of shares such Significant Stockholder is entitled to
purchase, the
aggregate purchase price and the time and place of the closing of
the
transaction.
(d) The closing of the purchase of the Restricted Stock pursuant
to
the Repurchase Option shall take place on the date designated by
the Company in
the Repurchase Notice or Supplemental Repurchase Notice, which date
shall not be
more than one month nor less than five days after the delivery of
the later of
either such notice to be delivered. The Company will pay for the
Restricted
Stock to be purchased by it pursuant to the Repurchase Option first
by
offsetting amounts outstanding under any bona fide debts owed by
the Executive
to the Company relating to the purchase of the Restricted Stock and
second by
delivery of a check or wire transfer of funds in an amount equal to
the balance
of the purchase price for such shares; provided that if such
payment (or the
related dividend of funds from one or more of the Company's
Subsidiaries to the
Company, as the case may be) would (i) cause the Company or such
Subsidiary to
violate applicable law, (ii) cause the Company or such Subsidiary
to breach any
agreement to which it is a party relating to the indebtedness for
borrowed money
or any other material agreement, or (iii) otherwise be imprudent in
view of the
financial condition of the Company or such Subsidiary (clauses (i),
(ii), and
(iii) are collectively referred to herein as the "Reasons for
Deferral"), then
the Company shall have the right to pay such amount as soon as no
Reason for
Deferral exists so long as the Company also pays interest at the
prime rate (as
published in The Wall Street Journal on the date of Termination)
plus 2% for the
deferral period at the time when such payment is made. Each
Significant
Stockholder will pay for the Restricted Stock to be purchased by it
pursuant to
the Repurchase Option by delivery of a check or wire transfer of
funds in the
aggregate amount of the purchase price for such shares. The Company
will be
entitled to receive customary representations and warranties from
the sellers as
to good title and to require all sellers' signatures be
guaranteed.
(e) The right of the Company and the Significant Stockholders
to
repurchase Vested Shares pursuant to this Section 3 shall terminate
in
accordance with Section 9(a).
4. Restrictions on Transfer of Shares. None of the Shares now owned
or
hereafter acquired shall be sold, assigned, transferred, pledged,
hypothecated,
given away or in any other manner disposed of or encumbered,
whether voluntarily
or by operation of law, unless such transfer is in compliance with
all
applicable securities laws (including, without limitation, the
Act), and such
disposition is in accordance with the terms and conditions of this
Section 4 and
such disposition does not cause the Company to become subject to
the reporting
requirements of the Securities Exchange Act of 1934, as amended. In
connection
with any transfer of Shares, the Company may require the transferor
to provide
at the Executive's own expense an opinion of counsel to the
transferor,
satisfactory to the Company, that such transfer is in compliance
with all
foreign, federal and state securities laws (including, without
limitation, the
Act). Any attempted disposition of Shares not in accordance with
the terms and
conditions of this Section 4 shall be null and void, and the
Company shall not
reflect on its records any change in record ownership of any Shares
as a result
of any such disposition, shall otherwise refuse to recognize any
such
disposition and shall not in any way give effect to any such
disposition of any
Shares. Subject to the foregoing
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general provisions, Shares may be transferred only pursuant to the
following
specific terms and conditions:
(a) The Executive (but not any transferee thereof) may sell,
assign,
transfer or give away any or all of the Shares to Permitted
Transferees;
provided, however, that such Permitted Transferee(s) shall, as a
condition to
any such transfer, agree to be subject to the provisions of this
Agreement
(including, without limitation, the provisions of Section 3 and
this Section 4)
and shall have delivered a written acknowledgment to that effect to
the Company.
(b) Upon the death of the Executive, all Unvested Shares shall
be
subject to the Repurchase Option and all Vested Shares shall be and
remain
subject to Section 4(c), if applicable, and the Executive's estate,
executors,
administrators, personal representatives, heirs, legatees and
distributees shall
be obligated to convey such Shares to the Company or its assigns
under the terms
contemplated hereby.
(c) In the event that the Executive at any time after but not prior
to
a Termination desires to sell or otherwise transfer all or any part
of the
Vested Shares (but in no event the Unvested Shares, which shall not
be sold or
transferred except as contemplated by Section 3(a) or 3(c)), the
Executive first
shall give written notice to the Company of the Executive's
intention to make
such transfer. Such notice shall state the number of Vested Shares
which the
Executive proposes to sell (the "Offered Shares"), the price and
the terms at
which the proposed sale is to be made and the name and address of
the proposed
transferee. At any time within 10 days after the receipt of such
notice by the
Company, the Company may elect to purchase all or any portion of
the Offered
Shares at the price and on the terms offered by the proposed
transferee and
specified in the notice. The Company shall exercise this right by
mailing or
delivering written notice to the Executive within the foregoing
10-day period.
If the Company elect to exercise its purchase rights under this
Section 3(c),
the closing for such purchase shall, in any event, take place
within 45 days
after the receipt by the Company of the initial notice from the
Executive. In
the event that the Company do not elect to exercise such purchase
right, or in
the event that the Company do not pay the full purchase price
within such 45-day
period, the Executive may, within 60 days thereafter, sell the
Offered Shares to
the proposed transferee and at the same price and on the same terms
as specified
in the Executive's notice. Any Shares purchased by such proposed
transferee
shall no longer be subject to the terms of this Agreement. Any
Shares not sold
to the proposed transferee shall remain subject to this
Agreement.
Notwithstanding the foregoing, the restrictions under this Section
4(c) shall
terminate in accordance with Section 9(a).
(d) Prior to Termination and prior to the expiration of the
Repurchase
Option, the Executive may not sell, assign, transfer or give away
any or all of
the Shares (except as provided in Sections 4(a) and 4(c) above).
Following
Termination and the expiration of the Repurchase Option, the
Executive may sell,
assign, transfer or give away any or all of the Vested Shares,
subject to
compliance with Section 4(c), if applicable.
5. Legend. The certificates representing the Restricted Stock
shall
bear the following legend:
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS AND CERTAIN
OTHER
AGREEMENTS SET FORTH IN AN RESTRICTED STOCK AGREEMENT BETWEEN
THE
COMPANY AND THE INITIAL HOLDER OF THE SECURITIES REPRESENTED BY
THIS
CERTIFICATE, DATED AS OF AUGUST 4, 2006, AS AMENDED AND MODIFIED
FROM
TIME TO TIME. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE
HOLDER
HEREOF AT THE COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT
CHARGE."
The Company shall imprint such legend on certificates evidencing
Restricted
Stock outstanding as of the date hereof. The legend set forth above
shall be
removed from the certificates evidencing any shares which cease to
be Restricted
Stock in accordance with Section 8 below.
6. Non-Disclosure and Use of Proprietary Information. The
Executive
recognizes and acknowledges that the Company's Proprietary
Information (as
defined below), as they may exist from time-to-time, are valuable,
special and
unique assets of the Company. The Executive further acknowledges
that access to
such Proprietary Information of the Company is essential to the
performance of
the Executive's duties as an employee of the Company. Therefore, in
order to
obtain access to such Proprietary Information, the Executive agrees
that the
Executive will not, in whole or in part, disclose such Proprietary
Information
to any person, firm, corporation, association or any other entity
for any reason
or purpose whatsoever, nor will the Executive make use of any such
information
for the Executive's own purposes or for the benefit of any person,
firm,
corporation, association or other entity (except the Company). For
purposes of
this Agreement, the term "Proprietary Information" means
information that is not
generally known to the public and that is used, developed or
obtained by the
Company in connection with its business, including but not limited
to (i)
products or services, (ii) fees, costs and pricing structures,
(iii) designs,
(iv) analysis, (v) drawings, photographs and reports, (vi) computer
software,
including operating systems, applications and program listings,
(vii) flow
charts, manuals and documentation, (viii) data bases, (ix)
accounting and
business methods, (x) inventions, devices, new developments,
methods and
processes, whether patentable or unpatentable and whether or not
reduced to
practice, (xi) customers and clients and customer or client lists,
(xii)
copyrightable works, (xiii) all technology and trade secrets, and
(xiv) all
similar and related information in whatever form. These
restrictions will not
apply to any Proprietary Information which: (A) is in the public
domain,
provided that the Executive was not responsible, directly or
indirectly, for
such Proprietary Information entering the public domain without the
Company's
consent; (B) becomes known to the Executive, during the term of
this Agreement,
from a third party not known to the Executive to be under a
confidential
relationship with the Company; or (C) is required by law or
governmental
tribunal to be disclosed; provided, however, that if the Executive
is legally
compelled to disclose any Proprietary Information, the Executive
will provide
the Company with prompt written notice of such legal compulsion so
that the
Company may seek a protective order or other available remedy.
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7. Non-Competition Covenant.
(a) Basic Covenant. During the term of this Agreement and
continuing
until the first anniversary of the date of termination of the
Executive's
employment with the Company for any reason (the "Restricted
Period"), the
Executive will not, directly or indirectly, on the Executive's own
behalf or in
the service of or on behalf of any other individual or entity,
compete with the
Company in the business of providing dental and/or vision health
care services
and any and all activities related thereto including, without
limitation,
network-based dental and/or vision care, reduced fee-for-service,
PPO and/or
indemnity dental and/or vision plans and/or third party
administration (the
"Business") within the Geographical Area (as hereinafter defined).
The term
"compete" means to engage, directly or indirectly, on the
Executive's own behalf
or in the service of or on behalf of any other individual or
entity, either as a
proprietor, employee, agent, independent contractor, consultant,
director,
officer, partner or stockholder (other than a stockholder of a
corporation
listed on a national securities exchange or whose stock is
regularly traded in
the over-the-counter market, provided that the Executive at no time
owns,
directly or indirectly, in excess of five percent of the
outstanding stock of
any class of any such corporation and does not participate in its
management) in
providing man
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