EXHIBIT 10.32
2004 AMENDED AND RESTATED INCENTIVE STOCK PLAN
RESTRICTED STOCK AWARD AGREEMENT
This
RESTRICTED STOCK AWARD AGREEMENT (this "Agreement"), made and as
of
the 12th day of August, 2005 (the "Grant
Date"), by and between Dr. John J.
McGrath (the "Participant") and EVCI Career
Colleges Holding Corp., a Delaware
corporation (the "Company"), sets forth the
terms and conditions of a Restricted
Stock Award issued pursuant to the
Company's Amended and Restated 2004 Incentive
Stock Plan (the "Plan") and this Agreement.
Any capitalized terms used but not
defined herein shall have the meaning
prescribed in the Plan.
1. Grant
and Vesting of Restricted Stock.
(a) The Company hereby grants to the Participant 63,078 shares
of
restricted Common Stock (the "Restricted
Stock"). The period during which the
Restricted Stock is not vested and is
subject to Transfer Restrictions (defined
below) is referred to herein as the
"Restriction Period." The Restricted Stock
is granted as of the Grant Date pursuant
to, and subject to the terms and
conditions of, the Plan and the Amended and
Restated Employment Agreement, dated
August 12, 2005, by and between the
Participant and the Company (the "Employment
Agreement") and Change in Control
Agreement, dated February 11, 2003, by and
between the Company and the Participant
(the "Change in Control Agreement").
(b) The Restricted Stock shall vest and no longer be subject to
any
Transfer Restrictions or shall be forfeited
to the Company as of the date the
Company's auditors release their report
(the "Determination Date") containing
their opinion on the Company's audited
financial statements as at and for the
year ending December 31, 2005, as a result
of the difference in the Company's
income from operations for 2005 as compared
to 2004, as follows:
<PAGE>
<TABLE>
<CAPTION>
<S>
<C>
<C>
<C>
<C>
Increase in income from
25%
20%
15%
10%((3))
operations in 2005
over 2004 (1)((2))
Vested shares ((4))(5)
63,078
47,308
31,539
15,769
Forfeited shares
-0-
15,770
31,539
47,309
</TABLE>
---------------------
(1)
Reference herein
to income from operations shall not include, the
results from operating the Pennsylvania School of Business, Inc.
or
any other acquisition made in 2005. The percentage increase in
income from operations shall be determined after having accrued
and,
therefore, expensed the full amount of cash bonuses earned by
the
Participant and any other person. The tuition disallowance of
$978,200 that is reclassified as an operating expense in
computing
income from operations for 2004 will be added to income from
operations for 2004 for purposes of computing the vested and
forfeited shares.
(2)
There is no
proration if the percentage increase is more than one
percentage target but less than the next.
(3)
All shares of
Restricted Stock are forfeited if less than 10%.
(4)
So long as the
Participant has remained continuously employed by the
Company from the grant date through December 31, 2005, subject
to
Sections 1 (c), (d) and (e) of this Agreement.
(5) Except to the extent
necessary to sell vested shares to pay the
income tax on the ordinary income equal to the market value of
all
of the vested shares, if and when vested, Participant agrees
the
vested shares cannot be sold until January 1, 2007.
(c) In the event of the Participant's termination of
employment,
prior to January 1, 2006, by the Company
without Cause (as defined in the
Employment Agreement), by the Participant
for Good Reason (as defined in the
Employment Agreement), or by reason of the
Participant's death or Permanent
Disability (as defined in the Employment
Agreement), the Restricted Stock shall
vest or be forfeited as of the
Determination Date as provided in Section 1 (b)
of this Agreement.
<PAGE>
(d) In the event of the Participant's termination of
employment,
prior to January 1, 2006, by the Company
for Cause (as defined in the Employment
Agreement) or by the Participant without
Good Reason (as defined in the
Employment Agreement), any portion of the
Restricted Stock that has not vested
as of the date of the Participant's
termination of employment shall immediately
be forfeited to the Company.
(e) In the event of a termination of Participant's employment,
prior
to January 1, 2006, for other than Cause or
without Good Reason (as those terms
are defined in the Change in Control
Agreement), any unvested and outstanding
portion of the Restricted Stock shall
immediately and fully vest and no longer
be subject to any Transfer Restrictions
hereunder.
(f) For purposes of this Agreement, employment with the Company
shall include employment with the Company's
affiliates and its successors.
2.
Issuance of Shares. Certificates representing the shares of
Restricted
Stock shall be issued and held by the
Company in escrow (together with all
Additional Property (as defined below)
relating to such Restricted Stock) and
shall remain in the custody of the Company
until their delivery to the
Participant or the Participant's estate
pursuant to this Agreement and the Plan.
Subject to Section 7 (pertaining to the
withholding of taxes), as soon as
practicable after the Determination Date,
the Company shall issue and deliver to
the Participant one or more legended stock
certificates repre
