Exhibit 4
RESTRICTED
STOCK AGREEMENT
ALLOY, INC.
This AGREEMENT is made effective as of the 15th day
of April 2010 (the “Grant Date”), by and between Alloy, Inc. (the “Company”), a
Delaware corporation, and MATTHEW DRAPKIN (the “Participant”).
WHEREAS,
the Company has adopted the Amended and Restated Alloy, Inc. 2007 Employee,
Director and Consultant Stock Incentive Plan (the “Plan”) to promote the
interests of the Company by providing an incentive for employees, directors and
consultants of the Company or its Affiliates;
WHEREAS, pursuant to the provisions of the Plan, the Company desires to offer to
the Participant shares of the Company's common stock, $0.01 par value per
shar(“Common Stock”), in accordance with the provisions of the Plan, all on the
terms and conditions hereinafter set forth;
WHEREAS,
Participant wishes to accept said offer; and
WHEREAS,
the parties hereto understand and agree that any terms used and not defined
herein have the meanings ascribed to such terms in the Plan.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Terms of Grant. The
Participant hereby accepts the offer of the Company to issue to the Participant,
in accordance with the terms of the Plan and this Agreement, Four Thousand Six
Hundred and Thirty-Five (4,635) Shares of the Company's Common Stock (such
shares, subject to adjustment pursuant to Section 22 of the Plan and Subsection
2.1 (f) hereof, the "Granted Shares") at a purchase price of $0.01 per share
(the "Purchase Price"), receipt of which is hereby acknowledged by the
Participant's prior service to the Company and which amount will be reported as
income on the Participant's W-2 for this calendar year.
2
..1. Forfeiture Provisions.
(a) Lapsing Forfeiture Right. In
the event that for any reason the Participant is no longer an employee, director
or consultant of the Company or an Affiliate prior to February 1, 2013 (the
“Termination”), the Participant (or the Participant's Survivor) shall, on the
date of Termination, immediately forfeit to the Company (or its designee) all of
the Granted Shares which have not yet lapsed in accordance with the schedule set
forth below (the “Lapsing Forfeiture Right”).
The
Company's Lapsing Forfeiture Right is as follows:
(i) If the
Participant's Termination is prior to February 1, 2011, all of the Granted
Shares shall be forfeited to the Company.
(ii) If the
Participant's Termination is on or after February 1, 2011 but prior to February 1, 2012, three thousand ninety (3,090)
of the Granted Shares shall be forfeited to the Company; and,
(iii) If the
Participant’s Termination is on or after February 1, 2012 but prior
to February 1, 2013, one thousand five hundred forty-five
(1,545) of the Granted Shares shall be forfeited to the
Company.
(b) Effect of
Termination for Disability or upon
Death. The following rules apply if the Participant's Termination is by
reason of Disability or death: to the extent the Company's Lapsing Forfeiture
Right has not lapsed as of the date of Disability or death, as case may be, the
Participant shall forfeit to the Company any or all of the Granted Shares
subject to such Lapsing Forfeiture Right; provided, however, that the Company's
Lapsing Forfeiture Right shall be deemed to have lapsed to the extent of a pro
rata portion of the Granted Shares through the date of Disability or death, as
would have lapsed had the Participant not become Disabled or died, as the case
may be. The proration shall be based upon the number of days accrued in such
current vesting period prior to the Participant's date of Disability or death,
as the case may be.
(c) Escrow. The
certificates representing all Granted Shares acquired by the Participant
hereunder which from time to time are subject to the Lapsing Forfeiture Right
shall be delivered to the Company and the Company shall hold such Granted Shares
in escrow as provided in this Subsection 2.I(c). The Company shall promptly
release from escrow and deliver to the Participant a certificate for the whole
number of Granted Shares, if any, as to which the Company's Lapsing Forfeiture
Right has lapsed. In the event of forfeiture to the Company of Granted Shares
subject to the Lapsing Forfeiture Right, the Company shall release from escrow
and cancel a certificate for the number of Granted Shares so forfeited. Any
securities distributed in respect of the Granted Shares held in escrow,
including, without limitation, shares issued as a result of stock splits, stock
dividends or other recapitalizations, shall also be held in escrow in the same
manner as the Granted Shares.
(d) Prohibition on
Transfer. The Participant
recognizes and agrees that all Granted Shares which are subject to the Lapsing
Forfeiture Right may not be sold, transferred, assigned, hypothecated, pledged,
encumbered or otherwise disposed of, whether voluntarily or by operation of law,
other than to the Company (or its designee). However, the Participant, with the
approval of the Administrator, may transfer the Granted Shares for no
consideration to or for the benefit of the Participant's Immediate Family
(including, without limitation, to a trust for the benefit of the Participant's
Immediate Family or to a partnership or limited liability company for one or
more members of the Participant's Immediate Family), subject to such limits as
the Administrator may establish, and the transferee shall remain subject to all
the terms and conditions applicable to this Agreement prior to such transfer and
each such transferee shall so acknowledge in writing as a condition precedent to
the effectiveness of such transfer. The term "Immediate Family" shall mean the
Participant's spouse, former spouse, parents, children, stepchildren, adoptive
relationships, sisters, brothers, nieces and nephews and grandchildren (and, for
this purpose, shall also include the Participant. The Company shall not be
required to transfer any Granted Shares on its books which shall have been sold,
assigned or otherwise transferred in violation of this Subsection 2.I(d), or to
treat as the owner of such Granted Shares, or to accord the right to vote as
such owner or to pay dividends to, any person or organization to which any such
Granted Shares shall have been so sold, assigned or otherwise transferred, in
violation of this Subsection 2.I(d).
(e) Failure to Deliver Granted
Shares
to be
Forfeited. In the event that the Granted Shares to be forfeited to the
Company under this Agreement are not in the Company's possession pursuant to
Subsection 2.I(d) above or otherwise and the Participant or the Participant's
Survivor fails to deliver such Granted Shares to the Company (or its designee),
the Company may immediately take such action as is appropriate to transfer
record title of such Granted Shares from the Participant to the Company (or its
designee) and treat the Participant and such Granted Shares in all respects as
if delivery of such Granted Shares had been made as required by this Agreement.
The Participant hereby irrevocably grants the Company a power of attorney, which
shall be coupled with an interest for the purpose of effectuating the preceding
sentence.
(f) Adjustments. The Plan
contains provisions covering the treatment of Shares in a number of
contingencies such as stock splits and mergers. Provisions in the Plan for
adjustment with respect to the Granted Shares and the related provisions with
respect to successors to the business of the Company are hereby made applicable
hereunder and are incorporated herein by reference.
2.2 General Restrictions on
Transfer of Granted
Shares.
(a) The
Participant acknowledges and agrees that neither the Company nor, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Participant any material information regarding the business of
the Company or affecting the value of the Shares before, at the time of, or
following a Termination, including, without limitation, any information
concerning plans for the Company to make a public offering of its securities or
to be acquired by or merged with or into another firm or entity.
3. Securities Law Compliance. The
Participant specifically acknowledges and agrees that any sales of Granted
Shares shall be made in accordance with the requirements of the Securities Act
of 1933, as amended.
4. Rights as a Stockholder. The
Participant shall have all the rights of a stockholder with respect to the
Granted Shares, including voting and dividend rights, subject to the transfer
and other restrictions set forth herein and in the Plan.
5. Legend. In addition
to any legend required pursuant to the Plan, if certificates
representing
the Granted Shares are issued to the Participant pursuant to this Agreement,
such certificates shall have endorsed thereon a legend substantially as
follows:
“The
shares represented by this certificate are subject to restrictions set forth in
a Restricted Stock Agreement dated as of April 15, 2010 with this Company, a
copy of which Agreement is available for inspection at the offices of the
Company or will be made available upon request.”
6. Incorporation of the Plan. The
Participant specifically understands and agrees that the Granted Shares issued
under the Plan are being sold to the Participant pursuant to the Plan, a copy of
which Plan the Participant acknowledges he or she has read and understands and
by which Plan he or she agrees to be bound. The provisions of the Plan are
incorporated herein by reference.
7. Tax Liability of the Participant
and Payment of Taxes. The Participant
acknowledges and agrees that any income or other taxes due from the Participant
with respect to the Granted Shares issued pursuant to this Agreement, including,
without limitation, the Lapsing Forfeiture Right, shall be the Participant's
responsibility. Without limiting the foregoing, the Participant agrees that, to
the extent that the lapsing of restrictions on disposition of any of the Granted
Shares or the declaration of dividends on any such shares before the lapse of
such restrictions on disposition results in the Participant's being deemed to be
in receipt of earned income under the provisions of the Code, the Company shall
be entitled to immediate payment from the Participant of the amount of any tax
required to be withheld by the Company. The Company may withhold such amount
from the Granted Shares to be delivered to the Participant as set forth in
Section 26 of the Plan.
Upon execution of this Agreement, the Participant may file an election under
Section 83 of the Code in substantially the form attached as Exhibit B. The
Participant acknowledges that if he does not file such an election, as the
Granted Shares are released from the Lapsing Forfeiture Right in accordance with
Section 2.1, the Participant will have income for tax purposes equal to the fair
market value of the Granted Shares at such date, less the price paid for the
Granted Shares by the Participant. The Participant has been given the
opportunity to obtain the advice of his or her tax advisors with respect to the
tax consequences of the purchase of the Granted Shares and the provisions of
this Agreement.
8. Equitable Relief. The
Participant specifically acknowledges and agrees that in the event of a breach
or threatened breach of the provisions of this Agreement or the Plan, including
the attempted transfer of the Granted Shares by the Participant in violation of
this Agreement, monetary damages may not be adequate to compensate the Company,
and, therefore, in the event of such a breach or threatened breach, in addition
to any right to damages, the Company shall be entitled to equitable relief in
any court having competent jurisdiction. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies available to it for any
such breach or threatened breach.
9. No Obligation to Maintain
Relationship. The Company is
not by the Plan or this Agreement
obligated to continue the Participant as an employee, director or consultant of
the Company or an Affiliate. The Participant acknowledges: (i) that the Plan is
discretionary in nature and may be suspended or terminated by the Company at any
time; (ii) that the grant of the Shares is a one-time benefit which does not
create any contractual or other right to receive future grants of shares, or
benefits in lieu of shares; (iii) that all determinations with respect to any
such future grants, including, but not limited to, the times when shares shall
be granted, the number of shares to be granted, the purchase price, and the time
or times when each share shall be free from a lapsing repurchase or forfeiture
right, will be at the sole discretion of the Company; (iv) that the
Participant's participation in the Plan is voluntary; (v) that the value of the
Shares is an extraordinary item of compensation which is outside the scope of
the Participant's employment contract, if any; and (vi) that the Shares are not
part of normal or expected compensation for
purposes
of calculating any severance, resignation, redundancy, end of service payments,
bonuses, long-service awards, pension or retirement benefits or similar
payments.
10. Notices. Any notices
required or permitted by the terms of this Agreement or the Plan shall be given
by recognized courier service, facsimile, registered or certified mail, return
receipt requested, addressed as follows:
If to the
Company:
Alloy,
Inc.
151 W.
26th Street 11th Floor
Attention:
Chief Executive Officer
If to the Participant at the address set forth on the Company’s records
or to
such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given on the
earliest of receipt, one business day following delivery by the sender to a
recognized courier service, or three business days following mailing by
registered or certified mail.
11. Benefit of Agreement.
Subject to the provisions of the Plan and the other provisions hereof, this
Agreement shall be for the benefit of and shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties
hereto.
12. Governing Law. This
Agreement shall be construed and enforced in accordance with the laws of the
State of Delaware, without giving effect to the conflict of law principles
thereof. For the purpose of litigating any dispute that arises under this
Agreement, whether at law or in equity, the parties hereby consent to exclusive
jurisdiction in New York and agree that such litigation shall be conducted in
the state courts of New York, New York or the federal courts of the United
States for the Southern District of New York.
13. Severability. If any
provision of this Agreement is held to be invalid or unenforceable by a court of
competent jurisdiction, then such provision or provisions shall be modified to
the extent necessary to make such provision valid and enforceable, and to the
extent that this is impossible, then such provision shall be deemed to be
excised from this Agreement, and the validity, legality and enforceability of
the rest of this Agreement shall not be affected thereby.
14. Entire Agreement.
This Agreement, together with the Plan, constitutes the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement not expressly set forth in this Agreement shall affect or
be used to interpret, change or restrict the
express terms and provisions of this Agreement provided, however, in any event,
this Agreement shall be subject to and governed by the Plan.
15. Modifications and
Amendments; Waivers and Consents. The
terms and provisions of this Agreement may be modified or amended as provided in
the Plan. Except as provided in the Plan, the terms and provisions of this
Agreement may be waived, or consent for the departure there from granted, only
by written document executed by the party entitled to the benefits of such terms
or provisions. No such waiver or consent shall be deemed to be or shall
constitute a waiver or consent with respect to any other terms or provisions of
this Agreement, whether or not similar. Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.
16. Consent of Spouse/Domestic Partner.
If the Participant has a spouse or domestic partner as of the date of this
Agreement, the Participant's spouse or domestic partner shall execute a Consent
of Spouse/Domestic Partner in the form of Exhibit A hereto,
effective as of the date hereof. Such consent shall not be deemed to confer or
convey to the spouse or domestic partner any rights in the Granted Shares that
do not otherwise exist by operation of law or the agreement of the parties. If
the Participant subsequent to the date hereof, marries, remarries or applies to
the Company for domestic partner benefits, the Participant shall, not later than
60 days thereafter, obtain his or her new spouse/domestic partner's
acknowledgement of and consent to the existence and binding effect of all
restrictions contained in this Agreement by having such spouse/domestic partner
execute and deliver a Consent of Spouse/Domestic Partner in the form of Exhibit
A.
17. Counterparts. This Agreement may
be executed in one or more counterparts, and by different parties hereto on
separate counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
18. Data Privacy. By
entering into this Agreement, the Participant: (i) authorizes the Company and
each Affiliate, and any agent of the Company or any Affiliate administering the
Plan or providing Plan record keeping services, to disclose to the Company or
any of its Affiliates such information and data as the Company or any such
Affiliate shall request in order to facilitate the grant of Shares and the
administration of the Plan; (ii) waives any data privacy rights he or she may
have with respect to such information; and (iii) authorizes the Company and each
Affiliate to store and transmit such information in electronic
form.
[THE NEXT
PAGE IS THE SIGNATURE PAGE]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
Title: Chief Legal
Officer, General Counsel
7
