printer-friendly

Sample Business Contracts

Restricted Stock Agreement - YP Corp. and Peter J. Bergmann

Sponsored Links

                           RESTRICTED STOCK AGREEMENT

     This  Restricted  Stock Agreement (the "Agreement") is entered into between
YP  Corp.,  a  Nevada  corporation  (the  "Company"), and Peter J. Bergmann (the
"Grantee"),  as  of  June  6,  2004  ("Date  of  Grant").

                                   Background

     The  Company  and Grantee have entered into an Employment Agreement of even
date  herewith  ("Employment Agreement").  Pursuant to the Employment Agreement,
the Company is obligated to grant Grantee shares of common stock of the Company,
$.001  par  value  per  share,  subject  to  the  restrictions set forth in this
Agreement.

                                    Agreement

     In  consideration  of the mutual covenants and conditions in this Agreement
and for other good and valuable consideration, the Company and the Grantee agree
as  follows:

          1.   GRANT  OF  STOCK.
               ----------------

          Subject  to  the  terms  of  this Agreement, the Company hereby grants
1,000,000 shares of the Company's common stock, $.001 par value (the "Stock") to
the Grantee. The delivery of any documents evidencing the Stock granted pursuant
to  this  Agreement  shall  be  subject  to  the  provisions of Section 5 below.
                                                                ----------

          2.   RIGHTS  OF  GRANTEE.
               -------------------

          Upon  the  execution  of  this  Agreement,  the  Grantee will become a
shareholder  with respect to all of the Stock granted to him pursuant to Section
                                                                         -------
1  and  will have all of the rights of a shareholder in the Company with respect
-
to  all  such Stock including the right to vote and receive dividends; provided,
                                                                       --------
however,  that  such Stock will be subject to the restrictions set forth in this
-------
Agreement.

          3.   RESTRICTIONS  ON  STOCK  SUBJECT  TO  THIS  AGREEMENT.
               -----------------------------------------------------

               A.   General.
                    -------

               Except  as set forth in this Agreement, the Grantee will transfer
those shares of Stock for which the restrictions have not lapsed under Section 4
                                                                       ---------
to  the  Company  immediately  and  without  any  payment  to the Grantee if the
Grantee's  employment  or  status  as  a  non-employee service provider with the
Company  (or  its  Subsidiary) is terminated for any reason. Notwithstanding the
foregoing,  in  the  event that Grantee's employment or status as a non-employee
service  provider  with the Company (or its Subsidiary) is terminated six months
or more after the Date of Grant as a result of Grantee's death or Disability (as
defined  in  the  Employment  Agreement), Grantee or Grantee's beneficiaries, as
applicable,  will  be  permitted  to  retain the Stock subject to the continuing
restrictions  set  forth  in  this  Agreement.


<PAGE>
               B.   Limitations  on  Transfer.
                    -------------------------

               Unless approved by the Committee or the Board, the Grantee agrees
not  to  sell,  transfer, pledge, exchange, hypothecate, or otherwise dispose of
any  shares  of Stock under this Agreement ("Transfer") before the date on which
the  restrictions  on  those shares of Stock lapse in accordance with Section 4.
                                                                      ----------
Any  attempted  disposition  of the Stock in violation of the preceding sentence
will be null and void, and the Company will not recognize or give effect to such
transfer  on  its  books  and records or recognize the person or persons to whom
such  proposed  transfer  has  been made as the legal or beneficial owner of the
shares  of  Stock.  In the event that a Transfer is approved by the Committee or
the  Board,  the  Grantee  must,  prior to consummating or effecting a Transfer,
first obtain the written agreement of the transferee to be bound by the terms of
this  Agreement  as  if  such  transferee  were  deemed  the original "Grantee."

          4.   LAPSE  OF  RESTRICTIONS.
               -----------------------

               A.   Schedule.
                    --------

               Subject  to  the  other  conditions  in  this  Section  4,  the
                                                              -----------
restrictions  on  the Stock set forth in Section 3 will lapse in accordance with
                                         ---------
the  following  schedule, subject to and as adjusted for, in the case of closing
prices  of  the  Company's  common  stock,  stock  splits, reverse stock splits,
combinations,  reclassifications  and  the  like:





                    Date Restriction Lapses                          Percentage of Stock Becomes
               (earlier to occur of the following)                           Unrestricted
                                                                  

               Third Anniversary of Date of Grant                                            100%
-------------------------------------------------------------------  ----------------------------
   Change of Control (as defined in the Company's 2003 Stock Plan)                           100%
-------------------------------------------------------------------  ----------------------------
Termination of Grantee's Employment with Company by Grantee for
  "Good Reason" (as defined in the Employment Agreement)                                     100%
-------------------------------------------------------------------  ----------------------------
Date that Company's common stock as listed on the Over-the-Counter
  Bulletin Board, Nasdaq, the American Stock Exchange, The New
York Stock Exchange, or a similar exchange or quotation system
("Exchange") reaches an average closing price of $4 for three
                     consecutive trading days                                                 20%
-------------------------------------------------------------------  ----------------------------
Date that Company's common stock as listed on an Exchange reaches
  an average closing price of $5 for three consecutive trading days                           40%
-------------------------------------------------------------------  ----------------------------
Date that Company's common stock as listed on an Exchange reaches
  an average closing price of $6 for three consecutive trading days                           60%
-------------------------------------------------------------------  ----------------------------
Date that Company's common stock as listed on an Exchange reaches
  an average closing price of $7 for three consecutive trading days                           80%
-------------------------------------------------------------------  ----------------------------
Date that Company's common stock as listed on an Exchange reaches
  an average closing price of $8 for three consecutive trading days                          100%
-------------------------------------------------------------------  ----------------------------




               Notwithstanding the above, if the Grantee's employment or service
is  terminated  for  Cause (as defined in the Employment Agreement), the Grantee
will be required to transfer all shares of Stock set forth in Section 1 (whether
                                                              ---------
or  not  subject to restrictions set forth in Section 3) back to the Company for
                                              ----------
no  consideration,  excluding  shares  of  Stock  that  have been transferred by
Grantee  in  accordance  with  the  terms  of  this  Agreement.


                                      -2-
<PAGE>
               B.   Condition  That Must be Satisfied Before Restrictions Lapse.
                    ------------------------------------------------------------

               Subject  to  Section 3A, the restrictions on the Stock subject to
                            -----------
this Agreement will not lapse unless the Grantee is employed by, or is providing
services to, the Company (or a Subsidiary) as of the date the restrictions lapse
in  accordance  with  the  above  schedule.

          5.   SECURITIES  ACT.
               ---------------

               A.   Registration.
                    ------------

               Without  limiting  the  registration  rights  set  forth  in  the
Employment  Agreement,  the  Company  agrees to register the Stock pursuant to a
Form  S-8  registration statement filed within 30 days following the date hereof
and  to file a reoffer prospectus with the Form S-8 to permit Executive to offer
and  sell  the  Stock  and  to  maintain  the effectiveness of such registration
statement  and  prospectus for a period of at least two years after restrictions
on  the  Stock  lapse.

               B.   Condition  on  Delivery  of  Stock.
                    ----------------------------------

               The  Company  will not be required to deliver any shares of Stock
if,  in  the  opinion of counsel for the Company, the issuance would violate the
Securities  Act of 1933 or any other applicable federal or state securities laws
or  regulations.  The  Company  may  require  the Grantee, prior to or after the
issuance  of  any  such  Stock,  to  sign  and  deliver to the Company a written
statement ("Investment Letter") in form and content acceptable to the Company in
its  sole discretion. Grantee agrees (i) that the Grantee is acquiring the Stock
for  investment  and  not  with a view to the sale or distribution thereof, (ii)
that the Grantee will not sell any Stock received hereunder that remains subject
to restrictions except with the prior written approval of the Company, and (iii)
that  Grantee  will  comply  with the Securities Act of 1933 or other applicable
federal  or  state  securities  laws  and  regulations.

               C.   Legend.
                    ------

               If   the  Stock  has not been registered under the Securities Act
of  1933  or  other  applicable federal or state securities laws or regulations,
such  shares will bear a legend restricting the transferability. The legend will
be  substantially  in  the  following  form:

          "The Stock represented by this certificate have not been registered or
          qualified under federal or state securities laws. The Stock may not be
          offered  for  sale,  sold, pledged, or otherwise disposed of unless so
          registered  or  qualified,  unless  an exemption exists or unless such
          disposition  is  not  subject to the federal or state securities laws,
          and  the  availability of any exemption or the inapplicability of such
          securities  laws  must  be established by an opinion of counsel, which
          opinion  of  counsel  will be reasonably satisfactory to the Company."


                                      -3-
<PAGE>
          6.   REPRESENTATIONS  OF  GRANTEE.
               ----------------------------

     In  connection  with  Grantee's  receipt  of  the  Stock,  Grantee  hereby
represents  and  warrants  to  the  Company  as  follows:

               A.   Further  Limitations  on  Disposition.
                    -------------------------------------

          Grantee  understands  and  acknowledges  that  he  may  not  make  any
disposition,  sale, or transfer (including transfer by gift or operation of law)
of  all  or  any  portion  of  the  Stock  except as provided in this Agreement.
Moreover,  Grantee  agrees  to  make no disposition of all or any portion of the
Stock  unless  and  until:  (i) there is then in effect a registration statement
under  the  Securities  Act  of 1933 covering such proposed disposition and such
disposition  is  made  in  accordance with said Registration Statement; (ii) the
resale  provisions  of  Rule  701  or  Rule  144 are available in the opinion of
counsel to the Company; or (iii)(A) Grantee notifies the Company of the proposed
disposition  and  has  furnished  the  Company  with a detailed statement of the
circumstances  surrounding  the  proposed disposition, (B) Grantee furnishes the
Company with an opinion of Grantee's counsel to the effect that such disposition
will  not  require  registration of such Stock under the Securities Act, and (C)
such  opinion of Grantee's counsel shall have been concurred with by counsel for
the  Company  and  the  Company  shall have advised Grantee of such concurrence.

               B.   Determination  of  Fair  Market  Value.
                    --------------------------------------

          Grantee understands Fair Market Value of the Stock shall be determined
in  accordance  with  Section  3.1(k)  of  the  Company's  2003  Stock  Plan.

               C.   Section  83(b)  Election.
                    ------------------------

          Grantee  understands  that  Section 83 of the Internal Revenue Code of
1986  (the  "Code")  taxes  as ordinary income the difference between the amount
paid  for  the  Stock  and the fair market value of the Stock as of the date any
restrictions  on  the  Stock  lapse.  In  this  context, "restriction" means the
restrictions  set  forth in Section 3. The Grantee understands that he may elect
                            ---------
to  be  taxed at the time the Stock is granted rather than when and as the Stock
vests  by  filing  an election under Section 83(b) of the Code with the Internal
Revenue  Service  within 30 days from the Date of Grant. The Grantee understands
that  failure  to  make  this  filing  timely  will result in the recognition of
ordinary  income by the Grantee, as the Stock vests, on the Fair Market Value of
the  Stock  at  the  time  such  restrictions  lapse.

          THE  GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE'S SOLE RESPONSIBILITY
          AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b),
          EVEN  IF  THE  GRANTEE  REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO
          MAKE  THIS  FILING  ON  THE  GRANTEE'S  BEHALF.


                                      -4-
<PAGE>
          7.   NONTRANSFERABILITY  OF  AGREEMENT.
               ---------------------------------

          Unless approved by the Committee or the Board, this Agreement will not
be transferable by the Grantee during his life other than by will or pursuant to
applicable laws of descent and distribution. Unless approved by the Committee or
the  Board,  any  rights  and privileges of the Grantee will not be transferred,
assigned,  pledged,  or  hypothecated  by the Grantee, or by any other person or
persons,  in any way, whether by operation of law, or otherwise, and will not be
subject  to  execution, attachment, garnishment or similar process. In the event
of any such occurrence, this Agreement will automatically be terminated and will
thereafter  be  null  and  void.

          8.   FEDERAL  AND  STATE  TAXES.
               --------------------------

          The  Grantee  may  incur  certain  liabilities  for federal, state, or
local  taxes  and  the  Company  may  be required by law to withhold taxes. Upon
determination  of  the year in which such taxes are due and the determination by
the  Company  of  the amount of taxes required to be withheld, the Grantee shall
pay  an amount equal to the amount of federal, state, or local taxes required to
be  withheld  to  the  Company.

          9.   ADJUSTMENT  OF  SHARES.
               ----------------------

          The  number of shares of Stock granted to the Grantee pursuant to this
Agreement will be proportionately adjusted in the event of any recapitalization,
forward  or  reverse  split,  reorganization,  merger,  consolidation, spin-off,
combination,  repurchase,  or  share  exchange,  or  other  similar  corporate
transaction  or  event affecting the Stock all as set forth in Article 11 of the
                                                               ----------
Company's  2003  Stock  Plan.

          10.  AMENDMENT  OF  THIS  AGREEMENT.
               ------------------------------

          This Agreement  may  only  be amended with the written approval of the
Grantee  and  the  Company.

          11.  GOVERNING  LAW.
               --------------

          This Agreement  shall  be  governed  in  all  respects,  whether as to
validity,  construction, capacity, performance, or otherwise, by the laws of the
State  of  Arizona.

          12.  SEVERABILITY.
               ------------

          In   the  event that a court of competent jurisdiction determines that
any  portion  of this Agreement is in violation of any statute or public policy,
then  only  the  portions of this Agreement which violate such statute or public
policy  shall  be  stricken. All portions of this Agreement which do not violate
any  statute  or public policy shall continue in full force and effect. Further,
any court order striking any portion of this Agreement shall modify the stricken
terms  as  narrowly  as  possible  to  give  as  much  effect as possible to the
intentions  of  the  parties  under  this  Agreement.


                                      -5-
<PAGE>
     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its  duly  authorized representative and Grantee has signed this Agreement as of
the  day  and  year  first  written  above.

YP  CORP.,  a  Nevada  corporation                  GRANTEE


/s/  DeVal  Johnson                                 /s/  Peter  J.  Bergmann
--------------------------                          ------------------------
DeVal  Johnson                                      Peter  J.  Bergmann
Executive  Vice  President
and  Corporate  Secretary











            [Signature Page to YP. Corp. Restricted Stock Agreement]