Scienture Holdings, Inc 8-K, filed Sep 1, 2022
Scienture Holdings, Inc. (SCNX)
About this 8-K
Scienture Holdings, Inc filed this 8-K on September 1, 2022, reporting on events of August 26, 2022.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of Earliest Event Reported):
(Exact name of Registrant as specified in its charter)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Director
On August 26, 2022, Christine L. Jennings resigned as a member of the Board of Directors of TRxADE HEALTH, INC. (“TRxADE”, the “Company”, “we” and “us”), effective on the same date. Ms. Jennings indicated that her resignation was not the result of any disagreement with the Company. Prior to her resignation, Ms. Jennings served on the Company’s Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. The Board intends to conduct a prompt director search process to find a well-qualified replacement member of the Board of Directors.
Reduced Officer and Employee Cash Compensation
Effective September 1, 2022, the Board of Directors and Compensation Committee, with the approval of each of the following officers, agreed to reduce the annual cash compensation payable to Suren Ajjarapu, the Company’s Chief Executive Officer; Prashant Patel, the Company’s President and Chief Operating Officer and Janet Huffman, the Company’s Chief Financial Officer, in an effort to conserve cash.
Specifically, effective beginning on September 1, 2022, the cash salaries of the officers set forth below were reduced in the following amounts, applied pro rata for the 2022 fiscal year, which reductions in salary will remain in place until otherwise determined by the Board of Directors and/or Compensation Committee:
| Officer | Position with Company | Reduced Cash Salary | Shares of Common Stock In Lieu of Reduced Cash Salary | |||||||
| Suren Ajjarapu | CEO | $ | 60,000 | 51,724 | ||||||
| Prashant Patel | President and COO | $ | 10,000 | 8,620 | ||||||
| Janet Huffman | CFO | $ | 25,000 | 21,551 | ||||||
In lieu of the reduced cash salary payable to each officer, the Board and Compensation Committee agreed to issue such officers shares of the Company’s common stock as set forth in the table above under “Shares of Common Stock In Lieu of Reduced Cash Salary”, equal to the amount of reduced cash salary set forth in the table above, divided by the closing sales price of the Company’s common stock on the NASDAQ Capital Market on August 31, 2022, the date approved by the Board of Directors.
The shares of common stock issuable to the officers vest at the rate of 1/4th of such shares on each of September 30, 2022, October 31, 2022, November 30, 2022, and December 31, 2022, subject to each applicable Officer’s continued service to the Company on such dates and subject to the restricted stock award agreements entered into to evidence such awards.
The reductions in officer were documented by (a) a Second Amendment to Employment Agreement with Mr. Ajjarapu, (b) a First Amendment to Employment Agreement with Mr. Patel; and (c) an Amendment to Offer Letter with Ms. Huffman, which were entered into between the Company and each officer, as applicable, on August 31, 2022 (collectively, the “Employment Amendments”). Mr. Ajjarapu’s agreement also clarified that any severance payment paid to Mr. Ajjarapu under the terms of his Employment Agreement, described in the Company’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 21, 2022, under “Executive Compensation—Employment and Consulting Agreements”, would reduce any Change of Control Payment payable to Mr. Ajjarapu under the terms of his agreement, as amended.
Separately, certain employees of the Company agreed to reduce their cash salaries by an aggregate of $37,000 in consideration for an aggregate of 31,896 shares of the Company’s restricted common stock, with the same vesting terms as the officer shares discussed above.
The reductions in cash salary discussed above were implemented in order for the Company to conserve cash and reduce its cash operating expenses.
All of the awards discussed above were issued under the Company’s Second Amended and Restated 2019 Equity Incentive Plan (the “2019 Plan”) and all restricted stock awards discussed above were evidenced by Restricted Stock Grant Agreements.
The description of the Employment Amendments and Restricted Stock Grant Agreements above are not complete and are qualified in their entirety by the Employment Amendments and Form of Restricted Stock Grant Agreement (August 2022 Employee and Officer Grants) copies of which are attached hereto as Exhibits 10.3, 10.5, 10.7 and 10.9, respectively, and which are incorporated by reference into this Item 5.02 by reference in their entirety.
Item 8.01 Other Events.
2022 Independent Director Compensation
Effective on August 31, 2022, the Board of Directors approved the issuance of 54,525 shares of common stock of the Company to each independent member of the Board of Directors, for services rendered to the Company during fiscal 2022, which shares were valued at $63,250, and based on the closing sales price of the Company’s common stock on the date approved by the Board of Directors. The shares vest at the rate of 1/4th of such shares immediately on the grant date, and 1/4th of such shares on each of October 1, 2022, January 1, 2023 and April 1, 2023, subject to each applicable independent director’s continued service to the Company on such dates.
All of the awards discussed above were issued under the Company’s Second Amended and Restated 2019 Plan and all restricted stock awards discussed above were evidenced by Restricted Stock Grant Agreements.
The description of the Restricted Stock Grant Agreements above are not complete and are qualified in their entirety by the Form of Restricted Stock Grant Agreement (August 2022 Board Grants) a copy of which is attached hereto as Exhibit 10.10, and incorporated by reference into this Item 8.01 by reference in its entirety.
Reduction in Independent Director Cash Compensation
Also on August 31, 2022, in an effort to conserve cash for operations, the Board approved a reduction in the annual cash retainer payable to independent members of the Board of Directors from $35,000 per year to $26,750 per year, effective as of September 1, 2022.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
* Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TRxADE HEALTH, INC. | ||
| Date: September 1, 2022 | By: | /s/ Suren Ajjarapu |
| Name: | Suren Ajjarapu | |
| Title: | Chief Executive Officer | |
Exhibit 10.3
TRXADE HEALTH, INC.
SECOND AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
THIS SECOND AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (this “Amendment”) is entered into on August 29, 2022, and effective as of September 1, 2022 (the “Effective Date”), by and between TRxADE HEALTH, INC., a Delaware corporation (the “Company”), and Suren Ajjarapu, an individual (the “Executive”) (each of the Company and Executive are referred to herein as a “Party”, and collectively referred to herein as the “Parties”).
WHEREAS, effective on April 14, 2020, the Parties entered into an Executive Employment Agreement 1, which was amended on May 5, 2020, by the entry into the First Amendment to Executive Employment Agreement 2 (as amended, the “Agreement”); and
WHEREAS, the Parties desire to amend the Agreement on the terms set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual covenants, agreements, and considerations herein contained, and other good and valuable consideration, which consideration the parties hereby acknowledge and confirm the receipt and sufficiency thereof, the parties hereto agree as follows:
1. Amendments to Agreement.
(a) Effective as of the Effective Date, Section 2.1 of the Agreement is amended and restated to read as follows:
“2.1. Base Salary. So long as this Agreement remains in effect, for all services rendered by Executive hereunder and all covenants and conditions undertaken by the Parties pursuant to this Agreement, the Company shall pay, and Executive shall accept, as compensation, an annual base salary (“Base Salary”) of $360,000, which shall be payable in cash; provided that solely during the 12 month period from September 1, 2022 to August 31, 2023, the Base Salary shall be paid by way of (a) $300,000 in cash; and (b) $60,000 in shares of the Company’s common stock, issuable pursuant to the Company’s Second Amended and Restated 2019 Equity Incentive Plan, and valued at the closing sales price of the Company’s common stock on the Nasdaq Capital Market on the date that the Second Amendment to Executive Employment Agreement effective September 1, 2022, is approved by the Board of Directors and Compensation Committee of the Company, and with such vesting terms as approved by the Board of Directors and Compensation Committee. The Base Salary shall be payable in regular installments in accordance with the normal payroll practices of the Company, in effect from time to time, but in any event no less frequently than on a monthly basis (except as discussed above). For so long as Executive is employed hereunder, beginning December 31, 2020, and on each December 31st thereafter, the Base Salary may be increased as determined by the Compensation Committee of the Board (the “Compensation Committee”), in its sole and absolute discretion. Additionally, in the event that Executive meets at least 70% of the requirements for any annual Performance Bonus, as determined in the reasonable discretion of the Compensation Committee of the Board of Directors, pursuant to the timeline and requirements of Section 2.3 hereof, Executive’s Base Salary shall increase by 20% (effective upon confirmation by the Compensation Committee that such metrics were met)(the “Base Salary Increase”). Executive shall be eligible for the Base Salary Increase on an annual basis with such increases being cumulative. Such increases in salary shall be documented in the Company’s records, but shall not require the Parties enter into a new or amended form of this Agreement.”
(b) Effective as of the Effective Date, Section 3.2 of the Agreement is amended to include the following sentence at the end thereof which shall begin immediately following the last sentence of the current Section 3.2:
“Any severance payments previously paid to the Executive under Section 3.4.2 hereof shall be subtracted by the Change of Control Payment payable pursuant to this Section 3.2.”
1 https://www.sec.gov/Archives/edgar/data/1382574/000149315220006512/ex10-4.htm
2 https://www.sec.gov/Archives/edgar/data/1382574/000149315220007876/ex10-2.htm
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written to be effective as of the Effective Date.
| “COMPANY” | ||
| TRXADE HEALTH, INC. | ||
| a Delaware corporation | ||
| By: | /s/ Donald G. Fell | |
| Name: | Donald G. Fell | |
| Title: | Chairman of the Compensation Committee of the Board of Directors | |
| “EXECUTIVE” | ||
/s/ Suren Ajjarapu | ||
| Suren Ajjarapu | ||
Second Amendment to Executive Employment Agreement August 2022 Suren Ajjarapu Page 2 of 2 |
Exhibit 10.5
TRXADE, INC.
FIRST AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (this “Amendment”) is entered into on August 29, 2022, and effective as of September 1, 2022 (the “Effective Date”), by and between TRxADE, INC., a Florida corporation (the “Company”), and Prashant Patel, an individual (the “Executive”) (each of the Company and Executive are referred to herein as a “Party”, and collectively referred to herein as the “Parties”).
WHEREAS, effective on May 24, 2013, the Parties entered into an Executive Employment Agreement 1 (as amended, the “Agreement”); and
WHEREAS, the Parties desire to amend the Agreement on the terms set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual covenants, agreements, and considerations herein contained, and other good and valuable consideration, which consideration the parties hereby acknowledge and confirm the receipt and sufficiency thereof, the parties hereto agree as follows:
1. Amendment to Agreement.
(a) Effective as of the Effective Date, a new Section 6(c) shall be added to the Agreement which shall provide as follows:
“(c) Solely during the 12 month period from September 1, 2022 to August 31, 2023, a total of $10,000 of the Base Salary payable to Executive shall be paid by way of $10,000 in shares of common stock of TRxADE HEALTH, INC., the Company’s parent corporation (the “Parent”), issuable pursuant to the Parent’s Second Amended and Restated 2019 Equity Incentive Plan, and valued at the closing sales price of the Parent’s common stock on the Nasdaq Capital Market on the date that the Amendment to Executive Employment Agreement effective September 1, 2022, is approved by the Board of Directors and Compensation Committee of the Parent, and with such vesting terms as approved by the Board of Directors and Compensation Committee of the Parent.”
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written to be effective as of the Effective Date.
| “COMPANY” |
| |
| TRXADE, INC. | ||
| a Florida corporation | ||
| By: | /s/ Suren Ajjarapu | |
| Name: | ||
| Title: | ||
| “EXECUTIVE” | ||
| /s/ Prashant Patel | ||
| Prashant Patel | ||
1 https://www.sec.gov/Archives/edgar/data/1382574/000107878214001329/form10_ex10z6.htm
Exhibit 10.7
TRXADE HEALTH, INC.
FIRST AMENDMENT TO
OFFER LETTER
THIS FIRST AMENDMENT TO OFFER LETTER (this “Amendment”) is entered into on August 29, 2022, and effective as of September 1, 2022 (the “Effective Date”), by and between TRxADE HEALTH, INC., a Delaware corporation (the “Company”), and Janet Huffman, an individual (the “Executive”) (each of the Company and Executive are referred to herein as a “Party”, and collectively referred to herein as the “Parties”).
WHEREAS, effective on February 3, 2022, the Parties entered into an Offer Letter1 (as amended, the “Agreement”); and
WHEREAS, the Parties desire to amend the Agreement on the terms set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual covenants, agreements, and considerations herein contained, and other good and valuable consideration, which consideration the parties hereby acknowledge and confirm the receipt and sufficiency thereof, the parties hereto agree as follows:
1. Amendment to Agreement.
(a) Effective as of the Effective Date, a new Section 4(c) shall be added to the Agreement which shall provide as follows:
| “c. | Solely during the 12 month period from September 1, 2022 to August 31, 2023, a total of $25,000 of the Annual Base Salary payable to Executive shall be paid by way of $25,000 in shares of the Company’s common stock, issuable pursuant to the Company’s Second Amended and Restated 2019 Equity Incentive Plan, and valued at the closing sales price of the Company’s common stock on the Nasdaq Capital Market on the date that the Amendment to Offer Letter effective September 1, 2022, is approved by the Board of Directors and Compensation Committee of the Company, and with such vesting terms as approved by the Board of Directors and Compensation Committee.” |
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written to be effective as of the Effective Date.
| “COMPANY” | TRXADE HEALTH, INC. | |
| a Delaware corporation | ||
| By: | /s/ Donald G. Fell | |
| Name: | Donald G. Fell | |
| Title: | Chairman of the Compensation Committee of the Board of Directors | |
| “EXECUTIVE” | ||
/s/ Janet Huffman | ||
| Janet Huffman | ||
1 https://www.sec.gov/Archives/edgar/data/1382574/000149315222008842/ex10-1.htm
Exhibit 10.9
TRXADE HEALTH, INC.
2019 EQUITY INCENTIVE PLAN
NOTICE OF RESTRICTED STOCK GRANT
Capitalized but otherwise undefined terms in this Notice of Restricted Stock Grant and the attached Restricted Stock Grant Agreement shall have the same defined meanings as in the TRxADE HEALTH, INC. Amended and Restated 2019 Equity Incentive Plan (as amended from time to time) (as amended from time to time, the “Plan”).
Grantee Name:
Address: ________________________________________
You have been granted Restricted Stock (“Shares”) subject to the terms and conditions of the Plan and the attached Restricted Stock Grant Agreement, as follows:
| Date of Grant: | August 31, 2022 |
| Vesting Commencement Date: | August 31, 2022 |
| Price Per Share: | $1.16 |
| Total Number of Shares Granted: | ______ |
| Total Value of Shares Granted: | $ |
| Total Purchase Price: | $0, Issued In Consideration For Services |
| Agreement Date: | August 31, 2022 |
Vesting Schedule: 1/4th of the Shares vest on September 30, 2022 and October 31, 2022, November 30, 2022 and December 31, 2022, subject to the terms of the applicable Restricted Stock Grant Agreement which follows and the Plan.
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TRXADE HEALTH, INC.
2019 EQUITY INCENTIVE PLAN
RESTRICTED STOCK GRANT AGREEMENT
This RESTRICTED STOCK GRANT AGREEMENT (“Agreement”), dated as of the Agreement Date specified on the Notice of Restricted Stock Grant is made by and between TRxADE HEALTH, INC., a Delaware corporation (the “Company”), and the grantee named in the Notice of Restricted Stock Grant (the “Grantee,” which term as used herein shall be deemed to include any successor to Grantee by will or by the laws of descent and distribution, unless the context shall otherwise require).
BACKGROUND
Pursuant to the Plan, the Board (or an authorized Committee thereof), approved the issuance to Grantee, effective as of the date set forth above, of an award of the number of shares of Restricted Stock as is set forth in the attached Notice of Restricted Stock Grant (which is expressly incorporated herein and made a part hereof, the “Notice of Restricted Stock Grant”) at the purchase price per share of Restricted Stock (the “Purchase Price”), if any, set forth in the attached Notice of Restricted Stock Grant, upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual premises and undertakings hereinafter set forth, the parties agree as follows:
1. Grant and Purchase of Restricted Stock. The Company hereby grants to Grantee, and Grantee hereby accepts the Restricted Stock set forth in the Notice of Restricted Stock Grant, subject to the payment by Grantee of the total purchase price, if any, set forth in the Notice of Restricted Stock Grant.
2. Stockholder Rights.
(a) Voting Rights. Until such time as all or any part of the Restricted Stock are forfeited to the Company under this Agreement, if ever, Grantee (or any successor in interest) has the rights of a stockholder, including voting rights, with respect to the Restricted Stock subject, however, to the transfer restrictions or any other restrictions set forth in the Plan.
(b) Dividends and Other Distributions. During the period of restriction, Participants holding Restricted Stock are entitled to all regular cash dividends or other distributions paid with respect to all shares while they are so held. If any such dividends or distributions are paid in shares, such shares will be subject to the same restrictions on transferability and forfeitability as the Restricted Stock with respect to which they were paid.
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3. Vesting of Restricted Stock.
(a) The Restricted Stock are restricted and subject to forfeiture until vested. The Restricted Stock which have vested and are no longer subject to forfeiture are referred to as “Vested Shares.” All Restricted Stock which have not become Vested Shares are referred to as “Nonvested Shares.”
(b) Restricted Stock will vest and become nonforfeitable in accordance with the vesting schedule contained in the Notice of Restricted Stock Grant.
(c) Any Nonvested Shares of Grantee will automatically vest and become nonforfeitable if Grantee’s service with the Company ceases owing to the Grantee’s Retirement, unless the Board (or an authorized committee thereof) provides otherwise.
(d) In the event of a Change of Control, the Board (or an authorized committee thereof), in its discretion, may accelerate the time at which all or any portion of Grantee’s Restricted Stock will vest.
(e) Terms used in Section 3 and Section 4 have the following meanings:
(i) “Cause” has the meaning ascribed to such term or words of similar import in Grantee’s written employment or service contract with the Company or its subsidiaries and, in the absence of such agreement or definition, means Grantee’s (i) conviction of, or plea of nolo contendere to, a felony or crime involving moral turpitude; (ii) fraud on or misappropriation of any funds or property of the Company or its subsidiaries, or any affiliate, customer or vendor; (iii) personal dishonesty, incompetence, willful misconduct, willful violation of any law, rule or regulation (other than minor traffic violations or similar offenses), or breach of fiduciary duty which involves personal profit; (iv) willful misconduct in connection with Grantee’s duties or willful failure to perform Grantee’s responsibilities in the best interests of the Company or its subsidiaries; (v) illegal use or distribution of drugs; (vi) violation of any material rule, regulation, procedure or policy of the Company or its subsidiaries, the violation of which could have a material detriment to the Company; or (vii) material breach of any provision of any employment, non-disclosure, non-competition, non-solicitation or other similar agreement executed by Grantee for the benefit of the Company or its subsidiaries, all as reasonably determined by the Board of Directors of the Company, which determination will be conclusive.
(ii) “Retirement” means Grantee’s retirement from Company employ at or above the age 65 as determined in accordance with the policies of the Company or its subsidiaries, if any, in good faith by the Board of Directors of the Company, which determination will be final and binding on all parties concerned.
(f) Nonvested Shares may not be sold, transferred, assigned, pledged, or otherwise disposed of, directly or indirectly, whether by operation of law or otherwise. The restrictions set forth in this Section will terminate upon a Change of Control.
4. Forfeiture of Nonvested Shares. Except as provided herein, if Grantee’s service with the Company ceases for any reason (including Disability) other than Grantee’s (a) Retirement or (b) death, any Nonvested Shares will be automatically forfeited to the Company for no consideration; unless the Board (or an authorized committee thereof) provides otherwise, and provided, however, that the Board (or an authorized committee thereof) may cause any Nonvested Shares immediately to vest and become nonforfeitable if Grantee’s service with the Company is terminated by the Company without Cause.
Page 3 of 9 2019 Equity Incentive Plan Restricted Stock Grant Agreement |
(a) Legend. Each certificate representing Restricted Stock granted pursuant to the Notice of Restricted Stock Grant may bear a legend substantially as follows:
“THE SALE OR OTHER TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE, WHETHER VOLUNTARY, INVOLUNTARY OR BY OPERATION OF LAW, IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN THE TRXADE HEALTH, INC. 2019 AMENDED AND RESTATED EQUITY INCENTIVE PLAN (AS AMENDED) AND IN A RESTRICTED SHARE GRANT AGREEMENT. A COPY OF SUCH PLAN AND SUCH AGREEMENT MAY BE OBTAINED FROM TRXADE HEALTH, INC.”
(b) Escrow of Nonvested Shares. The Company has the right to retain the certificates representing Nonvested Shares in the Company’s possession until such time as all restrictions applicable to such shares have been satisfied.
(c) Removal of Restrictions. The Participant is entitled to have the legend removed from certificates representing Vested Shares.
5. Recapitalizations, Exchanges, Mergers, Etc. The provisions of this Agreement apply to the full extent set forth herein with respect to any and all shares of capital stock of the Company or successor of the Company which may be issued in respect of, in exchange for, or in substitution for the Restricted Stock by reason of any stock dividend, split, reverse split, combination, recapitalization, reclassification, merger, consolidation or otherwise which does not terminate this Agreement. Except as otherwise provided herein, this Agreement is not intended to confer upon any other person except the parties hereto any rights or remedies hereunder.
6. Grantee Representations.
Grantee represents to the Company the following:
(a) Restrictions on Transfer. Grantee acknowledges that the Restricted Stock to be issued to Grantee must be held indefinitely unless subsequently registered and qualified under the Securities Act of 1933, as amended (the “Securities Act”) or unless an exemption from registration and qualification is otherwise available. In addition, Grantee understands that the certificate representing the Restricted Stock will be imprinted with a legend which prohibits the transfer of such Restricted Stock unless they are sold in a transaction in compliance with the Securities Act or are registered and qualified or such registration and qualification are not required in the opinion of counsel acceptable to the Company.
(b) Relationship to the Company; Experience. Grantee either has a preexisting business or personal relationship with the Company or any of its officers, directors or controlling persons or, by reason of Grantee’s business or financial experience or the business or financial experience of Grantee’s personal representative(s), if any, who are unaffiliated with and who are not compensated by the Company or any affiliate or selling agent, directly or indirectly, has the capacity to protect Grantee’s own interests in connection with Grantee’s acquisition of the Restricted Stock to be issued to Grantee hereunder. Grantee and/or Grantee’s personal representative(s) have such knowledge and experience in financial, tax and business matters to enable Grantee and/or them to utilize the information made available to Grantee and/or them in connection with the acquisition of the Restricted Stock to evaluate the merits and risks of the prospective investment and to make an informed investment decision with respect thereto.
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(c) Grantee’s Liquidity. In reaching the decision to invest in the Restricted Stock, Grantee has carefully evaluated Grantee’s financial resources and investment position and the risks associated with this investment, and Grantee acknowledges that Grantee is able to bear the economic risks of the investment. Grantee (i) has adequate means of providing for Grantee’s current needs and possible personal contingencies, (ii) has no need for liquidity in Grantee’s investment, (iii) is able to bear the substantial economic risks of an investment in the Restricted Stock for an indefinite period and (iv) at the present time, can afford a complete loss of such investment. Grantee’s commitment to investments which are not readily marketable is not disproportionate to Grantee’s net worth and Grantee’s investment in the Restricted Stock will not cause Grantee’s overall commitment to become excessive.
(d) Access to Data. Grantee acknowledges that during the course of this transaction and before deciding to acquire the Restricted Stock, Grantee has been provided with financial and other written information about the Company. Grantee has been given the opportunity by the Company to obtain any information and ask questions concerning the Company, the Restricted Stock, and Grantee’s investment that Grantee felt necessary; and to the extent Grantee availed himself/herself of that opportunity, Grantee has received satisfactory information and answers concerning the business and financial condition of the Company in response to all inquiries in respect thereof.
(e) Risks. Grantee acknowledges and understands that (i) an investment in the Company constitutes a high risk, (ii) the Restricted Stock are highly speculative, and (iii) there can be no assurance as to what investment return, if any, there may be. Grantee is aware that the Company may issue additional securities in the future which could result in the dilution of Grantee’s ownership interest in the Company.
(f) Valid Agreement. This Agreement when executed and delivered by Grantee will constitute a valid and legally binding obligation of Grantee which is enforceable in accordance with its terms.
(g) Residence. The address set forth on the Notice of Restricted Stock Grant is Grantee’s current address and accurately sets forth Grantee’s place of residence.
(h) Tax Consequences. Grantee has reviewed with Grantee’s own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Grantee understands that Grantee (and not the Company) is responsible for Grantee’s own tax liability that may arise as a result of the transactions contemplated by this Agreement. Grantee understands that Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”), taxes as ordinary income the difference between the purchase price for the Restricted Stock and the fair market value of the Restricted Stock as of the date any restrictions on the Restricted Stock lapse. Grantee understands that Grantee may elect to be taxed at the time the Restricted Stock is purchased rather than when and as the restrictions lapse by filing an election under Section 83(b) of the Code with the Internal Revenue Service within 30 days from the date of purchase. The form for making this election is attached as Exhibit A hereto.
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GRANTEE ACKNOWLEDGES THAT IT IS GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY ANY ELECTION UNDER SECTION 83(b), EVEN IF GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON GRANTEE’S BEHALF.
7. No Employment Contract Created. The issuance of the Restricted Stock is not to be construed as granting to Grantee any right with respect to continuance of employment or any service with the Company or any of its subsidiaries. The right of the Company or any of its subsidiaries to terminate at will Grantee’s employment or terminate Grantee’s service at any time (whether by dismissal, discharge or otherwise), with or without cause, is specifically reserved, subject to any other written employment or other agreement to which the Company and Grantee may be a party.
8. Tax Withholding. The Company has the power and the right to deduct or withhold, or require Grantee to remit to the Company, an amount sufficient to satisfy Federal, state and local taxes (including the Grantee’s FICA obligation) required by law to be withheld with respect to the grant and vesting of the Restricted Stock.
9. Interpretation. The Restricted Stock are being issued pursuant to the terms of the Plan, and are to be interpreted in accordance therewith. The Board (or an authorized committee thereof) will interpret and construe this Agreement and the Plan, and any action, decision, interpretation or determination made in good faith by the Board (or an authorized committee thereof) will be final and binding on the Company and Grantee.
10. Notices. All notices or other communications which are required or permitted hereunder will be in writing and sufficient if (i) personally delivered or sent by telecopy, (ii) sent by nationally-recognized overnight courier or (iii) sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:
(a) if to the Grantee, to the address (or telecopy number) set forth on the Notice of Grant; and
(b) if to the Company, to its principal executive office as specified in any report filed by the Company with the Securities and Exchange Commission or to such address as the Company may have specified to the Grantee in writing, Attention: Corporate Secretary;
or to such other address as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. Any such communication will be deemed to have been given (i) when delivered, if personally delivered, or when telecopied, if telecopied, (ii) on the first Business Day (as hereinafter defined) after dispatch, if sent by nationally-recognized overnight courier and (iii) on the fifth Business Day following the date on which the piece of mail containing such communication is posted, if sent by mail. As used herein, “Business Day” means a day that is not a Saturday, Sunday or a day on which banking institutions in the city to which the notice or communication is to be sent are not required to be open.
Page 6 of 9 2019 Equity Incentive Plan Restricted Stock Grant Agreement |
11. Specific Performance. Grantee expressly agrees that the Company will be irreparably damaged if the provisions of this Agreement and the Plan are not specifically enforced. Upon a breach or threatened breach of the terms, covenants and/or conditions of this Agreement or the Plan by Grantee, the Company will, in addition to all other remedies, be entitled to a temporary or permanent injunction, without showing any actual damage, and/or decree for specific performance, in accordance with the provisions hereof and thereof. The Board (or an authorized committee thereof) has the power to determine what constitutes a breach or threatened breach of this Agreement or the Plan. Any such determinations will be final and conclusive and binding upon Grantee.
12. No Waiver. No waiver of any breach or condition of this Agreement will be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature.
13. Grantee Undertaking. Grantee hereby agrees to take whatever additional actions and execute whatever additional documents the Company may in its reasonable judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on Grantee pursuant to the express provisions of this Agreement.
14. Modification of Rights. The rights of Grantee are subject to modification and termination in certain events as provided in this Agreement and the Plan.
15. Governing Law. This Agreement is governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to its conflict or choice of law principles that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
16. Counterparts; Facsimile Execution. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original, but all of which together will constitute one and the same instrument. Facsimile execution and delivery of this Agreement is legal, valid and binding execution and delivery for all purposes.
17. Entire Agreement. This Agreement (including the Notice of Restricted Stock Grant) and the Plan, constitute the entire agreement between the parties with respect to the subject matter hereof, and supersedes all previously written or oral negotiations, commitments, representations and agreements with respect thereto.
18. Severability. In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provisions of this Agreement, and this Agreement will be construed as if such invalid, illegal or unenforceable provision had never been contained herein.
19. WAIVER OF JURY TRIAL. THE GRANTEE HEREBY EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
[Signature Page Follows]
Page 7 of 9 2019 Equity Incentive Plan Restricted Stock Grant Agreement |
IN WITNESS WHEREOF, the parties hereto have executed this Restricted Share Grant Agreement as of the date first written above.
TRXADE HEALTH, INC.
| By: | ||
| Name: | Suren Ajjarapu | |
| Title: | CEO |
| GRANTEE: | ||
| Name: |
Page 8 of 9 2019 Equity Incentive Plan Restricted Stock Grant Agreement |
SPOUSE’S CONSENT TO AGREEMENT
(Required where Grantee resides in a community property state)
I acknowledge that I have read the Agreement and the Plan and that I know and understand the contents of both. I am aware that my spouse has agreed therein to the imposition of certain forfeiture provisions and restrictions on transferability with respect to the Restricted Stock that are the subject of the Agreement, including with respect to my community interest therein, if any, on the occurrence of certain events described in the Agreement. I hereby consent to and approve of the provisions of the Agreement, and agree that I will abide by the Agreement and bequeath any interest in the Restricted Stock which represents a community interest of mine to my spouse or to a trust subject to my spouse’s control or for my spouse’s benefit or the benefit of our children if I predecease my spouse.
| Dated: | ||
| Signature: | ||
| Print Name: |
Page 9 of 9 2019 Equity Incentive Plan Restricted Stock Grant Agreement |
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in the taxpayer’s gross income or alternative minimum taxable income, as the case may be, for the current taxable year, as compensation for services the excess (if any) of the fair market value of the shares described below over the amount paid for those shares:
1. The name, address, taxpayer identification number and taxable year of the undersigned are as follows:
| Taxpayer: | |
| Spouse: | |
| Name: | |
| Address: | |
| Identification No.: | |
| Taxable Year: |
2. The property with respect to which the election is made is described as follows: _________shares (the “Shares”) of the Common Stock of TRxADE HEALTH, INC., a Delaware corporation (the “Company”).
3. The date on which the property was transferred is: , .
4. The property is subject to the following restrictions: The Shares may not be transferred and are subject to forfeiture under the terms of an agreement between the taxpayer and the Company. These restrictions lapse upon the satisfaction of certain conditions contained in such agreement.
5. The fair market value of the property at the time of transfer (determined without regard to any restriction other than a nonlapse restriction as defined in § 1.83-3(h) of the Income Tax Regulations) is:
$ per share x shares = $ .
6. For the property transferred, the undersigned paid $ per share x shares = $ .
7. The amount to include in gross income is $ . [The result of the amount reported in Item 5 minus the amount reported in Item 6.]
The undersigned taxpayer will file this election with the Internal Revenue Service office with which taxpayer files his or her annual income tax return not later than 30 days after the date of transfer of the property. A copy of the election also will be furnished to the person for whom the services were performed. Additionally, the undersigned will include a copy of the election with his or her income tax return for the taxable year in which the property is transferred. The undersigned is the person performing the services in connection with which the property was transferred.
The undersigned understands that the foregoing election may not be revoked except with the consent of the Commissioner.
| Dated: ____________________, _________ | |
| __________________________ | |
| Taxpayer | |
| The undersigned spouse of taxpayer joins in this election. | |
| Dated:_____________________, _______ | |
| __________________________ | |
| Spouse of Taxpayer |
Exhibit 10.10
TRXADE HEALTH, INC.
2019 EQUITY INCENTIVE PLAN
NOTICE OF RESTRICTED STOCK GRANT
Capitalized but otherwise undefined terms in this Notice of Restricted Stock Grant and the attached Restricted Stock Grant Agreement shall have the same defined meanings as in the TRxADE HEALTH, INC. Amended and Restated 2019 Equity Incentive Plan (as amended from time to time) (as amended from time to time, the “Plan”).
Grantee Name:
Address:_________________________________________
You have been granted Restricted Stock (“Shares”) subject to the terms and conditions of the Plan and the attached Restricted Stock Grant Agreement, as follows:
| Date of Grant: | August 31, 2022 |
| Vesting Commencement Date: | August 31, 2022 Price |
| Per Share: | $1.16 |
| Total Number of Shares Granted: | ______ |
| Total Value of Shares Granted: | $ |
| Total Purchase Price: | $0, Issued In Consideration For Services |
| Agreement Date: | August 31, 2022 |
Vesting Schedule: 1/4th of the Shares vest on September 1, 2022 and October 1, 2022 and January 1 and April 1, 2023, subject to the terms of the applicable Restricted Stock Grant Agreement which follows and the Plan.
| Page 1 of 9 |
Amended and Restated 2019 Equity Incentive Plan Restricted
Stock Grant Agreement
TRXADE HEALTH, INC.
2019 EQUITY INCENTIVE PLAN
RESTRICTED STOCK GRANT AGREEMENT
This RESTRICTED STOCK GRANT AGREEMENT (“Agreement”), dated as of the Agreement Date specified on the Notice of Restricted Stock Grant is made by and between TRxADE HEALTH, INC., a Delaware corporation (the “Company”), and the grantee named in the Notice of Restricted Stock Grant (the “Grantee,” which term as used herein shall be deemed to include any successor to Grantee by will or by the laws of descent and distribution, unless the context shall otherwise require).
BACKGROUND
Pursuant to the Plan, the Board (or an authorized Committee thereof), approved the issuance to Grantee, effective as of the date set forth above, of an award of the number of shares of Restricted Stock as is set forth in the attached Notice of Restricted Stock Grant (which is expressly incorporated herein and made a part hereof, the “Notice of Restricted Stock Grant”) at the purchase price per share of Restricted Stock (the “Purchase Price”), if any, set forth in the attached Notice of Restricted Stock Grant, upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual premises and undertakings hereinafter set forth, the parties agree as follows:
1. Grant and Purchase of Restricted Stock. The Company hereby grants to Grantee, and Grantee hereby accepts the Restricted Stock set forth in the Notice of Restricted Stock Grant, subject to the payment by Grantee of the total purchase price, if any, set forth in the Notice of Restricted Stock Grant.
2. Stockholder Rights.
(a) Voting Rights. Until such time as all or any part of the Restricted Stock are forfeited to the Company under this Agreement, if ever, Grantee (or any successor in interest) has the rights of a stockholder, including voting rights, with respect to the Restricted Stock subject, however, to the transfer restrictions or any other restrictions set forth in the Plan.
(b) Dividends and Other Distributions. During the period of restriction, Participants holding Restricted Stock are entitled to all regular cash dividends or other distributions paid with respect to all shares while they are so held. If any such dividends or distributions are paid in shares, such shares will be subject to the same restrictions on transferability and forfeitability as the Restricted Stock with respect to which they were paid.
| Page 2 of 9 |
2019 Equity Incentive Plan Restricted Stock Grant Agreement
3. Vesting of Restricted Stock.
(a) The Restricted Stock are restricted and subject to forfeiture until vested. The Restricted Stock which have vested and are no longer subject to forfeiture are referred to as “Vested Shares.” All Restricted Stock which have not become Vested Shares are referred to as “Nonvested Shares.”
(b) Restricted Stock will vest and become nonforfeitable in accordance with the vesting schedule contained in the Notice of Restricted Stock Grant.
(c) Any Nonvested Shares of Grantee will automatically vest and become nonforfeitable if Grantee’s service with the Company ceases owing to the Grantee’s Retirement, unless the Board (or an authorized committee thereof) provides otherwise.
(d) In the event of a Change of Control, the Board (or an authorized committee thereof), in its discretion, may accelerate the time at which all or any portion of Grantee’s Restricted Stock will vest.
(e) Terms used in Section 3 and Section 4 have the following meanings:
(i) “Cause” has the meaning ascribed to such term or words of similar import in Grantee’s written employment or service contract with the Company or its subsidiaries and, in the absence of such agreement or definition, means Grantee’s (i) conviction of, or plea of nolo contendere to, a felony or crime involving moral turpitude; (ii) fraud on or misappropriation of any funds or property of the Company or its subsidiaries, or any affiliate, customer or vendor; (iii) personal dishonesty, incompetence, willful misconduct, willful violation of any law, rule or regulation (other than minor traffic violations or similar offenses), or breach of fiduciary duty which involves personal profit; (iv) willful misconduct in connection with Grantee’s duties or willful failure to perform Grantee’s responsibilities in the best interests of the Company or its subsidiaries; (v) illegal use or distribution of drugs; (vi) violation of any material rule, regulation, procedure or policy of the Company or its subsidiaries, the violation of which could have a material detriment to the Company; or (vii) material breach of any provision of any employment, non-disclosure, non-competition, non-solicitation or other similar agreement executed by Grantee for the benefit of the Company or its subsidiaries, all as reasonably determined by the Board of Directors of the Company, which determination will be conclusive.
(ii) “Retirement” means Grantee’s retirement from Company employ at or above the age 65 as determined in accordance with the policies of the Company or its subsidiaries, if any, in good faith by the Board of Directors of the Company, which determination will be final and binding on all parties concerned.
(f) Nonvested Shares may not be sold, transferred, assigned, pledged, or otherwise disposed of, directly or indirectly, whether by operation of law or otherwise. The restrictions set forth in this Section will terminate upon a Change of Control.
4. Forfeiture of Nonvested Shares. Except as provided herein, if Grantee’s service with the Company ceases for any reason (including Disability) other than Grantee’s (a) Retirement or (b) death, any Nonvested Shares will be automatically forfeited to the Company for no consideration; unless the Board (or an authorized committee thereof) provides otherwise, and provided, however, that the Board (or an authorized committee thereof) may cause any Nonvested Shares immediately to vest and become nonforfeitable if Grantee’s service with the Company is terminated by the Company without Cause.
| Page 3 of 9 |
2019 Equity Incentive Plan Restricted Stock Grant Agreement
(a) Legend. Each certificate representing Restricted Stock granted pursuant to the Notice of Restricted Stock Grant may bear a legend substantially as follows:
“THE SALE OR OTHER TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE, WHETHER VOLUNTARY, INVOLUNTARY OR BY OPERATION OF LAW, IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN THE TRXADE HEALTH, INC. 2019 AMENDED AND RESTATED EQUITY INCENTIVE PLAN (AS AMENDED) AND IN A RESTRICTED SHARE GRANT AGREEMENT. A COPY OF SUCH PLAN AND SUCH AGREEMENT MAY BE OBTAINED FROM TRXADE HEALTH, INC.”
(b) Escrow of Nonvested Shares. The Company has the right to retain the certificates representing Nonvested Shares in the Company’s possession until such time as all restrictions applicable to such shares have been satisfied.
(c) Removal of Restrictions. The Participant is entitled to have the legend removed from certificates representing Vested Shares.
5. Recapitalizations, Exchanges, Mergers, Etc. The provisions of this Agreement apply to the full extent set forth herein with respect to any and all shares of capital stock of the Company or successor of the Company which may be issued in respect of, in exchange for, or in substitution for the Restricted Stock by reason of any stock dividend, split, reverse split, combination, recapitalization, reclassification, merger, consolidation or otherwise which does not terminate this Agreement. Except as otherwise provided herein, this Agreement is not intended to confer upon any other person except the parties hereto any rights or remedies hereunder.
6. Grantee Representations.
Grantee represents to the Company the following:
(a) Restrictions on Transfer. Grantee acknowledges that the Restricted Stock to be issued to Grantee must be held indefinitely unless subsequently registered and qualified under the Securities Act of 1933, as amended (the “Securities Act”) or unless an exemption from registration and qualification is otherwise available. In addition, Grantee understands that the certificate representing the Restricted Stock will be imprinted with a legend which prohibits the transfer of such Restricted Stock unless they are sold in a transaction in compliance with the Securities Act or are registered and qualified or such registration and qualification are not required in the opinion of counsel acceptable to the Company.
(b) Relationship to the Company; Experience. Grantee either has a preexisting business or personal relationship with the Company or any of its officers, directors or controlling persons or, by reason of Grantee’s business or financial experience or the business or financial experience of Grantee’s personal representative(s), if any, who are unaffiliated with and who are not compensated by the Company or any affiliate or selling agent, directly or indirectly, has the capacity to protect Grantee’s own interests in connection with Grantee’s acquisition of the Restricted Stock to be issued to Grantee hereunder. Grantee and/or Grantee’s personal representative(s) have such knowledge and experience in financial, tax and business matters to enable Grantee and/or them to utilize the information made available to Grantee and/or them in connection with the acquisition of the Restricted Stock to evaluate the merits and risks of the prospective investment and to make an informed investment decision with respect thereto.
| Page 4 of 9 |
2019 Equity Incentive Plan Restricted Stock Grant Agreement
(c) Grantee’s Liquidity. In reaching the decision to invest in the Restricted Stock, Grantee has carefully evaluated Grantee’s financial resources and investment position and the risks associated with this investment, and Grantee acknowledges that Grantee is able to bear the economic risks of the investment. Grantee (i) has adequate means of providing for Grantee’s current needs and possible personal contingencies, (ii) has no need for liquidity in Grantee’s investment, (iii) is able to bear the substantial economic risks of an investment in the Restricted Stock for an indefinite period and (iv) at the present time, can afford a complete loss of such investment. Grantee’s commitment to investments which are not readily marketable is not disproportionate to Grantee’s net worth and Grantee’s investment in the Restricted Stock will not cause Grantee’s overall commitment to become excessive.
(d) Access to Data. Grantee acknowledges that during the course of this transaction and before deciding to acquire the Restricted Stock, Grantee has been provided with financial and other written information about the Company. Grantee has been given the opportunity by the Company to obtain any information and ask questions concerning the Company, the Restricted Stock, and Grantee’s investment that Grantee felt necessary; and to the extent Grantee availed himself/herself of that opportunity, Grantee has received satisfactory information and answers concerning the business and financial condition of the Company in response to all inquiries in respect thereof.
(e) Risks. Grantee acknowledges and understands that (i) an investment in the Company constitutes a high risk, (ii) the Restricted Stock are highly speculative, and (iii) there can be no assurance as to what investment return, if any, there may be. Grantee is aware that the Company may issue additional securities in the future which could result in the dilution of Grantee’s ownership interest in the Company.
(f) Valid Agreement. This Agreement when executed and delivered by Grantee will constitute a valid and legally binding obligation of Grantee which is enforceable in accordance with its terms.
(g) Residence. The address set forth on the Notice of Restricted Stock Grant is Grantee’s current address and accurately sets forth Grantee’s place of residence.
(h) Tax Consequences. Grantee has reviewed with Grantee’s own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Grantee understands that Grantee (and not the Company) is responsible for Grantee’s own tax liability that may arise as a result of the transactions contemplated by this Agreement. Grantee understands that Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”), taxes as ordinary income the difference between the purchase price for the Restricted Stock and the fair market value of the Restricted Stock as of the date any restrictions on the Restricted Stock lapse. Grantee understands that Grantee may elect to be taxed at the time the Restricted Stock is purchased rather than when and as the restrictions lapse by filing an election under Section 83(b) of the Code with the Internal Revenue Service within 30 days from the date of purchase. The form for making this election is attached as Exhibit A hereto.
| Page 5 of 9 |
2019 Equity Incentive Plan Restricted Stock Grant Agreement
GRANTEE ACKNOWLEDGES THAT IT IS GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY ANY ELECTION UNDER SECTION 83(b), EVEN IF GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON GRANTEE’S BEHALF.
7. No Employment Contract Created. The issuance of the Restricted Stock is not to be construed as granting to Grantee any right with respect to continuance of employment or any service with the Company or any of its subsidiaries. The right of the Company or any of its subsidiaries to terminate at will Grantee’s employment or terminate Grantee’s service at any time (whether by dismissal, discharge or otherwise), with or without cause, is specifically reserved, subject to any other written employment or other agreement to which the Company and Grantee may be a party.
8. Tax Withholding. The Company has the power and the right to deduct or withhold, or require Grantee to remit to the Company, an amount sufficient to satisfy Federal, state and local taxes (including the Grantee’s FICA obligation) required by law to be withheld with respect to the grant and vesting of the Restricted Stock.
9. Interpretation. The Restricted Stock are being issued pursuant to the terms of the Plan, and are to be interpreted in accordance therewith. The Board (or an authorized committee thereof) will interpret and construe this Agreement and the Plan, and any action, decision, interpretation or determination made in good faith by the Board (or an authorized committee thereof) will be final and binding on the Company and Grantee.
10. Notices. All notices or other communications which are required or permitted hereunder will be in writing and sufficient if (i) personally delivered or sent by telecopy, (ii) sent by nationally-recognized overnight courier or (iii) sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:
(a) if to the Grantee, to the address (or telecopy number) set forth on the Notice of Grant; and
(b) if to the Company, to its principal executive office as specified in any report filed by the Company with the Securities and Exchange Commission or to such address as the Company may have specified to the Grantee in writing, Attention: Corporate Secretary;
or to such other address as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. Any such communication will be deemed to have been given (i) when delivered, if personally delivered, or when telecopied, if telecopied, (ii) on the first Business Day (as hereinafter defined) after dispatch, if sent by nationally-recognized overnight courier and (iii) on the fifth Business Day following the date on which the piece of mail containing such communication is posted, if sent by mail. As used herein, “Business Day” means a day that is not a Saturday, Sunday or a day on which banking institutions in the city to which the notice or communication is to be sent are not required to be open.
| Page 6 of 9 |
2019 Equity Incentive Plan Restricted Stock Grant Agreement
11. Specific Performance. Grantee expressly agrees that the Company will be irreparably damaged if the provisions of this Agreement and the Plan are not specifically enforced. Upon a breach or threatened breach of the terms, covenants and/or conditions of this Agreement or the Plan by Grantee, the Company will, in addition to all other remedies, be entitled to a temporary or permanent injunction, without showing any actual damage, and/or decree for specific performance, in accordance with the provisions hereof and thereof. The Board (or an authorized committee thereof) has the power to determine what constitutes a breach or threatened breach of this Agreement or the Plan. Any such determinations will be final and conclusive and binding upon Grantee.
12. No Waiver. No waiver of any breach or condition of this Agreement will be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature.
13. Grantee Undertaking. Grantee hereby agrees to take whatever additional actions and execute whatever additional documents the Company may in its reasonable judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on Grantee pursuant to the express provisions of this Agreement.
14. Modification of Rights. The rights of Grantee are subject to modification and termination in certain events as provided in this Agreement and the Plan.
15. Governing Law. This Agreement is governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to its conflict or choice of law principles that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
16. Counterparts; Facsimile Execution. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original, but all of which together will constitute one and the same instrument. Facsimile execution and delivery of this Agreement is legal, valid and binding execution and delivery for all purposes.
17. Entire Agreement. This Agreement (including the Notice of Restricted Stock Grant) and the Plan, constitute the entire agreement between the parties with respect to the subject matter hereof, and supersedes all previously written or oral negotiations, commitments, representations and agreements with respect thereto.
18. Severability. In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provisions of this Agreement, and this Agreement will be construed as if such invalid, illegal or unenforceable provision had never been contained herein.
19. WAIVER OF JURY TRIAL. THE GRANTEE HEREBY EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
[Signature Page Follows]
| Page 7 of 9 |
2019 Equity Incentive Plan Restricted Stock Grant Agreement
IN WITNESS WHEREOF, the parties hereto have executed this Restricted Share Grant Agreement as of the date first written above.
| TRXADE HEALTH, INC. | ||
| By: | ||
| Name: | Suren Ajjarapu | |
| Title: | CEO | |
| GRANTEE: | ||
| Name: | ||
| Page 8 of 9 |
2019 Equity Incentive Plan Restricted Stock Grant Agreement
SPOUSE'S CONSENT TO AGREEMENT
(Required where Grantee resides in a community property state)
I acknowledge that I have read the Agreement and the Plan and that I know and understand the contents of both. I am aware that my spouse has agreed therein to the imposition of certain forfeiture provisions and restrictions on transferability with respect to the Restricted Stock that are the subject of the Agreement, including with respect to my community interest therein, if any, on the occurrence of certain events described in the Agreement. I hereby consent to and approve of the provisions of the Agreement, and agree that I will abide by the Agreement and bequeath any interest in the Restricted Stock which represents a community interest of mine to my spouse or to a trust subject to my spouse’s control or for my spouse’s benefit or the benefit of our children if I predecease my spouse.
| Dated: | ||
| Signature: | ||
| Print Name: |
| Page 9 of 9 |
2019 Equity Incentive Plan Restricted Stock Grant Agreement
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in the taxpayer’s gross income or alternative minimum taxable income, as the case may be, for the current taxable year, as compensation for services the excess (if any) of the fair market value of the shares described below over the amount paid for those shares:
1. The name, address, taxpayer identification number and taxable year of the undersigned are as follows:
Taxpayer:
Spouse:
Name:
Address:
Identification No.:
Taxable Year:
2. The property with respect to which the election is made is described as follows:_____________shares (the “Shares”) of the Common Stock of TRxADE HEALTH, INC., a Delaware corporation (the “Company”).
3. The date on which the property was transferred is: ____________________,________ .
4. The property is subject to the following restrictions: The Shares may not be transferred and are subject to forfeiture under the terms of an agreement between the taxpayer and the Company. These restrictions lapse upon the satisfaction of certain conditions contained in such agreement.
5. The fair market value of the property at the time of transfer (determined without regard to any restriction other than a nonlapse restriction as defined in § 1.83-3(h) of the Income Tax Regulations) is:
$ ______ per share x ______ shares = $ _________.
6. For the property transferred, the undersigned paid $ ______ per share x _______ shares= $ _____________.
7. The amount to include in gross income is $ _______________. [The result of the amount reported in Item 5 minus the amount reported in Item 6.]
The undersigned taxpayer will file this election with the Internal Revenue Service office with which taxpayer files his or her annual income tax return not later than 30 days after the date of transfer of the property. A copy of the election also will be furnished to the person for whom the services were performed. Additionally, the undersigned will include a copy of the election with his or her income tax return for the taxable year in which the property is transferred. The undersigned is the person performing the services in connection with which the property was transferred.
The undersigned understands that the foregoing election may not be revoked except with the consent of the Commissioner.
| Dated: ____________________, _________ | |
| __________________________ | |
| Taxpayer | |
| The undersigned spouse of taxpayer joins in this election. | |
| Dated:_____________________, _______ | |
| __________________________ | |
| Spouse of Taxpayer |