EXHIBIT (a)(11)
NEIGHBORCARE, INC.
2004 PERFORMANCE INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT
RS No. 2004-002
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Grantee: Robert Smith Date: June 15, 2004
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An Award of Restricted Stock is hereby awarded on the date set forth
above (the "Award Date") by NeighborCare, Inc. (the "Corporation"), to the
Grantee, in accordance with the following terms and conditions, and the
conditions contained in the Corporation's 2004 Performance Incentive Plan (the
"Plan"):
1. SHARE AWARD. The Corporation hereby awards the Grantee 26,250
shares (the "Shares") of common stock, par value $0.02 per share
("Common Stock"), of the Corporation pursuant to the Plan, as the same may from
time to time be amended, and upon the terms and conditions and subject to the
restrictions therein and hereinafter set forth. A copy of the Plan as currently
in effect is available from the Corporation upon request and is incorporated
herein by reference.
2. RESTRICTIONS ON TRANSFER AND RESTRICTED PERIOD. During the
period (the "Restricted Period") commencing on the Award Date and terminating on
the date the Shares vest as provided below, the Shares may not be sold,
assigned, exchanged, gifted, transferred, pledged, or otherwise encumbered by
the Grantee, except as hereinafter provided.
Except as set forth below, the Shares will vest pursuant to the
following schedule:
AMOUNT OF NUMBER OF
DATE OF VESTING AWARD VESTING SHARES VESTING
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July 30, 2004 25% 6,563
June 15, 2005 25% 6,563
June 15, 2006 25% 6,562
June 15, 2007 25% 6,562
Subject to the restrictions set forth in the Plan, the Committee (as
defined in the Plan) shall have the authority, in its discretion, to accelerate
the time at which any or all of the restrictions shall lapse with respect to any
Shares thereto, or to remove any or all of such restriction, whenever the
Committee may determine that such action is appropriate by reason of changes in
applicable tax or other laws, or other changes in circumstances occurring after
the commencement of the Restricted Period.
3. TERMINATION OF SERVICE. Except as provided in Section 9 below,
if the Grantee undergoes a "Status Change" (as defined in the Plan) for any
reason other than death, disability or Retirement (as defined in the Plan), all
Shares which at the time of such Status Change are subject to the restrictions
imposed by Section 2 above shall be forfeited to the Corporation if no
cash was paid. If the Grantee undergoes a Status Change by reason of death,
disability or Retirement, the Shares then still subject to restrictions imposed
by Section 2 will be free of those restrictions and shall not be forfeited.
4. CERTIFICATES FOR THE SHARES. The Corporation shall issue a
certificate (or certificates) in the name of the Grantee with respect to the
Shares, and shall hold such certificate (or certificates) on deposit for the
account of the Grantee until the expiration of the Restricted Period with
respect to the Shares represented thereby. Such certificate (or certificates)
shall bear the following restricted legend (the "Restricted Legend"):
The transferability of this certificate and the Shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) contained in the 2004
Performance Incentive Plan of NeighborCare, Inc. Copies of
such Plan are on file in the office of the Secretary of
NeighborCare, Inc.
The Grantee further agrees that simultaneously with the execution of
the Agreement, the Grantee shall execute stock powers in favor of the
Corporation with respect to the Shares and that the Grantee shall promptly
deliver such stock powers to the Corporation.
The following two paragraphs shall be applicable if, on the Award Date,
the Common Stock subject to such Award has not been registered under the
Securities Act of 1933, as amended, and under applicable state securities laws,
and shall continue to be applicable for so long as such registration has not
occurred:
The Grantee hereby agrees, warrants and represents that Grantee is
acquiring the Common Stock to be issued pursuant to this Agreement for Grantee's
own account for investment purposes only, and not with a view to, or in
connection with, any resale or other distribution of any of such shares, except
as hereafter permitted. The Grantee further agrees that Grantee will not at any
time make any offer, sale, transfer, pledge or other disposition of such Common
Stock to be issued hereunder without an effective registration statement under
the Securities Act of 1933, as amended, and under any applicable state
securities laws or an opinion of counsel acceptable to the Corporation to the
effect that the proposed transaction will be exempt from such registration. The
Grantee shall execute such instruments, representations, acknowledgments and
agreements as the Corporation may, in its sole discretion, deem advisable to
avoid any violation of federal, state, local or securities exchange rule,
regulation or law.
The certificates for Common Stock to be issued pursuant to this
Agreement shall bear the following securities legend (the "Securities Legend"):
The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
under applicable state securities laws. The shares have been
acquired for investment and may not be offered, sold,
transferred, pledged or otherwise disposed of without an
effective registration statement under the Securities Act of
1933, as amended, and under any applicable state securities
laws or an opinion of
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counsel acceptable to the Corporation that the proposed
transaction will be exempt from such registration.
The Securities Legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any applicable state
laws or upon receipt of any opinion of counsel acceptable to the Corporation
that said registration is no longer required.
The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Securities Act of 1933, as amended, and any applicable state
securities laws.
5. GRANTEE'S RIGHTS. Except as otherwise provided herein, the
Grantee, as owner of the Shares, shall have all rights of a stockholder. During
any Restricted Period, the Grantee shall be entitled to vote such Shares as to
which the Restricted Period has not yet lapsed or expired (the "Restricted
Shares") in Grantee's sole discretion, at any annual or special meetings of the
stockholders of the Corporation and at any continuations or adjournments of such
meetings, upon any matters coming before such meetings or adjournments.
6. CASH DIVIDENDS. Cash dividends, if any, paid on the Restricted
Shares shall be to paid to Grantee on the date of payment for any such cash
dividend to the Corporation's shareholders, as determined by the Corporation's
Board of Directors.
7. EXPIRATION OF RESTRICTED PERIOD. Upon the lapse or expiration
of the Restricted Period with respect to any portion of the Shares, the
Corporation shall deliver to the Grantee (or in the case of a deceased Grantee,
to Grantee's legal representative) the certificate in respect of such Shares and
the related stock powers held by the Corporation pursuant to Section 4 above.
The Shares as to which the Restricted Period shall have lapsed or expired shall
be free of the restrictions referred to in Section 2 above and such certificate
shall not bear the Restricted Legend provided for in Section 4 above.
Notwithstanding the foregoing, the Securities Legend described in Section 4
shall continue to be included on the certificates as long as registration has
not occurred.
8. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION OF THE CORPORATION.
In the event of any change in the outstanding shares of Common Stock by reason
of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation, or any change in the
corporate structure of the Corporation or in the shares of Common Stock, the
number and class of Shares covered by this Agreement shall be appropriately
adjusted by the Committee in the same manner as other outstanding shares are
adjusted. Any shares of Common Stock or other securities received, as a result
of the foregoing, by the Grantee with respect to Shares subject to the
restrictions contained in Section 2 above also shall be subject to such
restrictions and the certificate or other instruments representing or evidencing
such shares or securities shall be legended and deposited with the Corporation
in the manner provided in Section 4 above.
9. CHANGE IN CONTROL. Unless at least 75% of the Incumbent
Directors (as defined in the Plan) at a duly convened meeting of the Board held
before a "Change in Control" (as defined in the Plan) expressly determines
otherwise, upon a Change of Control (and regardless of
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whether or not Grantee undergoes a "Qualified Status Change" (as defined in the
Plan")), the Restricted Period with respect to all Shares shall lapse and all
Shares shall become fully vested in the Grantee.
10. PLAN AND PLAN INTERPRETATIONS AS CONTROLLING. The Shares
hereby awarded and the terms and conditions herein set forth are subject in all
respects to the terms and conditions of the Plan, which are controlling. All
determinations and interpretations by the Committee shall be binding and
conclusive upon the Grantee or Grantee's legal representatives with regard to
any question arising hereunder or under the Plan.
11. GRANTEE SERVICE. Nothing in this Agreement shall limit the
right of the Corporation or any of its Affiliates to terminate the Grantee's
service as an officer or employee, or otherwise impose upon the Corporation or
any of its Affiliates any obligation to employ or accept the services of the
Grantee.
12. WITHHOLDING AND SOCIAL SECURITY TAXES. Upon the termination
of any Restricted Period with respect to any Shares (or any such earlier time,
if any, that an election is made under Section 83(b) of the Code, or any
successor provision thereto, to include the value of such Shares in taxable
income), the Corporation shall have the right to withhold from the Grantee's
compensation an amount sufficient to fulfill its or its Affiliate's obligations
for any applicable withholding and employment taxes. Alternatively, the
Corporation may require the Grantee to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to the Shares,
or, in lieu thereof, to retain or sell without notice a sufficient number of
Shares to cover the amount required to be withheld. The Corporation shall
withhold from any cash dividends paid on the Restricted Stock an amount
sufficient to cover taxes owed as a result of the dividend payment. The
Corporation's method of satisfying its withholding obligations shall be solely
in the discretion of the Corporation, subject to applicable federal, state and
local laws.
13. 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
Corporation or any of its agents. Grantee understands that Grantee (and not
Corporation) shall be responsible for Grantee's own tax liability that may arise
as a result of this investment or 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 fair market value
of the Shares as of the date any "restrictions" on the Shares lapse. To the
extent that a grant hereunder is not otherwise an exempt transaction for
purposes of Section 16(b) of the Securities and Exchange Act of 1934
(the "1934 Act"), with respect to officers, directors and 10% shareholders, a
"restriction" on the Shares includes for these purposes the period after the
grant of the Shares during which such officers, directors and 10% shareholders
could be subject to suit under Section 16(b) of the 1934 Act. Alternatively,
Grantee understands that Grantee may elect to be taxed at the time the Shares
are granted rather than when the restrictions on the Shares lapse, or the
Section 16(b) period expires, by filing an election under Section 83(b) of the
Code with the I.R.S. within 30 days from the date of grant.
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GRANTEE ACKNOWLEDGES THAT IT IS GRANTEE'S SOLE RESPONSIBILITY AND NOT
THE CORPORATION'S TO FILE TIMELY THE ELECTION AVAILABLE TO GRANTEE UNDER SECTION
83(b) OF THE CODE, EVEN IF GRANTEE REQUESTS THAT THE CORPORATION OR ITS
REPRESENTATIVES MAKE THIS FILING ON GRANTEE'S BEHALF.
14. AMENDMENT/CHOICE OF LAW. This Agreement constitutes the entire
understanding between the Corporation and the Grantee with respect to the
subject matter hereof and no amendment, supplement or waiver of this Agreement,
in whole or in part, shall be binding upon the Corporation unless in writing and
signed by the appropriate officer of the Corporation, as designated by the
Committee. This Agreement and the performances of the parties hereunder shall be
construed in accordance with and governed by the laws of the Commonwealth of
Pennsylvania.
15. GRANTEE ACCEPTANCE. The Grantee shall signify Grantee's
acceptance of the terms and conditions of this Agreement by signing in the space
provided below and signing the attached stock powers and returning a signed copy
of this Agreement and the original attached stock powers to the Corporation. IF
A FULLY EXECUTED COPY HEREOF AND THE ATTACHED STOCK POWERS HAVE NOT BEEN
RECEIVED BY THE CORPORATION, THIS AWARD SHALL BE NULL AND VOID IN ITS ENTIRETY
AND THE CORPORATION SHALL HAVE NO OBLIGATIONS UNDER THIS AGREEMENT.
16. NONCOMPETE AGREEMENT. In consideration of this grant of the
Shares to Grantee, Grantee agrees to execute and deliver within fourteen (14)
days of the date hereof a noncompete agreement appropriate to the Grantee's
position in the Corporation's sole discretion (unless Grantee has previously
executed and delivered to the Corporation such a noncompete agreement). IF (i) A
FULLY EXECUTED NONCOMPETE AGREEMENT HAS NOT BEEN RECEIVED BY THE CORPORATION
WITHIN SUCH 14-DAY PERIOD OR (ii) A PREVIOUSLY EXECUTED NONCOMPETE AGREEMENT IS
NOT ON FILE FOR GRANTEE WITH THE CORPORATION, THIS AWARD SHALL BE NULL AND VOID
IN ITS ENTIRETY AND THE CORPORATION SHALL HAVE NO OBLIGATIONS UNDER THIS
AGREEMENT.
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IN WITNESS WHEREOF, the parties hereto have caused this RESTRICTED
STOCK AGREEMENT to be executed as of the date first above written.
NEIGHBORCARE, INC.
By: /s/ Kathleen F. Ayres
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Name: Kathleen F. Ayres
Title: Senior Vice President
Human Resources
ACCEPTED:
/s/ Robert Smith
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Name: Robert Smith
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(Street Address)
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(City, State & Zip Code)
STOCK POWER
For value received, I hereby sell, assign, and transfer to
NeighborCare, Inc. (the "Corporation") ____________ shares of the common stock
of the Corporation, standing in my name on the books and records of the
aforesaid Corporation, represented by Certificate No. _____ and do hereby
irrevocably constitute and appoint the Secretary of the Corporation attorney,
with full power of substitution, to transfer this stock on the books and records
of the aforesaid Corporation.
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Name:
Dated:
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In the presence of:
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Name