EXHIBIT 10.12
▇▇▇▇▇▇, INC.
EMPLOYEE STOCK PURCHASE AGREEMENT
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THIS EMPLOYEE STOCK PURCHASE AGREEMENT is made as of this 1st day of
September, 1994, by and between ▇▇▇▇▇▇, Inc., a Delaware corporation (the
"Company"), and ________________ (the "Purchaser").
1. Purchase of Shares.
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1.1 Purchase. Purchaser hereby purchases, and the Company hereby sells to
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Purchaser, _____ shares of the Company's Common Stock (the "Shares") at a
purchase price of $_____ or $1.00 per share (the "Purchase Price").
1.2 Payment. Concurrently with the execution of this Agreement, Purchaser
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shall pay the Purchase Price for the Shares either in cash or cash equivalent,
or in other consideration acceptable to the Company. Purchaser shall also
deliver to the Secretary of the Company a duly executed blank Assignment
Separate from Certificate (in the form attached hereto as Exhibit A) and any
additional documents required by the Company as a condition for the purchase.
1.3 Delivery of Certificates. The certificates representing the Shares
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purchased hereunder and subject to the Company's Repurchase Right under Article
5 hereof shall be held in escrow by the Secretary of the Company as provided in
Article 5 hereof.
2. Securities Law Compliance.
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2.1 Exemption From Registration. The Shares have not been registered
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under the Securities Act of 1933, as amended (the "1933 Act") and are being
issued to Purchaser in reliance upon the exemption from such registration
provided by Rule 701 of the Securities and Exchange Commission (the
"Commission") for stock issuances under compensatory benefit arrangements such
as this Agreement. Purchaser hereby acknowledges receipt of a copy of this
Agreement.
2.2 Restricted Securities.
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(a) Purchaser hereby confirms that Purchaser has been informed that the
Shares are "restricted securities" under the 1933 Act and may not be resold or
transferred unless the Shares are first registered under the federal securities
laws or unless an exemption from such registration is available. Accordingly,
Purchaser hereby acknowledges that Purchaser is prepared to hold the Shares for
an indefinite period.
(b) Purchaser is aware of the adoption of Rule 144 by the Commission,
promulgated under the 1933 Act, which permits
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limited public resales of securities acquired in a nonpublic offering, subject
to the satisfaction of certain conditions, including, among other things: the
availability of certain current public information about the issuer, the sale
being through a broker in an unsolicited "broker's transaction" and the amount
of securities being sold during any three (3) month period not exceeding
specified limitations. Purchaser is aware that Rule 144 of the Commission under
the 1933 Act is not presently available to exempt the sale of the Shares from
the registration requirements of the 1933 Act. Purchaser further represents
that he understands that at the time he wishes to sell the Shares there may be
no public market upon which to make such a sale, and that, even if such a public
market exists for the Company's Common Stock, the Company may not be satisfying
the current public information requirement of Rule 144 or other conditions under
Rule 144 which are required of the Company. If so, Purchaser understands that
he will be precluded from selling the securities under Rule 144.
(c) Purchaser represents that prior to acquisition of the Shares,
Purchaser acquired sufficient information about the Company to reach an informed
knowledgeable decision to acquire the Shares. Purchaser has such knowledge and
experience in financial and business matters as to make him capable of
evaluating the risks of the prospective investment and to make an informed
investment decision. Purchaser is able to bear the economic risk of his
investment in the Shares. Purchaser agrees not to make, without the prior
written consent of the Company, any public offering or sale of the Shares
although permitted to do so pursuant to Rule 144(k) promulgated under the 1933
Act, until the earlier of the date on which the Company effects its initial
registered public offering pursuant to the 1933 Act or the date on which it
becomes a registered company pursuant to section 12(g) of the Securities and
Exchange Act of 1934.
2.3 Disposition of Shares. Purchaser hereby agrees that Purchaser shall
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make no disposition of the Shares (other than a permitted transfer under Section
4.1) unless and until:
(a) Purchaser shall have notified the Company of the proposed
disposition and provided a written summary of the terms and conditions of
the proposed disposition;
(b) Purchaser shall have complied with all requirements of this
Agreement applicable to the disposition of the Shares; and
(c) Purchaser shall have provided the Company an opinion of counsel
in form and substance satisfactory to the Company, that (i) the proposed
disposition does not require registration of the Shares under the 1933 Act
or (ii) all appropriate action necessary for compliance with the
registration requirements of the
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1933 Act or of any exemption from registration available under the 1933 Act
(including Rule 144) has been taken.
The Company shall not be required (i) to transfer on its books any Shares
that have been sold or transferred in violation of the provisions of this
Article 2 nor (ii) to treat as the owner of the Shares, or otherwise to accord
voting or dividend rights to, any transferee to whom the Shares have been
transferred in contravention of this Agreement.
2.4 Restrictive Legends. In order to reflect the restrictions on the
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disposition of the Shares, the stock certificates for the Shares will be
endorsed with restrictive legends, including one or both of the following
legends:
(a) "The securities represented by this certificate have not been
registered or qualified under the Securities Act of 1933 or the securities
laws of any state, and may be offered and sold only if registered and
qualified pursuant to federal and state securities laws or if the Company
is provided an opinion of counsel satisfactory to the Company that
registration and qualification under federal and state securities laws is
not required."
(b) If required by the authorities of any state in connection with
the issuance of the Shares, the legend or legends required by such state
authorities shall also be endorsed on all such certificates.
3. Special Provisions.
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3.1 Stockholder Rights. Until such time as the Company actually exercises
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its repurchase rights under this Agreement, Purchaser (or any successor in
interest) shall have all the rights of a stockholder (including voting and
dividend rights) with respect to the Shares, including the Shares held in escrow
under Article 7, subject, however, to the transfer restrictions of Article 4.
3.2 Section 83(b) Election. Purchaser understands that under section 83
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of the Internal Revenue Code of 1986, as amended (the "Code"), the difference
between the Purchase Price paid for the Shares and their fair market value on
the date any forfeiture restrictions applicable to such shares lapse will be
reportable as ordinary income at that time. For this purpose, the term
"forfeiture restrictions" includes the right of the Company to repurchase the
Shares under Article 5 of this Agreement. Purchaser understands that he may
elect to be taxed at the time the Shares are acquired hereunder to the extent
the fair market value of the Shares differs from the Purchase Price rather than
when such Shares cease to be subject to such forfeiture restrictions, by filing
an election under section 83(b)
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of the Code with the I.R.S. within thirty (30) days after the date of purchase
hereunder. The form for making this election is attached as Exhibit B hereto.
Purchaser understands that failure to make this filing within the thirty (30)
day period will result in the recognition of ordinary income by Purchaser (in
the event the fair market value of the Shares increases after the date of
purchase) as the forfeiture restrictions lapse. PURCHASER ACKNOWLEDGES THAT IT
IS PURCHASER'S SOLE RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE A TIMELY
ELECTION UNDER SECTION 83(b), EVEN IF PURCHASER REQUESTS THE COMPANY OR ITS
REPRESENTATIVES TO MAKE THIS FILING ON HIS/HER BEHALF. PURCHASER IS RELYING
SOLELY ON HIS OR HER ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT
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TO FILE AN 83(b) ELECTION.
3.3 Market Stand-Off.
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(a) In connection with any underwritten public offering by the Company of
its equity securities pursuant to an effective registration statement filed
under the 1933 Act, including the Company's initial public offering, Purchaser
shall not sell, make any short sale of, loan, hypothecate, pledge, grant any
option for the purchase of, or otherwise dispose or transfer for value or agree
to engage in any of the foregoing transactions with respect to any Shares
without the prior written consent of the Company or its underwriters, for such
period of time after the effective date of such registration statement as may be
requested by the Company or such underwriters (not to exceed one hundred eighty
(180) days). This Section 3.3 shall only remain in effect for the two-year
period following the effective date of the Company's initial public offering.
(b) Purchaser shall be subject to the market stand-off provisions of this
Section 3.3 only if the officers and directors of the Company are also subject
to similar arrangements.
(c) In the event of any stock dividend, stock split, recapitalization, or
other change affecting the Company's outstanding Common Stock effected without
receipt of consideration, then any new, substituted, or additional securities
distributed with respect to the Shares shall be immediately subject to the
provisions of this Section 3.3, to the same extent the Shares are at such time
covered by such provisions.
3.4 Stop Transfer. In order to enforce the provisions of Section 3.3, the
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Company may impose stop-transfer instructions with respect to the Shares until
the end of the applicable stand-off period.
4. Transfer Restrictions.
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4.1 Restriction on Transfer. Purchaser shall not transfer, assign,
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encumber, or otherwise dispose of any of the Shares that are subject to the
Company's Repurchase Right under
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Article 5. In addition, Shares that are released from the Repurchase Right
shall not be transferred, assigned, encumbered, or otherwise made the subject of
disposition in contravention of the Company's First Refusal Right under Article
6. Such restrictions on transfer, however, shall not be applicable if Purchaser
receives prior written consent from the Company to (a) a gratuitous transfer of
the Shares made to Purchaser's spouse or issue, including adopted children, or
to a trust for the exclusive benefit of Purchaser or Purchaser's spouse or
issue, (b) a transfer of title to the Shares effected pursuant to Purchaser's
will or the laws of intestate succession, or (c) a transfer to the Company in
pledge as security for any purchase-money indebtedness incurred by Purchaser in
connection with the acquisition of the Shares.
4.2 Transferee Obligations. Each person (other than the Company) to whom
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the Shares are transferred by means of one of the permitted transfers specified
in Section 4.1 must, as a condition precedent to such transfer, acknowledge in
writing to the Company that such person is bound by the provisions of this
Agreement and that the transferred shares are subject to (a) both the Company's
Repurchase Right and the Company's First Refusal Right granted hereunder and (b)
the market stand-off provisions of Section 3.3, to the same extent such shares
would be so subject if retained by Purchaser.
4.3 Definition of Owner. For purposes of Articles 5, 6 and 7 of this
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Agreement, the term "Owner" shall include Purchaser and all subsequent holders
of the Shares who derive their chain of ownership through a permitted transfer
from Purchaser in accordance with Section 4.1.
5. Repurchase Right.
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5.1 Grant. The Company is hereby granted the right (the "Repurchase
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Right"), exercisable at any time during the sixty (60) day period following the
date Purchaser ceases for any reason to be a Service Provider to the Company, to
repurchase at the Purchase Price all or (at the discretion of the Company and
with the consent of Purchaser) any portion of the Shares in which Purchaser has
not acquired a vested interest in accordance with Section 5.3 (the "Unvested
Shares"). For purposes of this Agreement, Purchaser shall be deemed to be a
Service Provider to the Company for so long as Purchaser renders periodic
services to the Company or one or more of its parent or subsidiary corporations
as an employee, director or consultant.
5.2 Exercise of the Repurchase Right. The Repurchase Right shall be
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exercisable by written notice delivered to the Owner of the Unvested Shares
prior to the expiration of the sixty (60) day period specified in Section 5.1.
The notice shall indicate the number of Unvested Shares to be repurchased and
the date on which the repurchase is to be effected, such date to be not more
than thirty (30) days after the date of
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notice. To the extent one or more certificates representing Unvested Shares may
have been previously delivered out of escrow to the Owner, then the Owner shall,
prior to the close of business on the date specified for the repurchase, deliver
to the Secretary of the Company the certificates representing the Unvested
Shares to be repurchased, properly endorsed for transfer. The Company shall,
concurrently with the receipt of such stock certificates, pay to the Owner in
cash or cash equivalents (including the cancellation of any purchase-money
indebtedness), an amount equal to the Purchase Price previously paid for the
Unvested Shares that are to be repurchased.
5.3 Termination of the Repurchase Right.
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(a) The Repurchase Right shall terminate with respect to any Unvested
Shares for which it is not timely exercised under Section 5.2. In addition, the
Repurchase Right shall terminate with respect to any and all Shares in which
Purchaser vests in accordance with the schedule below. Accordingly, provided
Purchaser continues to be a Service Provider to the Company, Purchaser shall
acquire a vested interest in, and the Repurchase Right shall lapse with respect
to, the Shares in accordance with the following vesting schedule:
(i) Purchaser shall not acquire any vested interest in, nor shall the
Repurchase Right lapse with respect to, any Shares during the initial six
(6) month period measured from the date hereof (the "Vesting Measurement
Date").
(ii) Upon the expiration of the initial six (6) month period measured
from the Vesting Measurement Date, Purchaser shall acquire a vested
interest in, and the Repurchase Right shall lapse with respect to, that
number of Shares equal to six forty-eighths (6/48) of the Shares.
(iii) After the expiration of the initial six (6) month period
measured from the Vesting Measurement Date, Purchaser shall acquire a
vested interest in, and the Repurchase Right shall lapse with respect to,
the remaining Shares in a series of forty-two (42) successive monthly
installments each equal to one forty-eighth (1/48) of the Shares.
All Shares as to which the Repurchase Right lapses shall, however, continue
to be subject to (i) the First Refusal Right under Article 6, and (ii) the
market stand-off provisions of Section 3.3.
5.4 Fractional Shares. No fractional shares shall be repurchased by the
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Company. Accordingly, should the Repurchase Right extend to a fractional share
at the time Purchaser ceases
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to be a Service Provider, then such fractional share shall be added to any
fractional share in which Purchaser is at such time vested in order to make one
whole vested share no longer subject to the Repurchase Right.
5.5 Additional Shares or Substituted Securities. In the event of any
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stock dividend, stock split, recapitalization or other change affecting the
Company's outstanding Common Stock as a class effected without receipt of
consideration, then any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which is
by reason of any such transaction distributed with respect to the Shares shall
be immediately subject to the Repurchase Right, but only to the extent the
Shares are at the time covered by such right. Appropriate adjustments to
reflect the distribution of such securities or property shall be made to the
number of Shares hereunder and to the price per share to be paid upon the
exercise of the Repurchase Right in order to reflect the effect of any such
transaction upon the Company's capital structure, provided that the aggregate
Purchase Price shall remain the same.
5.6 Corporate Transaction.
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(a) In the event of any of the following transactions (a "Corporate
Transaction"):
(i) a merger or acquisition in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to
change the State in which the Company is incorporated,
(ii) the sale, transfer or other disposition of all or substantially
all of the assets of the Company, or
(iii) any reverse merger in which the Company is the surviving entity
but in which fifty percent (50%) or more of the Company's outstanding
voting stock is transferred to holders different from those who held the
stock immediately prior to such merger,
then the Repurchase Right shall automatically lapse in its entirety, and
Purchaser shall acquire a vested interest in all of the Shares, upon the
consummation of such Corporate Transaction. However, no such lapse of the
Repurchase Right shall occur if and to the extent the Repurchase Right is to be
assigned to the successor corporation (or its parent company) in connection with
such Corporate Transaction.
(b) To the extent the Repurchase Right remains in effect following such
Corporate Transaction in accordance with subparagraph (a) above, it shall apply
to the new capital stock or
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other property received in exchange for the Shares in consummation of the
Corporate Transaction, but only to the extent the Shares are at the time covered
by such right. Appropriate adjustments shall be made to the price per share
payable upon exercise of the Repurchase Right to reflect the effect of the
Corporate Transaction upon the Company's capital structure, provided that the
aggregate Purchase Price shall remain the same.
5.7 Initial Public Offering.
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In the event the Company effects its initial registered public offering
pursuant to the 1933 Act or the date on which it becomes a registered company
pursuant to section 12(g) of the Securities and Exchange Act of 1934, then the
Repurchase Right shall automatically lapse in its entirety and Purchaser shall
acquire a vested interest in all of the Shares.
6. Right of First Refusal.
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6.1 Grant. The Company is hereby granted the right of first refusal (the
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"First Refusal Right"), exercisable in connection with any proposed sale or
other transfer of the Shares in which Purchaser has vested in accordance with
Article 5. For purposes of this Article 6, the term "transfer" shall include
any assignment, pledge, encumbrance or other disposition for value of the Shares
intended to be made by the Owner, but shall not include any of the permitted
transfers under Section 4.1.
6.2 Notice of Intended Disposition. In the event the Owner desires to
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accept a bona fide third-party offer for any or all of the Shares (the shares
subject to such offer to be hereinafter called, for purposes of this Article 6,
the "Target Shares"), the Owner shall promptly (a) deliver to the Secretary of
the Company written notice (the "Disposition Notice") of the offer and the basic
terms and conditions thereof, including the proposed purchase price, and (b)
provide satisfactory proof that the disposition of the Target Shares to the
third-party offer or would not contravene the provisions of Articles 2 and 3 of
this Agreement.
6.3 Exercise of Right. The Company (or its assignees) shall, for a period
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of thirty (30) days following receipt of the Disposition Notice, have the right
to repurchase any or all of the Target Shares specified in the Disposition
Notice upon substantially the same terms and conditions specified therein. Such
right shall be exercisable by written notice (the "Exercise Notice") delivered
to the Owner prior to the expiration of the thirty (30) day exercise period. If
such right is exercised with respect to all the Target Shares specified in the
Disposition Notice, then the Company (or its assignees) shall effect the
repurchase of the Target Shares, including payment of the purchase price, not
more than five (5) business days after
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delivery of the Exercise Notice; and at such time the Owner shall deliver to the
Company the certificates representing the Target Shares to be repurchased,
properly endorsed for transfer. If any of the Target Shares are at the time
held in escrow under Article 7, the certificates for such shares shall
automatically be released from escrow and surrendered to the Company for
cancellation. The Target Shares so purchased shall thereupon be cancelled and
cease to be issued and outstanding shares of the Company's Common Stock.
Should the purchase price specified in the Disposition Notice be payable in
property other than cash or evidences of indebtedness, the Company (or its
assignees) shall have the right to pay the purchase price in the form of cash
equal in amount to the value of such property. If the Owner and the Company (or
its assignees) cannot agree on such cash value within ten (10) days after the
Company's receipt of the Disposition Notice, the valuation shall be made by an
appraiser of recognized standing selected by the Owner and the Company (or its
assignees), or, if they cannot agree on an appraiser within twenty (20) days
after the Company's receipt of the Disposition Notice, each shall select an
appraiser of recognized standing and the two appraisers shall designate a third
appraiser of recognized standing, whose appraisal shall be determinative of such
value. The cost of such appraisal shall be shared equally by the Owner and the
Company. The closing shall then be held on the latter of (a) the fifth business
day following delivery of the Exercise Notice or (b) the 15th day after such
cash valuation shall have been made.
6.4 Non-Exercise of Right. In the event the Exercise Notice is not given
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to the Owner within thirty (30) days following the date of the Company's
receipt of the Disposition Notice, the Owner shall have a period of thirty (30)
days thereafter, in which to sell or otherwise dispose of the Target Shares upon
terms and conditions (including the purchase price) no more favorable to the
third-party purchaser than those specified in the Disposition Notice; provided
that any such sale or disposition must not contravene the provisions of Article
2 of this Agreement. If any of the Target Shares are at the time held in escrow
under Article 7, the certificates for such shares shall automatically be
released from escrow and surrendered to the Owner. The third-party purchaser
shall acquire the Target Shares free and clear of all the terms and provisions
of this Agreement (including the Company's Repurchase Right under Article 5 and
the First Refusal Right hereunder). If the Owner does not sell or otherwise
dispose of the Target Shares within the specified thirty (30) day period, the
Company's First Refusal Right shall continue to apply to any subsequent
disposition of the Target Shares by the Owner until such right lapses in
accordance with Section 6.7.
6.5 Partial Exercise of Right. In the event the Company (or its
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assignees) makes a timely exercise of the First Refusal
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Right with respect to a portion, but not all, of the Target Shares specified in
the Disposition Notice, the Owner shall have the option, exercisable by written
notice to the Company delivered within thirty (30) days after the date of the
Disposition Notice, to effect the sale of the Target Shares pursuant to one of
the following alternatives:
(a) sale or other disposition of all the Target Shares to a third-
party purchaser in compliance with the requirements of Section 6.4, as if
the Company did not exercise the First Refusal Right hereunder; or
(b) sale to the Company (or its assignees) of the portion of the
Target Shares which the Company (or its assignees) has elected to purchase,
such sale to be effected in substantial conformity with the provisions of
Section 6.3.
Failure of the Owner to deliver timely notification to the Company under
this Section 6.5 shall be deemed to be an election by the Owner to sell the
Target Shares pursuant to alternative (a) above.
6.6 Recapitalization.
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(a) In the event of any stock dividend, stock split, recapitalization or
other transaction affecting the Company's outstanding Common Stock as a class
effected without receipt of consideration, then any new, substituted or
additional securities or other property which is by reason of such transaction
distributed with respect to the Shares shall be immediately subject to the
Company's First Refusal Right hereunder, but only to the extent the Shares are
at the time covered by such right.
(b) In the event of a Corporate Transaction (as defined in Section 5.6),
the Company's First Refusal Right shall remain in full force and effect and
shall apply to the new capital stock or other property received in exchange for
the Shares in consummation of the Corporate Transaction, but only to the extent
the Shares are at the time covered by such right.
6.7 Lapse. The First Refusal Right under this Article 6 shall lapse and
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cease to have effect upon the earliest to occur of (a) the first date on which
shares of the Company's Common Stock are held of record by more than five
hundred (500) persons, (b) the determination by the Company's Board of
Directors that a public market exists for the outstanding shares of the
Company's Common Stock, or (c) the closing of a firm commitment underwritten
public offering pursuant to an effective registration statement under the 1933
Act, covering the offer and sale of the Company's Common Stock in the aggregate
amount of at least $7,500,000.
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6.8 Legend. In addition to the legends required by Section 2.4, all
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certificates representing Shares subject to the Company's Right of Repurchase
and the Right of First Refusal shall be endorsed with the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE
WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE INITIAL
HOLDER HEREOF. SUCH AGREEMENT PROVIDES FOR CERTAIN RESTRICTIONS ON
TRANSFER OF THE SECURITIES, INCLUDING RIGHTS OF FIRST REFUSAL UPON AN
ATTEMPTED TRANSFER OF THE SECURITIES AND CERTAIN REPURCHASE RIGHTS IN FAVOR
OF THE COMPANY UPON TERMINATION OF SERVICE WITH THE COMPANY. THE SECRETARY
OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT
TO THE HOLDER HEREOF WITHOUT CHARGE."
7. Escrow.
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7.1 Deposit. Upon issuance, the certificates for the Shares shall be
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deposited in escrow with the Secretary of the Company to be held in accordance
with the provisions of this Article 7. Each deposited certificate shall be
accompanied by a duly executed Assignment Separate from Certificate in the form
of Exhibit A. The deposited certificates, together with any other assets or
securities from time to time deposited with the Company pursuant to the
requirements of this Agreement, shall remain in escrow until such time or times
as the certificates (or other assets and securities) are to be released or
otherwise surrendered for cancellation in accordance with Section 7.3. Upon
delivery of the certificates (or other assets and securities) to the Company,
the Owner shall be issued an instrument of deposit acknowledging the number of
Shares (or other assets and securities) delivered in escrow to the Secretary of
the Company.
7.2 Recapitalization. All regular cash dividends on the Shares (or other
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securities at the time held in escrow) shall be paid directly to the Owner and
shall not be held in escrow. However, in the event of any stock dividend, stock
split, recapitalization or other change affecting the Company's outstanding
Common Stock as a class effected without receipt of consideration or in the
event of a Corporate Transaction, any new, substituted or additional securities
or other property which is by reason of such transaction distributed with
respect to the Shares shall be immediately delivered to the Secretary of the
Company to be held in escrow under this Article 7, but only to the extent the
Shares are at the time subject to the escrow requirements of Section 7.1.
7.3 Release/Surrender. The Shares, together with any other assets or
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securities held in escrow hereunder, shall be subject to the following terms and
conditions relating to their
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release from escrow or their surrender to the Company for repurchase and
cancellation:
(a) Should the Company exercise the Repurchase Right under Article 5
with respect to any Unvested Shares, then the escrowed certificates for
such Unvested Shares (together with any other assets or securities issued
with respect thereto) shall be delivered to the Company for cancellation,
concurrently with the payment to the Owner, in cash or cash equivalent
(including the cancellation of any purchase-money indebtedness), of an
amount equal to the aggregate Purchase Price for such Unvested Shares, and
the Owner shall have no further rights with respect to such Unvested Shares
(or other assets or securities).
(b) Should the Company exercise its First Refusal Right under Article
6 with respect to any Target Shares held at the time in escrow hereunder,
then the escrowed certificates for such Target Shares (together with any
other assets or securities issued with respect thereto) shall, concurrently
with the payment of the Section 6.3 purchase price for such Target Shares
to the Owner, be surrendered to the Company for cancellation, and the Owner
shall have no further rights with respect to such Target Shares (or other
assets or securities).
(c) Should the Company elect not to exercise its First Refusal Right
under Article 6 with respect to any Target Shares held at the time in
escrow hereunder, then the escrowed certificates for such Target Shares
(together with any other assets or securities issued with respect thereto)
shall be surrendered to the Owner for disposition according to the
provisions of Section 6.4.
(d) As the interest of Purchaser in the Shares (or any other assets
or securities issued with respect thereto) vests in accordance with the
provisions of Article 5, the certificates for such vested shares (as well
as all other vested assets and securities) shall be released from escrow
and delivered to the Owner, if requested by the Owner, in accordance with
the following schedule:
(i) The initial release of vested shares (or other vested assets
and securities) from escrow shall be effected within thirty (30) days
following the expiration of the initial six (6) month period measured
from the Vesting Measurement Date.
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(ii) Subsequent releases of vested shares (or other vested
assets and securities) from escrow shall be effected at annual
intervals thereafter, with the first such annual release to occur
eighteen (18) months after the Vesting Measurement Date.
(iii) Upon Purchaser's cessation of Service Provider status, any
escrowed Shares (or other assets or securities) in which Purchaser is
at the time vested shall be promptly released from escrow.
(iv) Upon any earlier termination of the Company's Repurchase
Right in accordance with the applicable provisions of Article 5, the
Shares (or other assets or securities) at the time held in escrow
hereunder shall promptly be released to the Owner as fully vested
shares or other property.
(e) All Shares (or other assets or securities) released from escrow
in accordance with the provisions of subparagraph (iv) above shall
nevertheless remain subject to the First Refusal Right under Article 6 and
the market stand-off provisions of Section 3.3 until such provisions
terminate in accordance herewith.
8. General Provisions.
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8.1 Assignment. The Company may assign its Repurchase Rights under
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Article 5 and/or its First Refusal Right under Article 6 to any person or entity
selected by the Company's Board of Directors, including one or more stockholders
of the Company.
If the assignee of the Repurchase Right is other than a parent or
subsidiary corporation of the Company, then such assignee must make a cash
payment to the Company, upon the assignment of the Repurchase Right, in an
amount equal to the excess (if any) of the fair market value of the Unvested
Shares at the time subject to the Repurchase Right (as determined by the
Company's Board of Directors) and the aggregate Repurchase Price payable for
such Unvested Shares.
8.2 Definitions. For purposes of this Agreement, the following provisions
-----------
shall be applicable in determining the parent and subsidiary corporations of the
Company:
(a) Any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company shall be considered to be a parent
corporation of the Company, provided each such corporation in the unbroken
chain (other than the Company) owns, at the
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time of the determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
(b) Each corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company shall be considered to be a
subsidiary of the Company, provided each such corporation (other than the
last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
8.3 No Employment or Service Contract. Nothing in this Agreement shall
---------------------------------
confer upon Purchaser any right to continue in the service of the Company (or
any parent or subsidiary corporation of the Company) for any period of time or
restrict in any way the rights of the Company (or any parent or subsidiary
corporation of the Company) or Purchaser, to terminate the Service Provider
status of Purchaser at any time for any reason whatsoever, with or without
cause.
8.4 Notices. Any notice required in connection with (a) the Repurchase
-------
Right or the First Refusal Right or (b) the disposition of any Shares covered
thereby shall be given in writing and shall be deemed effective upon personal
delivery, upon deposit with a nationally recognized courier service, or upon
deposit in the United States mail, registered or certified, postage prepaid and
addressed to the party entitled to such notice at the address indicated below
such party's signature line on this Agreement or at such other address as such
party may designate by ten (10) days advance written notice under this Section
8.4 to all other parties to this Agreement.
8.5 No Waiver. The failure of the Company (or its assignees) in any
---------
instance to exercise the Repurchase Rights granted under Article 5, or the
failure of the Company (or its assignees) in any instance to exercise the First
Refusal Right granted under Article 6, shall not constitute a waiver of any
other repurchase rights and/or rights of first refusal that may subsequently
arise under the provisions of this Agreement or any other agreement between the
Company and Purchaser. No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or condition,
whether of like or different nature.
8.6 Cancellation of Shares. If the Company (or its assignees) shall make
----------------------
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Shares to be repurchased in accordance
with the provisions of this Agreement, then from and after such time, the person
from whom such shares are to be repurchased shall no
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longer have any rights as a holder of such shares (other than the right to
receive payment of such consideration in accordance with this Agreement), and
such shares shall be deemed purchased in accordance with the applicable
provisions hereof and the Company (or its assignees) shall be deemed the owner
and holder of such shares, whether or not the certificates therefor have been
delivered as required by this Agreement.
9. Miscellaneous Provisions.
------------------------
9.1 Purchaser Undertaking. Purchaser hereby agrees to take whatever
---------------------
additional action and execute whatever additional documents the Company may in
its judgment deem necessary or advisable in order to carry out the obligations
or restrictions imposed on Purchaser under this Agreement.
9.2 Agreement Is Entire Contract. This Agreement constitutes the entire
----------------------------
contract between the parties hereto with regard to the subject matter hereof.
9.3 Governing Law. This Agreement shall be governed by, and construed in
-------------
accordance with, the laws of the State of California, as such laws are applied
to contracts entered into and performed in such State.
9.4 Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
9.5 Successors and Assigns. The provisions of this Agreement shall inure
----------------------
to the benefit of, and be binding upon, the Company and its successors and
assigns and Purchaser and Purchaser's legal representatives, heirs, legatees,
distributees, assigns and transferees by operation of law, whether or not any
such person shall have become a party to this Agreement
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and have agreed in writing to join herein and be bound by the terms and
conditions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first indicated above.
▇▇▇▇▇▇, INC.
By
---------------------------------
Address ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇
---------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
---------------------------
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
---------------
------------------------------------
Signature
Address
----------------------------
----------------------------
----------------------------
Spousal Consent
---------------
________________ (Purchaser's spouse) indicates by the execution of this
Agreement his or her consent to be bound by the terms herein as to his or her
interests, whether as community property or otherwise, if any, in the Shares.
------------------------------------
Signature
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EXHIBIT A
---------
Assignment Separate From Certificate
------------------------------------
FOR VALUE RECEIVED ___________________ ("Stockholder") hereby sells,
assigns and transfers unto ▇▇▇▇▇▇, Inc., a Delaware corporation (the "Company"),
____________ (___) shares of Common Stock of the Company represented by
Certificate No. _____ herewith and does hereby irrevocably constitute and
appoint ________________ Attorney to transfer the said stock on the books of the
Company with full power of substitution in the premises.
Dated: ____________, 19__.
------------------------------------
Signature
Spousal Consent
---------------
________________ (Purchaser's spouse) indicates by the execution of this
Assignment his or her consent to be bound by the terms herein as to his or her
interests, whether as community property or otherwise, if any, in the Shares.
------------------------------------
Signature
INSTRUCTIONS: PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE.
THE PURPOSE OF THIS ASSIGNMENT IS TO ENABLE THE COMPANY TO EXERCISE ITS
"REPURCHASE OPTION" SET FORTH IN THE AGREEMENT WITHOUT REQUIRING ADDITIONAL
SIGNATURES ON THE PART OF PURCHASER.
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EXHIBIT B
---------
ELECTION UNDER SECTION 83(b) OF
THE INTERNAL REVENUE CODE
The undersigned hereby makes an election pursuant to Section 83(b) of the
Internal Revenue Code with respect to the property described below and supplies
the following information in accordance with the regulations promulgated
thereunder:
(i) The name, address and social security number of the undersigned:
----------------------------------------------
----------------------------------------------
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Social Security No.:__________________________
(ii) Description of property with respect to which the election is being
made:
__________ shares of common stock of ▇▇▇▇▇▇, Inc. (the "Company").
(iii) The date on which the property was transferred is __________, 19__.
(iv) The taxable year to which this election relates is calendar year
199__.
(v) Nature of restrictions to which the property is subject:
The shares of stock transferred to the undersigned taxpayer are
subject to the provisions of an Employee Stock Purchase Agreement between
the undersigned and the Company. Under the provisions of the Agreement,
the Company will have the right to repurchase the stock at a price which
may be less than the fair market value of the shares in the event of the
undersigned's termination of employment with the Company.
(vi) The fair market value of the property at the time of transfer
(determined without regard to any lapse restriction) was $1.00 per share, for a
total of $__________.
(vii) The amount paid by taxpayer for the property was $__________.
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(viii) A copy of this statement has been furnished to the Company.
Dated: __________, 19__
------------------------------------
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