EXHIBIT 4.9
AVANADE INC.
EARLY EXERCISE NOTICE AND STOCK PURCHASE AGREEMENT
2000 STOCK INCENTIVE PLAN
By your signature and the signature of the Company's representative below,
you ("Employee") and the Company agree that you are purchasing shares of the
Company's Common Stock subject to the terms and conditions of the Company's 2000
Stock Incentive Plan (the "Plan") and this Agreement. Capitalized terms that are
not defined in this Agreement have the meanings given to them in the Plan.
EMPLOYEE: ___________________________________________
ADDRESS: ___________________________________________
TAXPAYER I.D. NUMBER: ___________________________________________
GRANT DATE: ___________________________________________
TYPE OF OPTION: Nonqualified Stock Option
EXERCISE PRICE PER SHARE: $__________________________________________
TOTAL NUMBER OF SHARES SUBJECT TO OPTION: ___________________________________________
TOTAL NUMBER OF SHARES FOR WHICH OPTION ___________________________________________
IS BEING EXERCISED NOW (THESE SHARES
ARE REFERRED TO BELOW AS "SHARES"):
TOTAL EXERCISE PRICE FOR SHARES: $____________(Please enclose a check for this amount)
EXERCISE DATE: ___________________________________________
1. EARLY EXERCISE FOR UNVESTED SHARES ________ (YOU MUST INITIAL HERE IF
SECTION 1 APPLIES.)
By initialing this Section 1, Employee hereby acknowledges that all or a
portion of the Shares being purchased under this Agreement are not vested as of
the date of exercise according to the vesting schedule contained in the
agreement evidencing the Option (the "Option Agreement"). Any Shares purchased
hereunder pursuant to the exercise of any portion of the Option that is unvested
as of the date of exercise will be considered unvested shares (the "Unvested
Shares"). The Unvested Shares will vest (and to the extent so vested cease to be
Unvested Shares) in accordance with the vesting schedule contained in the
underlying Option Agreement. Employee hereby grants to the Company a right to
repurchase the Unvested Shares
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(the "Repurchase Right for Unvested Shares") for so long as they remain Unvested
Shares, subject to the terms and conditions set forth below.
EMPLOYEE UNDERSTANDS THAT EMPLOYEE HAS SOLE RESPONSIBILITY FOR DETERMINING
WHETHER TO FILE AN ELECTION UNDER SECTION 83(B) OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), IN CONNECTION WITH EMPLOYEE'S EXERCISE OF THE
OPTION FOR UNVESTED SHARES, AS DISCUSSED FURTHER IN SECTION 8.
2. PAYMENT OF EXERCISE PRICE
Prior to or concurrently with the delivery of this Agreement to the
Company, Employee has delivered the exercise price for the Shares in accordance
with the terms of the Plan and the Option Agreement.
3. SECURITIES LAW COMPLIANCE
3.1 Employee represents and warrants that Employee (a) has been furnished
with a copy of the Plan and all information which Employee deems necessary to
evaluate the merits and risks of the purchase of the Shares, (b) has had the
opportunity to ask questions and receive answers concerning the information
received about the Shares and the Company, and (c) has been given the
opportunity to obtain any additional information Employee deems necessary to
verify the accuracy of any information obtained concerning the Shares and the
Company.
3.2 Employee hereby confirms that Employee has been informed that the
Shares have not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), or any state securities laws pursuant to exemptions from
registration. Employee further confirms that Employee understands that the
reliance by the Company on such exemptions is predicated in part on the truth
and accuracy of the statements by Employee in this Agreement.
3.3 Employee hereby represents and warrants that Employee is purchasing
the Shares for Employee's own account, for investment purposes only, and not
with a view towards the distribution or public offering of all or any part of
the Shares.
3.4 Employee hereby confirms that Employee understands that because the
Shares have not been registered under the Securities Act, Employee must continue
to bear the economic risk of the investment for an indefinite period of time and
the Shares cannot be sold unless the Shares are subsequently registered or an
exemption from registration is available.
3.5 Employee hereby agrees that Employee will in no event sell or
distribute all or any part of the Shares unless (a) there is an effective
registration statement under the Securities Act and applicable state securities
laws covering any such transaction involving the Shares or (b) the Company
receives an opinion of Employee's legal counsel (concurred in by legal counsel
for the Company) stating that such transaction is exempt from registration or
the Company otherwise satisfies itself that such transaction is exempt from
registration.
3.6 Employee hereby consents to the placing of a legend on Employee's
certificate(s) as set forth in Section 10 and to the placing of a stop-transfer
order on the books of the Company
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and with any transfer agents against the Shares until the Shares may be legally
resold or distributed.
3.7 Employee hereby confirms that Employee understands that at the present
time Rule 144 of the Securities and Exchange Commission (the "SEC") may not be
relied on for the resale or distribution of the Shares by Employee. Employee
understands that the Company has no obligation to Employee to register the
Shares with the SEC and has not represented to Employee that it will so register
the Shares.
3.8 Employee confirms that Employee has been advised, prior to Employee's
purchase of the Shares, that neither the offering of the Shares nor any offering
materials have been reviewed by any administrator under the Securities Act or
any other applicable securities act (the "Acts") and that the Shares have not
been registered under any of the Acts and therefore cannot be resold unless they
are registered under the Acts or unless an exemption from such registration is
available.
3.9 Employee hereby agrees to indemnify the Company and hold it harmless
from and against any loss, claim or liability, including attorneys' fees or
legal expenses, incurred by the Company as a result of any breach by Employee
of, or any inaccuracy in, any representation, warranty or statement made by
Employee in this Agreement or the breach by Employee of any terms or conditions
of this Agreement.
4. TRANSFER RESTRICTIONS
4.1 RESTRICTIONS ON TRANSFER. Until the earliest of a Qualified IPO , a
Corporate Transaction (other than a Related Party Transaction) or July 1, 2005,
the Shares may not be sold, assigned, pledged, encumbered or otherwise
transferred. If a Qualified IPO or a Corporate Transaction (other than a Related
Party Transaction) has not occurred on or prior to July 1, 2005, the Shares may
be sold, transferred, assigned, pledged, encumbered or otherwise transferred
only in accordance with the provisions of this Agreement. Except as otherwise
provided in this Agreement or in the Option Agreement, such restrictions on
transfer, however, will not apply to (a) a gratuitous transfer of the Shares,
provided, and only if, Employee obtains the Company's prior written consent to
such transfer, (b) a transfer of title to the Shares effected pursuant to
Employee'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
Employee in connection with the acquisition of the Shares.
4.2 EMPLOYEE STOCKHOLDERS AGREEMENT. The Shares will be subject to the
Employee Stockholders Agreement dated as of August 4, 2000 if Employee is a
party to that agreement.
4.3 TRANSFEREE OBLIGATIONS. Each person (other than the Company) to whom
the Shares are transferred by means of one of the permitted transfers specified
in Section 4.1 must, as a condition precedent to the validity of such transfer,
acknowledge in writing to the Company that such person is bound by the
provisions of this Agreement, to the same extent the Shares would be so subject
if retained by Employee.
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5. MARKET STANDOFF
In connection with any underwritten public offering by the Company of its
equity securities pursuant to an effective registration statement filed under
the Securities Act, including the Company's initial public offering, Employee or
any transferee (either being referred to herein as "Employee") agrees not to
sell, make any short sale of, loan, hypothecate, pledge, assign, 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. Such
limitations will be in effect for such period of time as may be requested by the
Company or its underwriters, except that in no event will such period exceed 180
days. This market standoff provision will be in effect no longer than two years
after the closing date of a Qualified IPO.
6. REPURCHASE RIGHT FOR UNVESTED SHARES
6.1 The Company may exercise a Repurchase Right for Unvested Shares on the
earlier of (a) the date Employee ceases to be employed by the Company or a
Subsidiary for any reason whatsoever, including, without limitation, termination
by reason of Retirement, Disability or death or with or without cause and (b)
the date Employee or Employee's legal representative attempts to sell, exchange,
transfer, pledge or otherwise dispose of any Unvested Shares.
6.2 The Company may exercise a Repurchase Right for Unvested Shares by
giving Employee written notice within 60 days after (a) the date of such
termination of employment with the Company or a Subsidiary (or exercise of the
Option, if later) or (b) the date the Company has received notice of an
attempted disposition. If the Company fails to give notice within such 60-day
period, the Repurchase Right for Unvested Shares will terminate, unless, to the
extent permitted by applicable law, Employee and the Company have extended the
time for the exercise of the Repurchase Right for Unvested Shares. The
Repurchase Right for Unvested Shares must be exercised, if at all, for all the
Unvested Shares, except as Employee and the Company may otherwise agree.
6.3 Payment to Employee by the Company will be made in cash (by check), by
cancellation of all or any portion of outstanding indebtedness of Employee to
the Company, or by any combination thereof, within 30 days after the date the
Company mails the written notice of exercise of the Repurchase Right for
Unvested Shares. No interest will be paid on such amount. The purchase price for
each share being repurchased by the Company will be an amount equal to
Employee's original cost per share, as may be adjusted as provided in Section 15
of the Plan. Employee will deliver the Shares of stock being repurchased to the
Company at the same time the Company delivers the purchase price to Employee.
6.4 Employee hereby authorizes and directs the Company's Secretary (or
other authorized officer) or transfer agent to transfer to the Company or its
assignee any Unvested Shares as to which the Repurchase Right for Unvested
Shares is exercised.
6.5 The Repurchase Right for Unvested Shares will remain in full force and
effect in the event of a Corporate Transaction, except that the Repurchase Right
for Unvested Shares will
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automatically be assigned to the Successor Corporation and the Repurchase Right
will automatically lapse if and to the same extent that the vesting of the
underlying Option would have accelerated in connection with the Corporate
Transaction.
6.6 The Company may at any time require Employee to deposit any
certificate or certificates evidencing the Unvested Shares with an agent
designated by the Company under the terms and conditions of escrow and security
agreements approved by the Company.
6.7 Notwithstanding any other provision of this Agreement, if a Qualified
IPO or a Corporate Transaction other than a Related Party Transaction has not
occurred on or prior to July 1, 2005, and if Employee ceases to be employed by
the Company or a Subsidiary for any reason other than Disability or death, then
until July 1, 2005 all Unvested Shares that have vested will be subject to
repurchase as if they were Unvested Shares under the terms and conditions of
this Section 6.
7. ASSIGNMENT SEPARATE FROM CERTIFICATE
As security for the faithful performance of this Agreement, Employee
agrees, immediately upon receipt of the certificate(s) evidencing any Shares, to
deliver such certificate(s), together with a stock power in the form attached to
this Agreement as Exhibit A, executed by Employee and by Employee's spouse, if
any (with the transferee, certificate number, date and number of Shares left
blank), to the Secretary of the Company or its designee ("Escrow Holder"), who
is hereby appointed to hold such certificate(s) and stock power in escrow and to
take all such actions and to effectuate all such transfers and/or releases of
such Shares as are in accordance with the terms of this Agreement. Employee and
the Company agree that Escrow Holder will not be liable to any party to this
Agreement (or to any other party) for any actions or omissions unless Escrow
Holder is grossly negligent relative thereto. Escrow Holder may rely on any
letter, notice or other document executed by any signature purported to be
genuine and may rely on advice of counsel and obey any order of any court with
respect to the transactions contemplated in this Agreement. The Shares will be
released from escrow upon termination of the transfer restrictions imposed by
this Agreement, except that such release will not affect the rights of the
Company with respect to any pledge of Shares to the Company.
8. SECTION 83(b) ELECTION
If the Shares are acquired under this Agreement pursuant to the exercise
of the Option for Unvested Shares, Employee understands that under Section 83(a)
of the Code, the excess of the Fair Market Value of the Unvested Shares on the
date any forfeiture restrictions on the Unvested Shares lapse over the exercise
price paid for such Shares will be taxable as ordinary income, subject to
payroll and withholding tax and tax reporting, on the date the forfeiture
restrictions lapse. For this purpose, the term "forfeiture restrictions" means
the right of the Company to buy back the Unvested Shares pursuant to the
Repurchase Right for Unvested Shares set forth in Section 6. Employee
understands that he or she may elect under Section 83(b) of the Code to be taxed
at the time the Unvested Shares are acquired upon exercise of the Option, rather
than when and as the Unvested Shares cease to be subject to the forfeiture
restrictions. Such election (the "83(b) Election") must be filed with the
Internal Revenue Service WITHIN 30 DAYS from the date the Unvested Shares are
acquired upon exercise of the Option. Even if the Fair Market Value of the
Unvested Shares on the date the Option is exercised equals the exercise price
(and thus no tax
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is payable), the election must be made to avoid the risk of adverse tax
consequences in the future. Employee understands that there is a risk that the
Internal Revenue Service might challenge the Plan Administrator's determination
of the Fair Market Value of the Shares. Employee also understands that (a)
Employee will not be entitled to a deduction for any ordinary income previously
recognized as a result of the 83(b) Election if the Unvested Shares are
subsequently forfeited to the Company, and (b) the 83(b) Election may cause
Employee to recognize more compensation income than Employee would have
otherwise recognized if the Internal Revenue Service determines that the value
of the Unvested Shares on the date the Option was exercised is greater than the
Fair Market Value of the Shares on that date as determined by the Plan
Administrator and/or the value of the Unvested Shares subsequently declines.
THE FORM FOR MAKING THE 83(b) ELECTION IS ATTACHED TO THIS AGREEMENT AS
EXHIBIT C. EMPLOYEE UNDERSTANDS THAT FAILURE TO MAKE THIS FILING WITHIN THE
APPLICABLE 30-DAY PERIOD MAY RESULT IN THE RECOGNITION OF ORDINARY INCOME BY
EMPLOYEE AS THE FORFEITURE RESTRICTIONS LAPSE. Employee further understands that
an additional copy of such election form should be filed with Employee's federal
income tax return for the calendar year in which the date of this Agreement
falls. Employee acknowledges that the foregoing is only a summary of the federal
income tax laws that apply to the purchase of the Unvested Shares under this
Agreement and does not purport to be complete. EMPLOYEE FURTHER ACKNOWLEDGES
THAT THE COMPANY HAS DIRECTED EMPLOYEE TO SEEK INDEPENDENT ADVICE REGARDING THE
APPLICABLE PROVISIONS OF THE CODE, THE INCOME TAX LAWS OF ANY MUNICIPALITY,
STATE OR FOREIGN COUNTRY IN WHICH EMPLOYEE MAY RESIDE, AND THE TAX CONSEQUENCES
OF EMPLOYEE'S DEATH.
Employee agrees to execute and deliver to the Company with this Agreement
a copy of the Acknowledgment and Statement of Decision Regarding Section 83(b)
Election (the "Acknowledgment") attached hereto as Exhibit B. Employee further
agrees that Employee will execute and deliver to the Company with this Agreement
a copy of the 83(b) Election attached hereto as Exhibit C if Employee chooses to
make such an election.
9. FIRST REFUSAL, REPURCHASE AND PUT RIGHTS
Subject to Section 9.5, the Shares will be subject to the following first
refusal, repurchase and put rights beginning on July 2, 2005 if a Qualified IPO
or a Corporate Transaction (other than a Related Party Transaction) has not
occurred on or prior to July 1, 2005. Such rights will terminate upon the
closing of a Qualified IPO.
9.1 RIGHTS OF FIRST REFUSAL. Before any Shares held by Employee may be
sold or otherwise transferred (including any assignment, pledge, encumbrance or
other disposition of the Shares, but not including a permitted transfer under
Section 4.1), the Company will have a right of first refusal to purchase the
Shares on the terms and conditions set forth in this Section 9.1 (the "Right of
First Refusal").
9.1.1 In the event Employee desires to accept a bona fide
third-party offer for the sale or transfer of any or all of the Shares, Employee
will promptly deliver to the Company a
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written notice (the "First Refusal Notice") stating the terms and conditions of
any proposed sale or transfer, including (a) Employee's bona fide intention to
sell or otherwise transfer such Shares, (b) the name of each proposed Employee
or other transferee (the "Proposed Transferee"), (c) the number of Shares to be
transferred to each Proposed Transferee, and (d) the bona fide cash price or
other consideration for which Employee proposes to transfer the Shares (the
"Offered Price"). Employee will provide satisfactory proof that the disposition
of such shares to such Proposed Transferee would not be in contravention of the
provisions of Section 1.
9.1.2 At any time within the Semi-Annual Exercise Period during
which a First Refusal Notice is received, the Company or its assignee may, by
giving written notice to Employee, elect to purchase all or any portion of the
Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with Section 9.1.3.
9.1.3 The purchase price for the Shares purchased under this Section
9.1 will be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of the noncash consideration will be
determined by the Company's Board of Directors in good faith.
9.1.4 Payment of the purchase price will be made, in the discretion
of the Plan Administrator, either (a) in the manner set forth in Section 9.3 or
(b) in the manner and at the time(s) set forth in the First Refusal Notice.
9.1.5 If any of the Shares proposed in the First Refusal Notice to
be transferred to a given Proposed Transferee are not purchased by the Company
and/or its assignee as provided in this Section 9.1, then Employee may sell or
otherwise transfer such Shares to that Proposed Transferee at the Offered Price
or at a higher price, provided that such sale or other transfer is consummated
within 60 days after the date of the First Refusal Notice, and provided that any
such sale or other transfer is effected in accordance with any applicable
securities laws and the Proposed Transferee agrees in writing that the
provisions of this Section 9.1 will continue to apply to the Shares in the hands
of such Proposed Transferee. If the Shares described in the First Refusal Notice
are not transferred to the Proposed Transferee within such period, or if
Employee proposes to change the price or other terms to make them more favorable
to the Proposed Transferee, a new First Refusal Notice will be given to the
Company, and the Company or its assignee will again be offered the Right of
First Refusal before any Shares held by Employee may be sold or otherwise
transferred.
9.2 REPURCHASE AND PUT RIGHTS
9.2.1 The Company may exercise a right to repurchase any or all of the
Shares (the "Repurchase Right") in the event Employee terminates employment with
the Company or a Subsidiary for any reason whatsoever, including, without
limitation, termination by reason of Retirement, Disability or death, or with or
without cause. The Company may exercise the Repurchase Right by delivering a
notice to Employee specifying the number of Shares to be purchased (the "Call
Notice").
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9.2.2 Any Employee may cause the Company or an affiliate to purchase
any or all of the Shares held by Employee (the "Put Right") by delivering
written notice to the Company specifying the number of Shares to be purchased by
the Company substantially in a form to be provided by the Company (the "Put
Notice").
9.2.3 The purchase price for any Shares to be purchased pursuant to
a Call Notice or a Put Notice will be the Fair Market Value of the Shares as set
forth in the Year-End Valuation Notice or the Six-Month Valuation Notice for the
applicable Semi-Annual Exercise Period (as such terms are defined in Section 2
of the Plan).
9.3 PAYMENT OF PURCHASE PRICE. The purchase of the Shares subject to
purchase under this Section 9 will close within 60 days after receipt by the
Company of the applicable First Refusal Notice, Call Notice or Put Notice.
Unless otherwise mutually agreed by the involved parties, the closing of any
purchase by the Company under this Section 9 will take place at the principal
office of the Company. Subject to the maximum payment limitations set forth in
Section 9.6, the purchase price for any Shares acquired through such notices
will be paid in the form of (a) cash (by check), (b) promissory note as
described in Section 9.4, (c) the Company's assets, or (d) a combination thereof
as determined by the Company in its sole discretion, except that any payment
involving, in whole or in part, the Company's assets must be approved by
Employee.
9.4 PROMISSORY NOTE. Subject to the maximum payment limitations set forth
in Section 9.6, any promissory note issued for the purchase of Shares under this
Section 9 (the "Repurchase Note") will bear interest at the then-current
weighted average borrowing rate of the Company, compounded annually, and will be
paid in annual installments of interest only for four years, with all principal
and accrued interest due in full on the fifth anniversary of such Repurchase
Note. Each Repurchase Note will be subordinate to all other lenders of the
Company and subject to any contractual or lending restrictions on the Company
for payments of compensation or redemption of Shares, except that such
Repurchase Notes will be paid prior to any distributions made by the Company
attributable to any outstanding Shares of the Company. Employee will execute all
documents and agreements considered necessary by the Company's Board of
Directors to effectuate the issuance of the Repurchase Note.
9.5 EXERCISE RESTRICTIONS. Employee may not submit a First Refusal Notice
or a Put Notice to the Company and the Company may not submit a Call Notice to
Employee earlier than six months and one day following the date the Shares were
acquired by Employee (or any shorter period specified by the Company's outside
accountants as sufficient to avoid a charge to the Company's earnings for
financial reporting purposes). Such notices may be submitted only during a
Semi-Annual Exercise Period. Employee may not submit a First Refusal Notice to
the Company if the Company has previously submitted a Call Notice to Employee.
9.6 MAXIMUM CASH PAYMENT. Notwithstanding any other provisions of this
Section 9, and except as otherwise provided in this Section 9.6 or as otherwise
approved by the Company's Board of Directors, in no event will the Company be
obligated, during any calendar year, to make aggregate payments of cash (net of
any offsetting debts) to all persons who have sold shares of Common Stock to the
Company pursuant to first refusal, repurchase and put rights
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under the Plan and applicable agreements and any other compensatory plan or
arrangement of the Company during such year or any prior year for payment of the
purchase price, pursuant to the terms of a Note or otherwise relating to the
purchase of such Shares in excess of a sum equal to (a) 10% of Net Earnings for
the Company's prior fiscal year (Net Earnings to be determined by the Company's
outside accountants on the basis of the Company's financial statements) (the
"Maximum Annual Payment") plus (b) any unused carryforward of Maximum Annual
Payment from any prior year commencing on the date the first notice (as
applicable) is delivered to or by the Company. For this purpose, Net Earnings
means the net earnings of the Company for a fiscal year, as reported in the
Company's consolidated financial statements for such year, adjusted to eliminate
the effect of changes in accounting principles, and "extraordinary items"
determined under generally accepted accounting principles.
In addition, the Company will in no event be required to make any payment
which would, in the opinion of the Company's Board of Directors, (a) be in
violation of applicable law, (b) violate a covenant imposed by a bank or other
lender, lessor or other bona fide third-party contracting party of the Company,
or (c) unreasonably limit the ability of the Company to meet its cash
obligations in the ordinary course of business.
Any cash payment made that is subject to such limitations will be applied
first to accrued interest on any outstanding Notes to the extent of and in
proportion to such accrued interest outstanding as of the last day of the month
prior to any cash payment and then to the unpaid principal balance of
outstanding Notes, beginning with the oldest of such Notes and ending with the
most recently issued of such Notes, except that in no event will any payment
under a Note be deferred more than 10 years after the issuance thereof. The
Company will use reasonable efforts to provide its best information regarding
the maximum cash payment available to Employees and other interested parties no
later than the beginning of each Semi-Annual Exercise Period. The Company will
seek to accelerate payment for redeemed shares to the extent that cash is
reasonably available and provided such payments do not result in violation of
applicable contractual obligations or law.
9.7 FURTHER ACTS. Whenever the Company will, pursuant to this Agreement,
purchase Shares, each Employee or the legal representative of Employee will do
all things and execute and deliver all papers as may be necessary to consummate
such purchase.
9.8 INDEBTEDNESS TO COMPANY OF EMPLOYEE. In the event the Company
purchases an Employee's Shares pursuant to this Agreement, the Company may set
off against the purchase price for the Shares any indebtedness owed to the
Company by such Employee or his or her estate, whether or not such indebtedness
is then due.
10. LEGENDS
Employee understands and agrees that the Shares are subject to first
refusal and/or repurchase rights, as set forth in this Agreement. Employee
understands that the certificate(s) representing the Shares will bear legends in
substantially the following forms:
"The securities represented by this certificate are subject to certain
restrictions on public resale and transfer and first refusal and/or repurchase
rights held by the issuer and/or its
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assignee(s) and may not be sold, assigned, transferred, encumbered or in any way
disposed of except as set forth in a stock purchase agreement between the issuer
and the original purchaser of these shares, a copy of which may be obtained at
the principal office of the issuer. Such transfer restrictions and first refusal
and/or repurchase rights are binding on transferees of these shares."
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), or under applicable
state securities laws. These securities are subject to restrictions on
transferability and resale and may not be transferred or resold except as
permitted under the Act and applicable state securities laws, pursuant to
registration or exemption therefrom. Investors should be aware that they may be
required to bear the financial risks of this investment for an indefinite period
of time. The issuer of these securities may require an opinion of counsel in
form and substance satisfactory to the issuer to the effect that the proposed
transfer or resale is in compliance with the Act and any applicable state
securities laws."
11. STOP-TRANSFER NOTICES
Employee understands and agrees that, in order to ensure compliance with
the restrictions referred to in this Agreement, the Company may issue
appropriate "stop-transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records. The Company will not be
required to (a) transfer on its books any Shares that have been sold or
transferred in violation of the provisions of this Agreement or (b) treat as the
owner of the Shares, or otherwise accord voting, dividend or liquidation rights
to, any transferee to whom the Shares have been transferred in contravention of
this Agreement.
12. INDEPENDENT TAX ADVICE
Employee acknowledges that determining the actual tax consequences to each
particular Employee of exercising the Option or disposing of the Shares may be
complicated. These tax consequences will depend, in part, on Employee's specific
situation and may also depend on the resolution of currently uncertain tax law,
and other variables not within the control of the Company. Employee is aware
that Employee should consult a competent and independent tax advisor for a full
understanding of the specific tax consequences to Employee prior to exercising
the Option or disposing of the Shares. Prior to exercising the Option, Employee
either has consulted with a competent tax advisor independent of the Company to
obtain tax advice concerning the exercise of the Option in light of Employee's
specific situation or has had the opportunity to consult with such a tax advisor
but chose not to do so.
13. WITHHOLDING AND DISPOSITION OF SHARES
As described in the Option Agreement, Employee will make arrangements
satisfactory to the Company for the payment of any federal, state, local or
foreign withholding tax obligations that arise upon purchase of the Shares
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14. GENERAL PROVISIONS
14.1 ASSIGNMENT. The Company may assign its Rights of First Refusal and/or
Repurchase Rights or its obligations under any Put Rights at any time, whether
or not such rights are then exercisable, to any person or entity selected by the
Company's Board of Directors, including, without limitation, one or more
stockholders of the Company.
14.2 NOTICES. Any notice required in connection with (a) the Company's
first refusal and/or repurchase rights or (b) the disposition of any Shares
covered thereby will be given in writing and will be deemed effective upon
personal delivery or upon deposit in the U.S. mail, registered or certified,
postage prepaid and addressed to the party entitled to such notice at the
address indicated in this Agreement or at such other address as such party may
designate by 10 days' advance written notice under this Section 14.2 to all
other parties to this Agreement.
14.3 NO WAIVER. No waiver of any provision of this Agreement will be valid
unless in writing and signed by the person against whom such waiver is sought to
be enforced, nor will failure to enforce any right under this Agreement
constitute a continuing waiver of the same or a waiver of any other right under
this Agreement.
14.4 CANCELLATION OF SHARES. If the Company or its assignees will make
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Shares to be purchased by the Company
pursuant to the exercise of the Rights of First Refusal, Repurchase Rights
and/or Put Rights in accordance with the provisions of this Agreement, then,
from and after such time, the person from whom such Shares are to be repurchased
will no longer have any rights as a Employee of such Shares (other than the
right to receive payment of such consideration in accordance with this
Agreement). Such Shares will be deemed purchased in accordance with the
applicable provisions of this Agreement, and the Company or its assignees will
be deemed the owner and Employee of such Shares, whether or not the certificates
therefor have been delivered as required by this Agreement.
14.5 EMPLOYEE UNDERTAKING. Employee hereby agrees to take whatever
additional action and execute whatever additional documents the Company may deem
necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either Employee or the Shares pursuant to
the express provisions of this Agreement.
14.6 AGREEMENT IS ENTIRE CONTRACT. This Agreement constitutes the entire
contract between the parties hereto with regard to the subject matter hereof.
This Agreement is made pursuant to the provisions of the Plan and will in all
respects be construed in conformity with the express terms and provisions of the
Plan.
14.7 SUCCESSORS AND ASSIGNS. The provisions of this Agreement will inure
to the benefit of, and be binding on, the Company and its successors and assigns
and Employee and Employee's legal representatives, heirs, legatees,
distributees, assigns and transferees by operation of law, whether or not any
such person will have become a party to this Agreement and agreed in writing to
join herein and be bound by the terms and conditions hereof.
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14.8 NO EMPLOYMENT CONTRACT. Nothing in this Agreement will affect in any
manner whatsoever the right or power of the Company or a Subsidiary to terminate
Employee's employment with the Company, for any reason, with or without cause.
14.9 STOCKHOLDER OF RECORD. Employee will be recorded as a stockholder of
the Company and will have, subject to the provisions of this Agreement and the
Plan, all the rights of a stockholder with respect to the Shares.
14.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but which, upon
execution, will constitute one and the same instrument.
14.11 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Washington.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year indicated above as the Exercise Date.
AVANADE INC.
By: ___________________________________
Title: ________________________________
Address: ______________________________
_______________________________________
EMPLOYEE
_______________________________________
Printed Name: _________________________
By his or her signature below, the spouse of Employee, if such Employee is
legally married as of the date of Employee's execution of this Agreement,
acknowledges that he or she has read this Agreement and the Plan and is familiar
with the terms and provisions of this Agreement and the Plan, and agrees to be
bound by all the terms and conditions of this Agreement and the Plan.
Dated: _________________________
_______________________________________
Spouse's Signature
_______________________________________
Printed Name
By his or her signature below, Employee represents that he or she is not
legally married as of the date of executing this Agreement.
Dated: __________________________
_______________________________________
Employee's Signature
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RECEIPT
_______________________ hereby acknowledges receipt from
____________________ in payment for ________ shares of Common Stock of Avanade
Inc., a Washington corporation, of $______________ in the form of
[ ] Cash
[ ] Check (personal, cashier's or bank certified)
[ ] __________ shares of the Company's Common Stock, fair market value
$_______ per share, held by the optionee for a period of at least
six months
[ ] Copy of irrevocable instructions to broker
[ ] Other: _______________________
Date: __________________________ By: _________________________
FMV on such date: $______________ For: Avanade Inc.
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EXHIBIT A
[PLEASE SEE SECTION 7 OF THE EARLY EXERCISE NOTICE AND STOCK
PURCHASE AGREEMENT BEFORE FILLING THIS OUT!!!]
STOCK POWER AND ASSIGNMENT
SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Early Exercise Notice and
Stock Purchase Agreement dated as of ___________, ____, the undersigned hereby
sells, assigns and transfers unto ______________________ _______ shares of the
Common Stock of Avanade Inc., a Washington corporation, standing in the
undersigned's name on the books of said corporation represented by Certificate
No. ___ delivered herewith, and does hereby irrevocably constitute the Secretary
of said corporation as attorney-in-fact, with full power of substitution, to
transfer said stock on the books of said corporation.
Dated: _________________________________________
Signature: ______________________________________
Please print name: ______________________________
Spouse's signature, if any: ___________________________
Please print name: ____________________________________
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EXHIBIT B
ACKNOWLEDGMENT AND STATEMENT OF DECISION
REGARDING SECTION 83(b) ELECTION
The undersigned, a purchaser of ___________ shares of Common Stock of
Avanade Inc., a Washington corporation (the "Company"), by exercise of an option
(the "Option") granted pursuant to the Company's 2000 Stock Incentive Plan (the
"Plan"), hereby states as follows:
1. The undersigned acknowledges receipt of a copy of the Plan relating to
the offering of such shares. The undersigned has carefully reviewed the Plan and
the Option Agreement pursuant to which the Option was granted.
2. The undersigned either (check and complete as applicable):
(a) ____ has consulted, and has been fully advised by, the undersigned's
own tax advisor, _____________________________________, whose
business address is ______________________________, regarding the
federal, state and local tax consequences of purchasing shares under
the Plan, and particularly regarding the advisability of making an
election pursuant to Section 83(b) of the Internal Revenue Code of
1986, as amended (the "Code") and pursuant to the corresponding
provisions, if any, of applicable state law; or
(b) ____ has knowingly chosen not to consult such a tax advisor.
3. The undersigned hereby states that the undersigned has decided
(check as applicable):
(a) ____ to make an election pursuant to Section 83(b) of the Code, and
is submitting to the Company, together with the undersigned's
executed Early Exercise Notice and Stock Purchase Agreement, an
executed form entitled "Election Under Section 83(b) of the Internal
Revenue Code of 1986";
(b) ____ not to make an election pursuant to Section 83(b) of the Code.
4. Neither the Company nor any subsidiary or representative of the Company
has made any warranty or representation to the undersigned with respect to the
tax consequences of the undersigned's purchase of shares under the Plan or of
the making or failure to make an election pursuant to Section 83(b) of the Code
or the corresponding provisions, if any, of applicable state law.
Dated: ____________ ______________________________
Employee
______________________________
Print Name
Dated: ____________ ______________________________
Spouse of Employee
______________________________
Print Name
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EXHIBIT C
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
(FOR NONQUALIFIED STOCK OPTIONS)
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code, to include in taxpayer's gross income for the current
taxable year the amount of any compensation taxable to taxpayer in connection
with taxpayer's receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year of the
undersigned are as follows:
NAME OF TAXPAYER: ____________________________
NAME OF SPOUSE: ______________________________
ADDRESS: _____________________________________
______________________________________
IDENTIFICATION NO. OF TAXPAYER: ______________
IDENTIFICATION NO. OF SPOUSE: ___________________
TAXABLE YEAR: __________
2. The property with respect to which the election is made is described as
follows: ______________ shares of the Common Stock, par value $0.0001 per
share, of Avanade Inc., a Washington corporation (the "Company").
3. The date on which the property was transferred is _______________.
4. The property is subject to the following restrictions:
The property is subject to a repurchase right pursuant to which the
Company has the right to acquire the property at the original purchase
price if for any reason taxpayer's service with the Company is terminated.
The Company's repurchase right lapses in a series of installments over a
___-year period ending on _____________________.
5. The aggregate fair market value at the time of transfer, determined
without regard to any restriction other than a restriction which by its
terms will never lapse, of such property is $____________.
6. The amount (if any) paid for such property is $____________.
The undersigned has submitted a copy of this statement to the person for
whom the services were performed in connection with the undersigned's receipt of
the above-described property. The undersigned is the person performing the
services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner of Internal Revenue.
Date: _______________ Signature:_____________________________________________
Printed name of employee:______________________________
Date:________________ Signature:_____________________________________________
Printed name of spouse of employee:____________________
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Distribution of Copies
1. File original with the Internal Revenue Service Center where the
taxpayer's income tax return will be filed. Filing must be made by no
later than 30 days after the date the property was transferred.
2. Attach one copy to the taxpayer's income tax return for the taxable year
in which the property was transferred.
3. Mail one copy to the Company at the following address:
Avanade Inc.
Attention: General Counsel
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
Seattle, WA 98121
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