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EXHIBIT 10.24
CLICKOVER, INC.
STOCK OPTION PLAN
STOCK PURCHASE AGREEMENT
(A) Name of Purchaser:_____________________________
(B) Number of Plan Shares:_________________________
(C) Exercise Price:________________________________
(D) Purchase Price:________________________________
(E) Date of Option Agreement:______________________
(F) Effective Date:________________________________
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of the date set forth in Item F above (the "Effective Date") between
ClickOver, Inc., a California corporation (the "Company"), and the person named
in Item A above (the "Purchaser").
THE PARTIES AGREE AS FOLLOWS:
1. Purchase of Shares. Pursuant to the Company's Stock Option Plan (the
"Plan") and to a stock option agreement ("Option Agreement") between the parties
dated the date set forth in Item E above, the Company hereby sells to Purchaser,
and Purchaser hereby buys from the Company, that number of shares (the "Plan
Shares") of the Company's Common Stock (as defined in the Plan) set forth in
Item B above on the terms and conditions set forth herein and in the Plan and
the Option Agreement, the terms and conditions of the Plan and the Option
Agreement being hereby incorporated into this Agreement by reference.
2. Purchase Price. Purchaser shall purchase the Plan Shares from the
Company, and the Company shall sell the Plan Shares to Purchaser, at a price per
share as set forth in Item C above (the "Exercise Price"), for a total purchase
price as set forth in Item D above (the "Purchase Price").
3. Manner of Payment. Purchaser shall pay the Purchase Price of the Plan
Shares by delivery of cash, check, previously owned shares of Common Stock
(provided that delivery of previously owned shares may not be made more than
once in any six-month period), or a full recourse promissory note equal to up to
90% of the Purchase Price and payable over no more than five years (or in the
manner set forth in Exhibit 5.4 to the Option Agreement evidencing the option,
the absence of any Exhibit 5.4 indicating that no such exhibit was intended).
4. Company's Right of Repurchase Upon Termination of Employment. The
Plan Shares are subject to a right of repurchase in favor of the Company (the
"Right of Repurchase") to the extent set forth on Exhibit 7 of the Option
Agreement (the absence of Exhibit 7 in the Option Agreement indicating that no
such exhibit was intended). If the Purchaser's employment, consulting or service
as a director with the Company terminates before the Right of Repurchase lapses
in accordance with Exhibit 7 of the Option Agreement, the Company may purchase
stock subject to the Right of Repurchase (either by payment of cash or by
cancellation of purchase money indebtedness) for an amount equal to the price
the Optionee paid for such Plan Shares
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(exclusive of any taxes paid upon acquisition of the stock) by giving notice at
any time within the later of (a) 30 days after the acquisition of the Plan
Shares upon option exercise, or (b) 90 days after such termination of employment
that the Company is exercising its right of repurchase. The Company shall
include with such notice payment in full in cash or by evidence of cancellation
of purchase money indebtedness. The Purchaser may not dispose of or transfer
Plan Shares while such shares are subject to the Right of Repurchase and any
such attempted transfer shall be null and void.
5. Company's Right of First Refusal Respecting Plan Shares.
5.1 Right of First Refusal. In the event that Purchaser proposes
to sell, pledge, or otherwise transfer any Plan Shares or any interest in such
shares to a bona-fide third party offeror, the Company shall have a right of
first refusal (the "Right of First Refusal") with respect to such Plan Shares.
If Purchaser desires to transfer Plan Shares, Purchaser shall give a written
notice (the "Transfer Notice") to the Company describing fully the proposed
transfer, including the number of Plan Shares proposed to be transferred, the
proposed transfer price, and the name and address of the bona-fide third party
offeror. The Transfer Notice shall be signed both by Purchaser and by the
bona-fide third party offeror and must constitute a binding commitment of both
such parties for the transfer of such Plan Shares. The Company may elect to
purchase the Plan Shares subject to the Transfer Notice by delivery of a notice
of exercise of the Company's Right of First Refusal within 30 days after the
date the Transfer Notice is delivered to the Company. The purchase price paid by
the Company shall be the price per share equal to the proposed per share
transfer price, and shall be paid to the Purchaser within 60 days after the date
the Transfer Notice is received by the Company, unless a longer period for
payment was offered by the bona-fide third party offeror, in which case the
Company shall pay the purchase price within such longer period. The Company's
rights under this Section 5.1 shall be freely assignable, in whole or in part.
Notwithstanding the foregoing, the Right of First Refusal does not apply to a
transfer of Plan Shares by gift or devise to the Purchaser's immediate family
(i.e., parents, spouse or children or to a trust for the benefit of the
Purchaser or any of the Purchaser's immediate family members), but does apply to
any subsequent transfer of such Plan Shares by such immediate family members.
5.2 Transfer of Plan Shares. If the Company fails to exercise the
Right of First Refusal within 30 days after the date the Transfer Notice is
delivered to the Company, Purchaser may, not later than 75 days following
delivery to the Company of the Transfer Notice, conclude a transfer of the Plan
Shares subject to the Transfer Notice on the terms and conditions described in
the Transfer Notice. Any proposed transfer on terms and conditions different
from those described in the Transfer Notice, as well as any subsequent proposed
transfer by Purchaser, shall again be subject to the Company's Right of First
Refusal and shall require compliance by Purchaser with the procedure described
in Section 5.1 of this Agreement. If the Company exercises the Right of First
Refusal, the parties shall consummate the sale of Plan Shares on the terms,
other than price, as applicable under Section 5.1, set forth in the Transfer
Notice, subject; provided, however, in the event the Transfer Notice provides
for payment for the Plan Shares other than in cash, the Company shall have the
option of paying for the Plan Shares by paying in cash the present value of the
consideration described in the Transfer Notice; and further provided that if the
value of noncash consideration is to be paid, and the Optionee disagrees with
the value determined by the Company, the Optionee may request an independent
appraisal by an appraiser
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acceptable to the Optionee and the Company, the costs of such appraisal to be
borne equally by the Optionee and the Company. If, at the time of exercise of
the right of first refusal, any notes are outstanding which represent any
portion of the Purchase Price of the Plan Shares, the repurchase price shall be
paid first by cancellation of any obligation for accrued but unpaid interest
under such notes, next by cancellation of principal under such notes, and
finally by payment of cash.
5.3 Binding Effect of Right of First Refusal. The Company's Right of
First Refusal shall inure to the benefit of the successors and assigns of the
Company and shall be binding upon any transferee of Plan Shares other than a
transferee acquiring Plan Shares in a transaction where the Company failed to
exercise the Right of First Refusal (a "Free Transferee") or a transferee of a
Free Transferee.
5.4 Termination of Company's Right of First Refusal. Notwithstanding
anything in this Section 5, the Company shall have no Right of First Refusal,
and Purchaser shall have no obligation to comply with the procedures in Sections
5.1 through 5.3, after the earlier of (a) the closing of the Company's initial
registered public offering to the public generally, or (b) the date ten (10)
years after the Effective Date of the Option Agreement.
6. Stock Certificate Restrictive Legends. Stock certificates evidencing
Plan Shares may bear such restrictive legends as the Company and the Company's
counsel deem necessary or advisable under applicable law or pursuant to this
Agreement.
7. Representations, Warranties, Covenants, and Acknowledgements of
Purchaser. Purchaser hereby represents, warrants, covenants, acknowledges, and
agrees that:
7.1 Investment. Purchaser is acquiring the Plan Shares for
Purchaser's own account, and not for the account of any other person. Purchaser
is acquiring the Plan Shares for investment and not with a view to distribution
or resale thereof except in compliance with applicable laws regulating
securities.
7.2 Business Experience. Purchaser is capable of evaluating the
merits and risks of Purchaser's investment in the Company evidenced by the
purchase of the Plan Shares.
7.3 Relation of Company. Purchaser is presently an officer,
director, or employee of, or consultant to, the Company and in such capacity has
become personally familiar with the business, affairs, financial condition, and
results of operations of the Company.
7.4 Access to Information. Purchaser has had the opportunity to
ask questions of, and to receive answers from, appropriate executive officers of
the Company with respect to the terms and conditions of the transactions
contemplated hereby and with respect to the business, affairs, financial
condition, and results of operations of the Company. Purchaser has had access to
such financial and other information as is necessary in order for Purchaser to
make a fully-informed decision as to investment in the Company by way of
purchase of the Plan Shares, and has had the opportunity to obtain any
additional information necessary to verify any of such information to which
Purchaser has had access. Purchaser acknowledges that all financial information
concerning the Company that has been or will be provided to Purchaser is
Confidential Information within the meaning of the Employee Confidential
Information and
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Inventions Agreement between Purchaser and the Company and is subject to the
obligation of confidentiality and other restrictions and limitations set forth
therein.
7.5 Speculative Investment. Purchaser's investment in the Company
represented by the Plan Shares is highly speculative in nature and is subject to
a high degree of risk of lose in whole or in part. The amount of such investment
is within Purchaser's risk capital means and is not so great in relation to
Purchaser's total financial resources as would jeopardize the personal financial
needs of Purchaser or Purchaser's family in the event such investment were lost
in whole or in part.
7.6 Registration. Purchaser may bear the economic risk of
investment for an indefinite period of time because the sale to Purchaser of the
Plan Shares has not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), and the Plan Shares cannot be transferred by Purchaser
unless such transfer is registered under the Securities Act or an exemption from
such registration is available. The Company has made no agreements, covenants or
undertakings whatsoever to register the transfer of any of the Shares under the
Securities Act. The Company has made no representations, warranties, or
covenants whatsoever as to whether any exemption from the Securities Act,
including without limitation any exemption for limited sales in routine brokers'
transactions pursuant to Rule 144, will be available; if the exemption under
Rule 144 is available at all, it will not be available until at least two years
after payment of cash for the Plan Shares and not then unless: (a) a public
trading market then exists in the Company's common stock; (b) adequate
information as to the Company's financial and other affairs and operations is
then available to the public; and (c) all other terms and conditions of Rule 144
have been satisfied. Purchaser understands that the resale provisions of Rule
701 will not apply until 90 days after the Company becomes subject to the
reporting obligations of the Securities Exchange Act of 1934 (typically upon the
effective date of an initial public offering).
7.7 Public Trading. None of the Company's securities is presently
publicly traded, and the Company has made no representation, covenant, or
agreement as to whether there will be a public market for any of its securities.
7.8 Tax Advice. The Company has made no warranties or
representations to Purchaser with respect to the income tax consequences of the
transactions contemplated by this Agreement and Purchaser is in no manner
relying on the Company or its representatives for an assessment of such tax
consequences. Purchaser shall execute and deliver to the Company a copy of the
Acknowledgment and Statement of Decision Regarding Election Pursuant to Section
83(b) of the Internal Revenue Code (the "Acknowledgment") attached hereto as
Exhibit 7A and a copy of the Election Pursuant to Section 83(b) of the Code,
attached hereto as Exhibit 7B, if Purchaser has indicated in the Acknowledgment
his or her decision to make such an election. Purchaser will consult with his or
her tax advisor to determine if there is a comparable election to file in the
state of his or her residence and whether such filing is desirable under the
circumstances.
8. Binding Effect. Subject to the limitations set forth in this
Agreement, this Agreement shall be binding upon, and inure to the benefit of,
the executors, administrators, heirs, legal representatives, successors, and
assigns of the parties hereto.
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9. Damages. Purchaser shall be liable to the Company for all costs and
damages, including incidental and consequential damages, resulting from a
disposition of Plan Shares which is not in conformity with the provisions of
this Agreement.
10. Disqualifying Dispositions of ISO Stock. If stock acquired by
exercise of an ISO (as defined in Section 1 of the Plan) is disposed of within
two years after the Effective Date (as defined in the Option Agreement) or
within one year after such exercise, Purchaser immediately prior to the
disposition shall promptly notify the Company in writing of the date and terms
of the disposition and shall provide such other information regarding the
disposition as the Company may reasonably require.
11. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California excluding those laws that
direct the application of the laws of another jurisdiction.
12. Notices. All notices and other communications under this Agreement
shall be in writing. Unless and until Purchaser is notified in writing to the
contrary, all notices, communications, and documents directed to the Company and
related to the Agreement, if not delivered by hand, shall be mailed, addressed
as follows:
ClickOver, Inc.
524 ▇▇▇▇ ____________
Attention: President
Unless and until the Company is notified in writing to the contrary, all
notices, communications, and documents intended for Purchaser and related to
this Agreement, if not delivered by hand, shall be mailed to Purchaser's last
known address as shown on the Company's books. Notices and communications shall
be mailed by first class mail, postage prepaid; documents shall be mailed by
registered mail, return receipt requested, postage prepaid. All mailings and
deliveries related to this Agreement shall be deemed received when actually
received, if by hand delivery, and two business days after mailing, if by mail.
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IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase
Agreement as of the day and year first above written.
CLICKOVER, INC.
By: _____________________________________
Title: __________________________________
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Purchaser hereby accepts and agrees to be bound by all of the terms and
conditions of this Agreement and the Plan.
Purchaser ___________________________________
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 Plan Shares hereby purchased.
Purchaser's Spouse____________________________________
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Exhibits
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Exhibit 7A Acknowledgment Regarding Election Pursuant to
Section 83(b)
Exhibit 7B Section 83(b) Election
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ACKNOWLEDGEMENT AND STATEMENT
OF DECISION REGARDING ELECTION
PURSUANT TO SECTION 83(b) OF
THE INTERNAL REVENUE CODE
The undersigned (which term includes the undersigned's spouse), a
purchaser of _____________ shares of Common Stock of ClickOver, Inc. (the
"Company") pursuant to an option granted under the Company's Stock Option Plan
(the "Plan"), hereby states as follows:
1. The undersigned acknowledges receipt of a copy of a Stock Purchase
Agreement by and between the undersigned and the Company (the "Agreement")
effecting the purchase of shares, which the undersigned has carefully reviewed.
2. The undersigned either [check as applicable]:
_____ (a) has consulted, and has been fully advised by, the
undersigned's own tax advisor, _____________________, whose business address is
_____________________, regarding the income tax consequences of purchasing
shares under the Agreement, 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 laws (including without limitation Section 17122.7(b)
of the California Revenue and Taxation Code, as amended (the "Rev. & Tax. Code")
if applicable); or
_____ (b) has knowingly chosen not to consult a tax advisor.
3. The undersigned hereby avers that, with respect to the purchase of
shares, the undersigned [check as applicable]:
_____ (a) will make an election under Section 83(b) solely for
purposes of Section 56(b)(3) of the Code (and analogous state law, if any)
relating to the Alternative Minimum Tax, and a "protective" election under
Section 83(b) (and analogous state law, if any) for all other income tax
purposes;
_____ (b) will not make an election under Section 83(b) of the
Code (and analogous state law, if any) for any purpose.
4. with respect to any election under Section 83(b) of the Code,
"protective" or otherwise, indicated in paragraph (3), above, the undersigned
herewith submits an executed copy of the appropriate form of election and
acknowledges that copies thereof have been duly and timely filed with the
appropriate offices of the Internal Revenue Service and applicable state taxing
authorities and that the undersigned will attach a copy of the form of election
to the undersigned's federal income tax return for the year of the purchase and,
if required, to the undersigned's state income tax return(s) for the same
period.
5. 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
Exhibit 7A-1
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the undersigned's purchase of shares under the Agreement 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.
Date:____________________________ _________________________________________
(Purchaser)
Date:____________________________ _________________________________________
Spouse
Exhibit 7A-2
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ELECTION PURSUANT TO SECTION 83(b) OF THE
INTERNAL REVENUE CODE WITH RESPECT TO PROPERTY
TRANSFERRED IN CONNECTION WITH THE PERFORMANCE OF SERVICES
The undersigned hereby makes the election, modified to the extent
described in Paragraph 9 below, authorized by Section 83(b) of the Internal
Revenue Code of 1986, as amended (the "Code") and the regulations thereunder,
with respect to shares of Common Stock of ClickOver, Inc. (the "Company")
described below acquired by the undersigned on the date shown below. To the
extent permitted, this election shall also serve as an election under analogous
state law. As required by the Treasury Regulations under Section 83(b), the
undersigned supplies herewith the following information:
1. The undersigned's name and address are:
Name:_______________________________________
Address:____________________________________
_____________________________________
2. The undersigned has taxpayer identification number ___-___-____.
3. The property with respect to which this protective election is
made consists of _____________ shares of Common Stock, no par
value, of the Company.
4. The date on which the above-described property was transferred to
the undersigned was _____________ 19__.
5. As of the date of transfer, the property was subject to the
following substantial risk of forfeiture:
_________________________________________________________________
_________________________________________________________________
6. The fair market value of the property at the time of transfer
(determined without regard to any restrictions other than
restrictions which by their terms will never lapse) was $____ per
share.
7. The amount paid for the property by the undersigned was $____ per
share.
8. A copy of this election has been furnished to the Company, and a
copy of this election will be attached to the undersigned's
federal income tax return for the year to which this election
relates.
Exhibit 7B
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9. If the property was acquired by the exercise of an Incentive
Stock Option within the meaning of Section 422 of the Code then,
except in the event of a "disqualifying disposition" of the
property, this election is protective only and does not
constitute an agreement to report or include as income subject to
federal income tax amounts which, but for this election, are not
so reportable or includible.
Date:___________________________ _________________________________________
(Purchaser)
Exhibit 7B
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CLICKOVER, INC.
ADMINISTRATION OF EMPLOYEE STOCK OPTION PLAN
I. Board of Directors Approval on August 31, 1996.
II. Shareholder Approval - Received _______________________.
III. Board of Directors, or a Committee appointed by the Board to administer
the Plan, grants options to employees, including officers and directors
who are also employees.
A. Terms of options granted to be specified in the Board or
Committee minutes:
1. Name of Optionee.
2. Grant date.
3. Whether an option is an ISO or an ▇▇▇.
▇. Exercisability:(1) subject to vesting or immediately
exercisable; if the option is subject to a vesting
schedule limiting exercisability, set forth the vesting
schedule on Exhibit 5.1 to the Option Agreement. If the
option is immediately exercisable and the Option Shares
are then subject to a right of repurchase, do not use
Exhibit 5.1 but rather use Exhibit 7 to establish the
dates on which the repurchase right lapses. The Vesting
Base Date (generally the date employment commenced or
the date of option grant) should be noted on page 1 of
the Option Agreement.
5. Term of option (if shorter than maximum term permitted
by Plan).
6. Option price.
(a) ISO: must equal fair market value on the grant
date.
(b) NSO: must equal at least 85% of fair market
value on the grant date.
(c) ISO and NSO: must equal 110% of fair market
value if Optionee is shareholder owning more
than 10% of ClickOver, Inc.'s Common Stock.
IV. Stock Option Agreement.
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(1) Aggregate fair market value (determined as of the grant date) of ISOs
first becoming exercisable within a calendar year may not exceed
$100,000. (N.B. This limit is tested by multiplying (i) the number of
shares first becoming exercisable in a calendar year, and (ii) the per
share exercise price, and determining whether or not this number is
greater than $100,000.00.)
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A. NSO or ISO Option Agreement (either being referred to as "Option
Agreement") depending on nature of grant.
1. Attach copy of Option Plan (marked as Exhibit 1) to the
appropriate Option Agreement as well as a copy of the
proper Stock Purchase Agreement (marked Exhibit 5.3).
Separate Exhibits 5.1 and 7 have been prepared for options
which are subject to vesting and those which are
immediately exercisable but subject to a right of
repurchase.
2. If term of option is other than ten years, create Exhibit
3 to specify the other term.
B. Company, Optionee and, if applicable, spouse of Optionee (for
purposes of community property law) should all sign two copies of
the Option Agreement. Company and Optionee each retain one
executed original. Forward one copy to HEW&M for placement in
Company's corporate files. The "Effective Date" is the date of
the Option Agreement and cannot precede the Grant Date.
C. Be sure that the Option Agreement contains the exercise vesting
schedule or right of repurchase desired (i.e. prepare Exhibit 5.1
or 7 as appropriate).
V. Exercise of Option by Optionee.
A. Stock Purchase Agreement
1. Attach copy of Option Plan marked as Exhibit 1A and copy
of Option Agreement (executed pursuant to V, above) marked
as Exhibit 1B.
2. If an Optionee is acquiring shares that will be subject to
the Company's Right of Repurchase then Optionee and, if
applicable, spouse of Optionee, complete Acknowledgment,
and Optionee completes three copies of Section 83(b)
Election (Exhibits 7A and 7B to Stock Purchase Agreement)
if Optionee has chosen to make such an Election.
(a) Acknowledgment to be retained in Company files.
(b) Original Section 83(b) election must be filed
within 30 days of exercise with IRS office where
Optionee files tax returns. There is no "cure" for
failure to file on time.
NOTE: PROOF OF MAILING IS IMPORTANT: COMPANY SHOULD SEND
TO COUNSEL IMMEDIATELY UPON EXECUTION OF STOCK PURCHASE
AGREEMENT A COPY OF THE ACKNOWLEDGMENT AND ONE ORIGINAL
OF SECTION 83(b) ELECTION FOR FILING WITH IRS.
(c) Company should keep one original of Section
83(b) Election.
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(d) Optionee should keep one original of Section 83(b)
Election to be attached to Optionee's federal and
state personal income tax return for year of option
exercise.
(e) It is suggested that employees who are California
residents file a comparable election with the
Franchise Tax Board. Optionees who are not
residents of California should be told to consult
their own tax advisers as to the need or
advisability of filing any election in their state
of residence.
B. Stock Certificate. Optionee gets share certificate.
1. Share certificate to be prepared by counsel must bear
restrictive legends set forth in the Stock Purchase
Agreement.
2. Each certificate must be signed by the President (or Vice
President) and Secretary (or Assistant Secretary) of the
Company.
3. Each Optionee should be required to acknowledge receipt of
the share certificate (a sample form of receipt is
attached as Sample VI (B) (3).
C. NSOs only: Company must either withhold from Optionee's paycheck
the amount of tax required to be withheld by the Company arising
from exercise of the option (the amount of income being based on
the difference, if any, between the exercise price and the fair
market value, on the exercise date, of the stock purchased by
Optionee) or get check from Optionee for the amount of tax.
D. ISOs only: Establish a procedure whereby Optionees notify the
Company of any "disqualifying dispositions" of stock purchased
pursuant to an ISO (disposition within two years after ISO grant
or one year after exercise of the ISO).
E. Right of First Refusal. Each Optionee exercising option should be
advised of the Company's right of first refusal pursuant to the
Stock Purchase Agreement in the event Optionee wishes to sell any
of the shares.
VI. Termination of Employment.
A. Optionee may exercise option within time period permitted by
Plan.
B. Company may exercise repurchase right, if applicable, by giving
notice to Optionee in manner and within time permitted by Option
Plan and the Stock Purchase Agreement.
C. Optionee keeps any vested portion of stock and returns any
unvested or repurchased portion of stock to Company, requiring
cancellation of old share certificate(s) and issuance of new
certificate(s).
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VII. Each action taken by Company or Optionee with respect to the Stock
Option Plan should be recorded on a Stock Option Plan Ledger, a sample
of which is attached. If the Company wishes to exercise its rights of
first refusal (or the right of repurchase (See VI.B)), counsel should be
notified in order to carry out such purchase in compliance with the
California Corporations Code.
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RECEIPT
[Name of Purchasing Optionee] hereby acknowledges receipt from
ClickOver, Inc., a California corporation, of share certificate No. _____ for
_______________ shares of Common Stock, this ____day of _______________, 19__.
[To be Signed by Purchasing Optionee]
Sample V (B) (3)
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Employee Stock Option Plan Ledger
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Comments
(Termination
Vesting No. Exercise Exercise Shares Certificate Shares Repurchase,
Employee Grant Date Base Date of Shares Price Date Purchased Number Returned Balance Split, Grant)
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Sample V (B) (3)
