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EXHIBIT 99.6
COM21, INC.
STOCK ISSUANCE AGREEMENT
AGREEMENT made this _____ day of ___________________ 19____,
by and between Com21, Inc., a Delaware corporation, and
__________________________________________________, a Participant in the
Corporation's 1998 Stock Incentive Plan.
All capitalized terms in this Agreement shall have the meaning
assigned to them in this Agreement or in the attached Appendix.
A. PURCHASE OF SHARES
1. PURCHASE. Participant hereby purchases _____________
shares of Common Stock (the "Purchased Shares") pursuant to the provisions of
the Stock Issuance Program at the purchase price of $______ per share (the
"Purchase Price").
2. PAYMENT. Concurrently with the delivery of this
Agreement to the Corporation, Participant shall pay the Purchase Price for the
Purchased Shares in cash or check payable to the Corporation and shall deliver
a duly-executed blank Assignment Separate from Certificate (in the form
attached hereto as Exhibit I) with respect to the Purchased Shares.
3. STOCKHOLDER RIGHTS. Until such time as the
Corporation exercises the Repurchase Right, Participant (or any successor in
interest) shall have all the rights of a stockholder (including voting,
dividend and liquidation rights) with respect to the Purchased Shares, subject,
however, to the transfer restrictions of this Agreement.
4. ESCROW. The Corporation shall have the right to hold
the Purchased Shares in escrow until those shares have vested in accordance
with the Vesting Schedule.
5. COMPLIANCE WITH LAW. Under no circumstances shall
shares of Common Stock or other assets be issued or delivered to Participant
pursuant to the provisions of this Agreement unless, in the opinion of counsel
for the Corporation or its successors, there shall have been compliance with
all applicable requirements of Federal and state securities laws, all
applicable listing requirements of any stock exchange (or the Nasdaq National
Market, if applicable) on which the Common Stock is at the time listed for
trading and all other requirements of law or of any regulatory bodies having
jurisdiction over such issuance and delivery.
B. TRANSFER RESTRICTIONS
1. RESTRICTION ON TRANSFER. Except for any Permitted
Transfer, Participant shall not transfer, assign, encumber or otherwise dispose
of any of the Purchased Shares which are subject to the Repurchase Right.
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2. RESTRICTIVE LEGEND. The stock certificate for the
Purchased Shares shall be endorsed with the following restrictive legend:
"The shares represented by this certificate are
unvested and subject to certain repurchase rights granted to the
Corporation and accordingly may not be sold, assigned, transferred,
encumbered, or in any manner disposed of except in conformity with the
terms of a written agreement dated ____________, 199__ between the
Corporation and the registered holder of the shares (or the
predecessor in interest to the shares). A copy of such agreement is
maintained at the Corporation's principal corporate offices."
3. TRANSFEREE OBLIGATIONS. Each person (other than the
Corporation) to whom the Purchased Shares are transferred by means of a
Permitted Transfer must, as a condition precedent to the validity of such
transfer, acknowledge in writing to the Corporation that such person is bound
by the provisions of this Agreement and that the transferred shares are subject
to the Repurchase Right to the same extent such shares would be so subject if
retained by Participant.
C. REPURCHASE RIGHT
1. GRANT. The Corporation is hereby granted the right
(the "Repurchase Right"), exercisable at any time during the ninety (90)-day
period following the date Participant ceases for any reason to remain in
Service, to repurchase at the Purchase Price all or any portion of the Purchased
Shares in which Participant is not, at the time of his or her cessation of
Service, vested in accordance with the Vesting Schedule or the special vesting
acceleration provisions of Paragraph C.5 of this Agreement (such shares to be
hereinafter referred to as the "Unvested Shares").
2. EXERCISE OF THE REPURCHASE RIGHT. The Repurchase
Right shall be exercisable by written notice delivered to each Owner of the
Unvested Shares prior to the expiration of the ninety (90)-day exercise period.
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 such notice. The certificates
representing the Unvested Shares to be repurchased shall be delivered to the
Corporation on or before the close of business on the date specified for the
repurchase. Concurrently with the receipt of such stock certificates, the
Corporation shall pay to Owner, in cash or cash equivalent (including the
cancellation of any purchase-money indebtedness), an amount equal to the
Purchase Price previously paid for the Unvested Shares to be repurchased from
Owner.
3. TERMINATION OF THE REPURCHASE RIGHT. The Repurchase
Right shall terminate with respect to any Unvested Shares for which it is not
timely exercised under Paragraph C.2. In addition, the Repurchase Right shall
terminate and cease to be exercisable with respect to any and all Purchased
Shares in which Participant vests in accordance with the following Vesting
Schedule:
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(i) Upon Participant's completion of one
(1) year of Service measured from ______________, 199__, Participant
shall acquire a vested interest in, and the Repurchase Right shall
lapse with respect to, twenty-five percent (25%) of the Purchased
Shares.
(ii) Participant shall acquire a vested
interest in, and the Repurchase Right shall lapse with respect to, the
remaining Purchased Shares in a series of thirty six (36) successive
equal monthly installments upon Participant's completion of each
additional month of Service over the thirty-six (36)-month period
measured from the initial vesting date under subparagraph (i) above.
4. RECAPITALIZATION. Any new, substituted or additional
securities or other property (including cash paid other than as a regular cash
dividend) which is by reason of any Recapitalization distributed with respect
to the Purchased Shares shall be immediately subject to the Repurchase Right
and any escrow requirements hereunder, but only to the extent the Purchased
Shares are at the time covered by such right or escrow requirements.
Appropriate adjustments to reflect such distribution shall be made to the
number and/or class of securities subject to this Agreement 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 Recapitalization upon the Corporation's capital
structure; provided, however, that the aggregate purchase price shall remain
the same.
5. CORPORATE TRANSACTION.
(a) Immediately prior to the consummation of any
Corporate Transaction, the Repurchase Right shall automatically lapse in its
entirety and the Purchased Shares shall vest in full, except to the extent the
Repurchase Right is to be assigned to the successor corporation (or parent
thereof) in connection with the Corporate Transaction.
(b) To the extent the Repurchase Right remains in
effect following a Corporate Transaction, such right shall apply to the new
capital stock or other property (including any cash payments) received in
exchange for the Purchased Shares in consummation of the Corporate Transaction,
but only to the extent the Purchased 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 Corporation's capital structure; provided, however, that
the aggregate purchase price shall remain the same. The new securities or
other property (including cash payments) issued or distributed with respect to
the Purchased Shares in consummation of the Corporate Transaction shall
immediately be deposited in escrow with the Corporation (or the successor
entity) and shall not be released from escrow until Participant vests in such
securities or other property in accordance with the same Vesting Schedule in
effect for the Purchased Shares.
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(c) The Repurchase Right may also be subject to
termination in whole or in part on an accelerated basis, and the Purchased
Shares subject to immediate vesting, in accordance with the terms of any
special Addendum attached to this Agreement.
D. SPECIAL TAX ELECTION
1. SECTION 83(b) ELECTION . Under Code Section 83, the
excess of the fair market value of the Purchased Shares on the date any
forfeiture restrictions applicable to such shares lapse over the Purchase Price
paid for such shares will be reportable as ordinary income on the lapse date.
For this purpose, the term "forfeiture restrictions" includes the right of the
Corporation to repurchase the Purchased Shares pursuant to the Repurchase
Right. Participant may elect under Code Section 83(b) to be taxed at the time
the Purchased Shares are acquired, rather than when and as such Purchased
Shares cease to be subject to such forfeiture restrictions. Such election must
be filed with the Internal Revenue Service within thirty (30) days after the
date of this Agreement. Even if the fair market value of the Purchased Shares
on the date of this Agreement equals the Purchase Price paid (and thus no tax
is payable), the election must be made to avoid adverse tax consequences in the
future. THE FORM FOR MAKING THIS ELECTION IS ATTACHED AS EXHIBIT II HERETO.
PARTICIPANT UNDERSTANDS THAT FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE
THIRTY (30)-DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME AS THE
FORFEITURE RESTRICTIONS LAPSE.
2. FILING RESPONSIBILITY. PARTICIPANT ACKNOWLEDGES THAT
IT IS PARTICIPANT'S SOLE RESPONSIBILITY, AND NOT THE CORPORATION'S, TO FILE A
TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF PARTICIPANT REQUESTS THE
CORPORATION OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS OR HER BEHALF.
E. GENERAL PROVISIONS
1. ASSIGNMENT. The Corporation may assign the
Repurchase Right to any person or entity selected by the Board, including
(without limitation) one or more stockholders of the Corporation.
2. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this
Agreement or in the Plan shall confer upon Participant any right to continue in
Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Participant) or of Participant, which rights are hereby
expressly reserved by each, to terminate Participant's Service at any time for
any reason, with or without cause.
3. NOTICES. Any notice required to be given under this
Agreement shall be in writing and shall be deemed effective upon personal
delivery or upon deposit in the U.S. mail, registered or certified, postage
prepaid and properly addressed to the party entitled to such notice
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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 paragraph to all other parties to this Agreement.
4. NO WAIVER. The failure of the Corporation in any
instance to exercise the Repurchase Right shall not constitute a waiver of any
other repurchase rights that may subsequently arise under the provisions of
this Agreement or any other agreement between the Corporation and Participant.
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.
5. CANCELLATION OF SHARES. If the Corporation shall
make available, at the time and place and in the amount and form provided in
this Agreement, the consideration for the Purchased 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 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). Such shares
shall be deemed purchased in accordance with the applicable provisions hereof,
and the Corporation shall be deemed the owner and holder of such shares,
whether or not the certificates therefor have been delivered as required by
this Agreement.
6. PARTICIPANT UNDERTAKING. Participant hereby agrees
to take whatever additional action and execute whatever additional documents
the Corporation may deem necessary or advisable in order to carry out or effect
one or more of the obligations or restrictions imposed on either Participant or
the Purchased Shares pursuant to the provisions of this Agreement.
7. 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 shall in all respects be construed in conformity with the terms of
the Plan.
8. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of California without
resort to that State's conflict-of-laws rules.
9. 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.
10. SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall inure to the benefit of, and be binding upon, the Corporation
and its successors and assigns and upon Participant, Participant's assigns and
the legal representatives, heirs and legatees of Participant's estate, whether
or not any such person shall have become a party to this Agreement and have
agreed in writing to join herein and be bound by the terms hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement
on the day and year first indicated above.
COM21, INC.
By:___________________________________________
Title:________________________________________
Address:______________________________________
______________________________________________
______________________________________________
PARTICIPANT
Address:______________________________________
______________________________________________
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SPOUSAL ACKNOWLEDGMENT
The undersigned spouse of the Participant has read and hereby approves
the foregoing Stock Issuance Agreement. In consideration of the Corporation's
granting the Participant the right to acquire the Purchased Shares in
accordance with the terms of such Agreement, the undersigned hereby agrees to
be irrevocably bound by all the terms of such Agreement, including (without
limitation) the right of the Corporation (or its assigns) to purchase any
Purchased Shares in which the Participant is not vested at the time of his or
her termination of Service.
______________________________________________
PARTICIPANT'S SPOUSE
Address:______________________________________
______________________________________________
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EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED ______________________ hereby sell(s), assign(s) and
transfer(s) unto Com21, Inc. (the "Corporation"), ____ ______________(_______)
shares of the Common Stock of the Corporation standing in his or her name on the
books of the Corporation represented by Certificate No. ___________________
herewith and do(es) hereby irrevocably constitute and appoint
_______________________________ Attorney to transfer the said stock on the books
of the Corporation with full power of substitution in the premises. Dated:
________________, 199__.
Signature_____________________________________
INSTRUCTION: Please do not fill in any blanks other than the signature line.
Please sign exactly as you would like your name to appear on the issued stock
certificate. The purpose of this assignment is to enable the Corporation to
exercise the Repurchase Right without requiring additional signatures on the
part of Participant.
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EXHIBIT II
SECTION 83(b) TAX ELECTION
This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Taxpayer Ident. No.:
(2) The property with respect to which the election is being made is
____________ shares of the common stock of Com21, Inc.
(3) The property was issued on _____________, 199___.
(4) The taxable year in which the election is being made is the calendar
year 199__.
(5) The property is subject to a repurchase right pursuant to which the
issuer has the right to acquire the property at the original purchase
price if for any reason taxpayer's service with the issuer terminates.
The issuer's repurchase right lapses in a series of annual and monthly
installments over a four (4)-year period ending on ______________.
(6) The 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) is $_____________per share.
(7) The amount paid for such property is $____________ per share.
(8) A copy of this statement was furnished to Com21, Inc. for whom
taxpayer rendered the services underlying the transfer of property.
(9) This statement is executed on ________________________, 199__.
____________________________ _____________________________________
Spouse (if any) Taxpayer
This election must be filed with the Internal Revenue Service Center with which
taxpayer files his or her Federal income tax returns and must be made within
thirty (30) days after the execution date of the Stock Issuance Agreement.
This filing should be made by registered or certified mail, return receipt
requested. Participant must retain two (2) copies of the completed form for
filing with his or her Federal and state tax returns for the current tax year
and an additional copy for his or her records.
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APPENDIX
The following definitions shall be in effect under the
Agreement:
A. AGREEMENT shall mean this Stock Issuance Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. COMMON STOCK shall mean shares of the Corporation's common
stock.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions:
(i) a merger or consolidation in which
securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities are
transferred to a person or persons different from the persons holding
those securities immediately prior to such transaction, or
(ii) the sale, transfer or other
disposition of all or substantially all of the Corporation's assets in
complete liquidation or dissolution of the Corporation.
F. CORPORATION shall mean Com21, Inc., a Delaware corporation,
and its successors.
G. OWNER shall mean Participant and all subsequent holders of the
Purchased Shares who derive their chain of ownership through a Permitted
Transfer from Participant.
H. PARENT shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) 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.
I. PARTICIPANT shall mean the person to whom the Purchased Shares
are issued under the Stock Issuance Program.
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J. PERMITTED TRANSFER shall mean (i) a gratuitous transfer of the
Purchased Shares, provided and only if Participant obtains the Corporation's
prior written consent to such transfer, (ii) a transfer of title to the
Purchased Shares effected pursuant to Participant's will or the laws of
intestate succession following Participant's death or (iii) a transfer to the
Corporation in pledge as security for any purchase-money indebtedness incurred
by Participant in connection with the acquisition of the Purchased Shares.
K. PLAN shall mean the Corporation's 1998 Stock Incentive Plan.
L. PLAN ADMINISTRATOR shall mean either the Board or a committee
of the Board acting in its administrative capacity under the Plan.
M. PURCHASE PRICE shall have the meaning assigned to such term in
Paragraph A.1.
N. PURCHASED SHARES shall have the meaning assigned to such term
in Paragraph A.1.
O. RECAPITALIZATION shall mean any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the Corporation's outstanding Common Stock as a class without the
Corporation's receipt of consideration.
P. REPURCHASE RIGHT shall mean the right granted to the
Corporation in accordance with Article C.
Q. SERVICE shall mean the Participant's performance of services
for the Corporation (or any Parent or Subsidiary) in the capacity of an
employee, subject to the control and direction of the employer entity as to
both the work to be performed and the manner and method of performance, a
non-employee member of the board of directors or a consultant.
R. STOCK ISSUANCE PROGRAM shall mean the Stock Issuance Program
under the Plan.
S. SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each 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.
T. VESTING SCHEDULE shall mean the vesting schedule specified in
Paragraph C.3, subject to the special vesting acceleration provisions of
Paragraph C.5.
U. UNVESTED SHARES shall have the meaning assigned to such term
in Paragraph C.1.
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