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Exhibit 10.5
AMENDMENT TO
NEW FOCUS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
This Amendment is made this ____ day of ______, 1999, by and between
New Focus, Inc. (the "Company") and _____________________ (the "Optionee"), and
is cumulative with respect to any prior amendments.
WHEREAS, the Optionee was granted a stock option by the Company under
the 1990 Incentive Stock Plan (as amended May 4, 1998) and / or the 1999 Stock
Option Plan (collectively referred to as the "Plan") on __________________,
pursuant to the Plan and the Stock Option Agreement by and between the Company
and Optionee;
WHEREAS, the Company and the Optionee desire to amend the Nonstatutory
Stock Option Agreement to provide for the early exercise of options, the ability
of Optionee to pay by promissory note, and to provide for the acceleration of
option vesting in certain circumstances within eighteen months following a
Change of Control.
NOW, THEREFORE, the parties agree as follows:
A. Section 3 of the Stock Option Agreement shall be amended in its
entirety to read as follows:
" 3. Exercise of Option. This Option shall be exercisable during its
term in accordance with the provisions of Section 8 of the Plan as follows:
(a) Right to Exercise
(i) Subject to Subsections 3(a)(iii) and
3(a)(iv) below, this Option shall be
exercisable cumulatively according to the
following vesting schedule: 12/60ths of the
total number of Shares subject to this
Option shall vest twelve months following
the Vesting Commencement Date, and 1/60th of
the total number of Shares subject to this
Option shall vest thereafter on the monthly
anniversary date of the Vesting Commencement
Date. Alternatively, at the election of the
Optionee, this Option may be exercised in
whole or in part at any time as to any
Shares (vested or unvested). Vested Shares
shall not be subject to the Company's
Repurchase Option as set forth in the
Restricted Stock Purchase Agreement,
attached hereto as Exhibit C- 1 (the
"Repurchase Option").
(ii) As a condition to exercising this Option for
unvested Shares, the Optionee shall execute
the Restricted Stock Purchase Agreement.
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Unvested Shares shall be subject to the
Company's Repurchase Option, which shall
lapse at the same rate as the vesting
schedule set forth in the first sentence of
Section 3(a)(i), subject to accelerated
vesting in certain circumstances within
eighteen months following a Change of
Control (as defined in Section 15 hereof).
(iii) This Option may not be exercised for a
fraction of a Share. (iv) In the event of
Optionee's death, disability or other
termination of employment, the
exercisability of the Option is governed by
Sections 8, 9, and 10 below."
B. Section 5 of the Stock Option Agreement shall be amended in its
entirety to read as follows:
"5. Method of Payment. Payment of the purchase price shall be
made by any of the following, at the election of the Optionee:
(a) cash;
(b) check;
(c) delivery of Optionee's promissory note (the
"Note") in the form attached hereto as
Exhibit B-1, in the amount of the purchase
price plus any applicable federal, state, or
local income taxes payable on account of the
exercise of the Option, together with the
execution and delivery by the Optionee of
the Security Agreement attached hereto as
Exhibit B-2. The note shall be secured by a
pledge of the Shares purchased by the Note
pursuant to the Security Agreement."
C. Sections 13 and 14 shall be combined into a new Section 13 which
shall read in its entirety as follows:
"13. Tax Consequences. Set forth below is a brief summary as of the
date of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of Option. Upon the exercise of an NSO, Optionee
will recognize compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the fair market value of the exercised Shares on the
date of exercise over the purchase price. If Optionee is an Employee or a former
Employee, the Company will be required to withhold from Optionee's compensation
or collect from Optionee and pay to the applicable taxing authorities an amount
in cash equal to a percentage of this compensation income at the time of
exercise, and may refuse to
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honor the exercise and refuse to deliver Shares if such withholding amounts are
not delivered at the time of exercise.
(b) Disposition of Shares. If Shares are held for at least one
year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes. Different rules may
apply if the Shares are subject to a substantial risk of forfeiture (within the
meaning of Section 83 of the Code) at the time of purchase.
(c) Section 83(b) Election for Unvested Shares Purchased
Pursuant to Options. With respect to the exercise of an Option for unvested
Shares, an election (the "Election") may be filed by the Optionee with the
Internal Revenue Service, within 30 days of the purchase of the Shares, electing
pursuant to Section 83(b) of the Code to be taxed currently on any difference
between the purchase price of the Shares and their fair market value on the date
of purchase. This will result in a recognition of taxable income to the Optionee
on the date of exercise, measured by the excess, if any, of the Fair Market
Value of the exercised Shares, at the time the Option is exercised over the
purchase price for the exercised Shares. Absent such an election, taxable income
will be measured and recognized by Optionee at the time or times on which the
Company's Repurchase Option lapses. Optionee is strongly encouraged to seek the
advice of his or her own tax consultants in connection with the purchase of the
Shares and the advisability of filing of the Election under Section 83(b) of the
Code. A form of Election under Section 83(b) is attached hereto as Exhibit C-5
for reference.
OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE'S SOLE RESPONSIBILITY AND NOT
THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF OPTIONEE
REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON OPTIONEE'S
BEHALF."
D. A new Section 15 entitled "Acceleration of Vesting Following a
Change of Control" shall be added to read as follows:
"15. Acceleration of Vesting Following a Change of Control. If, within
eighteen (18) months following a Change of Control, Optionee's employment or
consulting relationship is terminated involuntarily by the Company other than
for Cause, death or disability or by the Optionee by a voluntary termination for
Good Reason, then 50% of the Optionee's unvested options shall vest. For
Purposes of the preceding sentence, the following definitions apply:
(a) "Cause" shall mean an Optionee's (i) willful act of
personal dishonesty, fraud or misrepresentation taken by the Optionee in
connection with his or her responsibilities as an employee which was intended to
result in gain or personal enrichment of the Optionee at the expense of the
Company; (ii) the Optionee's conviction of a felony; or (iii) the Optionee's
willful and continued failure to substantially perform his or her principal
duties and obligations of employment (other than any such failure resulting from
incapacity due to physical or mental illness), which failure is not remedied in
a reasonable period of time after receipt of written notice from the Company.
For the purposes of this Section, no act or failure to act shall be considered
"willful"
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unless done or omitted to be done in bad faith and without reasonable belief
that the act or omission was in or not opposed to the best interests of the
Company.
(b) "Change of Control" means the occurrence of any of the
following events:
(i) The shareholders of the Company approve one of the
following:
(A) Any consolidation, merger or plan of
exchange involving the Company pursuant to which all of the Company's common
stock would be converted into cash; or
(B) Any sale, lease, exchange, or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company or the adoption of any plan or
proposal for the liquidation or dissolution of the Company; or
(ii) Any "person" (as such term is defined in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becoming the
"beneficial owner" (as that term is defined in Rule 13d-3 under said Act)
directly or indirectly, of securities of the Company representing 50% or more of
the total voting power represented by the Company's then outstanding voting
securities; or
(iii) During any period of 12 months or less,
individuals who at the beginning of such period constituted a majority of the
Board of Directors cease for any reason to constitute a majority thereof unless
the nomination or election of such new directors was approved by a majority of
the directors then still in office who were directors at the beginning of such
period.
(c) "Good Reason" means
(i) A reduction of Optionee's title, duties, position,
responsibilities, or the removal of Optionee from such title, duties, position
or responsibilities other than a reduction directly attributable to a Change of
Control (as for example, when the Chief Executive Officer of the Company remains
as such following a Change of Control and is not made the Chief Executive
Officer of the acquiring corporation);
(ii) A reduction by the Company in the base salary of
the Executive other than a reduction directly attributable to a Change of
Control;
(iii) Without the Executive's express written consent,
the relocation of the Executive to a facility or a location more than fifty (50)
miles from the Executive's then present location other than a relocation
directly attributable to a Change of Control; or
(iv) Any purported termination of the Executive by the
Company which is not effected for Cause, or any purported termination for which
the grounds relied upon are not valid."
E. The Exercise Notice, Investment Representation Statement, Note,
Security Agreement, Restricted Stock Purchase Agreement and related documents
attached to this
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Amendment as Exhibits A through C-5 shall be incorporated as exhibits to the
Stock Option Agreement, hereby replacing any prior exhibits.
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IN WITNESS WHEREOF, this Amendment has been entered into as of the date
first set forth above.
OPTIONEE NEW FOCUS, INC.
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Signature By
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Print Name Title
Residence Address:
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EXHIBIT A
EXERCISE NOTICE
New Focus, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
The undersigned hereby elects to exercise the option indicated below
with respect to the number of shares of Common Stock of New Focus, Inc. (the
"Company") set forth:
Option Grant Date: ______________________
Number of Shares Being Exercised: __________ shares
Exercise Price Per Shares: $__________
Total Exercise Price: $__________
Method of Payment: / / Cash
/ / Check
/ / Promissory Note
Enclosed herewith is payment in full of the total exercise price or a
Promissory Note (if applicable), a copy of the Option Agreement, an executed
copy of an Investment Representation Statement (Exhibit B to the Option
Agreement), a Security Agreement (if applicable), and a Restricted Stock
Purchase Agreement.
I understand and agree that the Company shall cause the legends set
forth below or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Shares together with any other
legends that may be required by the Company or by state or federal securities
laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN
THE OPINION OF
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COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE
SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND RIGHT OF FIRST REFUSAL
OPTIONS HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN
THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER
OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND
RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE
SHARES.
I also agree that, in order to ensure compliance with the restrictions
referred to herein, 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 shall not be required (i) to transfer on its books any
Shares that have been sold or otherwise transferred in violation of any of the
provisions of this Exercise Notice or (ii) to treat as owner of such Shares or
to accord the right to vote or pay dividends to any purchaser or other
transferee to whom such Shares shall have been so transferred.
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My exact name, address and social security number for purposes of the
stock certificates to be issued and the shareholder list of the Company are:
Name:
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Address:
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Social Security Number:
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Sincerely,
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Dated:
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EXHIBIT B-1
NOTE
$_________________________ Santa Clara, California
__________________, _____
FOR VALUE RECEIVED, _____________________ ("Optionee") promises to pay to New
Focus, Inc., a California corporation (the "Company"), or order, the principal
sum of _______________________ ($_____________), without interest.
Principal shall be due and payable on _______________, _____ (the "Due Date").
Payment of principal shall be made in lawful money of the United States of
America.
The Optionee may at any time prepay all or any portion of the principal owing
hereunder.
This Note is subject to the terms of the Option, dated as of ________________.
This Note is secured by a pledge of the Company's Common Stock under the terms
of a Security Agreement of even date herewith and is subject to all the
provisions thereof.
The holder of this Note shall have full recourse against the undersigned, and
shall not be required to proceed against the collateral securing this Note in
the event of default.
In the event the Optionee ceases to be an employee or consultant of the Company,
this Note shall become due and fully payable within 60 days of such termination.
In the event the Optionee sells, exchanges, transfers, or otherwise disposes of
any Shares prior to the Due Date, the pro-rata portion of the total principal
payable under this Note which is attributable to such Shares shall become due
and fully payable within sixty (60) days of such sale, exchange, transfer or
disposition.
Should any action be instituted for the collection of this Note, the reasonable
costs and attorneys' fees therein of the holder shall be paid by the Optionee.
______________________________
______________________________
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EXHIBIT B-2
SECURITY AGREEMENT
This Security Agreement is made as of __________, _____ between New Focus, Inc.,
a California corporation ("Pledgee"), and _________________________ ("Pledgor").
Recitals
Pursuant to Pledgor's election to purchase Shares under the Option Agreement
dated ________ (the "Option"), between Pledgor and Pledgee under Pledgee's 1990
Incentive Stock Plan, and / or the 1999 Stock Option Plan, and Pledgor's
election under the terms of the Option to pay for such shares, with his
promissory note (the "Note"), Pledgor has purchased _________ shares of
Pledgee's Common Stock (the "Shares") at a price of $________ per share, for a
total purchase price of $__________. The Note and the obligations thereunder are
as set forth in Exhibit B-1 to the Option.
NOW, THEREFORE, it is agreed as follows:
1. Creation and Description of Security Interest. In consideration of
the transfer of the Shares to Pledgor under the Option Agreement, Pledgor,
pursuant to the California Commercial Code, hereby pledges all of such Shares
(herein sometimes referred to as the "Collateral") represented by certificate
number ______, duly endorsed in blank or with executed stock powers, and
herewith delivers said certificate to the Secretary of Pledgee ("Pledgeholder"),
who shall hold said certificate subject to the terms and conditions of this
Security Agreement.
The pledged stock (together with an executed blank stock assignment for
use in transferring all or a portion of the Shares to Pledgee if, as and when
required pursuant to this Security Agreement) shall be held by the Pledgeholder
as security for the repayment of the Note, and any extensions or renewals
thereof, to be executed by Pledgor pursuant to the terms of the Option, and the
Pledgeholder shall not encumber or dispose of such Shares except in accordance
with the provisions of this Security Agreement.
2. Pledgor's Representations and Covenants. To induce Pledgee to enter
into this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:
(a) Payment of Indebtedness. Pledgor will pay the principal sum
of the Note secured hereby, at the time and in the manner provided in the Note.
(b) Encumbrances. The Shares are free of all other encumbrances,
defenses and liens, and Pledgor will not further encumber the Shares without the
prior written consent of Pledgee.
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(c) Margin Regulations. In the event that Pledgee's Common Stock
is now or later becomes margin-listed by the Federal Reserve Board and Pledgee
is classified as a "lender" within the meaning of the regulations under Part 207
of Title 12 of the Code of Federal Regulations ("Regulation U"), Pledgor agrees
to cooperate with Pledgee in making any amendments to the Note or providing any
additional collateral as may be necessary to comply with such regulations.
3. Voting Rights. During the term of this pledge and so long as all
payments of principal is made as they become due under the terms of the Note,
Pledgor shall have the right to vote all of the Shares pledged hereunder.
4. Stock Adjustments. In the event that during the term of the pledge
any stock dividend, reclassification, readjustment or other changes are declared
or made in the capital structure of Pledgee, all new, substituted and additional
shares or other securities issued by reason of any such change shall be
delivered to and held by the Pledgee under the terms of this Security Agreement
in the same manner as the Shares originally pledged hereunder. In the event of
substitution of such securities, Pledgor, Pledgee and Pledgeholder shall
cooperate and execute such documents as are reasonable so as to provide for the
substitution of such Collateral and, upon such substitution, references to
"Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.
5. Options and Rights. In the event that, during the term of this
pledge, subscription Options or other rights or options shall be issued in
connection with the pledged Shares, such rights, Options and options shall be
the property of Pledgor and, if exercised by Pledgor, all new stock or other
securities so acquired by Pledgor as it relates to the pledged Shares then held
by Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Shares pledged.
6. Default. Pledgor shall be deemed to be in default of the Note and of
this Security Agreement in the event:
(a) Payment of principal on the Note shall be delinquent for a
period of 10 days or more; or
(b) Pledgor fails to perform any of the covenants set forth in
the Option or contained in this Security Agreement for a period of 10 days after
written notice thereof from Pledgee.
In the case of an event of Default, as set forth above, Pledgee shall
have the right to accelerate payment of the Note upon notice to Pledgor, and
Pledgee shall thereafter be entitled to pursue its remedies under the California
Commercial Code.
7. Release of Collateral. Subject to any applicable contrary rules
under Regulation G, there shall be released from this pledge a portion of the
pledged Shares held by Pledgeholder hereunder upon payments of the principal of
the Note. The number of the pledged Shares which shall be released shall be that
number of full Shares which bears the same proportion to the initial
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number of Shares pledged hereunder as the payment of principal bears to the
initial full principal amount of the Note.
8. Withdrawal or Substitution of Collateral. Pledgor shall not sell,
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.
9. Term. The within pledge of Shares shall continue until the payment
of all indebtedness secured hereby, at which time the remaining pledged stock
shall be promptly delivered to Pledgor, subject to the provisions for prior
release of a portion of the Collateral as provided in paragraph 7 above.
10. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.
11. Pledgeholder Liability. In the absence of willful or gross
negligence, Pledgeholder shall not be liable to any party for any of his acts,
or omissions to act, as Pledgeholder.
12. Invalidity of Particular Provisions. Pledgor and Pledgee agree that
the enforceability or invalidity of any provision or provisions of this Security
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
13. Successors or Assigns. Pledgor and Pledgee agree that all of the
terms of this Security Agreement shall be binding on their respective successors
and assigns, and that the term "Pledgor" and the term "Pledgee" as used herein
shall be deemed to include, for all purposes, the respective designees,
successors, assigns, heirs, executors and administrators.
14. Governing Law. This Security Agreement shall be interpreted and
governed under the internal substantive laws, but not the choice of law rules,
of California.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
"PLEDGOR"
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Signature
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Print Name
Address:
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"PLEDGEE"
NEW FOCUS, INC.
a California corporation
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Signature
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Print Name
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Title
"PLEDGEHOLDER"
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Secretary of New Focus, Inc.
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EXHIBIT C-1
NEW FOCUS, INC.
RESTRICTED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made between _____________________________ (the
"Purchaser") and New Focus, Inc. (the "Company") as of __________________, ____.
Unless otherwise defined herein, the terms defined in the 1990
Incentive Stock Plan (as amended May 4, 1998) and / or the 1999 Stock Option
Plan, shall have the same defined meanings in this Agreement.
RECITALS
A. Pursuant to the exercise of the option (grant number ____) granted
to Purchaser under the Plan and pursuant to the Option Agreement dated
_______________, ____ by and between the Company and Purchaser with respect to
such grant (the "Option"), which Plan and Option Agreement are hereby
incorporated by reference, Purchaser has elected to purchase _________ of those
shares of Common Stock which have not become vested under the vesting schedule
set forth in the Option Agreement ("Unvested Shares"). The Unvested Shares and
the shares subject to the Option Agreement which have become vested are
sometimes collectively referred to herein as the "Shares."
B. As required by the Option Agreement, as a condition to Purchaser's
election to exercise the option, Purchaser must execute this Agreement, which
sets forth the rights and obligations of the parties with respect to Shares
acquired upon exercise of the Option.
1. Repurchase Option.
(a) If Purchaser's status as a Service Provider is terminated for
any reason, including for cause, death, and Disability, the Company shall have
the right and option to purchase from Purchaser, or Purchaser's personal
representative, as the case may be, all of the Purchaser's Unvested Shares as of
the date of such termination at the price paid by the Purchaser for such Shares
(the "Repurchase Option").
(b) Upon the occurrence of such termination, the Company may
exercise its Repurchase Option by delivering personally or by registered mail,
to Purchaser (or his transferee or legal representative, as the case may be),
within ninety (90) days of the termination, a notice in writing indicating the
Company's intention to exercise the Repurchase Option and setting forth a date
for closing not later than thirty (30) days from the mailing of such notice. The
closing shall take place at the Company's office. At the closing, the holder of
the certificates for the Unvested Shares being transferred shall deliver the
stock certificate or certificates evidencing the Unvested Shares, and the
Company shall deliver the purchase price therefor.
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(c) At its option, the Company may elect to make payment for the
Unvested Shares to a bank selected by the Company. The Company shall avail
itself of this option by a notice in writing to Purchaser stating the name and
address of the bank, date of closing, and waiving the closing at the Company's
office.
(d) If the Company does not elect to exercise the Repurchase
Option conferred above by giving the requisite notice within ninety (90) days
following the termination, the Repurchase Option shall terminate.
(e) The Repurchase Option shall terminate in accordance with the
vesting schedule contained in Optionee's Option Agreement.
2. Transferability of the Shares; Escrow.
(a) Purchaser hereby authorizes and directs the Secretary of the
Company, or such other person designated by the Company, to transfer the
Unvested Shares as to which the Repurchase Option has been exercised from
Purchaser to the Company.
(b) To insure the availability for delivery of Purchaser's
Unvested Shares upon repurchase by the Company pursuant to the Repurchase Option
under Section 1, Purchaser hereby appoints the Secretary, or any other person
designated by the Company as escrow agent, as its attorney-in-fact to sell,
assign and transfer unto the Company, such Unvested Shares, if any, repurchased
by the Company pursuant to the Repurchase Option and shall, upon execution of
this Agreement, deliver and deposit with the Secretary of the Company, or such
other person designated by the Company, the share certificates representing the
Unvested Shares, together with the stock assignment duly endorsed in blank,
attached hereto as Exhibit C-2. The Unvested Shares and stock assignment shall
be held by the secretary in escrow, pursuant to the Joint Escrow Instructions of
the Company and Purchaser attached as Exhibit C-3 hereto, until the Company
exercises its Repurchase Option, until such Unvested Shares are vested, or until
such time as this Agreement no longer is in effect. As a further condition to
the Company's obligations under this Agreement, the spouse of the Purchaser, if
any, shall execute and deliver to the Company the Consent of Spouse attached
hereto as Exhibit C-4. Upon vesting of the Unvested Shares, the escrow agent
shall promptly deliver to the Purchaser the certificate or certificates
representing such Shares in the escrow agent's possession belonging to the
Purchaser, and the escrow agent shall be discharged of all further obligations
hereunder; provided, however, that the escrow agent shall nevertheless retain
such certificate or certificates as escrow agent if so required pursuant to
other restrictions imposed pursuant to this Agreement.
(c) The Company, or its designee, shall not be liable for any act
it may do or omit to do with respect to holding the Shares in escrow and while
acting in good faith and in the exercise of its judgment.
(d) Transfer or sale of the Shares is subject to restrictions on
transfer imposed by any applicable state and federal securities laws. Any
transferee shall hold such Shares subject to all the provisions hereof and the
Exercise Notice executed by the Purchaser with respect to any
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Unvested Shares purchased by Purchaser and shall acknowledge the same by signing
a copy of this Agreement.
3. Ownership, Voting Rights, Duties. This Agreement shall not affect in
any way the ownership, voting rights or other rights or duties of Purchaser,
except as specifically provided herein.
4. Legends. The share certificate evidencing the Shares issued
hereunder shall be endorsed with the following legend (in addition to any legend
required under applicable federal and state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS
ON FILE WITH THE SECRETARY OF THE COMPANY.
5. Adjustment for Stock Split. All references to the number of Shares
and the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, stock dividend or other change in the
Shares which may be made by the Company pursuant to Section 12 of the Plan after
the date of this Agreement.
6. Notices. Notices required hereunder shall be given in person or by
registered mail to the address of Purchaser shown on the records of the Company,
and to the Company at their respective principal executive offices.
7. Survival of Terms. This Agreement shall apply to and bind Purchaser
and the Company and their respective permitted assignees and transferees, heirs,
legatees, executors, administrators and legal successors.
8. Section 83(b) Election. Purchaser hereby acknowledges that he or she
has been informed that, with respect to the exercise of an Option for Unvested
Shares, an election (the "Election") may be filed by the Purchaser with the
Internal Revenue Service, within 30 days of the purchase of the exercised
Shares, electing pursuant to Section 83(b) of the Code to be taxed currently on
any difference between the purchase price of the exercised Shares and their Fair
Market Value on the date of purchase. In the case of a Nonstatutory Stock
Option, this will result in a recognition of taxable income to the Purchaser on
the date of exercise, measured by the excess, if any, of the Fair Market Value
of the exercised Shares, at the time the Option is exercised over the purchase
price for the exercised Shares. Absent such an Election, taxable income will be
measured and recognized by Purchaser at the time or times on which the Company's
Repurchase Option lapses. In the case of an Incentive Stock Option, such an
Election will result in a recognition of income to the Purchaser for alternative
minimum tax purposes on the date of exercise, measured by the excess, if any, of
the Fair Market Value of the exercised Shares, at the time the option is
exercised, over the purchase price for the exercised Shares. Absent such an
Election, alternative minimum taxable income will be measured and recognized by
Purchaser at the time or times on which the Company's Repurchase Option lapses.
Purchaser is strongly encouraged to seek the advice of his or her own tax
consultants
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in connection with the purchase of the Shares and the advisability of filing of
the Election under Section 83(b) of the Code. A form of Election under Section
83(b) is attached hereto as Exhibit C-5 for reference.
PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b) OF THE CODE, EVEN IF PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVE
TO MAKE THIS FILING ON PURCHASER'S BEHALF.
9. Representations. Purchaser has reviewed with his own tax advisors
the federal, state, local and foreign tax consequences of this investment and
the transactions contemplated by this Agreement. Purchaser is relying solely on
such advisors and not on any statements or representations of the Company or any
of its agents. Purchaser understands that he (and not the Company) shall be
responsible for his own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement.
10. Governing Law. This Agreement shall be governed by the internal
substantive laws, but not the choice of law rules, of California.
Purchaser represents that he has read this Agreement and is familiar
with its terms and provisions. Purchaser hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions arising under this Agreement.
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IN WITNESS WHEREOF, this Agreement is deemed made as of the date first
set forth above.
OPTIONEE NEW FOCUS, INC.
-------------------------------- -------------------------------
Signature By
-------------------------------- -------------------------------
Print Name Title
Residence Address:
--------------------------------
-------------------------------
Dated:
--------------------------------
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EXHIBIT C-2
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, __________________________, hereby sell, assign
and transfer unto New Focus, Inc. ______________________ (__________) shares of
the Common Stock of New Focus, Inc. standing in my name of the books of said
corporation represented by Certificate No. _____ herewith and do hereby
irrevocably constitute and appoint _______________ to transfer the said stock on
the books of the within named corporation with full power of substitution in the
premises.
This Stock Assignment may be used only in accordance with the
Restricted Stock Purchase Agreement between New Focus, Inc. and the undersigned
dated ______________,
Dated: _______________,____ Signature: ___________________________
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
"repurchase option," as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.
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EXHIBIT C-3
JOINT ESCROW INSTRUCTIONS
Corporate Secretary
New Focus, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Corporate Secretary:
As Escrow Agent for both New Focus, Inc. (the "Company"), and the
undersigned purchaser of stock of the Company (the "Purchaser"), you are hereby
authorized and directed to hold the documents delivered to you pursuant to the
terms of that certain Restricted Stock Purchase Agreement (the "Agreement")
between the Company and the undersigned, in accordance with the following
instructions:
1. In the event the Company and/or any assignee of the Company
(referred to collectively for convenience herein as the "Company") exercises the
Company's repurchase option set forth in the Agreement, the Company shall give
to Purchaser and you a written notice specifying the number of shares of stock
to be purchased, the purchase price, and the time for a closing hereunder at the
principal office of the Company. Purchaser and the Company hereby irrevocably
authorize and direct you to close the transaction contemplated by such notice in
accordance with the terms of said notice.
2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver the stock assignments, together with the
certificate evidencing the shares of stock to be transferred, to the Company or
its assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, or some combination thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Company's repurchase option.
3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer of,
the securities. Subject to the provisions of this paragraph 3, Purchaser shall
exercise all rights and privileges of a stockholder of the Company while the
stock is held by you.
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4. Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's repurchase option has been exercised, you
will deliver to Purchaser a certificate or certificates representing so many
shares of stock as are not then subject to the Company's repurchase option.
Within 120 days after cessation of Purchaser's continuous employment by or
services to the Company, or any parent or subsidiary of the Company, you will
deliver to Purchaser a certificate or certificates representing the aggregate
number of shares held or issued pursuant to the Agreement and not purchased by
the Company or its assignees pursuant to exercise of the Company's repurchase
option.
5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Purchaser,
you shall deliver all of the same to Purchaser and shall be discharged of all
further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith,
and any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree, you
shall not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
10. You shall not be liable for the outlawing of any rights under the
Statute of Limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
11. You shall be entitled to employ such legal counsel and other
experts as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.
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12. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be an officer or agent of the Company or if you shall resign
by written notice to each party. In the event of any such termination, the
Company shall appoint a successor Escrow Agent.
13. If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
15. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties thereunto
entitled at the following addresses or at such other addresses as a party may
designate by ten days' advance written notice to each of the other parties
hereto.
16. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.
17. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.
18. These Joint Escrow Instructions shall be governed by the internal
substantive laws, but not the choice of law rules, of California.
PURCHASER NEW FOCUS, INC.
-------------------------------- -------------------------------
Signature By
-------------------------------- -------------------------------
Print Name Title
Residence Address:
--------------------------------
--------------------------------
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ESCROW AGENT
Corporate Secretary
Dated:
---------------------------
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EXHIBIT C-4
CONSENT OF SPOUSE
I, ____________________, spouse of ___________________, have read and
approve the foregoing Restricted Stock Purchase Agreement (the "Agreement"). In
consideration of granting of the right to my spouse to purchase shares of
____________________________, as set forth in the Agreement, I hereby appoint my
spouse as my attorney-in-fact in respect to the exercise of any rights under the
Agreement and agree to be bound by the provisions of the Agreement insofar as I
may have any rights in said Agreement or any shares issued pursuant thereto
under the community property laws or similar laws relating to marital property
in effect in the state of our residence as of the date of the signing of the
foregoing Agreement.
Dated: ___________________,_____ Signature: ______________________________
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EXHIBIT C-5
ELECTION UNDER SECTION 83(B)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, 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: TAXPAYER: SPOUSE:
ADDRESS:
IDENTIFICATION NO.: TAXPAYER: SPOUSE:
TAXABLE YEAR:
2. The property with respect to which the election is made is described as
follows: __________ shares (the "Shares") of the Common Stock of New
Focus, Inc. (the "Company").
3. The date on which the property was transferred is:___________________
,______.
4. The property is subject to the following restrictions:
The Shares may not be transferred and are subject to forfeiture under
the terms of an agreement between the taxpayer and the Company. These
restrictions lapse upon the satisfaction of certain conditions
contained in such agreement.
5. 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, 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 transferee of such property 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.
Dated: ______________________, _____ ___________________________________
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated: _____________________, ______ ___________________________________
Spouse of Taxpayer