Exhibit (d)(10)
XXXXXXXX.XXX, INC.
STOCK ISSUANCE AGREEMENT
AGREEMENT made this 20th day of March 2002, to be effective as of June 11,
2001, by and between Xxxxxxxx.xxx, Inc., a Delaware corporation, and Xxxxxxx
Xxxxxxx, a Participant in the Corporation's 2000 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 5,587 shares of Common Stock
(the "Purchased Shares") pursuant to the provisions of the Stock Issuance
Program at the purchase price of $0.0001 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.
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 March 20, 2002, effective as of June 11, 2001, 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 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:
The Participant will vest in 100% of the Purchased Shares on June 11,
2004.
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. Change in Control.
(a) Immediately prior to the consummation of any Change in Control, 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
assigned to the successor corporation (or parent thereof) or otherwise
continues in full force and effect pursuant to the terms of the Change in
Control.
(b) To the extent the Repurchase Right remains in effect following a
Change in Control, 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 Change in Control, 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 Change in
Control upon the Corporation's capital structure; provided, however, that
the aggregate purchase price shall remain the same. Any capital stock or
other property (including cash payments) issued or distributed with respect
to the Purchased Shares may be held in escrow.
(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.
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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 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.
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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 New York without resort to that
State's conflict-of-laws rules.
9. 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.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first indicated above.
XXXXXXXX.XXX, INC.
By: /s/ Xxxx Xxxx
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Title: VP & General Counsel
Address: 000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
/s/ Xxxxxxx Xxxxxxx
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PARTICIPANT
Xxxxxxx Xxxxxxx
Address:
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EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED _____________________ hereby sell(s), assign(s) and
transfer(s) unto Xxxxxxxx.xxx, 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: Signature
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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.
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 Xxxxxxxx.xxx, Inc.
(3) The property was issued on _______________________.
(4) The taxable year in which the election is being made is the calendar year
________.
(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 employment with the issuer is
terminated. The issuer's repurchase right lapses in a series of
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 Xxxxxxxx.xxx, Inc. for whom
taxpayer rendered the services underlying the transfer of property.
(9) This statement is executed on ______________________________.
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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.
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. Change in Control shall mean a change in ownership or control of the
Corporation effected through any of the following transactions:
(i) a merger, consolidation or reorganization approved by the
Corporation's stockholders, unless securities representing more than
fifty percent (50%) of the total combined voting power of the voting
securities of the successor corporation are immediately thereafter
beneficially owned, directly or indirectly and in substantially the same
proportion, by the persons who beneficially owned the Corporation's
outstanding voting securities immediately prior to such transaction.
(ii) any stockholder-approved transfer or other disposition of all or
substantially all of the Corporation's assets, or
(iii) the acquisition, directly or indirectly by any person or related
group of persons (other than the Corporation or a person that directly or
indirectly controls, is controlled by, or is under common control with,
the Corporation), of beneficial ownership (within the meaning of Rule
13d-3 of the 0000 Xxx) of securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's outstanding
securities pursuant to a tender or exchange offer made directly to the
Corporation's stockholders which the Board recommends such stockholders
to accept.
D. Code shall mean the Internal Revenue Code of 1986, as amended.
E. Common Stock shall mean the Corporation's common stock.
F. Corporation shall mean Xxxxxxxx.xxx, Inc., a Delaware corporation.
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.
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 2000 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.
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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 acceleration (if any) in connection with a Change
in Control.
U. Unvested Shares shall have the meaning assigned to such term in
Paragraph C.1.
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