1
Exhibit 4.2
ALTERA CORPORATION
RESTRICTED STOCK PURCHASE AGREEMENT
THIS RESTRICTED STOCK PURCHASE AGREEMENT (this "Agreement") is entered into
as of March 8, 2001, by and between Altera Corporation, a Delaware corporation
(the "Company"), and Xxxxxx Xxxxxxx ("Recipient").
W I T N E S S E T H
WHEREAS, Recipient is a newly hired employee of the Company;
WHEREAS, the Company believes that Recipient will be a valuable contributor
to the Company and has determined that it would be in the interests of the
Company and its stockholders to sell the Shares (as defined below) provided for
in this Agreement to Recipient (i) as an inducement essential to the Recipient's
entering into an employment contract with the Company, (ii) as compensation for
the compensation and benefits that Recipient relinquished when Recipient left
his previous employer and joined the Company and (iii) as an incentive for
continued service with the Company and increased achievements in the future by
Recipient; and
WHEREAS, on February 5, 2001, the Stock Option Plan Committee of the Board
of Directors of the Company approved the issuance of the Shares (as defined
below) to Recipient for a consideration of $0.001 per share and this Agreement
memorializes such issuance;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties to this Agreement hereby agree as follows:
A G R E E M E N T
1. Restricted Stock Purchase.
(a) Within 30 days after execution of this Agreement, the Company
will issue and sell to Recipient ten thousand (10,000) shares of Common Stock,
$0.001 par value per share, of the Company (the "Stock") for a consideration of
$0.001 per share ("Purchase Price Per Share") for a total purchase price of Ten
Dollars ($10) (the "Total Purchase Price"). Payment for the Stock in the amount
of the Total Purchase Price shall be made to the Company upon execution of this
Agreement. Such payment shall be made in the form of a check. The Stock
certificate(s) evidencing the Stock will be retained by the Company, accompanied
by (i) blank stock powers executed by Recipient and Recipient's spouse, if any,
and (ii) a consent of spouse (if any), for the period during which the Stock
constitutes Restricted Stock (as defined below) pursuant to the terms of
Sections 2 and 3 hereof.
(b) All shares of Stock issued hereunder shall be deemed issued to
Recipient as fully paid and nonassessable shares, and Recipient shall have all
rights of a stockholder with respect thereto, including the right to vote,
receive dividends (including stock dividends), participate in stock splits or
other recapitalizations, and exchange such shares in a
2
merger, consolidation or other reorganization. The term "Stock," in addition to
the shares purchased pursuant to this Agreement, also refers to all securities
received in replacement of the Stock, as a stock dividend or as a result of any
stock split, recapitalization, merger, reorganization, exchange or the like, and
all new, substituted or additional securities or other properties to which
Recipient is entitled by reason of Recipient's ownership of the Stock.
2. Restrictions.
(a) No Stock issued to the Recipient hereunder shall be sold,
transferred by gift, pledged, hypothecated, or otherwise transferred or disposed
of by the Recipient prior to the date when the Recipient shall become vested in
such Stock pursuant to Section 3 or 4 hereof, and such Stock shall constitute
"Restricted Stock" until such date. Any attempt to transfer Stock in violation
of this Section 2 shall be null and void and shall be disregarded by the
Company.
(b) In addition, Restricted Stock shall be subject to a repurchase
option in favor of the Company (the "Repurchase Option"). The Repurchase Option
shall be subject to the following terms and conditions:
(i) Upon termination of Recipient's employment with the Company
or any of its subsidiaries, the Company, for a period of ninety (90) days from
the date of such termination, shall have an irrevocable, exclusive option to
repurchase any or all Restricted Stock from Recipient or any person receiving
the Restricted Stock by operation of law or other involuntary transfer, at the
original Purchase Price Per Share for the Restricted Stock. The Repurchase
Option may be assigned by the Company to any third person or entity.
(ii) The Repurchase Option shall be exercised by written notice
by the Company or its assignee to Recipient or his executor and, at the
Company's or its assignee's option, by delivery to the Recipient or his
executor, with such notice, of (A) a check in the amount of the Purchase Price
Per Share for the Restricted Stock being repurchased, (B) in the event that
Recipient is indebted to the Company or its assignee, by cancellation by the
Company or its assignee of an amount of such indebtedness equal to the Purchase
Price Per Share for the Restricted Stock being repurchased, or (C) by a
combination of (A) and (B) so that the combined payment and cancellation of
indebtedness equals such Purchase Price Per Share. Upon delivery by the Company
or its assignee of such notice and payment of the Purchase Price Per Share, the
Company or its assignee shall become the legal and beneficial owner of the
Restricted Stock being repurchased and all rights and interest therein or
related thereto, and the Company shall have the right to transfer to its or its
assignee's own name the number of shares of Restricted Stock being repurchased
by the Company or its assignee, without further action by Recipient.
(c) For purposes of facilitating the enforcement of the provisions of
this Section 2, Recipient agrees that (i) the stock certificate(s) evidencing
the Stock will be retained by the Company to be held in escrow for so long as
such Stock remains Restricted Stock, (ii) Recipient shall promptly deliver to
the Secretary or Assistant Secretary of the Company, or their designee, (A) an
Assignment Separate from Certificate, in substantially the form of that attached
hereto as Exhibit A, executed in blank by Recipient and Recipient's spouse (if
any) with respect to each stock certificate evidencing the Stock, and (B) if
Recipient is
3
married, a Consent of Spouse in substantially the form of that attached hereto
as Exhibit B, and (iii) the Company shall have the authority to take all such
actions and to effectuate all such transfers and/or releases as may be necessary
or appropriate to accomplish the objectives of this Agreement in accordance with
the terms hereof. Recipient hereby acknowledges that the appointment of the
Secretary or Assistant Secretary of the Company (or their designee) as the
escrow holder hereunder with the stated authorities is a material inducement to
the Company to make this Agreement and that such appointment is coupled with an
interest and is accordingly irrevocable. Recipient agrees that such escrow
holder shall not be liable to any party hereto (or to any other party) for any
actions or omissions unless such escrow holder is grossly negligent relative
thereto. The escrow holder may rely upon any letter, notice or other document
executed by any signature purported to be genuine and may resign at any time.
3. Vesting. For purposes of this Agreement, the term "vest" shall mean
with respect to any share of the Stock that such share is no longer Restricted
Stock subject to the restrictions on transfer set forth in Section 2 and that
such share is released from the Repurchase Option. If Recipient would become
vested in any fraction of a share of Stock on any date, such fractional share
shall not vest and shall remain Restricted Stock until the Recipient becomes
vested in the entire share. The shares of Stock subject to this Agreement shall,
subject to Section 2, vest with respect to one-fourth of the Stock on each
anniversary of Recipient's hire date of February 5, 2001, such that all the
shares of Stock shall vest on the fourth anniversary of such date.
4. Withholding of Taxes. Recipient shall provide the Company with a copy
of any timely election made pursuant to Section 83(b) of the Internal Revenue
Code or similar provision of state law (collectively, an "83(b) Election"), a
form of which election is attached hereto as Exhibit C. If Recipient makes a
timely 83(b) Election, Recipient shall immediately pay the Company the amount
necessary to satisfy any applicable federal, state, and local income and
employment tax withholding requirements. If Recipient does not make a timely
83(b) Election, Recipient shall, either at the time that the restrictions lapse
under this Agreement or at the time withholding is otherwise required by any
applicable law, pay the Company the amount necessary to satisfy any applicable
federal, state, and local income and employment tax withholding requirements.
If, upon written request by the Company, Recipient fails to pay the Company such
amount in a timely manner, the Company shall have the right to deduct such
amount from any sum(s) due Recipient from Company and shall also have the right
to sell a sufficient number of shares of the Stock to satisfy such tax
obligation.
5. Additional Securities. Any securities received as the result of
ownership of Restricted Stock (hereinafter called "Additional Securities"),
including, without limitation, warrants, options and securities received as a
stock dividend or stock split, or as a result of a recapitalization or
reorganization, shall be retained by the Company in the same manner and subject
to the same conditions as the Restricted Stock with respect to which they were
issued. Recipient shall be entitled to direct the Company to exercise any
warrant or option received as Additional Securities upon supplying the funds
necessary to do so, in which event the securities so purchased shall constitute
Additional Securities, but the Recipient may not direct the Company to sell any
such warrant or option. If Additional Securities consist of a convertible
security, Recipient may exercise any conversion right, and any securities so
acquired shall be
4
deemed Additional Securities. Additional Securities shall be subject to the
provisions of Sections 2 and 3 above in the same manner as the Restricted Stock.
6. Legends; Stop Transfer.
(a) All certificates for shares of the Stock shall bear substantially
the following legends:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE
TERMS OF THAT CERTAIN RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN
THE COMPANY AND THE NAMED STOCKHOLDER. THE SHARES REPRESENTED BY
THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH SUCH
AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
(b) The certificates for shares of the Stock shall also bear any
other legends required by applicable state corporate or securities laws.
(c) In addition, the Company shall make a notation regarding the
restrictions on transfer of the Stock in its stockbooks, and shares of the Stock
shall be transferred on the books of the Company only if transferred or sold
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act") covering such shares.
7. NO EFFECT ON TERMS OF EMPLOYMENT. THIS AGREEMENT SHALL NOT CONFER UPON
RECIPIENT ANY RIGHT WITH RESPECT TO CONTINUATION OF RECIPIENT'S EMPLOYMENT WITH
THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH THE RIGHT OF RECIPIENT OR
THE COMPANY TO TERMINATE RECIPIENT'S EMPLOYMENT WITH THE COMPANY AT ANY TIME FOR
ANY REASON WITH OR WITHOUT CAUSE OR CHANGE THE TERMS OF EMPLOYMENT OF RECIPIENT.
8. California Law. This Agreement is to be construed in accordance with
and governed by the internal laws of the State of California as permitted by
Section 1646.5 of the California Civil Code (or any similar successor provision)
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties.
9. Notice. Any notice required to be given under the terms of this
Agreement shall be addressed to the Company in care of its Secretary at the
office of the Company at 000 Xxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000, and any
notice to be given to Recipient shall be addressed to him at the address given
by Recipient beneath his signature to this Agreement, or such other address as
either party to this Agreement may hereafter designate in writing to the other.
Any such notice shall be deemed to have been duly given when enclosed in a
properly sealed envelope or wrapper addressed as aforesaid, registered or
certified and deposited (postage or registration or certification fee prepaid)
in a post office or branch post office regularly maintained by the United
States.
5
10. Successors. This Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Company. Where the context
permits, "Recipient" as used in this Agreement shall include Recipient's
executor, administrator or other legal representative or the person or persons
to whom Recipient's rights pass by will or the applicable laws of descent and
distribution.
11. Severability. If any provisions of this Agreement is determined by any
court or arbitrator of competent jurisdiction to be invalid, illegal or
unenforceable in any respect, such provision will be enforced to the maximum
extent possible given the intent of the parties hereto. If such clause or
provision cannot be so enforced, such provision shall be stricken from this
Agreement and the remainder of this Agreement shall be enforced as if such
invalid, illegal or unenforceable clause or provision had (to the extent not
enforceable) never been contained in this Agreement. Notwithstanding the
foregoing, if the value of this Agreement based upon the substantial benefit of
the bargain for any party is materially impaired, as determined by such party in
its sole discretion, than this Agreement will not be enforceable against such
affected party and both parties agree to renegotiate such provision(s) in good
faith.
12. Amendment and Waiver. This Agreement may be amended only by a written
agreement executed by each of the parties hereto. No amendment of or waiver of,
or modification of any obligation under this Agreement will be enforceable
unless set forth in a writing signed by the party against which enforcement is
sought. Any amendment effected in accordance with this Section 12 will be
binding upon all parties hereto and each of their respective successors and
assigns. No delay or failure to require performance of any provision of this
Agreement shall constitute a waiver of that provision as to that or any other
instance. No waiver granted under this Agreement as to any one provision herein
shall constitute a subsequent waiver of such provision or of any other provision
herein, nor shall it constitute the waiver of any performance other than the
actual performance specifically waived.
13. Entire Agreement. This Agreement and the Exhibits attached hereto
constitute the entire agreement and understanding of the parties with respect to
the subject matter of this Agreement, and supercede all prior understandings and
agreements, whether oral or written, between or among the parties hereto with
respect to the specific subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this Restricted
Stock Purchase Agreement as of the date first above written.
ALTERA CORPORATION, RECIPIENT:
a Delaware corporation
By: /s/ Xxxxxx Xxxxxxxxx /s/ Xxxxxx Xxxxxxx
--------------------------- ------------------------
Xxxxxx Xxxxxxxxx Xxxxxx Xxxxxxx
Senior Vice President & CFO
Address:
-----------------------
-----------------------
6
EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Purchase
Agreement between the undersigned ("Recipient") and Altera Corporation, Inc.
dated as of March 8, 2001 (the "Agreement"), Recipient hereby sells, assigns and
transfers unto _______________ _________________ (_________) shares of Common
Stock of Altera Corporation standing in Recipient's name on the books of said
corporation represented by Certificate No. ____ herewith and does hereby
irrevocably constitute and appoint ______________________________ to transfer
said stock on the books of the within-named corporation with full power of
substitution in the premises. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY
THE AGREEMENT AND THE EXHIBITS THERETO.
Dated: , 20 By:
---------------- --- -------------------------------------
Xxxxxx Xxxxxxx
By:
-------------------------------------
Signature of Spouse, if any
-------------------------------------
Print Name of Spouse, if any
/X/ Check this box if you do not have a
spouse
Instruction: 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 set forth in the Agreement without requiring additional signatures on the
part of Recipient.
7
EXHIBIT B
SPOUSE CONSENT
The undersigned spouse of Xxxxxx Xxxxxxx (the "Purchaser") has read,
understands and hereby approves all the terms and conditions of the Restricted
Stock Purchase Agreement dated as of March 8, 2001 (the "Agreement"), by and
between Purchaser and Altera Corporation, a Delaware corporation (the
"Company"), pursuant to which Purchaser has purchased ten thousand (10,000)
shares of the Company's Common Stock, $0.001 par value per share (the "Shares").
In consideration of the Company granting my spouse the right to purchase
the Shares under the Agreement, I hereby agree to be irrevocably bound by all
the terms and conditions of the Agreement (including but not limited to the
Company's Repurchase Option contained therein) and further agree that any
community property interest I may have in the Shares will be similarly bound by
the Agreement.
I hereby appoint Purchaser as my attorney-in-fact, to act in my name, place
and xxxxx with respect to any amendment of the Agreement and with respect to the
making and filing of an election under Internal Revenue Code Section 83(b) in
connection with the purchase of the Shares.
Dated: March 8, 2001
-------------------------------------
Signature of Spouse, if any
-------------------------------------
Print Name of Spouse, if any
/X/ Check this box if you do not have a
spouse
8
EXHIBIT C
ELECTION UNDER SECTION 83(B) OF THE
INTERNAL REVENUE CODE
The undersigned Taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code, as amended, to include in gross income for the Taxpayer's
current taxable year the excess, if any, of the fair market value of the
property described below at the time of transfer over the amount paid for such
property, as compensation for services.
1. TAXPAYER'S NAME:
--------------------------------
TAXPAYER'S ADDRESS:
--------------------------------
--------------------------------
SOCIAL SECURITY NUMBER:
--------------------------------
2. The property with respect to which the election is made is described as
follows: _____________ shares of Common Stock, $0.001 par value per share,
of Altera Corporation, a Delaware corporation (the "Company"), which is
Taxpayer's employer or the corporation for whom the Taxpayer performs
services.
3. The date on which the shares were transferred was _______________ and this
election is made for calendar year 200_.
4. The shares are subject to the following restrictions: The Company may
repurchase all or a portion of the shares at the Taxpayer's original
purchase price under certain conditions at the time of Taxpayer's
termination of employment or services.
5. The fair market value of the shares (without regard to restrictions other
than restrictions which by their terms will never lapse) was $______ per
share at the time of transfer.
6. The amount paid for such shares was $_____ per share.
7. The Taxpayer has submitted a copy of this statement to the Company.
THIS ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE ("IRS"), AT THE
OFFICE WHERE THE TAXPAYER FILES ANNUAL INCOME TAX RETURNS, WITHIN 30 DAYS AFTER
THE DATE OF TRANSFER OF THE PROPERTY, AND MUST ALSO BE FILED WITH THE TAXPAYER'S
INCOME TAX RETURNS FOR THE CALENDAR YEAR. THE ELECTION CANNOT BE REVOKED WITHOUT
THE CONSENT OF THE IRS.
Dated:
---------------------- -----------------------------------------------
Taxpayer's Signature
