Exhibit 10.3
LOG POINT TECHNOLOGIES, INC.
RESTRICTED STOCK PURCHASE AGREEMENT
This Agreement is made as of the_____day of ________ 19 , between LOG POINT
TECHNOLOGIES, INC., a California corporation (the "Company"), and (the
"Purchaser").
RECITALS
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1. The Purchaser is an employee, officer or director of the Company, and
the Purchaser's continued participation is considered by the Company to be
important for the Company's growth.
2. In order to give the Purchaser an opportunity to acquire an equity
interest in the Company as an incentive for the Purchaser to provide services to
the Company, the Company is willing to sell to the Purchaser and the Purchaser
desires to purchase shares of the Company's Common Stock according to the terms
and conditions hereof.
NOW, THEREFORE, in consideration of the following covenants and
representations:
1. Purchase and Sale of Stock.
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(a) The Company hereby sells to the Purchaser and the Purchaser hereby
purchases from the Company, ___________ shares of the Company's Common Stock
(the "Shares") at a price of $0.00 125 per share, for an aggregate purchase
price of $__________. The Company will promptly, after delivery of this
Agreement, issue a certificate representing the Shares registered in the name of
the Purchaser to the Escrow Agent referred to in Section 7, below.
(b) The purchase price for the Shares shall be paid at the time of delivery
of this Agreement in cash, by check made payable to the Company, or by some
combination thereof or other method acceptable to the Company.
2. Repurchase Option.
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(a) All of the Shares shall be subject to the right of the Company to
repurchase the Shares ("Repurchase Option") as set forth in this Section 2. In
the event the Purchaser shall cease to be employed by the Company, including a
parent or subsidiary of the Company, for any reason, with or without cause,
including involuntary termination, death, or temporary or permanent disability
(a "Termination"), the Repurchase Option shall come into effect. Following a
Termination, the Company shall have the right, as provided in subsection (c) of
this Section 2, to repurchase from the Purchaser or his successor, as the case
may be, at the purchase price per share originally paid as set forth in Section
1 ("Option Price"), that fraction of the Shares, the numerator of which shall be
a number equal to 48 minus the total number of full calendar months elapsed from
__________,19 (the "Commencement Date"), and the denominator of which shall be
48.
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(b) The consolidation or merger of the Company with another corporation or
the sale by this Company of all or substantially all of its assets shall have no
effect upon the right or ability of the Company or such successor corporation to
exercise any rights provided in this Agreement.
(c) Within 90 days following a Termination, the Company may exercise the
Repurchase Option by written notice delivered or mailed as provided in Section
14 (with a copy to the Escrow Agent referred to in Section 7). At the Company's
option, the Option Price for the Shares repurchased may be paid (i) by delivery
with such notice of a check to the Purchaser or his executor in the amount of
the purchase price for the Shares being repurchased, or (ii) by cancellation by
the Company of an amount of the Purchaser's indebtedness to the Company equal to
the purchase price for the Shares being repurchased, or (iii) by a combination
of (i) and (ii) so that the combined payment and cancellation of indebtedness
equals such repurchase price. Upon delivery of such notice and payment of the
repurchase price, the Shares being repurchased and all rights and interests
therein shall be canceled, and the Purchaser shall no longer be considered the
owner of the Shares repurchased for record or any other purposes.
3. Stock Splits, etc.
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If, from time to time during the term of this Agreement:
(a) there is any stock dividend or liquidating' dividend of cash and/or
property, stock split, or other change in the character or amount of any of the
outstanding securities of the Company; or
(b) there is any liquidation or consolidation or merger of the Company with
another corporation;
then, in such event, any and all new, substituted or additional securities,
or other property to which the Purchaser is entitled by reason of his ownership
of Shares shall be immediately subject to this Agreement and be included in the
word "Shares" for all purposes with the same force and effect as the Shares
presently subject to the Repurchase Option, right of first refusal, and other
terms of this Agreement. While the aggregate Option Price shall remain the same
after each such event, the Option Price per Share upon execution of the
Repurchase Option shall be appropriately adjusted. In the event of any cash
dividend or liquidating distribution made with respect to the Shares, the
Company may apply the amount thereof against any indebtedness owed by Purchaser
to the Company.
4. Restriction on Transfer.
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The Purchaser shall not sell, transfer, pledge, or otherwise dispose of any
Shares which remain subject to the Repurchase Option other than a pledge in
connection with indebtedness owed to the Company.
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5. Legends.
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All certificates representing any of the Shares shall have endorsed thereon
legends in substantially the following form:
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN OPTION
SET FORTH N AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS
PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF
THE COMPANY."
(b) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED."
(c) Any legend required to be placed thereon by the California Commissioner
of Corporations, or required by the applicable blue sky laws of any state.
6. Purchaser's Representations.
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In connection with his purchase of the Shares, the Purchaser hereby
represents and warrants to the Company as follows:
(a) Investment Intent; Capacity to Protect Interests. The Purchaser is
purchasing the Shares solely for investment and not with any present intention
of selling or otherwise disposing of the Shares or any portion thereof in any
transaction other than a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Act"). The Purchaser also represents
that the entire legal and beneficial interest of the Shares is being purchased,
and will be held, for the Purchaser's account only, and neither in whole nor in
part for any other person except to the extent held jointly with Purchaser's
spouse.
(b) Residence. The Purchaser's principal residence is located at the
address indicated beneath the Purchaser's signature below.
(c) Information Concerning Company. The Purchaser has had the opportunity
to discuss the plans, operations, and financial condition of the Company with
its officers and has received all information the Purchaser has deemed
appropriate to enable the Purchaser to evaluate the financial risk inherent in
investing in the Shares. Purchaser either has a preexisting business or personal
relationship with the Company or any of its officers, directors, or controlling
persons or by reason of Purchaser's business or financial experience or the
business or financial experience of Purchaser's professional advisors who are
unaffiliated with and who are not compensated by the Company, directly or
indirectly, could be reasonably assumed to have the capacity to evaluate the
merits and risks of an investment in the Company and to protect purchaser's own
interests in connection with this transaction.
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(d) Economic Risk. The Purchaser realizes that the purchase of the Shares
involves a high degree of risk, and the Purchaser is able, without impairing his
financial condition, to hold the Shares for an indefinite period of time and to
suffer a complete loss of its value.
(e) Restricted Securities. The Purchaser acknowledges that the sale of the
Shares has not been registered under the Act. The Shares must be held
indefinitely unless subsequently registered under the Act or an exemption from
such registration is available, and the Company is under no obligation to
register the Shares.
(f) Disposition under Rule 144. The Purchaser understands:
(i) that the Shares are restricted securities within the meaning of
Rule 144 promulgated under the Act which limits the sale of the Shares in a
Public market transaction;
(ii) that (unless Rule 701 promulgated under the Act is available) the
exemption from registration under Rule 144 will not be available, in any event,
for at least two years from the date of purchase of and actual payment for the
Shares, and even then will not be available unless (A) a public trading market
then exists for the Common Stock of the Company, (B) adequate information
concerning the Company is then available to the public, and (C) other terms and
conditions of Rule 144 are complied with;
(iii) that certain sales of the Shares may be made only in limited
amounts in accordance with such terms and conditions;
(iv) that the resale provisions of Rule 701, if available, will not
apply until 90 days after the Company becomes subject to the reporting
obligations under the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); and
(v) that there can be no assurance that the requirements of Rule 144
or Rule 701 will be met, or that the stock will ever be salable.
(g) Further Limitations on Disposition. Without in any way limiting his
representations set forth above, the Purchaser further agrees that he shall in
no event make any disposition of any portion of the Shares unless and until:
(i) (A) there is in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with said registration statement; (B) the resale provisions of Rule 701 or Rule
144 are available in the opinion of counsel to the Company; or (C)(1) the
Purchaser shall have notified the Company of the proposed disposition and shall
have furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition, (2) the Purchaser shall have furnished the
Company with an opinion of the Purchaser's counsel to the effect that such
disposition will not require registration of such shares under the Act, and (3)
such opinion of the Purchaser's counsel shall have been concurred in by counsel
for the Company and the Company shall have advised the Purchaser of such
concurrence; and
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(ii) the Shares proposed to be transferred are no longer subject to
the Repurchase Option.
(h) Valuation of Shares. The Purchaser understands that the Shares have
been valued by the board of directors for the purpose of this sale, and that the
Company believes this valuation represents a fair attempt at reaching an
accurate appraisal of its worth. The Purchaser also understands, however, that
the Company can give no assurances that such price is in fact the fair market
value of the Shares and that it is possible that the Internal Revenue Service
would successfully assert that the value of the Shares on the date of purchase
is substantially greater than so determined.
If the Internal Revenue Service were to succeed in a determination that the
Shares had value greater than the purchase price, the additional value would
constitute ordinary income as of the date of its receipt. The additional taxes
(and interest) due would be payable by the Purchaser, and there is no provision
for the Company to reimburse him for that tax liability. The Purchaser assumes
all responsibility for such potential tax liability.
(i) Section 83(b) Election. The Purchaser understands that Section 83 of
the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary
income the difference between the amount paid for the Shares and the fair market
value of the Shares as of the date any restrictions on the Shares lapse. In this
context, "restriction" means the right of the Company to buy back the shares
pursuant to the Repurchase Option. In the event the Company has registered under
the Securities Exchange Act of 1934 (the "Exchange Act"), "restriction" with
respect to officers, directors, and 10% shareholders also means the six-month
period after the purchase of the Shares during which sales of certain securities
by such officers, directors, and 10% shareholders would give rise to liability
under Section 16(b) of the Exchange Act. The Purchaser understands that he may
elect to be taxed at the time the Shares are purchased rather than when and as
the Repurchase Option or six-month Section 16(b) period expires, by filing an
election under Section 83(b) of the Code with the Internal Revenue Service
within 30 days from the date of purchase. Even if the fair market value of the
Shares equals the amount paid for the Shares, the election must be made to avoid
adverse tax consequences in the future. The Purchaser understands that failure
to make this filing in a timely manner will result in the recognition of
ordinary income by the Purchaser, as the Repurchase Option lapses, or after the
lapse of the six-month Section 16(b) period, on any difference between the
purchase price and the fair market value of the Shares at the time such
restrictions lapse.
THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY
AND NOT THE COMPANY'S TO TIMELY FILE THE ELECTION UNDER SECTION 83(B), EVEN IF
THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON
THE PURCHASER'S BEHALF.
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7. Escrow
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As security for the faithful performance of the terms of this Agreement and
to insure the availability for delivery of Purchaser's Shares upon exercise of
the Repurchase Option, the Purchaser hereby pledges and delivers for deposit
with the [Chief Financial Officer] of the Company, or such other person
designated by the Company, as escrow agent in this transaction ("Escrow Agent"),
two stock assignments duly endorsed (with date and number of shares blank)
together with the certificate or certificates evidencing the Shares. Such
documents are to be held by the Escrow Agent and delivered by the Escrow Agent
pursuant to the following instructions of the Company and the Purchaser:
(a) In the event the Company and/or any assignee of the Company
exercises the Repurchase Option, Purchaser and the Company hereby irrevocably
authorize and direct the Escrow Agent to execute the transaction contemplated by
notice of repurchase in accordance with the terms of such notice.
(b) In connection with such transaction the Escrow Agent is directed
(i) to date the stock assignment necessary for the transfer in question, (ii) to
fill in the number of shares being transferred, and (iii) to deliver such
assignment, together with the certificate evidencing the Shares to be
transferred, to the Company against the delivery of the purchase price for the
number of shares of stock being purchased pursuant to the exercise of the
Repurchase Option.
(c) Purchaser irrevocably authorizes the Company to deposit with the
Escrow Agent any certificates evidencing the Shares to be held by the Escrow
Agent hereunder and any additions and substitutions to said shares as defined
herein. Purchaser irrevocably constitutes and appoints the Escrow Agent as his
attorney-in-fact and agent for the term of this escrow to execute all documents
appropriate to make such securities negotiable and to complete any transaction
herein contemplated.
(d) Upon written request of the Purchaser, but no more than once per
calendar year, unless the Repurchase Option has been exercised, the Escrow Agent
will deliver to Purchaser a certificate or certificates representing so many of
the Shares as are not then subject to the Repurchase Option. Within 180 days
after cessation of Purchaser's continuous employment by the Company, or any
parent or subsidiary of the Company, the Escrow Agent will deliver to Purchaser
a certificate or certificates representing the aggregate number of Shares sold
pursuant to this Agreement and not repurchased by the Company or its assignees
pursuant to exercise of the Repurchase Option.
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(e) If at the time of termination of this escrow the Escrow Agent has
in his possession any documents, securities, or other property belonging to
Purchaser, the Escrow Agent shall deliver such property to Purchaser and be
discharged of all further obligations hereunder.
(f) The responsibilities of the Escrow Agent hereunder shall terminate
if he shall cease to be Chief Financial Officer of the Company or if he shall
resign by written notice to each party. In the event of any such termination or
resignation, the Company shall appoint a successor Escrow Agent. In the absence
of such appointment, the President of the Company shall be the Escrow Agent.
(g) It is understood and agreed that should any dispute arise with
respect to the delivery, ownership, or right of possession of the Shares held by
the Escrow Agent hereunder, the Escrow Agent is authorized to retain without
liability to anyone all or any part of said Shares until such disputes shall
have been settled either by mutual written agreement or by a final order,
decree, or judgment of the arbitrator, if applicable, or of a court of competent
jurisdiction after the time for appeal has expired and no appeal has been
perfected, but the Escrow Agent shall be under no duty whatsoever to institute
or defend such proceedings.
(h) By signing this Agreement, the Escrow Agent becomes a party hereto
only for the purpose of executing the instructions set forth in this Section 7
and does not otherwise become a party to this Agreement.
8. Limitation on Sale of Shares.
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In the event that the Company should propose to offer its securities
to the general public in an initial public offering, the Purchaser agrees, at
the option of the managing underwriters of such offering, not to sell any
securities of the Company, other than securities registered in such offering,
for a period specified by the Company not to exceed 180 days from the effective
date of the registration statement filed with the Securities and Exchange
Commission, pursuant to which such offering is to be made. The Purchaser further
agrees, upon the request of such managing underwriter or underwriters, to
execute and deliver such further agreements and instruments, consistent
herewith, as it or they may reasonably request to effect this limitation.
9. Arbitration.
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At the option of either party, any and all disputes or controversies,
whether of law or fact, and of any nature whatsoever arising from or respecting
this Agreement, unless otherwise expressly provided herein, shall be decided by
arbitration by the American Arbitration Association in accordance with the rules
and regulations of that Association.
(a) The arbitrators shall be selected as follows: In the event the Company
and Purchaser agree on one arbitrator, the arbitration shall be conducted by
such arbitrator. In the event the Company and Purchaser do not so agree, the
Company and Purchaser shall each select one independent, qualified arbitrator
and these two arbitrators shall select a third arbitrator. The
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Company reserves the right to reject any individual arbitrator who shall be
employed by or affiliated with a competing organization.
(b) Arbitration shall take place at Palo Alto, California, or any other
location mutually agreeable to the parties. At the request of either party,
arbitration proceedings will be conducted in secrecy. In such case all
documents, testimony, and records shall be received, heard, and maintained by
the arbitrators in secrecy under seal, available for inspection only by the
Company and the Purchaser and their respective attorneys and their respective
experts who shall agree in advance and in writing to receive all such
information confidentially and to maintain such information in secrecy until
such information shall become generally known,. The arbitrator, who shall act by
majority vote, shall be able to decree any and all relief of an equitable
nature, including but not limited to such relief as a temporary restraining
order, a temporary or a permanent injunction, or both, and shall also be able to
award damages, with or without an accounting, costs, and reasonable attorneys'
fees. The decree or judgment of an award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.
(c) Reasonable notice of the time and place of arbitration shall be given
to all persons, other than the parties, as shall be required by law, in which
case such persons or their authorized representatives shall have the right to
attend and participate in all the arbitration hearings to the extent and in such
manner as the law shall require.
10. Governing Law.
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This Agreement shall be governed by and construed under the laws of the
State of California as applied to agreements among California residents entered
into and to be performed entirely within California.
The prevailing party in any legal action, including an arbitration
proceeding, arising out of this Agreement shall be entitled, in addition to any
other rights and remedies such party may have, to reimbursement for its
expenses, including costs and reasonable attorneys' fees.
12. Rights as Shareholders.
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Subject to the provisions and lifflitations hereof, Purchaser may, during
the term of this Agreement, exercise all rights and privileges of a shareholder
of the Company with respect to the Shares.
13. Additional Actions.
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The parties will execute such further instruments and take such further
action as may reasonably be necessary to carry out the intent of this Agreement.
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14. Notices.
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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 regular or certified mail with postage and fees
prepaid, addressed, if to Purchaser, at his address shown on the Company's
records and, if to the Company, at the address of its principal corporate
offices (attention: President) or at such other address as such party may
designate by ten days' advance written notice to the other party.
15. Assignment.
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The Company may assign its rights and delegate its duties under this
Agreement. If any such assignment or delegation requires consent of the
California Commissioner of Corporations, the parties agree to cooperate in
requesting such consent. This Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer herein set forth, be binding upon Purchaser, his heirs, executors,
administrators, successors, and assigns.
16. Employment at Will.
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The parties acknowledge that any employment relationship between the
Company and Purchaser is at the will of either party, unless otherwise agreed in
writing, and that nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Purchaser or the Company, or a parent or
subsidiary of the Company, to terminate such employment relationship, for any
reason, with or without cause. This Agreement does not constitute an express or
implied promise of continued employment for the vesting period or any other
period.
THE VESTING OF SHARES PURSUANT TO THIS AGREEMENT IS EARNED BY CONTINUED
EMPLOYMENT, AND THE COMPANY'S RIGHT TO REPURCHASE UNVESTED SHARES UPON
TERMINATION IS ABSOLUTE, WHETHER THE TERMINATION IS VOLUNTARY OR INVOLUNTARY, OR
WITH OR WITHOUT CAUSE.
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IN WITNESS WHEREOF, the parties hereof have executed this Agreement as of
day and year first above written.
PURCHASER LOG POINT TECHNOLOGIES, INC.
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(Signature) Xxxxxx Xxxxxx, President
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(Print Name)
Address:
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ESCROW AGENT
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(Signature)
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(Print Name)
Firm Name:
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Title:
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CONSENT OF SPOUSE
The undersigned spouse of Purchaser has read and hereby approves the
foregoing Agreement. In consideration of the Company granting my spouse the
right to purchase the Shares as set forth in the Agreement, the undersigned
hereby agrees to be irrevocably bound by the Agreement and further agrees that
any community property interest shall be similarly bound by the Agreement. I
hereby irrevocably appoint my spouse as my attorney-in-fact with respect to any
amendment or exercise of any rights under the Agreement.
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Spouse of Purchaser
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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 his gross income for
the current taxable year, the amount of any compensation taxable to him in
connection with his receipt of the property described below:
1. The name, address, taxpayer identification number, and taxable year of the
undersigned and his or her spouse, if applicable, are as follows:
TAXPAYER SPOUSE
NAME
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ADDRESS
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IDENTIFICATION
NUMBER
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TAXABLE YEAR: 199_______
2. The property with respect to which the election is made is described as
follows: __________ shares of Common Stock of LOG POINT Technologies, Inc.,
a California corporation (the "Company").
3. The date on which the property was transferred is:
_______________________________
4. The property is subject to the following restrictions: The right of the
Company to repurchase the shares, or a portion thereof, at the original
purchase price of the shares.
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: $_______ (0.00125 per share).
6. The amount (if any) paid for such property: $_______ (0.00 125 per share).
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: _______________, 19 ____________________________________
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated: _______________, 19 ____________________________________
Spouse of Taxpayer
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