Sales Plan
Exhibit 10.1
Sales Plan, dated
as of May 31, 2002 (the “Sales Plan”), between Xxxxxxx Xxx (“Seller”) and Xxxxxxx, Sachs & Co. (“Broker”).
WHEREAS, the Seller desires to establish the Sales Plan to sell shares of common stock, par value $0.0001 per share (the “Stock”), of Legato Systems, Inc. (the “Issuer”) in
accordance with the requirements of Rule 10b5-1 as further set forth herein;
NOW, THEREFORE, the Seller and
Broker hereby agree as follows:
1. Broker shall effect one or more sales (each a “Sale”) of shares of
Stock (the “Shares”) as further set forth in the attached Annex A to the Sales Plan.
2. This Sales Plan
shall become effective as of the date hereof and shall terminate on the earlier of (i) June 13, 2003, (ii) the date all Shares have been sold in accordance with this Plan or (iii) the death of the Seller.
3. Seller understands that Broker may effect Sales hereunder jointly with orders for other sellers of Stock of the Issuer and that the
average price for executions resulting from bunched orders will be assigned to Seller’s account. All orders will be deemed day orders only and not held unless otherwise specified in Annex A.
4. Seller represents and warrants that, as of the date first set forth above, Seller is not aware of material, nonpublic information with respect to the Issuer or any
securities of the Issuer (including the Stock) and is entering into this Sales Plan in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1.
5. It is the intent of the parties that this Sales Plan comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act and this Sales Plan shall be interpreted to
comply with the requirements of Rule 10b5-1(c).
6. Seller represents that the Shares were acquired in a
transaction to which Rule 145 under the Securities Act of 1933, as amended, applies. The Sales of the Shares pursuant to the Sales Plan shall be effected pursuant to Rule 145(d)(1), provided that Broker may assume that Sales effected hereunder are
the only sales for Seller’s account which must be aggregated for purposes of compliance with Rule 144(e), and Seller shall not take, and shall not cause any person or entity with which he or she would be required to aggregate sales of Stock
pursuant to paragraph (a)(2) or (e) of Rule 144 to take, any action that would cause the Sales not to comply with Rule 145 and Rule 144(e).
7. Seller represents and warrants that Seller is currently permitted to sell Stock in accordance with the Issuer’s xxxxxxx xxxxxxx policies and has obtained the approval of the Issuer to enter into this
Sales Plan and that, other than any Rule 145 requirements set forth herein, there are no contractual, regulatory, or other restrictions applicable to the Sales contemplated under this Sales Plan that would interfere with Broker’s ability to
execute Sales and effect delivery and settlement of such Sales on behalf of Seller, other than restrictions with respect to which the Seller has
obtained all required consents, approvals and waivers. Seller shall notify Broker immediately in the event that any of the above statements become inaccurate prior to the termination of this Sales Plan.
8. Seller shall make all filings, if any, required under Sections 13(d) and 16 of the Exchange Act.
9. Seller understands that Broker may not be able to effect a Sale due to a market disruption or a legal, regulatory or contractual
restriction applicable to the Broker or any other event or circumstance (a “Blackout”). Seller also understands that even in the absence of a Blackout, Broker may be unable to effect Sales consistent with ordinary principles of best
execution due to insufficient volume of trading, failure of the Stock to reach and sustain a limit order price, or other market factors in effect on the date of a Sale set forth in Annex A (“Unfilled Sales”).
Broker agrees that if Issuer enters into a transaction that results, in Issuer’s good faith determination, in the imposition of trading restrictions on the
Seller and on all directors and senior executive officers of the Issuer, such as a stock offering requiring a lock-up of all such persons (“Issuer Restriction”), and if Issuer and Seller shall provide Broker at least three (3) days’
prior written notice signed by Issuer and Seller and confirmed by telephone of such trading restrictions (Attn: Restricted Stock Desk, c/o Control Room; Fax No. (000) 000-0000; Tel: (000) 000-0000), then Broker will cease effecting Sales under this
Plan until notified in writing by Issuer and Seller that such restrictions have terminated. Broker shall resume effecting Sales in accordance with this Plan as soon as practicable after the cessation or termination of a Blackout or Issuer
Restriction. Any Unfilled Sales, and any Sales that would have been executed in accordance with the terms of Annex A but are not executed due to the existence of a Blackout or Issuer Restriction, shall be deemed to be cancelled and shall not be
effected pursuant to this Sales Plan.
10. This Sales Plan shall be governed by and construed in accordance with
the laws of the State of Delaware and may be modified or amended only by a writing signed by the parties hereto (and, if required by Broker, upon the acknowledgement in writing by the Issuer if at such xxxx Xxxxxx is a person covered by section
16(a) of the Securities Exchange Act of 1934, as amended, with respect to the Issuer or is otherwise then subject to the Issuer’s xxxxxxx xxxxxxx policies) or terminated upon delivery by Seller of written notice to Broker of such termination in
the form attached hereto as Annex B, and provided that any such modification, termination or amendment shall only be permitted at a time when the Seller is otherwise permitted to effect sales under the Issuer’s trading policies and at a time
when the Seller is not aware of material nonpublic information concerning the Issuer or its securities. In the event of a modification or amendment to this Sales Plan, or in the event Seller establishes a new plan after termination of the Sales
Plan, no sales shall be effected during the thirty days immediately following such modification, amendment or termination (other than Sales already provided for in the Sales Plan prior to modification, amendment or termination).
2
11. Broker shall have the right to require, as a condition to Broker’s
consent to any modification, termination or amendment under paragraph 10, that Seller shall (i) exculpate Broker from any action taken or omitted to be taken by Broker and (ii) indemnify Broker against any losses, damages, liabilities or expenses
incurred by Broker, in each case for actions or losses in connection with or arising out of this Sales Plan and any amended or subsequent sales plan.
12. This Sales Plan may be executed in one or more counterparts (whether delivered by facsimile or otherwise), all of which shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
3
IN WITNESS WHEREOF, the undersigned have signed this Sales Plan as of the date
first written above.
| Xxxxxxx, Sachs & Co. | ||||
| /s/ Xxxxxxx X. Xxx |
By: |
/s/ Xxxxxxx Xxxxx | ||
| Xxxxxxx X. Xxx |
Name: Title: |
Xxxxxxx Xxxxx Managing Director | ||
Annex A
Xxxxxxx X. Xxx
Xxxxxx Systems, Inc.
Broker shall sell up to a maximum of 3,000,000 Shares under this Sales Plan pursuant to the following limit orders:
| Date |
Shares to be sold* |
$ Limit** |
Cost Basis |
Purchase Date |
Nature of Acquisition | |||||
| Each Trading Day commencing June 17, 2002 through and including
June 13, 2003 |
[***] |
[***] |
||||||||
| Each Trading Day commencing June 17, 2002 through and including June 13,
2003 |
[***] |
[***] |
||||||||
| Each Trading Day commencing July 18, 2002 through and including June 13,
2003 |
[***] |
[***] |
||||||||
* |
Share amounts and limit prices listed shall be increased or decreased to reflect stock splits, stock dividends, recapitalizations and the like, should they
occur |
** |
Any Sale executed at a time when more than one limit order is in effect shall be allocated to the highest such limit order. |
Commissions:
If the average
per share price of Broker’s daily executions hereunder is less than $8.00, then Seller shall pay a per share commission of $0.06. If the average per share price of Broker’s daily executions hereunder is $8.00 or greater, then Seller shall
pay a per share commission of $0.08. Such commissions comply with the requirements of Rule 144(g)(1).
[SIGNATURE PAGE
FOLLOWS]
[***] |
Means that certain confidential information has been deleted from this document and filed separately with the Securities and Exchange Commission.
|
IN WITNESS WHEREOF, the undersigned have signed this Annex A to the Sales Plan of
Xxxxxxx X. Xxx as of the date of such Sales Plan.
| Xxxxxxx, Xxxxx & Co. | ||||
| /s/ Xxxxxxx X. Xxx |
By: |
/s/ Xxxxxxx Xxxxx | ||
| Xxxxxxx X. Xxx |
Name: Title: |
Xxxxxxx Xxxxx Managing Director | ||
ANNEX B
FORM OF TERMINATION NOTICE
Termination Notice, dated as of ___________, 2002, of the Sales Plan, dated __________, _____ (the “Sales Plan”), between ____________ (“Seller”) and Xxxxxxx, Sachs & Co. (“Broker”).
WHEREAS, Seller and Broker have previously entered into the Sales Plan;
WHEREAS, Seller desires to terminate the Sales Plan in accordance with the terms thereof as hereinafter provided; and
WHEREAS, all capitalized and undefined terms have the meanings assigned to them in the Sales Plan;
NOW THEREFORE, the Seller hereby notifies Broker as follows:
1. Any Sales set forth under Annex A to the Sales Plan that have not been executed shall be cancelled as promptly as practicable but in no event
later than three days following the date of delivery of this Termination Notice to Broker in accordance with the notice provisions set forth under paragraph 9 of the Sales Plan. The last day on which Sales are executed shall be the “Termination
Date”.
2. Seller represents and warrants that Seller is not aware of material,
nonpublic information with respect to the Issuer or any securities of the Issuer (including the Stock) and is providing this Termination Notice in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1.
3. Seller agrees that Broker shall not have any liability whatsoever to the Seller for any action
previously or hereafter taken or omitted to be taken in connection with the Sales Plan or this Termination Notice or the making of any Sale thereunder, or for any sales of any securities of the Issuer that may be effected by Seller following the
Termination Date, unless such liability is determined in a non-appealable order of a court
of competent jurisdiction to be solely the result of Broker’s bad faith or gross negligence. Seller
further agrees to hold Broker free and harmless from any and all losses, damages, liabilities or expenses (including reasonable attorneys’ fees and costs) incurred or sustained by Broker in connection with or arising out of any suit, action or
proceeding relating to the Sales Plan or this Termination Notice or any other sales of shares of any securities of the Issuer that may be effected by Seller following the Termination Date (each an “Action”) and to reimburse Broker for its
expenses, as they are incurred, in connection with any Action, unless such loss, damage, liability or expense is determined in a non-appealable order of a court of competent jurisdiction to be solely the result of Broker’s bad faith or gross
negligence.
4. This Termination shall be governed by and construed in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the undersigned have signed this Termination Notice as of the
date first written above.
__________________________________
[Name of Seller] :
________________________________________
(Xxxxxxx, Xxxxx & Co.)
