Exhibit 2.3
EXHIBIT K
RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement (this "Agreement") is made and entered
into as of _________, 2000, by and between Mitel Corporation, a Canadian
corporation (the "M Corp."), and _____________("Holder"). Terms not otherwise
defined herein shall have the meaning set forth in the Merger Agreement (as
defined herein).
RECITALS
A. This Agreement is entered into in connection with and is ancillary to
an Agreement and Plan of Reorganization and Merger, dated as of June 6, 2000 by
and among M Corp., U.S. Acquisition Corp., a California corporation and
wholly-owned subsidiary of M Corp. ("Acquisition Corp."), and Vertex Networks,
Incorporated (the "Merger Agreement"), pursuant to which Acquisition Corp. is to
merge with and into V Inc. (the "Merger"), V Inc. will continue as the surviving
corporation in the Merger, and the shares of V Inc. capital stock outstanding
immediately prior to the effective time of the merger will be converted into
shares of M Corp. Common Stock. The Effective Time (as defined in the Merger
Agreement) shall be the effective date of this Agreement (the "Effective Date").
B. At the Effective Time of the Merger, Holder will receive_______ shares
of Purchaser Common Stock (the "Shares").
C. M Corp. intends to continue the business of V Inc. after the Merger and
to integrate such business into M Corp.'s ongoing business as one of the
wholly-owned subsidiary of M Corp.
X. Xxxxxx has been actively involved in the development of V Inc.'s
products and services and Holder's continued participation with V Inc. and M
Corp. following the Merger is necessary to preserve and protect the assets of V
Inc., including the goodwill, customers and trade secrets, of which Holder has
knowledge as a result of his role with V Inc.
E. As a material inducement to cause M corp. to enter into the Merger
Agreement and consummate the Merger, and in consideration of the amounts
allocated to Holder under the Retention Pool (as defined in the Employment
Agreement) and M Corp.'s entering into and performing under the Employment
Agreement with Holder dated as of June 6, 2000 herewith (the "Employment
Agreement"), Holder has agreed to enter into this Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Restricted Shares. At the Effective Time and upon receipt of the
Shares, Holder grants to M Corp the right to repurchase up to ________of the
Shares (the "Restricted Shares") that were received by Holder in connection with
the Merger that
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have not vested in accordance with the following vesting schedule, on the other
terms and conditions described in this Agreement.
(a) 50% of the Restricted Shares shall vest on the first anniversary
of the Effective Date; and
(b) the remaining 50% of the Restricted Shares shall vest in equal
monthly installments thereafter until the second anniversary of the Effective
Date (the "Vesting Expiration Date"), at which time all such Restricted Shares
shall vest; provided, however, that prior to the Vesting Expiration Date, no
Restricted Shares shall vest from and after the termination of Holder's
"Continuous Service" (as defined below) (i) for Cause (as such term is defined
in the Employment Agreement), or (ii) pursuant to a voluntary resignation
without Good Reason (as such term is defined in the Employment Agreement).
Restricted Shares which so vest are sometimes referred to herein as
"Vested Shares," and all Restricted Shares which are not Vested Shares are
sometimes referred to as "Nonvested Shares."
As used herein, the term "Continuous Service" shall mean employment by
either M Corp. or any parent or subsidiary corporation of M Corp., which is
uninterrupted except for vacations, illness or leaves of absence as provided by
this Agreement and the Employment Agreement.
All of Holder's Nonvested Shares shall vest and become Vested Shares (i)
at such time as Holder's Continuous Service is terminated for any reason (other
than (A) for Cause or (B) voluntary resignation without Good Reason), (ii) upon
the death or permanent disability (as such terms are defined in the Employment
Agreement) of Holder or (iii) in the event of a Change in Control of M Corp. As
used herein, Change in Control shall mean (a) the acquisition, directly or
indirectly, by any person or group (within the meaning of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended) of the beneficial ownership of
securities of M Corp. possessing more than fifty percent (50%) of the total
combined voting power of all outstanding securities of M Corp; (b) a merger or
consolidation in which the M Corp. is not the surviving entity, except for a
transaction the principal purpose of which is to change the jurisdiction in
which M Corp. is incorporated; (c) the sale, transfer or other disposition of
all or substantially all of the assets of M Corp.; (d) a complete liquidation or
dissolution of M Corp.; or (e) any reverse merger in which M Corp. is the
surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of M Corp.'s outstanding securities are
transferred to or acquired by a person or persons different from the persons
holding those securities immediately prior to such merger.
2. Repurchase of Nonvested Shares; Purchase Price.
(a) At such time as the Continuous Service of Holder ceases due to a
termination for Cause or a voluntary resignation without Good Reason
(hereinafter an
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"Event of Resale") then, in such event, the Nonvested Shares shall be
repurchased by M Corp. at the purchase price set forth below.
(b) The purchase price for the Nonvested Shares shall be $___ per
share [price paid by Employee for Vertex shares divided by the Exchange Ratio].
The purchase price shall be paid in one lump sum within a reasonable time
following the receipt by M Corp. of Holder's written request for such payment.
3. Escrow. As security for the faithful performance of the terms of this
Agreement and to insure the availability for delivery of Nonvested Shares upon
the Event of Resale, Holder hereby pledges and delivers for deposit with the
Secretary of M Corp., or such other person designated by M Corp., as escrow
agent in this transaction ("Escrow Agent"), two stock assignments duly endorsed
(with date and number of shares blank) together with the 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 M Corp. and Holder:
(a) Upon the occurrence of the Event of Resale, Holder and M Corp.
hereby irrevocably authorize and direct the Escrow Agent to consummate the
repurchase of the Nonvested Shares in accordance with this Agreement.
(b) In connection with the Event of Resale, 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 M Corp. against the delivery of the purchase price for the
number of Nonvested Shares being purchased pursuant to the Event of Resale.
(c) Holder irrevocably authorizes M Corp. to deposit with the Escrow
Agent any certificates evidencing the Restricted Shares to be held by the Escrow
Agent hereunder and any additions and substitutions to said shares as defined
herein. Holder irrevocably constitutes and appoints the Escrow Agent as Holder's
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 the Vesting Expiration Date or promptly following the
written request of Holder (but in no event later than five business days
following receipt of such request), the Escrow Agent will deliver to Holder (or
the assignee or the estate of Holder, as the case may be) a certificate or
certificates representing the Vested Shares.
(e) If at the time of termination of this escrow, the Escrow Agent
has in the Escrow Agent's possession any documents, securities, or other
property belonging to Holder, the Escrow Agent shall deliver such property to
Holder and be discharged of all further obligations hereunder.
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4. Stock Splits, etc. 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 M Corp.; or
(b) there is any liquidation or consolidation; then, in such event,
any and all new, substituted or additional securities, or other property to
which the Holder is entitled by reason of her ownership of the Nonvested Shares
shall be immediately subject to this Agreement and be included in the word
"Nonvested Shares" for all purposes with the same force and effect as the
Nonvested Shares presently subject to the Event of Resale, and other terms of
this Agreement, and the purchase price shall be appropriately adjusted.
5. Restriction on Transfer. Holder shall not sell, transfer, pledge, or
otherwise dispose of any Nonvested Shares other than a pledge in connection with
indebtedness owed to M Corp.
6. Legends. All certificates representing any of the Nonvested Shares
shall have endorsed thereon legends in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER, INCLUDING A RIGHT OF REPURCHASE HELD BY M CORP.
THEREON, SET FORTH IN AN AGREEMENT BETWEEN M CORP. AND THE REGISTERED HOLDER, OR
THE REGISTERED HOLDER'S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT
THE PRINCIPAL OFFICE OF M CORP."
7. Responsibility for Tax Consequences. Holder has reviewed the federal,
state, local and foreign tax consequences of this investment and the
transactions contemplated by this Agreement (including any tax consequences that
may result now or in the future under recently enacted tax legislation) and has
had the opportunity to consult with Holder's tax advisors, if any, regarding
such consequences, except as otherwise provided in the Merger Agreement. In
particular, Holder acknowledges that Holder is not relying on any statements or
representations of M Corp. or any of its agents in regard to such tax
consequences and understands that Holder (and not M Corp.) shall be responsible
for Holder's own tax liability that may arise as a result of this investment or
the transactions contemplated by this Agreement, except as otherwise provided in
the Merger Agreement. Holder acknowledges that M Corp. has no obligation in
regard to the future conduct of its business, to act or refrain from acting in
any manner, regardless of the loss of any tax benefit to Holder in connection
with the issuance, ownership, or sale of the Shares, which may result from such
action or inaction. Holder further agrees to report and pay on a timely basis
any income tax liabilities incurred by (or assessed against) Holder associated
with the acquisition, ownership, holding and/or disposition of the Restricted
Shares. Holder intends to timely file an election under Code Section 83(b)
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which includes, among other things, the statement of Holder that no compensation
income is to be recognized or reported by Holder by reason of the receipt of the
Restricted Shares following the Merger. M Corp. hereby confirms that it will
take a tax position consistent with the foregoing.
8. Arbitration. In the event of a claimed breach of this Agreement by any
of the parties hereto, except for a dispute where the remedy sought is specific
performance or another form of extraordinary equitable relief, such dispute
shall be submitted to alternative resolution in accordance with the terms of
this Section 8. The party who is alleging that a dispute exists shall send a
notice of such dispute to all other parties to this Agreement, setting forth in
detail the dispute, the parties involved and the position of such party with
respect to the dispute. The parties to such dispute shall endeavor in good faith
to select an alternative dispute resolution service to resolve the dispute and
the rules that shall govern the resolution. If agreement as to the matters
detailed in the preceding sentence is not reached within 20 business days after
receipt of the notice, then, within 10 business days thereafter, counsel for the
parties shall mutually select as an arbitrator an attorney practicing in the
Orange County, California area (or such other location as is agreed to by the
parties), who is experienced in commercial arbitration. If counsel for the
parties are unable to agree upon the selection of the arbitrator, the arbitrator
shall be selected by the American Arbitration Association (the "AAA"). Any
disputes as to the rules for conducting the arbitration shall be resolved by
reference to the AAA rules for commercial arbitration by the arbitrator. The
arbitrator shall schedule a hearing on the disputed issues within 40 business
days after his or her appointment, and the arbitrator shall render his or her
decision after the hearing, in writing, as. expeditiously as possible, and shall
deliver copies of such decision to the parties. A default judgment may be
entered against any party who fails to appear at the arbitration hearing. Such
decision and determination shall be final and unappealable and may be filed as a
judgment or record in any jurisdiction designated by the successful party. The
parties to this Agreement agree that this paragraph has been included to rapidly
and inexpensively resolve any disputes among them with respect to the matters
described above, and that this paragraph shall be grounds for dismissal of any
court action commenced by any party with respect to a dispute arising out of
such matters.
9. Governing Law; Severability. This Agreement shall be governed by the
laws of the State of California, without regard to the conflicts of laws
provisions thereof. Should any provision of this Agreement be determined by a
court of law to be illegal or unenforceable, the other provisions shall
nevertheless remain effective and enforceable.
10. Rights as a Shareholder. Subject to the provisions and limitations
hereof, Holder may, during the term of this Agreement, exercise all rights and
privileges of a shareholder of M Corp. with respect to the Shares.
11. Additional Actions. 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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12. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or delivery
by facsimile or electronic mail or three days after deposit in the United States
mail, by regular or certified mail with postage and fees prepaid, addressed, if
to Holder, at Holder's address shown on M Corp.'s records and, if to M Corp., at
the address of its principal corporate offices (Attention: Secretary) or at such
other address as such party may designate by 10 days' advance written notice to
the other party.
13. Assignment. M Corp. may assign its rights and delegate its duties
under this Agreement to its successors in interest. This Agreement shall inure
to the benefit of, and be binding on, the successors and assigns of M Corp. and,
subject to the restrictions on transfer herein set forth, be binding upon
Holder, Holder's heirs, executors, administrators, successors, and assigns.
14. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same instrument.
15. Attorney's Fees. If any dispute arises hereunder, the prevailing party
shall be entitled to reasonable attorney's fees.
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IN WITNESS WHEREOF, the parties hereto have caused this HOLDER'S STOCK
RESTRICTION AGREEMENT to be executed as of the date first above written.
"M. CORP." MITEL CORPORATION,
a Canadian corporation
By:
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Name:
Title:
"HOLDER"
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"ESCROW AGENT" By:
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, Secretary
[Signature page to Holder's Stock Restriction Agreement]
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CONSENT OF SPOUSE
The undersigned spouse of Holder has read and hereby approves Holder's
Restricted Restriction Agreement (the "Agreement")and hereby agrees to be
irrevocably, bound by the Agreement and further agrees that any community
property interest shall be similarly bound by the Agreement. The undersigned
hereby irrevocably appoint the undersigned's spouse as my attorney-in-fact with
respect to any amendment or exercise of any rights under the Agreement.
Dated: __________, 2000
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(signature of spouse)
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ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED,___________________________ hereby sells, assigns, and
transfers unto _____________________________________, ____________ shares of the
Common Stock of M Corp. standing in the undersigned's name on the books of said
corporation, represented by Certificate No. _____, and does hereby irrevocably
constitute and appoint ______________________________________ attorney to
transfer the said stock on the books of the said corporation with full power of
substitution in the premises.
Dated:
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(signature)
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(print name)
[This assignment may only be completed and delivered in accordance with the
terms of Holder's Restricted Stock Agreement between the signatory hereof and
the above-mentioned corporation.]
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ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED,___________________________ hereby sells, assigns, and
transfers unto _____________________________________, ____________ shares of the
Common Stock of M Corp. standing in the undersigned's name on the books of said
corporation, represented by Certificate No. _____, and does hereby irrevocably
constitute and appoint ______________________________________ attorney to
transfer the said stock on the books of the said corporation with full power of
substitution in the premises.
Dated:
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(signature)
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(print name)
[This assignment may only be completed and delivered in accordance with the
terms of Holder's Restricted Stock Agreement between the signatory hereof and
the above-mentioned corporation.]
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