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EXHIBIT 10.12
SALES VISION, INC.
STOCK RESTRICTION AGREEMENT
THIS AGREEMENT is made as of this 13th day of May, 1999, by
and among Sales Vision, Inc., a North Carolina corporation (the "Company"), and
Xxxxxx Xxxx ("Stockholder").
RECITALS
WHEREAS, Stockholder is the holder of record of two thousand
two hundred (2,200) shares of Common Stock of the Company (the "Purchased
Shares") which Stockholder purchased from the Company on August 15, 1995 at an
aggregate purchase price of Two Thousand Two Hundred Dollars ($2,200) (the
"Aggregate Purchase Price");
WHEREAS, effective May 13, 1999, the Company effected a split
of the outstanding shares of its Common Stock such that each share of its Common
Stock was automatically converted into fifty-six (56) shares of Series A
Preferred Stock and four hundred forty-four (444) shares of Common Stock;
WHEREAS, the Purchased Shares were fully vested and not
subject to repurchase by the Company;
WHEREAS, Stockholder is a party to that certain Stock Purchase
Agreement by and among the Investors and the Selling Stockholders (as defined
therein) pursuant to which Stockholder sold all of such Stockholder's one
hundred twenty-three thousand two hundred (123,200) shares of Series A Preferred
Stock to the Investors;
WHEREAS, after giving effect to the Sale of Series A Preferred
Stock to the Investors, Stockholder now holds nine hundred seventy-six thousand
eight hundred (976,800) shares of the Company's Common Stock (the "Common
Shares"); and
WHEREAS, in order to induce the Company to enter into a sale
of Series A Preferred Stock with certain investors, Stockholder hereby agrees to
the imposition of contractual restrictions with respect to Stockholder's Common
Shares, and Stockholder and the Company hereby agree that this Agreement shall
govern the rights of the Company to repurchase such Common Shares according to
the vesting schedule defined herein;
NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth herein, the parties hereby agree as follows:
A. RESTRICTIONS ON COMMON SHARES AND STOCK CERTIFICATE
1. Stock Restrictions and Delivery of Certificate. Stockholder
has previously purchased from the Company the Common Shares, and Stockholder now
hereby agrees to the imposition of certain contractual restrictions on the
Common Shares. Stockholder shall deliver to the Company, subject to the terms
hereof, at the time of the execution of this Agreement, any previously issued
stock certificate representing the Common Shares and shall deliver to the
Company concurrently therewith a
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duly-executed blank Assignment Separate from Certificate (in the form attached
hereto as Exhibit I) with respect to the Common Shares.
2. Legending of Certificate and Deposit into Escrow. Upon
receipt by the Company of the items in Section A.1 above, the Company shall
legend the stock certificate representing the Common Shares pursuant to the
terms of Section A.3 below and shall hold such stock certificate in escrow in
accordance with the provisions of this Agreement.
3. Restrictive Legends. The stock certificate for the Common
Shares shall be endorsed with the following restrictive legends (in addition to
any previously existing legends):
"The shares represented by this certificate are unvested
and subject to certain repurchase rights granted to the Company 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 between the Company
and the registered holder of the shares (or the predecessor in interest to the
shares). A copy of such agreement is maintained at the Company's principal
corporate offices"
"The Shares represented hereby have not been registered
under the Securities Act of 1933, as amended, and may not be sold, pledged or
otherwise transferred without an effective registration thereof under such Act
or an opinion of counsel, satisfactory to the Company and its counsel, that such
registration is not required."
4. Stockholder Rights. Until such time as the Company
exercises the Repurchase Right, Stockholder (or any successor in interest) shall
have all the rights of a stockholder (including voting, dividend and liquidation
rights) with respect to the Common Shares, including the Common Shares held in
escrow hereunder, subject, however, to the transfer restrictions of Article B.
B. TRANSFER RESTRICTIONS
1. Restriction on Transfer. Except for any Permitted Transfer,
Stockholder shall not transfer, assign, encumber or otherwise dispose of any of
the Common Shares that are subject to the Repurchase Right (as hereinafter
defined). In addition, Common Shares that are released from the Repurchase Right
shall not be transferred, assigned, encumbered or otherwise disposed of in
contravention of the market stand-off provisions of this Agreement.
2. Transferee Obligations. Each person (other than the
Company) to whom the Common 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 Company that such person is bound by the
provisions of this Agreement and the Right of First Refusal and Co-Sale
Agreement by and among the Company, the Founders (as defined therein) and the
Purchasers (as defined therein) dated as of the date hereof (the "Co-Sale
Agreement"), and that the transferred shares are subject to the Repurchase Right
and the rights set forth in the Co-Sale Agreement to the same extent such shares
would be so subject if retained by Stockholder.
3. Market Stand-Off. In connection with any underwritten
public offering by the Company of its equity securities pursuant to an effective
registration statement filed under the Securities Act of 1933, as amended,
including the Company's initial public offering, the Stockholder shall not
directly or indirectly sell, make any short sale of, loan, hypothecate, pledge,
offer, grant or sell any option or other contract for the purchase of, purchase
any option or other contract for the sale of, or otherwise dispose of or
transfer, or agree to engage in any of the foregoing transactions with respect
to, any
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Common Shares without the prior written consent of the Company or its
underwriters. Such restriction (the "Market Stand-Off") shall be in effect for
such period of time following the date of the final prospectus for the offering
as may be requested by the Company or such underwriters. In no event, however,
shall such period exceed 180 days. The Market Stand-Off shall in any event
terminate two years after the date of the Company's initial public offering. In
the event of the declaration of a stock dividend, a spin-off, a stock split, an
adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company's outstanding securities without receipt of consideration,
any new, substituted or additional securities which are by reason of such
transaction distributed with respect to any Common Shares subject to the Market
Stand-Off, or into which such Common Shares thereby become convertible, shall
immediately be subject to the Market Stand-Off. In order to enforce the Market
Stand-Off, the Company may impose stop-transfer instructions with respect to the
Common Shares until the end of the applicable stand-off period. The Company's
underwriters shall be beneficiaries of the agreement set forth in this
Subsection B.3. This Subsection B.3 shall not apply to Common Shares registered
in the public offering under the Securities Act of 1933, as amended, and the
Stockholder shall be subject to this Subsection B.3 only if the directors and
officers of the Company are subject to similar arrangements.
C. REPURCHASE RIGHT
1. Grant. The Company is hereby granted the right (the
"Repurchase Right"), exercisable at any time during the thirty (30) day period
following the date Stockholder resigns from Service for any reason or is
terminated by the Company for Good Cause, to repurchase at $4.039 per share
("Repurchase Price") all or any portion of the Common Shares in which
Stockholder is not, at the time of his cessation of Service, vested in
accordance with the Vesting Schedule set forth in Paragraph C.3 herein (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 prior to the
expiration of the thirty (30) 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 Company prior to the close of business on
the date specified for the repurchase. Concurrently with the receipt of such
stock certificates, the Company shall pay to Owner, in cash or cash equivalents
(including the cancellation of any purchase-money indebtedness), an amount equal
to the Repurchase Price for the Unvested Shares that are 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 herein. In addition, the Repurchase Right shall
terminate and cease to be exercisable with respect to any and all Common Shares
in which Stockholder vests in accordance with the following vesting schedule
(the "Vesting Schedule"):
Thirty percent (30%) of the Common Shares shall not
be subject to the Company's Repurchase Right. Stockholder
shall acquire a vested interest in and the Company's
Repurchase Right will accordingly lapse with respect to the
remaining seventy percent (70%) of the Common Shares
("Unvested Shares") in successive equal monthly installments
upon Stockholder's completion of each of the twenty-four (24)
months of Service measured from and after May 13, 1999 (the
"Vesting Date").
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All Common Shares as to which the Repurchase Right lapses shall, however, remain
subject to any market stand-off provisions set forth in this Agreement and to
the provisions of the Co-Sale Agreement.
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 Common Shares, shall be immediately subject to the Repurchase Right, but
only to the extent the Common Shares are at the time covered by such right.
Appropriate adjustments to reflect such distribution shall be made to the number
and/or class of Common Shares 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 Company's capital structure.
5. Corporate Transaction.
To the extent the Repurchase Right remains in effect
following a Corporate Transaction, such right shall apply to the new capital
stock or other property (including any cash payment) received in exchange for
the Unvested Shares in consummation of the Corporate Transaction, but only to
the extent the Unvested 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 Corporate
Transaction upon the Company's capital structure.
D. ESCROW
1. Deposit. Upon issuance, the certificates for the Common
Shares that are subject to the Repurchase Right shall be deposited in escrow
with the Company to be held in accordance with the provisions of this Article D.
Each deposited certificate shall be accompanied by a duly-executed Assignment
Separate from Certificate in the form of Exhibit I. The deposited certificates,
together with any other assets or securities from time to time deposited with
the Company pursuant to the requirements of this Agreement, shall remain in
escrow until such time or times as the certificates (or other assets and
securities) are to be released or otherwise surrendered for cancellation in
accordance with Paragraph D.3. Upon delivery of the certificates (or other
assets and securities) to the Company, Stockholder shall be issued a receipt
acknowledging the number of Common Shares (or other assets and securities)
delivered in escrow.
2. Recapitalization/Reorganization. Any new, substituted or
additional securities or other property which is by reason of any
Recapitalization or Reorganization distributed with respect to the Common Shares
shall be immediately delivered to the Company to be held in escrow under this
Article D, but only to the extent the Common Shares are at the time subject to
the escrow requirements hereunder. However, all regular cash dividends on the
Common Shares (or other securities at the time held in escrow) shall be paid
directly to Owner and shall not be held in escrow.
3. Release/Surrender. The Common Shares, together with any
other assets or securities held in escrow hereunder, shall be subject to the
following terms relating to their release from escrow or their surrender to the
Company for repurchase and cancellation:
(a) Should the Company elect to exercise the Repurchase
Right with respect to any Unvested Shares, then the escrowed certificates for
those Unvested Shares (together with any other assets or securities attributable
thereto) shall be surrendered to the Company concurrently with the payment to
Owner of an amount equal to the aggregate Repurchase Price for such Unvested
Shares, and Owner shall cease to have any further rights or claims with respect
to such Unvested Shares (or other assets or securities attributable thereto).
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(b) As the Unvested Shares (or any other assets or
securities attributable thereto) vest in accordance with the Vesting Schedule,
the certificates for those vested shares (as well as all other vested assets and
securities) shall be released from escrow upon Owner's request, but not more
frequently than once every six (6) months; provided, however, that the failure
to release the certificates for any Vested Shares solely for administrative
reasons only shall not affect such shares' status as Vested Shares.
(c) All Common Shares (or other assets or securities)
released from escrow shall nevertheless remain subject to (i) the Company's and
the Purchasers first refusal right and the Purchasers' co-sale rights under the
Co-Sale Agreement, to the extent such rights have not otherwise lapsed, and (ii)
the market stand-off provisions of this Agreement, until such provisions
terminate.
E. SPECIAL TAX ELECTION
The imposition of the Repurchase Right under this Agreement on
the Unvested Shares may result in adverse tax consequences that may be avoided
or mitigated by filing an election under Code Section 83(b). Such election must
be filed within thirty (30) days after the date of this Agreement. A description
of the tax consequences applicable to the imposition of the Repurchase Right on
the Common Shares and the form for making the Code Section 83(b) election are
set forth in Exhibit II. STOCKHOLDER SHOULD CONSULT WITH HIS TAX ADVISOR TO
DETERMINE THE TAX CONSEQUENCES OF EXECUTING THIS AGREEMENT AND THE ADVANTAGES
AND DISADVANTAGES OF FILING THE CODE SECTION 83(B) ELECTION. STOCKHOLDER
ACKNOWLEDGES THAT IT IS STOCKHOLDER'S SOLE RESPONSIBILITY, AND NOT THE
COMPANY'S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(B), EVEN IF
STOCKHOLDER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON
HIS BEHALF.
F. GENERAL PROVISIONS
1. No Employment or Service Contract. Nothing in this
Agreement shall confer upon Stockholder 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 Company (or any Parent or Subsidiary employing or retaining
Stockholder) or of Stockholder, which rights are hereby expressly reserved by
each, to terminate Stockholder's Service at any time for any reason, with or
without cause.
2. Notices. Any notice required or permitted to be given under
this Agreement shall be given in writing and shall be deemed effective upon
personal delivery, upon delivery by confirmed facsimile or electronic
transmission (with duplicate original sent by U.S. mail) or two (2) days after
deposit in the U.S. mail, registered or certified, postage prepaid and properly
addressed to the party to be notified 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 the terms of this
paragraph) to all other parties to this Agreement.
3. No Waiver. The failure of the Company in any instance to
exercise the Repurchase Right shall not constitute a waiver of any other
repurchase rights and/or rights of first refusal that may subsequently arise
under the provisions of this Agreement, the Stock Purchase Agreement or any
other agreement between the Company and Stockholder or Stockholder's spouse. 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.
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4. Cancellation of Shares. If the Company shall make
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Common 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
Company shall be deemed the owner and holder of such shares, whether or not the
certificates therefor have been delivered as required by this Agreement.
G. MISCELLANEOUS PROVISIONS
1. Further Actions. The parties hereby agree to take whatever
additional actions and execute whatever additional documents they may deem
necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either of them or on the Common Shares
pursuant to the provisions of this Agreement.
2. Amendments and Waivers. This Agreement represents the
entire understanding of the parties with respect to the subject matter hereof
and supersedes all previous understandings, whether written or oral. This
Agreement may only be amended with the written consent of Stockholder and the
Company, or the successors or assigns of the foregoing, and no oral waiver or
amendment shall be effective under any circumstances whatsoever.
3. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of North Carolina without
resort to that State's conflict-of-laws rules.
4. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
5. Successors and Assigns. The terms and provisions of this
Agreement shall inure to the benefit of, and be binding upon, the Company and
its successors and assigns and upon Stockholder, Stockholder's permitted assigns
and legal representatives, heirs and legatees of Stockholder'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.
6. Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7. Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
8. Conflicts. In the event that the terms of this Agreement
conflict or are inconsistent with the terms of any other agreement, written or
oral, relating to the subject matter hereof between the Company and Stockholder,
the terms of this Agreement shall control.
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IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first indicated above.
SALES VISION, INC.:
/s/ XXXXXX XXXXXX
------------------
Pres.
----------------------------------------
Title
Address: 0000 Xxxxxxxx Xx., Xxxxx 0000
Xxxxxxxxx, XX 00000
STOCKHOLDER: (1)
/s/ XXXXXX XXXX
----------------
----------------------------------------
Xxxxxx Xxxx
Address: 0000 Xxxxxx Xx.
Xxxxxxxxxx, XX 00000
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(1) I have received, completed, executed and retained the Section 83(b)
election that was attached hereto as Exhibit III. I understand that I, and not
the Company, will be responsible for completing the form and filing the election
with the appropriate office of the federal and state tax authorities and that if
such filing is not completed within thirty (30) days after the date of this
Agreement, I will forfeit the significant tax benefits of Section 83(b). I
understand further that such filing should be made by registered or certified
mail, return receipt requested, and that I must retain two (2) copies of the
completed form for filing with my state and federal tax returns for the current
tax year and an additional copy for my records.
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INSTRUCTION TO EXHIBIT I:
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 Company to exercise the
Repurchase Right without requiring additional signatures on the part of
Stockholder.
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EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, ___________ hereby sells, assigns and
transfers unto Sales Vision, Inc. (the "Company") nine hundred seventy-six
thousand eight hundred (976,800) shares of the Common Stock of the Company
standing in his name on the books of the Company represented by Certificate
Number(s) _____________ herewith and does hereby irrevocably constitute and
appoint _____________________ his attorney-in-fact to transfer such stock on the
books of the Company with full power of substitution in the premises.
Dated: _______________
_____________________________________
Signature
This Assignment Separate from Certificate was executed in conjunction
with the terms of the Stock Restriction Agreement by and between the above
assignor and Sales Vision, Inc. dated May ___, 1999.
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EXHIBIT II
FEDERAL INCOME TAX CONSEQUENCES AND
SECTION 83(b) TAX ELECTION
I. Federal Income Tax Consequences and Section 83(b) Election. Under
Section 83 of the Internal Revenue Code of 1986, as amended (the "Code"), the
excess of the Fair Market Value of the Common 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 Company to
repurchase the Common Shares pursuant to the Repurchase Right. However,
Stockholder may elect under Code Section 83(b) to be taxed at the time the
Common Shares become subject to forfeiture restrictions, rather than when and as
such Common 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 Common
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 III.
FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY (30) DAY PERIOD WILL
RESULT IN THE RECOGNITION OF ORDINARY INCOME BY STOCKHOLDER AS THE FORFEITURE
RESTRICTIONS LAPSE.
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EXHIBIT III
PROTECTIVE SECTION 83(b) ELECTION
This statement is being made under Section 83(b) of the
Internal Revenue Code, pursuant to Treas. Reg. Section 1.83-2.
(37) The taxpayer who performed the services is:
Name: Xxxxxx Xxxx
Address: 0000 Xxxxx Xxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Taxpayer Ident. No.:_______________________________________________
(38) The property with respect to which the election is being made is nine
hundred seventy-six thousand eight hundred (976,800) shares of Common
Stock of Sales Vision, Inc.
(39) The property was issued on May __, 1999.
(40) The taxable year in which the election is being made is the calendar
year 1999.
(41) The property is subject to a repurchase right pursuant to which the
issuer has the right to acquire the property at a percentage of its
value as of May 13, 1999, if for any reason taxpayer's employment with
the issuer is terminated. The issuer's repurchase right lapses in a
series of monthly installments over a two (2)-year period ending on May
13, 2001.
(42) 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.
(43) The amount paid for such property is $___ per share.
(44) A copy of this statement was furnished to Sales Vision, Inc. for whom
taxpayer rendered the services underlying the transfer of property.
(45) This statement is executed on _______________ ____, 1999.
__________________________________ ___________________________________
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 Purchase Agreement. This
filing should be made by registered or certified mail, return receipt requested.
Purchaser 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.
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APPENDIX
The following definitions shall be in effect under the Agreement:
1. AGGREGATE PURCHASE PRICE shall have the meaning assigned to such term
in the Recitals.
2. AGREEMENT shall mean this Stock Restriction Agreement.
3. BOARD shall mean the Company's Board of Directors.
4. CODE shall mean the Internal Revenue Code of 1986, as amended.
5. COMMON SHARES shall have the meaning assigned to such term in the
Recitals.
6. COMMON STOCK shall mean the Company's common stock.
7. COMPANY shall mean Sales Vision, Inc., a North Carolina corporation.
8. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to a
person or persons different from the persons holding those
securities immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Company's assets in complete
liquidation or dissolution of the Company.
9. FAIR MARKET VALUE of a share of Common Stock on any relevant date,
prior to the initial public offering of the Common Stock, shall be
determined by the Board after taking into account such factors as it
shall deem appropriate.
10. GOOD CAUSE shall mean Stockholder's unauthorized use or disclosure of
the confidential information or trade secrets of the Company which use
causes material harm to the Company, Stockholder's conviction of a
felony under the laws of the United States or any state thereof,
Stockholder's gross misconduct, or Stockholder's continued failure to
perform assigned duties for 45 days after receiving written
notification from the Board. The foregoing definition shall not be
deemed to be inclusive of all the acts or omissions which the Company
may consider as grounds for dismissal or discharge.
11. OWNER shall mean Stockholder and all subsequent holders of the Common
Shares who derive their chain of ownership through a Permitted Transfer
from Stockholder.
12. PARENT shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, provided each
corporation in the unbroken chain (other than the Company) 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.
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13. PERMITTED TRANSFER shall mean (i) a gratuitous transfer of the Common
Shares, provided and only if Stockholder obtains the Company's prior
written consent to such transfer, (ii) a transfer of title to the
Common Shares effected pursuant to Stockholder's will or the laws of
intestate succession following Stockholder's death or (iii) a transfer
to the Company in pledge as security for any purchase-money
indebtedness incurred by Stockholder in connection with the acquisition
of the Common Shares.
14. PURCHASE PRICE shall mean the purchase price per share as calculated by
dividing the Aggregate Purchase Price by the total number of Common
Shares.
15. RECAPITALIZATION shall mean any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other
change affecting the Company's outstanding Common Stock as a class
without the Company's receipt of consideration.
16. REORGANIZATION shall mean any of the following transactions:
(i) a merger or consolidation in which the Company is not the
surviving entity,
(ii) a sale, transfer or other disposition of all or substantially
all of the Company's assets,
(iii) a reverse merger in which the Company is the surviving entity
but in which the Company's outstanding voting securities are
transferred in whole or in part to a person or persons
different from the persons holding those securities
immediately prior to the merger, or
(iv) any transaction effected primarily to change the state in
which the Company is incorporated or to create a holding
company structure.
17. REPURCHASE RIGHT shall mean the right granted to the Company in
accordance with Article C.
18. SERVICE shall mean the provision of services to the Company (or any
Parent or Subsidiary) by a person in his or her capacity as 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.
19. SUBSIDIARY shall mean any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, 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.
20. VESTING SCHEDULE shall mean the vesting schedule specified in Paragraph
C.3.
21. UNVESTED SHARES shall have the meaning assigned to such term in
Paragraph C.1.
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