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EXHIBIT 99.15
ACT NETWORKS, INC.
STOCK PURCHASE AGREEMENT
AGREEMENT made as of this ___ day of _________ 19 ___, by and
between ACT Networks, Inc., a Delaware corporation and
________________________________, Optionee under the Corporation's 1995 Stock
Option/Stock Issuance Plan.
All capitalized terms in this Agreement shall have the meaning
assigned to them in this Agreement or in the attached Appendix.
A. EXERCISE OF OPTION
1. EXERCISE. Optionee hereby purchases _____________
unvested shares of Common Stock (the "Purchased Shares") pursuant to that
certain option (the "Option") granted Optionee on ____________________, 199__
(the "Grant Date") to purchase up to _______________ shares of Common Stock
under the Plan at the exercise price of $______ per share (the "Exercise
Price").
2. PAYMENT. Concurrently with the delivery of this
Agreement to the Corporation, Optionee shall pay the Exercise Price for the
Purchased Shares in accordance with the provisions of the Option Agreement and
shall deliver whatever additional documents may be required by the Option
Agreement as a condition for exercise, together with a duly-executed blank
Assignment Separate from Certificate (in the form attached hereto as Exhibit I)
with respect to the Purchased Shares.
3. DELIVERY OF CERTIFICATES. The certificates
representing the Purchased Shares shall be held in escrow in accordance with the
provisions of this Agreement.
4. STOCKHOLDER RIGHTS. Until such time as the
Corporation exercises the Repurchase Right, Optionee (or any successor in
interest) shall have all the rights of a stockholder (including voting, dividend
and liquidation rights) with respect to the Purchased Shares, subject, however,
to the transfer restrictions of Article B.
5. COMPLIANCE WITH LAW. Under no circumstances shall
shares of Common Stock or other assets be issued or delivered to Optionee
pursuant to the provisions of this Agreement unless, in the opinion of counsel
for the Corporation or its successors, there shall have been compliance with all
applicable requirements of the Federal and state securities laws, all applicable
listing requirements of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock is at the time listed for trading and all
other requirements of law or of any regulatory bodies having jurisdiction over
such issuance and delivery.
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B. TRANSFER RESTRICTIONS
1. RESTRICTION ON TRANSFER. Except for any Permitted
Transfer, Optionee shall not transfer, assign, encumber or otherwise dispose of
any of the Purchased Shares which are subject to the Repurchase Right.
2. RESTRICTIVE LEGEND. The stock certificates for the
Purchased Shares shall be endorsed with the following restrictive legend:
"The shares represented by this certificate are
unvested and are subject to a repurchase right granted to the
Corporation 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 dated _________, 199__ between the
Corporation and the registered holder of the shares (or the predecessor
in interest to the shares). A copy of such agreement is maintained at
the Corporation's principal corporate offices."
3. TRANSFEREE OBLIGATIONS. Each person (other than the
Corporation) to whom the Purchased 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 Corporation that such person is bound by
the provisions of this Agreement and that the transferred shares are subject to
the Repurchase Right to the same extent such shares would be so subject if
retained by Optionee.
C. REPURCHASE RIGHT
1. GRANT. The Corporation is hereby granted the right
(the "Repurchase Right"), exercisable at any time during the ninety (90)-day
period following the date Optionee ceases for any reason to remain in Service or
(if later) during the ninety (90)-day period following the execution date of
this Agreement, to repurchase at the Exercise Price all or any portion of the
Purchased Shares in which Optionee is not, at the time of his or her cessation
of Service, vested in accordance with the Vesting Schedule (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 of the
Unvested Shares prior to the expiration of the ninety (90)-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
Corporation prior to the close of business on the date specified for the
repurchase. Concurrently with the receipt of such stock certificates, the
Corporation shall pay to Owner, in cash or cash equivalents (including the
cancellation of any purchase-money indebtedness), an amount
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equal to the Exercise Price previously paid for the Unvested Shares which 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. In addition, the Repurchase Right shall
terminate and cease to be exercisable with respect to any and all Purchased
Shares in which Optionee vests in accordance with the Vesting Schedule.
4. AGGREGATE VESTING LIMITATION. If the Option is
exercised in more than one increment so that Optionee is a party to one or more
other Stock Purchase Agreements (the "Prior Purchase Agreements") which are
executed prior to the date of this Agreement, then the total number of Purchased
Shares as to which Optionee shall be deemed to have a fully-vested interest
under this Agreement and all Prior Purchase Agreements shall not exceed in the
aggregate the number of Purchased Shares in which Optionee would otherwise at
the time be vested, in accordance with the Vesting Schedule, had all the
Purchased Shares (including those acquired under the Prior Purchase Agreements)
been acquired exclusively under this Agreement.
5. 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 Purchased Shares shall be immediately subject to the Repurchase Right, but
only to the extent the Purchased 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 Purchased 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 Corporation's capital
structure; provided, however, that the aggregate purchase price shall remain the
same.
6. CORPORATE TRANSACTION.
(a) Immediately prior to the consummation of any
Corporate Transaction, the Repurchase Right shall automatically lapse in its
entirety, except to the extent the Repurchase Right is to be assigned to the
successor corporation (or parent thereof) in connection with the Corporate
Transaction.
(b) 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 payments) received in
exchange for the Purchased Shares in consummation of the Corporate Transaction,
but only to the extent the Purchased 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 Corporation's capital structure; provided, however, that
the aggregate purchase price shall remain the same.
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(c) The Repurchase Right shall automatically
lapse in its entirety, and all the Purchased Shares shall immediately vest in
full, upon an Involuntary Termination of Optionee's Service within eighteen (18)
months following the effective date of a Corporate Transaction in which the
Repurchase Right has been assigned.
D. ESCROW
1. DEPOSIT. Upon issuance, the certificates for the
Purchased Shares shall be deposited in escrow with the Corporation 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 Corporation 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
Corporation, Owner shall be issued a receipt acknowledging the number of
Purchased 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 Purchased
Shares shall be immediately delivered to the Corporation to be held in escrow
under this Article D, but only to the extent the Purchased Shares are at the
time subject to the escrow requirements hereunder. However, all regular cash
dividends on the Purchased 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 Purchased 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 Corporation for repurchase and cancellation:
(i) Should the Corporation 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 Corporation
concurrently with the payment to Owner of an amount equal to
the aggregate Exercise Price paid for those 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).
(ii) Should the Corporation elect not
to exercise the Repurchase Right with respect to any Unvested
Shares held at the time in escrow hereunder, then the
escrowed certificates for those shares (together
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with any other assets or securities attributable thereto)
shall be released to Owner.
(iii) As the Purchased 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.
(iv) Upon any earlier termination of
the Repurchase Right in connection with a Corporate
Transaction or Involuntary Termination, any Purchased Shares
(or other assets or securities) at the time held in escrow
hereunder shall promptly be released to Owner.
E. SPECIAL TAX ELECTION
The acquisition of the Purchased Shares may result in adverse
tax consequences which 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 acquisition of the Purchased Shares and the form for making the Code Section
83(b) election are set forth in Exhibit II. OPTIONEE SHOULD CONSULT WITH HIS OR
HER TAX ADVISOR TO DETERMINE THE TAX CONSEQUENCES OF ACQUIRING THE PURCHASED
SHARES AND THE ADVANTAGES AND DISADVANTAGES OF FILING THE CODE SECTION 83(b)
ELECTION. OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE'S SOLE RESPONSIBILITY, AND
NOT THE CORPORATION'S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN
IF OPTIONEE REQUESTS THE CORPORATION OR ITS REPRESENTATIVES TO MAKE THIS FILING
ON HIS OR HER BEHALF.
F. GENERAL PROVISIONS
1. ASSIGNMENT. The Corporation may assign the Repurchase
Right to any person or entity selected by the Board, including (without
limitation) one or more stockholders of the Corporation.
2. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this
Agreement or in the Plan shall confer upon Optionee 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 Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee's Service at any time for any
reason, with or without cause.
3. NOTICES. Any notice required to be given under this
Agreement shall be in writing and shall be deemed effective upon personal
delivery or upon deposit in the U.S. mail, registered or certified, postage
prepaid and properly addressed to the party
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entitled to such notice 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 this paragraph to all other parties
to this Agreement.
4. NO WAIVER. The failure of the Corporation in any
instance to exercise the Repurchase Right shall not constitute a waiver of any
other repurchase rights that may subsequently arise under the provisions of this
Agreement or any other agreement between the Corporation and Optionee. 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.
5. CANCELLATION OF SHARES. If the Corporation shall make
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Purchased 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
Corporation shall be deemed the owner and holder of such shares, whether or not
the certificates therefor have been delivered as required by this Agreement.
6. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of California without
resort to that State's conflict-of-laws rules.
7. SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall inure to the benefit of, and be binding upon, the Corporation
and its successors and assigns and upon Optionee, Optionee's permitted assigns
and the legal representatives, heirs and legatees of Optionee'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.
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IN WITNESS WHEREOF, the parties have executed this Agreement
on the day and year first indicated above.
ACT NETWORKS, INC.
By:___________________________
Title:________________________
Address:______________________
______________________________
______________________________
OPTIONEE
Address:______________________
______________________________
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EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED ______________________ hereby sell(s),
assign(s) and transfer(s) unto ACT Networks, Inc. (the "Corporation"),
______________________ (________) shares of the Common Stock of the Corporation
standing in his or her name on the books of the Corporation represented by
Certificate No. ______________________ herewith and does hereby irrevocably
constitute and appoint ______________________ Attorney to transfer the said
stock on the books of the Corporation with full power of substitution in the
premises. Dated:
Signature ______________________
INSTRUCTION: 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 Corporation to
exercise the Repurchase Right without requiring additional signatures on the
part of Optionee.
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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 FOR
EXERCISE OF NON-STATUTORY OPTION. If the Purchased Shares are acquired pursuant
to the exercise of a Non-Statutory Option, as specified in the Grant Notice,
then under Code Section 83, the excess of the fair market value of the Purchased
Shares on the date any forfeiture restrictions applicable to such shares lapse
over the Exercise 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 Corporation to repurchase the Purchased Shares
pursuant to the Repurchase Right. However, Optionee may elect under Code Section
83(b) to be taxed at the time the Purchased Shares are acquired, rather than
when and as such Purchased 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 the Agreement. Even if the fair market
value of the Purchased Shares on the date of the Agreement equals the Exercise
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 part of this exhibit. FAILURE TO MAKE THIS FILING WITHIN THE
APPLICABLE THIRTY (30)-DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY
INCOME BY OPTIONEE AS THE FORFEITURE RESTRICTIONS LAPSE.
II. FEDERAL INCOME TAX CONSEQUENCES AND CONDITIONAL SECTION 83(b)
ELECTION FOR EXERCISE OF INCENTIVE OPTION. If the Purchased Shares are acquired
pursuant to the exercise of an Incentive Option, as specified in the Grant
Notice, then the following tax principles shall be applicable to the Purchased
Shares:
(i) For regular tax purposes, no taxable income
will be recognized at the time the Option is exercised.
(ii) The excess of (A) the fair market value of
the Purchased Shares on the date the Option is exercised or (if later)
on the date any forfeiture restrictions applicable to the Purchased
Shares lapse over (B) the Exercise Price paid for the Purchased Shares
will be includible in Optionee's taxable income for alternative minimum
tax purposes.
(iii) If Optionee makes a disqualifying
disposition of the Purchased Shares, then Optionee will recognize
ordinary income in the year of such disposition equal in amount to the
excess of (A) the fair market value of the Purchased Shares on the date
the Option is exercised or (if later) on the date any forfeiture
restrictions applicable to the Purchased Shares lapse over (B) the
Exercise Price paid for the Purchased Shares. Any additional gain
recognized upon the disqualifying disposition will be either short-term
or long-term capital gain depending upon the period for which the
Purchased Shares are held prior to the disposition.
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(iv) For purposes of the foregoing, the term
"forfeiture restrictions" will include the right of the Corporation to
repurchase the Purchased Shares pursuant to the Repurchase Right. The
term "disqualifying disposition" means any sale or other
disposition(1/) of the Purchased Shares within two (2) years after
the Grant Date or within one (1) year after the exercise date of the
Option.
(v) In the absence of final Treasury Regulations
relating to Incentive Options, it is not certain whether Optionee may,
in connection with the exercise of the Option for any Purchased Shares
at the time subject to forfeiture restrictions, file a protective
election under Code Section 83(b) which would limit (A) Optionee's
alternative minimum taxable income upon exercise and (B) Optionee's
ordinary income upon a disqualifying disposition to the excess of the
fair market value of the Purchased Shares on the date the Option is
exercised over the Exercise Price paid for the Purchased Shares.
Accordingly, such election if properly filed will only be allowed to
the extent the final Treasury Regulations permit such a protective
election. Page 2 of the attached form for making the election should be
filed with any election made in connection with the exercise of an
Incentive Option.
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(1/) Generally, a disposition of shares purchased under an Incentive Option
includes any transfer of legal title, including a transfer by sale, exchange or
gift, but does not include a transfer to the Optionee's spouse, a transfer into
joint ownership with right of survivorship if Optionee remains one of the joint
owners, a pledge, a transfer by bequest or inheritance or certain tax free
exchanges permitted under the Code.
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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.
(1) The taxpayer who performed the services is:
Name:
Address:
Taxpayer Ident. No.:
(2) The property with respect to which the election is being made is
____________ shares of the common stock of ACT Networks, Inc.
(3) The property was issued on _____________, 199__.
(4) The taxable year in which the election is being made is the calendar
year 199__.
(5) The property is subject to a repurchase right pursuant to which the
issuer has the right to acquire the property at the original purchase
price if for any reason taxpayer's employment with the issuer is
terminated. The issuer's repurchase right lapses in a series of
installments over a four (4)-year period ending on ____________, 199__.
(6) 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.
(7) The amount paid for such property is $____________ per share.
(8) A copy of this statement was furnished to ACT Networks, Inc. for whom
taxpayer rendered the services underlying the transfer of property.
(9) This statement is executed on _______________________, 199__.
___________________________________ ______________________________
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.
Optionee 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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The property described in the above Section 83(b) election is comprised of
shares of common stock acquired pursuant to the exercise of an incentive stock
option under Section 422 of the Internal Revenue Code (the "Code"). Accordingly,
it is the intent of the Taxpayer to utilize this election to achieve the
following tax results:
1. The purpose of this election is to have the
alternative minimum taxable income attributable to the purchased shares measured
by the amount by which the fair market value of such shares at the time of their
transfer to the Taxpayer exceeds the purchase price paid for the shares. In the
absence of this election, such alternative minimum taxable income would be
measured by the spread between the fair market value of the purchased shares and
the purchase price which exists on the various lapse dates in effect for the
forfeiture restrictions applicable to such shares. The election is to be
effective to the full extent permitted under the Code.
2. Section 421(a)(1) of the Code expressly excludes from
income any excess of the fair market value of the purchased shares over the
amount paid for such shares. Accordingly, this election is also intended to be
effective in the event there is a "disqualifying disposition" of the shares,
within the meaning of Section 421(b) of the Code, which would otherwise render
the provisions of Section 83(a) of the Code applicable at that time.
Consequently, the Taxpayer hereby elects to have the amount of disqualifying
disposition income measured by the excess of the fair market value of the
purchased shares on the date of transfer to the Taxpayer over the amount paid
for such shares. Since Section 421(a) presently applies to the shares which are
the subject of this Section 83(b) election, no taxable income is actually
recognized for regular tax purposes at this time, and no income taxes are
payable, by the Taxpayer as a result of this election.
THIS PAGE 2 IS TO BE ATTACHED TO ANY SECTION 83(b) ELECTION FILED IN CONNECTION
WITH THE EXERCISE OF AN INCENTIVE STOCK OPTION UNDER THE FEDERAL TAX LAWS.
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APPENDIX
The following definitions shall be in effect under the
Agreement:
A. AGREEMENT shall mean this Stock Purchase Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean the Corporation's common stock.
E. 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 Corporation'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 Corporation's assets in complete
liquidation or dissolution of the Corporation.
F. CORPORATION shall mean ACT Networks, Inc., a Delaware
corporation.
G. EXERCISE PRICE shall have the meaning assigned to such term in
Paragraph A.1.
X. XXXXX DATE shall have the meaning assigned to such term in
Paragraph A.1.
X. XXXXX NOTICE shall mean the Notice of Grant of Stock Option
pursuant to which Optionee has been informed of the basic terms of the Option.
J. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.
K. INVOLUNTARY TERMINATION shall mean the termination of
Optionee's Service which occurs by reason of:
(i) Optionee's involuntary dismissal or
discharge by the Corporation for reasons other than Misconduct, or
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(ii) Optionee's voluntary resignation following
(A) a change in Optionee's position with the Corporation which
materially reduces Optionee's level of responsibility, (B) a reduction
in Optionee's level of compensation (including base salary, fringe
benefits and participation in corporate-performance based bonus or
incentive programs) by more than fifteen percent (15%) or (C) a
relocation of Optionee's place of employment by more than fifty (50)
miles, provided and only if such change, reduction or relocation is
effected by the Corporation without Optionee's consent.
L. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any other intentional misconduct by Optionee adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not be deemed
to be inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or discharge of
Optionee or any other person in the Service of the Corporation (or any Parent or
Subsidiary).
M. NON-STATUTORY OPTION shall mean an option not intended to
satisfy the requirements of Code Section 422.
N. OPTION shall have the meaning assigned to such term in
Paragraph A.1.
O. OPTION AGREEMENT shall mean all agreements and other documents
evidencing the Option.
P. OPTIONEE shall mean the person to whom the Option is granted
under the Plan.
Q. OWNER shall mean Optionee and all subsequent holders of the
Purchased Shares who derive their chain of ownership through a Permitted
Transfer from Optionee.
R. PARENT shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) 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.
S. PERMITTED TRANSFER shall mean (i) a gratuitous transfer of the
Purchased Shares, provided and only if Optionee obtains the Corporation's prior
written consent to such transfer, (ii) a transfer of title to the Purchased
Shares effected pursuant to Optionee's will or the laws of intestate succession
following Optionee's death or (iii) a transfer to the
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Corporation in pledge as security for any purchase-money indebtedness incurred
by Optionee in connection with the acquisition of the Purchased Shares.
T. PLAN shall mean the Corporation's 1995 Stock Option/Stock
Issuance Plan.
U. PLAN ADMINISTRATOR shall mean either the Board or a committee
of Board members, to the extent the committee is at the time responsible for
administration of the Plan.
V. PRIOR PURCHASE AGREEMENT shall have the meaning assigned to
such term in Paragraph C.4.
W. PURCHASED SHARES shall have the meaning assigned to such term
in Paragraph A.1.
X. RECAPITALIZATION shall mean any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration.
Y. REORGANIZATION shall mean any of the following transactions:
(i) a merger or consolidation in which the
Corporation is not the surviving entity,
(ii) a sale, transfer or other disposition of all
or substantially all of the Corporation's assets,
(iii) a reverse merger in which the Corporation is
the surviving entity but in which the Corporation'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 Corporation is incorporated or to create a
holding company structure.
Z. REPURCHASE RIGHT shall mean the right granted to the
Corporation in accordance with Article C.
AA. SEC shall mean the Securities and Exchange Commission.
AB. SERVICE shall mean Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an employee,
subject to the control and direction of the employer entity as to both the work
to be performed and the manner and
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method of performance, a non-employee member of the board of directors or a
consultant or independent advisor.
AC. SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, 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.
AD. VESTING SCHEDULE shall mean the vesting schedule specified in
the Grant Notice, subject to the acceleration provisions upon an Involuntary
Termination following a Corporate Transaction.
AE. UNVESTED SHARES shall have the meaning assigned to such term
in Paragraph C.1.
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