EXHIBIT (D)(4)
STOCK RESTRICTION AGREEMENT
AGREEMENT made this day of October, 2001 (the "Grant Date") between Avici
Systems Inc., a Delaware corporation (the "Company"), and (the
"Employee").
RECITALS:
1. The Employee has been granted shares (the "Shares") of the
Common Stock, $.0001 par value per share (the "Common Stock"), of the Company
pursuant to the Company's 2000 Stock Option and Incentive Plan (the "Plan") in
exchange for tendering for cancellation certain previously granted options to
purchase Common Stock of the Company (the "Tendered Options").
2. The Company wishes to continue to retain the Employee as an employee of
the Company and the Employee wishes to continue to be retained by the Company.
In consideration of the mutual covenants contained herein and for other
valuable consideration, receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. Grant. Subject to the terms and conditions of the Plan, the Company
hereby grants and issues to the Employee Shares in exchange for the
Tendered Options. The Shares granted pursuant to the Plan shall be subject to
forfeiture, if, in the discretion of the Board of Directors (the "Board") or
any one or more committees or subcommittees of the Board (a "Committee"), the
Employee has not, within a reasonable period of time following the grant of the
Shares, executed any instrument required by the Board or a Committee to be
executed in connection with such grant. The Shares will be evidenced by this
Agreement and the Employee will not receive a stock certificate for the Shares.
Initially, the Employee will have his or her ownership of the Shares registered
only in book-entry form in the records of the transfer agent for the Company's
Common Stock. Book-entry registration refers to a method of recording stock
ownership in which no share certificates are issued to stockholders. After any
date upon which the Shares have vested, the Employee may obtain a certificate
for his or her vested Shares registered in his or her name in book-entry form
upon request from the Company, provided that the Employee has signed this
Agreement and the Irrevocable Standing Order to Sell Shares, attached hereto as
Exhibit A (the "Standing Order") to facilitate payment of applicable
Withholding Taxes (as defined in Section 4 below).
2. Vesting of Option if Business Relationship Continues.
(a) If the Employee has continued to serve the Company or any parent or
subsidiary of the Company (a "Related Corporation") in the capacity of an
employee, officer, director or consultant (such service is described herein as
maintaining or being involved in a "Business Relationship" with the Company or
any Related Corporation) on the following dates, the Shares granted to the
Employee shall vest as indicated below:
On the First Anniversary [Insert a number that is 50% of the Shares]
of the Grant Date:
After the first anniversary of the [Grant Date], an additional Shares
will vest on the last day of every three-month period (or with respect to the
final installment such number of shares as shall remain unexercisable) such
that it shall be fully exercisable, subject to the terms and conditions of this
Agreement, on the date which is two years from [Insert Grant Date]]. In the
event that the Grant Date occurs on the 29th, 30th or 31st day of a month and
if vesting occurs within a month where there are fewer than those number of
days, vesting shall occur on the last day of that month.
(b) In the event the Employee ceases to maintain a Business Relationship
with the Company or any Related Corporation, no additional unvested Shares
shall become vested Shares under any circumstances with
respect to the Employee. Any determination under this Agreement as to
employment status or other matters referred to above shall be made in good
faith by the Board of Directors of the Company, whose decision shall be binding
on all parties. In addition, all unvested Shares shall be forfeited by the
Employee and the Common Stock represented by the unvested Shares shall again be
available for the grant of awards under the Plan.
3. Restrictions on Transfer. The Employee shall not sell, assign, transfer,
pledge, encumber or dispose of all or any of his unvested Shares, either
voluntarily or by operation of law, except that the Employee may transfer all
or any of his unvested Shares as follows:
(a) As a gift to any member of his family or to any trust for the benefit
of any such family member or the Employee provided that any such
transferee shall agree in writing with the Company, as a condition
precedent to such transfer, to be bound by all of the provisions of
this Agreement to the same extent as if such transferee were the
Employee; or
(b) By court order, in which event each such transferee shall be bound by
all of the provisions of this agreement to the same extent as if such
transferee were the Employee. As used herein, the word "family" shall
include any spouse, lineal ancestor or descendant, brother or sister.
4. Taxes
(a) The Company's obligation to deliver the Shares to the Employee shall be
subject to the satisfaction of all applicable federal, state and local
income and employment tax withholding requirements ("Withholding
Taxes"). In order to satisfy all Withholding Taxes due with respect to
the Employee's Shares, the Employee agrees to the following:
(i) As a condition of receiving any vested Shares, on the date of
this Agreement the Employee must execute the Standing Order,
which authorizes the Company and [broker] to take the actions
described in this subsection 4.(a)(i). The Employee agrees to
deposit a sufficient number of the Shares into his or her account
at [broker] and authorizes [broker] to sell, at the market price
and on the vesting date (or the first business day thereafter if
the vesting date falls on a day when the market is closed), the
number of vested Shares that the Company has instructed [broker]
is necessary to obtain proceeds sufficient to satisfy the
Withholding Taxes. The Employee understands and agrees that the
number of Shares that [broker] will sell will be based on the
last reported sale price of the Common Stock on each vesting
date.
(ii) The Employee agrees that the proceeds received from the sale of
vested Shares pursuant to Section 4.(a)(i) will be used to
satisfy the Withholding Taxes and, accordingly, the Employee
hereby authorizes [broker] to pay such proceeds to the Company
for such purpose. The Employee understands that to the extent
that the proceeds obtained by such sale exceed the amount
necessary to satisfy the Withholding Taxes, such excess proceeds
shall be deposited into the Employee's account at [broker]. The
Employee further understands that any remaining vested Shares
shall be deposited into the Employee's account at [broker].
(iii) The Employee acknowledges and agrees that, in the event that
there is not a market in the Common Stock, the Company will have
the right to make other arrangements to satisfy the Withholding
Taxes due with respect to the Employee's Shares.
(b) THE EMPLOYEE ACKNOWLEDGES THAT HE OR SHE HAS BEEN INFORMED THAT THE
EMPLOYEE MUST DECIDE WHETHER OR NOT TO MAKE AN ELECTION UNDER SECTION
83(b) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, WITH RESPECT TO
THE UNVESTED SHARES; THAT SUCH ELECTION MUST BE FILED WITH THE INTERNAL
REVENUE SERVICE WITHIN 30 DAYS OF THE EFFECTIVE GRANT DATE OF THE
EMPLOYEE'S UNVESTED SHARES; AND THAT THE EMPLOYEE IS SOLELY RESPONSIBLE
FOR MAKING OR NOT MAKING A TIMELY SECTION 83(b) ELECTION (AND OBTAINING
TAX ADVICE CONCERNING WHETHER AND HOW TO MAKE SUCH ELECTION).
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(c) The Employee hereby agrees to deliver to the Company a signed copy of
any document he may execute and file with the Internal Revenue Service
evidencing a Section 83(b) Election, and to deliver such copy to the
Company prior to, or promptly upon, such filing, accompanied by a cash
payment in the amount the Company anticipates is required to fulfill
the Withholding Taxes. The Employee further agrees that the Company may
withhold from the Employee's wages or other remuneration the
appropriate amount of Withholding Taxes (to the extent not covered by
the Employee's cash payment to the Company). The Employee further
agrees that, if the Company does not withhold an amount from the
Employee's wages or other remuneration sufficient to satisfy the
withholding obligation of the Company, the Employee will make
reimbursement on demand, in cash, for the amount underwithheld.
(d) The Employee understands that if he or she makes a timely election
under Section 83(b) of the Internal Revenue Code to recognize taxable
income with respect to the Shares and provides the Company with (i) a
copy of such election, (ii) proof of filing such election and (iii) a
cash payment in the amount the Company anticipates is required to
fulfill the Withholding Taxes, the Company shall not enforce its rights
under this Section 4 and/or the Standing Order.
5. Adjustments for Stock Splits, Stock Dividends, etc.
(a) If at any time, (i) the Company shall subdivide (by any stock split,
stock dividend, stock distribution or other reclassification of the
Common Stock of the Company) its outstanding shares of Common Stock or
(ii) the stockholders of the Company receive by reason of any
distribution in total or partial liquidation, securities of another
corporation pursuant to paragraph (c) below, then as a condition of
such reorganization, reclassification or distribution, the Employee
shall thereupon have the right to receive, (A) that number of vested
shares of stock, securities or assets as may be issued or payable with
respect to or in exchange for the Shares which are vested immediately
prior to or as a result of such subdivision, reorganization or
reclassification and (B) that number of unvested shares of stock,
securities or assets as may be issued or payable with respect to or in
exchange for the Shares which are unvested immediately prior to such
subdivision, reorganization or reclassification.
(b) If from time to time during the term of this Agreement there is any
stock split-up, stock dividend, stock distribution or other
reclassification of the Common Stock of the Company, any and all new,
substituted or additional securities to which the Employee is entitled
by reason of his ownership of the Shares shall be immediately subject
to vesting and other provisions of this Agreement in the same manner
and to the same extent as the Shares.
(c) If the Shares are converted into or exchanged for, or stockholders of
the Company receive by reason of any distribution in total or partial
liquidation, securities of another corporation, or other property
(including cash), pursuant to any merger of the Company or acquisition
of its assets, then the rights of the Company under this Agreement
shall inure to the benefit of the Company's successor and this
Agreement shall apply to the securities or other property received upon
such conversion, exchange or distribution in the same manner and to the
same extent as the Shares.
6. "Stand-Off" Agreement. The Employee agrees that, if requested by the
Company and the managing underwriter(s) of a public offering of the Company's
Common Stock, he will enter into an agreement with the Company and said
underwriter(s) not to sell or otherwise transfer any Common Stock of the
Company owned or controlled by him for a period of 270 days after the effective
date of the registration statement for the offering, provided that all
directors and executive officers of the Company enter into substantially the
same agreement with respect to shares of the Company's Common Stock owned or
controlled by them or by organizations they represent.
7. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of this Agreement shall
be severable and enforceable to the extent permitted by law.
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8. Waiver. Any provision contained in this Agreement may be waived, either
generally or in any particular instance, by the Board of Directors of the
Company.
9. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Company and the Employee and their respective heirs, executors,
administrators, legal representatives, successors and assigns.
10. No Rights To Employment. Nothing contained in this Agreement shall be
construed as giving the Employee any right to be retained, in any position, as
an employee of the Company.
11. Notice. All notices required or permitted hereunder shall be in writing
and deemed effectively given upon personal delivery or via the United States
Post Office, by registered or certified mail, postage prepaid, addressed to the
other party hereto at the address shown beneath signature to this Agreement or
at such other address or addresses as either party shall designate to the
other.
12. Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural, and vice
versa.
13. Entire Agreement. This Agreement constitutes the entire agreement
between the parties, and supersedes all prior agreements and understandings,
relating to the subject matter of this Agreement.
14. Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Employee.
15. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the Commonwealth of Massachusetts,
exclusive of its choice of law or conflict of law rules.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
AVICI SYSTEMS INC.
_____________________________________ 000 Xxxxxxxxx Xxxxxx
Employee Signature Xxxxx Xxxxxxxxx, XX 00000
_____________________________________ By:__________________________________
Print Name of Employee
_____________________________________ _____________________________________
Title Title
_____________________________________
Xxxxxx Xxxxxxx
_____________________________________
City State Zip Code
_____________________________________
Telephone No. (with area code)
_____________________________________
Tax ID/ Social Security No.
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