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Exhibit 10.27 - Restricted Stock Agreement
This Restricted Stock Purchase Agreement (the "Agreement") is made this
30th day of April, 1999 (the "Effective Date"), at Phoenix, Arizona, between
SalesLogix Corporation, a Delaware corporation ("Parent") and Xxxxx X. Xxxxx
(the "Executive"), in connection with a Plan of Reorganization and Agreement of
Merger (the "Merger Agreement") of even date by and among Parent, SLX Merger
Company ("Newco") and Enact Incorporated ("Enact"). Capitalized terms not
otherwise defined herein shall have the meaning set forth in the Merger
Agreement.
WHEREAS the Executive was a founder of Enact and is now an employee of
Newco, a wholly owned subsidiary of Parent;
WHEREAS, the parties to the Merger Agreement recognize the necessity of
the continued involvement of Executive to the preservation of both the developed
and in process technology developed by Enact and now owned by Newco; and
WHEREAS in order to give the Executive an opportunity to acquire
additional equity interests in Parent as an incentive for the Executive to
participate in the affairs of Newco and the Parent, Parent is willing to
transfer as payment in part to the Executive and the Executive desires to
receive as payment in part for his services Class A Common Stock of the Parent
according to the terms and conditions hereof.
THEREFORE, the parties agree as follows:
1. Sale of Stock.
In consideration of Executive's ongoing employment with Newco or the
Parent, as described in the Xxxxx Xxxxx Employment Agreement, Parent hereby
agrees to transfer to the Executive and the Executive hereby agrees to receive
as partial payment for his ongoing services an aggregate of 201,893 shares of
Class A Common Stock issued by Parent (the "Shares"), subject to the vesting
schedule and repurchase rights set forth herein, and also subject to those
further vesting conditions and other provisions described in the Escrow
Agreement to which a portion of the shares transferable hereunder shall be
subject.
2. Repurchase Rights and Escrows.
An aggregate 20,189 of the Shares distributed under this Agreement
shall be deposited in the Escrow described in the Merger Agreement (hereafter
the "Merger Escrow"), and shall be subject in full to the Escrow Agreement. Upon
release of Shares from the Merger Escrow, such Shares shall still be subject to
the repurchase rights described in Section 5 and the escrow provisions described
in Section 8 of this Agreement. With respect to the remaining 181,704 Shares
distributed under this Agreement, Executive shall deliver to the Secretary of
Parent (hereinafter referred to as the "Escrow Holder") all certificates
representing the Shares and an executed blank stock assignment for use in
transferring all or a portion of said Shares to Parent if, as and when required
under any provision of this Agreement, including Section 5.
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3. Issuance of Shares.
Upon full execution by all parties of the Merger Agreement, the Xxxxx
Xxxxx Employment Agreement and this Agreement, Parent shall issue duly executed
certificates evidencing the Shares in the name of the Executive, a portion of
which Shares shall be subject to the Merger Escrow, and all of which Shares
shall be subject to the escrow described in this Agreement until expiration of
Parent's repurchase rights as described in Sections 5 and 6.
4. Tax Treatment.
In the event Executive makes an election under Section 83(b) of the
Internal Revenue Code, Executive shall deliver to Parent a copy of such election
form. In connection with such an election for tax treatment under Section 83(b),
Executive acknowledges that Parent may have to withhold taxes on any amounts
deemed to be compensation. Parent shall have the right, in its sole discretion,
to withhold from any cash amounts due or to become due from Parent or Newco to
the Executive an amount equal to the taxes required by any government to be
withheld or otherwise deducted and paid with respect to the issuance of the
Shares.
5. Repurchase Rights.
a. Repurchase Right A. In the event that a "Xxxxx Xxxxx Triggering
Termination," as defined in the Xxxxx Xxxxx Employment Agreement, occurs before
all of the Shares are released from Parent's repurchase rights under Section 6,
then upon the date of such Xxxxx Xxxxx Triggering Termination Parent shall be
deemed to have automatically repurchased, at a purchase price of $0.00, the
following number of Shares:
(i) if the Xxxxx Xxxxx Triggering Termination occurs either on
or after May 1, 2000, or before May 1, 2000 but simultaneous with or
after a Xxxx Xxxxx Triggering Termination, all of the Shares which have
not been released from Parent's repurchase rights under Section 6.
(ii) if the Xxxxx Xxxxx Triggering Termination occurs before
May 1, 2000 and before any Xxxx Xxxxx Triggering Termination, all of
the Shares which have not been released from Parent's repurchase rights
under Section 6, less that number of Shares equal to 5,608 * X, where X
equals the lesser of six (6) or that number of completed months,
commencing with May 1999 inclusive, that Xxxxx Xxxxx was employed prior
to the Xxxxx Xxxxx Triggering Termination.
b. Repurchase Right B. In the event that a "Xxxx Xxxxx Triggering
Termination," as defined below, occurs before May 1, 2000, then upon the date of
such Xxxx Xxxxx Triggering Termination , Parent shall be deemed to have
automatically repurchased, at a purchase price of $0.00: (i) 33,649 of the
Shares less 8,412 Shares for each full month past the eighth month of employment
completed by Xxxx Xxxxx prior to the Xxxx Xxxxx Triggering Termination, if no
Xxxxx Xxxxx Triggering Termination has occurred as of such date; or (ii) if a
Xxxxx Xxxxx
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Triggering Termination has already occurred as of such date, that number of
Shares calculated using the "5,608 * X" formula described in Section 5(a)(ii)
above.
c. The repurchase rights described in this Section 5 shall be
automatic. Upon the occurrence of an event triggering an automatic repurchase
Parent shall become the legal and beneficial owner of the Shares deemed
repurchased and all rights and interests therein or relating thereto, and Parent
shall have the right to retain and transfer to its own name the number of Shares
so repurchased by Parent.
d. As used herein, "Xxxx Xxxxx Triggering Termination" shall mean that
Xxxx Xxxxx'x employment with the Company and/or Newco is terminated prior to
June 1, 2000 due to: (i) any resignation or voluntary abandonment of employment
by Xxxx Xxxxx other than a resignation "For Good Reason" as defined in Section
5.4 of the Xxxx Xxxxx Employment Agreement; or (ii) any termination of Xxxx
Xxxxx for "Cause" as defined in Section 5.3 of the Xxxx Xxxxx Employment
Agreement. Conversely, the term "Xxxx Xxxxx Triggering Termination" shall not
mean: (i) termination due to Xxxx Xxxxx'x death, as described under Section 5.2
of the Xxxx Xxxxx Employment Agreement; (ii) termination due to Xxxx Xxxxx'x
"Disability," as defined in Section 5.1 of the Xxxx Xxxxx Employment Agreement;
(iii) resignation by Xxxx Xxxxx "For Good Reason" as defined in Section 5.4 of
the Xxxx Xxxxx Employment Agreement; or (iv) termination of employment by the
Company and/or Newco (meaning Employee shall no longer be employed by at least
one of them) other than for "Cause" as defined in Section 5.3 of the Xxxx Xxxxx
Employment Agreement.
6. Release of Shares From Repurchase Option.
a. Provided in each case that the Shares have not been completely
repurchased under Section 5, the Shares shall be released from both of Parent's
repurchase rights described in Section 5 above in accordance with the following
schedule:
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RELEASE DATE NUMBER OF SHARES RELEASED
(in addition to those Previously released)
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Months employment B+M+ B+M- B-M+ B-M-
completed:
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June 1, 99 One 0 0 0 0
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July 1, 99 Two 0 0 0 0
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August 1, 99 Three 0 0 0 0
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September 1, 99 Four 0 0 0 0
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October 1, 99 Five 0 0 0 0
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November 1, 99 Six 0 0 0 0
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December 1, 99 Seven 5,608 5,608 0 0
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January 1, 00 Eight 5,608 5,608 0 0
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February 1, 00 Nine 5,608+8,412 5,608 (5,608*X/4) 0
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March 1, 00 Ten 5,608+8,412 5,608 (5,608*X/4)0 0
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April 1, 00 Eleven 5,608+8,412 5,608 (5,608*X/4)0 0
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May 1, 00 Twelve 5,608+8,413 5,608 (5,608 * X/4) 0
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1st of each month thereafter
(assuming no Xxxxx Xxxxx
Triggering Termination occurs) 5,608 5,608 N/A N/A
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As used in the foregoing chart:
- "B+M+" means that as of the date immediately preceding the Release Date
neither a Xxxxx Xxxxx Triggering Termination nor a Xxxx Xxxxx
Triggering Termination has occurred.
- "B+M-" means that as of the date immediately preceding the Release Date
a Xxxxx Xxxxx Triggering Termination has not occurred, but a Xxxx Xxxxx
Triggering Termination has occurred.
- "B-M+" means that as of the date immediately preceding the Release Date
a Xxxxx Xxxxx Triggering Termination has occurred, but a Xxxx Xxxxx
Triggering Termination has not occurred.
- "B-M-" means that as of the date immediately preceding the Release Date
both a Xxxxx Xxxxx Triggering Termination and a Xxxx Xxxxx Triggering
Termination have occurred.
- "X" means the lesser of six (6) or that number of completed months,
commencing with May 1999 inclusive, that Xxxxx Xxxxx was employed prior
to the Xxxxx Xxxxx Triggering Termination.
b. The Shares which have been released from Parent's repurchase rights
described in Section 5 shall be delivered to the Executive at the Executive's
request (see Section 8) except to the extent they remain subject to the Merger
Escrow.
c. Notwithstanding Section 5 or the release schedule set forth in
Section 6(a) above, all Shares not previously repurchased under Section 5 shall
immediately be released from both Parent's repurchase rights and the escrow
described in this Agreement upon either: (i) the effective date of a "Xxxxx
Xxxxx Non-Triggering Termination," as defined in the Xxxxx Xxxxx Employment
Agreement; or (ii) a "Change in Control Transaction." As used in this Section, a
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Change in Control Transaction shall mean a transaction in which: (i) Parent is
merged or consolidated with another business entity not previously controlled by
Parent; (ii) the Parent sells or transfers all or substantially all of its
assets; or (iii) at least 50% or more of the equity investment and of the voting
power of the Parent is acquired by a single entity or reporting group.
7. Restriction on Transfer.
Except for the escrow described in Sections 2 and 8, or a transfer of
the Shares to Parent as contemplated by this Agreement, none of the Shares or
any beneficial interest therein shall be transferred, encumbered or otherwise
disposed of in any way until the release of such Shares from Parent's repurchase
rights in accordance with the provisions of this Agreement.
8. Escrow of Shares.
a. The Shares issued under this Agreement shall be held by the Escrow
Holder, along with a stock assignment executed by the Executive in blank, until
Parent's rights to repurchase such Shares, as set forth above, have expired.
b. The Escrow Holder is hereby directed to permit transfer of the
Shares only in accordance with this Agreement or instructions signed by both
parties. The Escrow Holder shall have no liability for any act or omission
hereunder while acting in good faith in the exercise of his own judgment.
c. If Parent's automatic repurchase rights are triggered, the Escrow
Holder, upon receipt of written notice from Parent, shall take all steps
necessary to accomplish such transfer.
d. When the Parent's repurchase option specified in Section 5 has been
exercised or expires unexercised or a portion of the Shares have been released
from such repurchase option, upon Executive's request the Escrow Holder shall
promptly cause a new certificate to be issued for such released Shares and shall
deliver such certificate to the Executive, except to the extent such Shares
remain subject to the Merger Escrow.
e. Subject to the terms hereof, the Executive shall have all the rights
of a shareholder with respect to such Shares while they are held in escrow,
including without limitation, the right to vote the Shares and receive any cash
dividends declared thereon. If, from time to time during the term of Parent's
repurchase option, there is (i) any stock dividend, stock split or other change
in the Shares, or (ii) any merger or sale of all or substantially all of the
assets or other acquisition of Parent, any and all new, substituted or
additional securities to which the Executive is entitled by reason of his
ownership of the Shares shall be immediately subject to this escrow, deposited
with the Escrow Holder and included thereafter as "Shares" for purposes of this
Agreement and Parent's repurchase option set forth above.
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9. Investment Representations.
In connection with the purchase of the Shares, the Executive represents
and warrants to Parent the following:
a. He is aware of Parent's business affairs and financial condition and
has acquired sufficient information about Parent to reach an informed and
knowledgeable decision to acquire the Shares.
b. He is acquiring the Shares for investment for his own account only
and not with a view to, or for resale in connection with, any "distribution"
thereof within the meaning of the Securities Act of 1933 and applicable state
securities laws (collectively, the "Securities Act"). He further acknowledges
and understands that the Shares have not been registered under the Securities
Act by reason of a specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of his investment intent as expressed
herein.
c. He acknowledges and understands that the Shares must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. He understands that the
certificate(s) evidencing the Shares will be imprinted with a legend which
prohibits the transfer of the Shares unless they are registered or such
registration is not required in the opinion of counsel for Parent.
d. He is aware of the adoption of Rule 144 by the Securities and
Exchange Commission, promulgated under the Securities Act, which permits limited
public resale of securities acquired in a non-public offering subject to the
satisfaction of certain conditions and that such conditions are not currently
satisfied with respect to Parent and the Shares and there can be no assurance
(and Parent undertakes no obligation to ensure) that such conditions will ever
be met.
e. He further acknowledges that in the event all of the requirements of
Rule 144 are not met, compliance with another registration exemption will be
required; and that although Rule 144 is not exclusive, the staff of the
Commission has expressed its opinion that persons proposing to sell private
placement securities other than in a registered offering and other than pursuant
to Rule 144 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales and that such
persons and the brokers who participate in the transactions do so at their own
risk.
10. Legends.
The share certificate(s) evidencing the Shares issued hereunder shall
be endorsed with the same legend described in Section 1.3 of the Enact
Investor Rights Agreement.
11. Right of First Refusal.
[intentionally omitted]
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12. Adjustment for Stock Split.
All references to the number and purchase price of the Shares in this
Agreement shall be appropriately adjusted to reflect any stock split, stock
dividend or other change in the Shares which may be made by Parent after the
date of this Agreement. This provision does not grant Executive any preemptive
or other rights to acquire additional shares of Parent.
13. General Provisions.
a. This Agreement shall be governed by the laws of the State of
Arizona. This Agreement represents the entire agreement between the parties with
respect to the purchase of Common Stock by the Executive (other than the Merger
Agreement and other documents ancillary thereto) and may only be modified or
amended in writing signed by both parties.
b. Any notice, demand or request required or permitted to be given by
either Parent or the Executive pursuant to the terms of this Agreement shall be
in writing and shall be deemed given when delivered personally or deposited in
the U.S. mail, first class with postage prepaid, and addressed to the parties at
the addresses set forth at the end of this Agreement or such other address as a
party may request by notifying the other in writing. Any notice to the Escrow
Holder shall be sent to Parent's address with a copy to the party not sending
the notice.
c. The rights and benefits of Parent under this Agreement shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by
Parent's successors and assigns. The rights and obligations of the Executive
under this Agreement may only be assigned with the prior written consent of
Parent.
d. Either party's failure to enforce any provision or provisions of
this Agreement shall not in any way be construed as a waiver of any such
provision or provisions, nor prevent that party thereafter from enforcing each
and every other provision of this Agreement. The rights granted both parties
herein are cumulative and shall not constitute a waiver of either party's right
to assert all other legal remedies available to it under the circumstances.
e. The Executive agrees to execute, upon request of Parent, any further
documents or instruments necessary or desirable to carry out the purposes or
intent of this Agreement.
14. Not an Employment Agreement.
Executive is an employee at will of Parent or Newco and may be
terminated at any time with or without cause, subject to the Xxxxx Xxxxx
Employment Agreement and any other employment agreements between Parent and the
Executive. Nothing in this Agreement or any other agreement with Parent shall
imply or be construed as a promise or guarantee of continued employment for any
period, including without limitation, any period of time required for full
vesting or exercise of rights under this Agreement.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date set forth above.
SALESLOGIX CORPORATION
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Its: CFO
/s/ Xxxxx Xxxxx
Xxxxx Xxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxx 00000
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