EXHIBIT 10.33
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ON TECHNOLOGY CORPORATION
STOCK RESTRICTION AGREEMENT
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THIS IS AN AGREEMENT made as of the 28th day of December, 2000 between
ON Technology Corporation, a Delaware corporation (the "Company"), and Xxxxxx X.
Xxxxxxx (the "Stockholder").
For valuable consideration, receipt of which is acknowledged, the
Company and the Stockholder agree as follows:
1. Purchase of Shares. Contemporaneously with the execution of this
Agreement, the Stockholder has exercised an option to purchase, subject to the
terms and conditions of this Agreement, 300,000 shares (the "Shares") of Common
Stock, $.01 par value per share, of the Company ("Common Stock"), at a purchase
price of $.10 per share. The aggregate purchase price for the Shares was paid by
the Stockholder by check payable to the order of the Company, or by such other
method as may be acceptable to the Company. The Stockholder agrees that both the
Shares and any other capital stock of the Company subsequently acquired by the
Stockholder will be subject to the repurchase option set forth in Section 2 and
the restrictions on transfer set forth in Section 3 of this Agreement.
2. Resale of Shares. If the Stockholder ceases to be employed by the
Company for any reason or for no reason:
(a) at any time prior to February 1, 2001, the Stockholder shall
immediately sell and transfer to the Company all Shares held by the Stockholder;
(b) at any time on or after February 1, 2001 but prior to May 1,
2002, the Stockholder shall be entitled to retain 75,000 Shares and shall
immediately sell and transfer to the Company 225,000 Shares held by the
Stockholder;
(c) for each three month period commencing on (but including) May
1, 2002 and ending with (but including) February 1, 2004, the number of Shares
which the Stockholder shall be entitled to retain shall be increased by 18,750
Shares per three-month period and there shall be a corresponding decrease in the
number of Shares which the Stockholder would be required to sell and transfer to
the Company; and
(d) after February 1, 2004, the Stockholder shall be entitled to
retain all Shares held by him;
(e) Any Shares required to be transferred and sold by the
Stockholder to the Company shall be sold by the Stockholder and purchased by the
Company at $.10 per Share, such consideration to be paid by the Company in cash
or by check.
(f) Notwithstanding anything herein to the contrary, in the event
of a consolidation or merger in which the Company is not the surviving
corporation or results in a change of 50% or more of the Company's equity
securities, or in the event of the acquisition of all or substantially all of
the Company's outstanding Common Stock by a single person, entity or group of
persons or entities acting in concert, or in the event of the sale or the
transfer of all or substantially all of the assets of the Company, prior to the
fourth anniversary of the date hereof (each, an "Organic Event"), then, in
connection with, and immediately prior to, the consummation of such Organic
Event, the repurchase provisions of this Section 2 shall terminate and the
Stockholder may retain all Shares subject to this Agreement.
3. Restrictions on Transfer. The Stockholder shall not (directly or
indirectly through an agent, executor, heir, administrator, trustee, receiver,
conservator or other representative) sell, assign, exchange, encumber,
distribute, bequeath, transfer, pledge, hypothecate or otherwise dispose of, by
gift or otherwise (collectively "transfer"), any of the Shares, or any interest
therein, unless and until the Stockholder shall have complied with the
provisions of this Agreement. Notwithstanding the foregoing, the Stockholder may
transfer the Shares to the Company or to or for the benefit of any spouse, child
or grandchild, or to a trust for their benefit, or by will or the laws of
descent and distribution; provided, that such Shares shall remain subject to
this Agreement and such permitted transferee shall, as a condition to such
transfer, deliver to the Company a written instrument confirming that such
transferee shall be bound by all of the terms and conditions of this Agreement.
4. Effect of Prohibited Transfer. The Company will not be required
(a) to transfer on its books any of the Shares or other stock which have been
sold or transferred in violation of any of the provisions set forth in this
Agreement, or (b) to treat as owner of such Shares or other stock, or to pay
dividends to, any transferee to whom any such Shares or other stock have been so
sold or transferred. In addition, in the event that any Shares or other stock
are sold or transferred (including by operation of law or otherwise) in
violation of any of the provisions set forth in this Agreement, the Company will
have the right and option to purchase from the transferring Stockholder and any
purported transferee all of such Shares or other stock for a purchase price per
share equal to the price per share originally paid by the Stockholder pursuant
to this Agreement.
5. Termination of Agreement. This Agreement shall terminate upon the
earlier of (i) the satisfaction of all provisions set forth in Section 2 herein
or (ii) ten years from the date of this Agreement.
6. Restrictive Legend. All certificates representing Shares or other
capital stock subject to this Agreement will bear a legend in substantially the
following form, in addition to any other legends that may be required under
federal or state securities laws:
"The shares of stock represented by this certificate are
subject to restrictions on transfer and an option to
purchase set forth in a certain Stock Restriction
Agreement between the Company and the registered owner of
this certificate (or his predecessor in interest), and
such Agreement is available for inspection without charge
at the office of the Treasurer of the Company."
7. Investment Representations. The Stockholder represents, warrants
and covenants as follows:
(a) He is purchasing the Shares for his own account for investment
only, and not with a view to, or for sale in connection with, any distribution
of the Shares in violation of the Securities Act, or any rule or regulation
under the Securities Act.
(b) He has had such opportunity as he has deemed adequate to
obtain from representatives of the Company such information as is necessary to
permit him to evaluate the merits and risks of his investment in the Company.
(c) He has sufficient experience in business, financial and
investment matters to be able to evaluate the risks involved in the purchase of
the Shares and to make an informed investment decision with respect to that
purchase.
(d) He can afford a complete loss of the value of the Shares and
is able to bear the economic risk of holding the Shares for an indefinite
period.
(e) He understands that (i) the Shares have not been registered
under the Securities Act and are "restricted securities" within the meaning of
Rule 144 under the Securities Act, (ii) the Shares cannot be sold, transferred
or otherwise disposed of unless they are subsequently registered under the
Securities Act or an exemption from registration is then available; (iii) in any
event, the exemption from registration under Rule 144 will not be available for
at least two years and even then will not be available unless a public market
then exists for the Common Stock, adequate information concerning the Company is
then available to the public, and other terms and conditions of Rule 144 are
complied with; and (iv) there is now no registration statement on file with the
Securities and Exchange Commission with respect to any stock of the Company and
the Company has no obligation or current intention to register the Shares under
the Securities Act.
(f) A legend substantially in the following form will be placed on
the certificate representing the Shares:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended,
and may not be sold, transferred or otherwise disposed of
in the absence of an effective registration statement
under such Act or an opinion of counsel satisfactory to
the corporation to the effect that such registration is
not required."
8. Adjustments for Stock Splits, Stock Dividends, etc. 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
Stockholder is entitled by reason of his ownership of the Shares or other
Company securities will be immediately subject to the restrictions on transfer
and the other provisions of this Agreement in the same manner and to the same
extent as the Shares, and the respective option prices shall be appropriately
adjusted.
9. Withholding Taxes.
(a) The Stockholder acknowledges and agrees that the Company has
the right to deduct from payments of any kind otherwise due to the Stockholder
any federal, state or local taxes of any kind required by law to be withheld
with respect to the purchase of the Shares by the Stockholder.
(b) If the Stockholder elects, in accordance with Section 83(b) of
the Internal Revenue Code of 1986, as amended, to recognize ordinary income in
the year of acquisition of the Shares, the Company will require at the time of
such election an additional payment for withholding tax purposes based on the
difference, if any, between the purchase price for such Shares and the fair
market value of such Shares as of the day immediately preceding the date of the
purchase of such Shares by the Stockholder.
10. Severability. The invalidity or unenforceability of an provision
of this Agreement will not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of this Agreement will be
severable and enforceable to the extent permitted by law.
11. 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.
12. Binding Effect. This Agreement is binding upon and shall inure to
the benefit of the Company and the Stockholder and their respective heirs,
executors, administrators, legal representatives, successors and assigns,
subject to the restrictions on transfer set forth in Section 3 of this
Agreement.
13. No Rights To Employment. Nothing contained in this Agreement is to
be construed as giving the Stockholder any right to be retained, in any
position, as an employee of the Company.
14. Notice. All notices required or permitted hereunder must be in
writing and are deemed effectively given upon personal delivery or upon deposit
in the United States Post Office, by registered or certified mail, postage
prepaid, addressed to the other party to this Agreement at the address shown
beneath such party's signature to this Agreement, or at such other address as
one party will designate to the other in accordance with this Section 14.
15. Pronouns. Whenever the context may require, any pronouns used in
this Agreement are deemed to include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns are deemed to include
the plural, and vice versa.
16. 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.
17. Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Stockholder.
18. Governing Law. This Agreement is to be construed, interpreted and
enforced in accordance with the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ON TECHNOLOGY CORPORATION
By:
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Name:
Title:
Address: 000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Stockholder:
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Xxxxxx X. Xxxxxxx
Address: 000 Xxxxxxxxxxxx Xxxxxx, Xx. 0
Xxxxxx, XX 00000
