EXHIBIT 10.18
SHAREHOLDER'S AGREEMENT
THIS SHAREHOLDER'S AGREEMENT (the "Agreement") is made as of the 13th
day of April, 1999, by and between NETSOLVE(SM) INCORPORATED, a Delaware
corporation (the "Company"), and ______________________ (the "Purchaser").
WHEREAS, the Purchaser has been granted an option to purchase shares
of Common Stock of the Company under the Company's Long-Term Incentive
Compensation Plan (the "Plan"); and
WHEREAS, the Purchaser and the Company acknowledge that they are
entering into this Agreement in accordance with the provisions of the Plan and
that certain Series B Preferred Stock Purchase Agreement (the "Stock Purchase
Agreement"), dated as of October 19, 1992, as amended, by and among the Company
and the Investors (as defined therein);
NOW, THEREFORE, IT IS HEREBY AGREED:
1. Sale and Purchase of Shares. Pursuant to the terms and conditions
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of this Agreement, upon exercise of Purchaser's option, the Purchaser shall
purchase, and the Company shall sell to Purchaser, 15,000 shares of Common Stock
of the Company (the "Shares") for a cash consideration of $9.00 per share.
2. Company's Right to Repurchase. The Shares shall be subject to the
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following right ("Repurchase Right"):
(a) If the Purchaser should cease to be a director of the Company, for
any reason, the Company (or, as provided in (c) below, its designee) shall
have the right to repurchase from the Purchaser, or the Purchaser's
personal representative, as the case may be, all of the Shares subject to
the Repurchase Right. The starting date for determination of the percentage
of the Shares which are subject to the Repurchase Right shall be the date
of this Agreement (the "Vesting Commencement Date").
(b) The percentage of the Shares which are subject to the Repurchase
Right shall be determined as follows:
Length of Time Vesting Percentage of
Commencement Date Shares Subject to
-------------------------- Repurchase Right
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Less than 4 completed
quarters 100%
4 completed quarters 75%
5 completed quarters 68.75%
6 completed quarters 62.50%
7 completed quarters 56.25%
8 completed quarters 50%
9 completed quarters 43.75%
10 completed quarters 37.50%
11 completed quarters 31.25%
12 completed quarters 25%
13 completed quarters 18.75%
14 completed quarters 12.50%
15 completed quarters 6.25%
16 completed quarters None
(c) Within sixty (60) days after the later of the effective date upon
which Purchaser ceases to be a director of the Company, upon notice to
Purchaser specifying the time, place and date for settlement, the Company
(or, to the extent the Company is legally prohibited from exercising such
right, its designee) shall repurchase from the Purchaser, in cash, at
Purchaser's original purchase price per share as set forth in Paragraph 1
above, the Shares which are subject to the Repurchase Right. If the Company
is prohibited by law from fully exercising, or the Company (or its
designee) fails to fully exercise this Repurchase Right within such sixty
(60) day period, the Repurchase Right shall expire as to all Shares.
3. Rights as Stockholder; Escrow.
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(a) Subject to the terms and conditions of this Agreement, Purchaser
shall have all of the rights of a stockholder of the Company with respect
to the Shares from and after the date of issuance of the Shares until
repurchase or other disposition of the
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Shares as provided for herein. At all times after the date of this
Agreement, whenever submitted to the stockholders of the Company for vote
thereon, Purchaser agrees to vote the Shares in accordance with the terms
of Section 8 of the Stock Purchase Agreement (the terms of which, as
amended from time to time, are incorporated herein by reference) as though
he/she were a party thereto.
(b) Purchaser shall deliver all certificates representing the Shares
to the Secretary of the Company for safekeeping. Each such certificate
shall be accompanied by a duly executed stock power authorizing any officer
to effect the transfer of such Shares on the books of the Company in
accordance with the terms of this Agreement. If Purchaser so requests, such
Secretary will deliver to Purchaser certificates representing such number
of Shares as are not then subject to the Repurchase Right. Following the
exercise, or lapse without exercise, of the Repurchase Right, the Company
will direct its Secretary to deliver to Purchaser a certificate(s)
representing the aggregate number of Shares, if any, not repurchased by the
Company.
4. Stock Splits, Recapitalizations, Etc. If during the term of the
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Repurchase Right:
(a) there is any stock dividend, stock split, reverse stock split,
reorganization, reclassification, recapitalization, spin-off or other
change in the character or amount of the outstanding securities of the
Company; or
(b) there is any consolidation, merger, or sale of all, or
substantially all, of the assets of the Company;
then, in such event, any and all new, substituted or additional securities or
property to which the Purchaser is entitled by reason of ownership of the Shares
shall be immediately subject to this Agreement and be included in the term
"Shares" for all purposes of this Agreement, and the repurchase price per share
specified in Paragraph 2(c) shall be appropriately adjusted by the Board of
Directors of the Company.
5. Purchase of Additional Stock. If the Purchaser at any time after
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the date of this Agreement acquires any capital stock of the Company, in
addition to that described in Paragraphs 1 and 4 above (other than capital stock
acquired on the open market or from an unrelated third party, and capital stock
acquired from the Company which the Board of Directors of the Company, in its
discretion, expressly designates as not subject to this Agreement), or any
options, rights or warrants therefor ("Additional Stock"), such Additional Stock
shall be immediately subject to this Agreement and included in the term "Shares"
for all purposes of this Agreement; provided, however, that:
(a) the repurchase price per share of such Additional Stock shall
be the purchase price paid or to be paid by the Purchaser therefor;
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(b) any such Additional Stock purchased pursuant to a vested option
shall be deemed to be fully vested and not subject to the Repurchase Right;
and
(c) the "Vesting Commencement Date" for purposes of the Repurchase
Right shall be the date of purchase by, or issuance to, Purchaser of such
Additional Stock unless otherwise specified by the Company's Board of
Directors at the time of such purchase or issuance.
6. Right of First Refusal. Shares subject to the Repurchase Right may
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not be transferred. Before any Shares held by the Purchaser and not subject to
the Repurchase Right may be sold or otherwise transferred (including, but not
limited to, any transfer by operation of law and any transfer at death or by
inheritance, but excluding a transfer described in Paragraph 6(e) hereof), such
Shares shall first be offered to the Company in the following manner:
(a) Purchaser shall deliver to the Company a notice (the "Notice")
stating (i) his bona fide intention to sell or otherwise transfer such
Shares; (ii) the number of Shares to be transferred; (iii) the name of the
proposed transferee; and (iv) the price or other consideration for which
Purchaser proposes to transfer the Shares.
(b) At any time within sixty (60) days after receipt of the Notice,
the Company, upon notice to Purchaser specifying the time, place and date
for settlement, may elect to purchase all of the Shares specified in the
Notice at the price per share specified therein, or if no price is
specified, at the fair market value thereof as determined in good faith by
the Company's Board of Directors.
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(c) The Company's right of first refusal provided for in this
Paragraph 6 shall not be assignable, except that if the Company does not,
for any reason, exercise its right of first refusal within thirty (30) days
after receipt of the Notice, the Company hereby assigns such right as of
that date to the Investors, or their heirs, executors, guardians,
successors and assigns, who are then holders of the Company's Preferred
Stock or Common Stock of the Company into which such stock has been
converted. The Company may also, by written agreement, assign such right
(on a pro rata basis) to subsequent purchasers of the Company's Preferred
Stock. The right shall be exercisable by each such assignee, upon notice to
Purchaser specifying the time, place and date for settlement, with respect
to the number of Shares subject to such right in the proportion which the
number of shares of Common Stock owned (or which would be owned upon
conversion of the Preferred Stock) by such assignee at the time of
exercise, bears to the total number of shares of Common Stock so owned or
deemed to be owned by all such assignees. Each such assignee which
exercises its right to purchase all of the Shares purchasable by it
hereunder may, in addition, exercise such right as to the Shares not
purchased by other assignees hereunder, pro rata based upon the number of
shares of Common Stock so owned (or deemed to be owned) by each assignee
exercising its right hereunder. The sale by Purchaser to the Company or its
assignees shall be consummated within sixty (60) days after receipt by the
Company of the Notice.
(d) If all of the Shares to which the Notice refers are not purchased
by the Company or such assignees within such sixty (60) day period, then
such right of first refusal shall terminate and Purchaser may sell such
Shares to any person named in the Notice at the price specified therein, or
at a higher price, provided that such sale or transfer is consummated
within ninety (90) days of the date of the Notice to the Company, and
provided further, that any such sale is in accordance with all the terms
and conditions hereof. If the Purchaser does not consummate the sale or
transfer within such 90-day period, the right of first refusal provided
herein shall be deemed to be revived with respect to such Shares and no
sale or transfer shall be effected without first offering the Shares in
accordance herewith.
(e) There shall be excepted from this right of first refusal any gift
or donation to a member of Purchaser's family, or to a trust established
for the benefit of Purchaser or a member or members of his family, provided
that any such transfer to a child who is then under twenty-one (21) years
of age must be conditioned upon the Purchaser retaining and reserving for
himself the right to do any act with respect to the transferred Shares on
behalf of such transferee that is permitted, authorized or required by this
Agreement. For purposes hereof, the term "family" shall mean the spouse,
natural or adopted children and other lineal descendants, parents,
parents-in-law, brothers, sisters, nephews, and nieces of Purchaser.
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(f) Notwithstanding the above, neither the Company nor its assignees
shall have any right under this Paragraph 6 at any time subsequent to the
closing of a bona fide, firm commitment underwritten public offering of the
Common Stock of the Company pursuant to a Registration Statement on Form
S-1, or its then equivalent, declared effective under the Securities Act of
1933, as amended.
7. Investment Representations of Purchaser. Purchaser hereby
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represents and warrants that he is acquiring the Shares with his own funds for
investment for an indefinite period for his own account, not as a nominee or
agent, and not with a view to the sale or distribution of any part thereof, and
that he has no present intention of selling, granting participation in, or
otherwise distributing the same, but subject, nevertheless, to any requirement
of law that the disposition of his property shall at all times be within his
control. Purchaser further represents that he does not have any contract,
undertaking, agreement or arrangement to sell, transfer, or grant participations
to any third person, with respect to any of the Shares.
Purchaser represents that he is able to fend for himself in the transaction
contemplated by this Agreement, has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of his
investment, has the ability to bear the economic risks of his investment and has
been furnished with and has had access to such information as would be made
available in the form of a registration statement, together with such additional
information as is necessary to verify the accuracy of the information supplied
and to have all questions answered by the Company.
Purchaser understands that the Shares have not been registered under the
Securities Act of 1933, as amended (the "Act"), on the ground that the sale
provided for in this Agreement is exempt pursuant to Section 3(b) or 4(2) of the
Act, and that the Company's reliance on such exemption is predicated on his
representations set forth herein.
Purchaser understands that if the Company does not register with the
Securities and Exchange Commission pursuant to Sections 12 or 15 of the
Securities Exchange Act of 1934 or if a registration statement covering the
Shares (or a filing pursuant to the exemption from registration under Regulation
A of the Act) under the Act is not in effect when he desires to sell the Shares,
he may be required to hold the Shares for an indeterminate period. The Purchaser
also acknowledges that he understands that any sale of the Shares which might be
made by him in reliance upon Rule 144 under the Act may be made only in limited
amounts in accordance with the terms and conditions of that Rule and that he may
not be able to sell the Shares at the time or in the amount he so desires.
Purchaser is familiar with Rule 144 and understands that the Shares constitute
"restricted securities" within the meaning of that Rule.
Purchaser agrees that in no event will he make a disposition of any of the
Shares unless and until (a) he shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition, and (b) he shall have
furnished the Company with an opinion of counsel satisfactory to the Company to
the effect that (i) such disposition will not require registration of such
Shares
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under the Act, or (ii) that appropriate action necessary for compliance
with the Act has been taken, or (c) the Company shall have waived, expressly and
in writing, its rights under clauses (a) and (b) of this subparagraph. The
Company shall be under no obligation to register such Shares.
8. Restrictive Legends. All certificates representing any Shares subject to
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the provisions of this Agreement shall have endorsed thereon the following
legends:
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A CERTAIN SHAREHOLDER'S AGREEMENT WHICH, AMONG
OTHER THINGS, INCLUDES A RIGHT OF REPURCHASE OF THESE SECURITIES, A RIGHT
OF FIRST REFUSAL ON THE SALE OF THE SECURITIES AND REQUIRES THAT THESE
SECURITIES BE VOTED AS THEREIN PROVIDED. COPIES OF THE AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION."
(b) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND
MAY NOT BE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT COVERING
SUCH SHARES UNDER THE SECURITIES ACT OF 1933, OR PURSUANT TO RULE 144 UNDER
THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT."
(c) Any legend required to be placed thereon by applicable state
securities laws.
9. No Obligation to Transfer. The Company shall not be required (i) to
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transfer on its books any Shares which shall have been sold or transferred in
violation of any of the provisions set forth in this Agreement, or (ii) to treat
as owner of such Shares or to accord the right to vote as such owner or to pay
dividends to any transferee to whom such Shares shall have been so transferred.
10. Further Assurances. The parties agree to execute such further
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instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement.
11. Governing Law. This Agreement shall be construed, governed and enforced
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in accordance with the laws of the State of Texas, except to the extent the
General Corporation Law of the State of Delaware is applicable.
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12. Entire Agreement. This Agreement constitutes the entire agreement
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of the parties with respect to the subject matter hereof. This Agreement may
only be amended with the written consent of the parties hereto and the written
consent of the Investors, or their respective successors or assigns, who are
then holders of at least a majority of the Preferred Stock or Common Stock of
the Company into which such Preferred Stock has been converted; and no oral
waiver or amendment shall be effective under any circumstances whatsoever.
13. Binding Effect. This Agreement shall be binding upon and inure to
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the benefit of the parties hereto and their respective successors, heirs,
executors, administrators, guardians and personal representatives. Nothing in
this Agreement shall be construed to give any person or entity other than the
parties hereto and their respective successors any legal or equitable right,
remedy or claim under this Agreement.
14. Headings. Headings of the several sections of this Agreement are
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inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
NETSOLVE(SM) INCORPORATED
00000 Xxxxx Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
By:
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Xxxxxxx X. Xxxxxx, Vice President-Finance,
Chief Financial Officer and Secretary
PURCHASER:
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Executed by each of the following directors:
Xxxx X. Xxxxx
J. Xxxxxxx Xxxxxxx
C. Xxxxxxx Xxxxxxxx
Xxxx X. XxXxxxxx
H. Xxxxxx Xxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxx, Xx.
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