EXHIBIT B
NETOBJECTS, INC.
RESTRICTED STOCK TRANSFER AGREEMENT
THIS AGREEMENT is made and entered into as of ______________, ____
between NetObjects, Inc., a Delaware corporation (the "Company") and
______________ ("Purchaser"), the holder of stock options under the 1997
Special Stock Option Plan (the "Plan") pursuant to a Stock Option Agreement
dated ______________, ____ (the "Option Agreement").
A. Pursuant to the exercise of stock options granted to the
Purchaser by the Company in the Option Agreement, the Purchaser has elected
to purchase __________ shares of the Company's Common Stock (the "Shares")
for a total purchase price of $____________.
B. As provided in the Option Agreement, Purchaser must execute
this Agreement giving the Company a right of first refusal on all sales of
Shares by Purchaser upon the terms and conditions stated herein and making
certain representations regarding his purchase of the Shares as required by
the Company pursuant to applicable federal and state securities laws.
C. Unless otherwise provided expressly herein, defined terms
under the Plan when used herein shall have the meanings ascribed to them
under the Plan.
In consideration of the mutual covenants exchanged, the
parties agree as follows:
1. RESTRICTIONS ON TRANSFER; RIGHT OF FIRST REFUSAL.
(a) NO TRANSFER OF SHARES SUBJECT TO REPURCHASE OPTION.
Purchaser shall not sell, transfer, pledge, assign or otherwise dispose of
any of the Shares except in accordance with the provisions of this Agreement.
(b) RIGHT OF FIRST REFUSAL. Should Purchaser wish to
transfer any of the Shares, or any interest in such Shares, Purchaser shall
first deliver a written notice (the "Transfer Notice") to the Company, which
shall have the option to purchase such shares as provided herein (the "Right
of First Refusal"). As used herein, the term "transfer" means any sale,
assignment, gift, hypothecation, alienation or other disposition (including
any involuntary transfer of the Shares (or part of them) to a creditor) to
any individual, entity, government, government agency, political subdivision
or unincorporated association. The Transfer Notice must specify: (i) that
Purchaser has a bona fide intention to sell or transfer such Shares; (ii) the
name and address of the person or firm to whom the Purchaser intends to
transfer the Shares, or interest
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therein; (iii) the number of Shares, or interest therein, Purchaser proposes
to transfer; (iv) the price or amount to be paid for the proposed transfer
(including the amount of any debt to be paid, cancelled or forgiven upon
foreclosure of a security interest in the Shares or upon any other transfer
to the Purchaser's creditors); and (v) all other material terms and
conditions of the proposed transfer.
(c) ELECTION TO PURCHASE SHARES. Within thirty (30)
days after receipt of the Transfer Notice, the Company or its designee (as
the case may be) may elect to purchase all, but not less than all, of the
Shares to which the Transfer Notice refers at the per share price specified
in the Transfer Notice. If no price is specified in the Transfer Notice, the
purchase price shall be the fair market value of the Shares, as determined in
good faith by the Board of Directors of the Company. Such Right of First
Refusal shall be exercised by delivery to the Purchaser by the Company or its
designee, of a written election to exercise such Right of First Refusal,
specifying the number of Shares to be purchased by the Company or its
designee (as the case may be). Notwithstanding the foregoing, the Company
may elect to offset against and deduct from any payment of the purchase price
any indebtedness then owed by Purchaser to the Company.
(d) CLOSING FOR PURCHASE OF SHARES. In the event the
Company elects to acquire Shares of the Purchaser as specified in the
Transfer Notice, the Secretary of the Company shall so notify the Purchaser
and settlement thereof shall be made in cash within forty-five (45) days
after the Secretary of the Company receives the Transfer Notice, provided
that if the terms of payment set forth in the Transfer Notice were other than
cash against delivery, the Company shall pay for said Shares on the same
terms and conditions set forth in the Transfer Notice.
(e) TRANSFERS FREE OF RIGHT OF FIRST REFUSAL. If the
Shares referred to in the Transfer Notice are not purchased as aforesaid by
the Company, or its designee(s), Purchaser, within a period of ninety (90)
days from the date of delivery of the Transfer Notice to the Company, may
sell any of said Shares to any person named in the Transfer Notice at the
price and on the terms specified in the Transfer Notice, or at a higher price
or on terms more favorable to the Purchaser, provided that such sale or
transfer is consummated within ninety (90) days following the date of
delivery of the Transfer Notice to the Company and, provided further, that
such sale is in accordance with all the terms and conditions hereof. The
transferee will hold all Shares transferred hereunder subject to the
provisions of this Agreement. No transfer of the Shares shall be made after
the end of such ninety (90)-day period, nor shall any change in the terms of
the transfer be permitted, without delivery by the Purchaser to the Company
of a new Transfer Notice in compliance with the requirements of this Section
4.
(f) GIFTS OF SHARES. Notwithstanding any other term of
this Section 4, Purchaser may make a gift of all or any part of the Shares to
any of Purchaser's parents, spouse, or issue, or to a trust for the exclusive
benefit of any of the foregoing parties. The donee or donees shall hold such
Shares subject to all the provisions of this Agreement.
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2. PROCEDURE FOR PURCHASE OF THE SHARES.
(a) The closing for the purchase of the Shares hereunder
shall take place at the Company's principal offices within forty-five (45)
days of the Company's receipt of the Notice. At the closing, the holder of
the certificate(s) representing the Shares being transferred shall deliver
said certificate or certificates evidencing the Shares to the Company, duly
endorsed for transfer, and the Company shall deliver the purchase price. The
purchase price shall be payable in full in cash, or by certified check or
cashier's check, provided that the Company may elect to offset against and
deduct from any payment of the purchase price any indebtedness then owed by
Purchaser to the Company.
(b) As security for the faithful performance of the
terms of this Agreement and to ensure the availability for delivery of
Purchaser's Shares upon the exercise of the Company's purchase option by the
Company or its designee, Purchaser agrees to deliver and deposit with the
Secretary of the Company two Stock Assignments duly endorsed (with date and
number of shares blank). Purchaser hereby constitutes and appoints the
Secretary of the Company as his attorney-in-fact and agent to transfer Shares
as to which the Company's purchase option has been exercised hereunder if the
Company or its designee has tendered the purchase price for the Shares to
Purchaser at the address set forth herein or as otherwise noticed in writing
and, in connection therewith: (i) to date the stock assignment(s) necessary
for the transfer in question; (i) to fill in the number of shares being
transferred; and (iii) to deliver a certificate representing the shares being
purchased to the Company or its designee. Purchaser further authorizes the
Company to refuse, or to cause its transfer agent to refuse, to transfer of
record any stock attempted to be transferred in violation of this Agreement.
Purchaser agrees that the foregoing power of attorney is coupled with an
interest, is irrevocable and shall survive Purchaser's death, insanity,
incapacity, bankruptcy or insolvency.
(c) If any transfer of the Shares requires the consent
of any agency pursuant to the securities laws of any state, the time periods
specified herein shall be extended for such periods as the necessary request
for consent to transfer is pending before such agency. All parties agree to
cooperate in making such request for transfer, and no transfer shall be
effected without such consent if required by law.
3. EXEMPT TRANSFERS. Notwithstanding any other term of this
Agreement, Purchaser may make a gift of all or part of the Shares to any of
his parents, spouse or issue, or to a trust for his or their exclusive
benefit. The donee or donees shall hold such Shares subject to all
provisions of this Agreement.
4. TERMINATION OF RESTRICTIONS.
The restrictions on transfer imposed by Section 1 of this
Agreement shall terminate:
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(i) on the termination of this Agreement;
(ii) at such time as a public market exists for the
Company's Common Stock. For the purpose of this Agreement, a "public market"
shall be deemed to exist if (i) said Common Stock is listed on a national
securities exchange (as that term is used in the Securities Exchange Act of
1934), or (ii) said Common Stock is listed on the Nasdaq Stock Market or is
traded on the over-the-counter market and prices are published daily on
business days in a recognized financial journal; or
(ii) if the Company dissolves, or if more than fifty
percent (50%) of the outstanding shares of the Company's capital stock
entitled to vote are sold, redeemed or exchanged in any (i) merger,
consolidation, or reorganization involving the Company and one or more
unaffiliated corporations, (ii) exchange of capital stock of the Company for
stock of any unaffiliated corporation, provided that the security holders of
the Company receive in exchange for the Company's capital stock securities
for which a public market exists, or (iii) sale of all or substantially all
of the assets of the Company to an unaffiliated corporation. For purposes of
this subsection, an "unaffiliated corporation" means any corporation that is
not controlled by or under common control with, directly or indirectly, the
Company or any or all of its shareholders.
5. ENDORSEMENT ON CERTIFICATES.
(a) The certificates representing the Shares subject to this
Agreement shall be endorsed with a legend substantially in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY
IN ACCORDANCE WITH THE TERMS OF A RESTRICTED STOCK TRANSFER AGREEMENT BETWEEN
THE COMPANY AND THE REGISTERED HOLDER OR HIS PREDECESSOR IN INTEREST, A COPY
OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.
(b) Any transfer or sale of the Shares is further subject to
any restrictions on transfer imposed by state or Federal securities laws.
Accordingly, it is understood and agreed that the certificates representing
the Shares shall bear any legends required by the securities laws of any
state or by Federal securities laws.
6. PURCHASER'S REPRESENTATIONS. In connection with his purchase
of the Shares, Purchaser hereby represents and warrants to the Company as
follows:
(a) INVESTMENT INTENT; CAPACITY TO PROTECT INTERESTS.
Purchaser is purchasing the Shares solely for his or her own account for
investment and not with a view to or for sale in connection with any
distribution of the Shares or any portion thereof and not with any present
intention of selling, offering to sell or otherwise
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disposing of or distributing the Shares or any portion thereof in any
transaction other than a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Act"). Purchaser also represents
that the entire legal and beneficial interest of the Shares is being
purchased, and will be held, for Purchaser's account only, and neither in
whole or in part for any other person. Purchaser either (i) has a
pre-existing business or personal relationship with the Company or any of its
officers, directors or controlling persons or (ii) by reason of Purchaser's
business or financial experience or the business or financial experience of
Purchaser's professional advisors who are unaffiliated with and who are not
compensated by the Company or any affiliate or selling agent of the Company,
directly or indirectly, could be reasonably assumed to have the capacity to
evaluate the merits and risks of an investment in the Company and to protect
Purchaser's own interests in connection with this transaction.
(b) INFORMATION CONCERNING COMPANY. Purchaser has heretofore
discussed the Company and its plans, operations and financial condition with
the Company's officers and has heretofore received all such information as
Purchaser has deemed necessary and appropriate to enable Purchaser to
evaluate the financial risk inherent in making an investment in the Shares,
and Purchaser has received satisfactory and complete information concerning
the business and financial condition of the Company in response to all
inquiries in respect thereof.
(c) ECONOMIC RISK. Purchaser realizes that the purchase of
the Shares will be a highly speculative investment and involves a high degree
of risk, and Purchaser is able, without impairing his financial condition, to
hold the Shares for an indefinite period of time and to suffer a complete
loss on Purchaser's investment.
(d) RESTRICTED SECURITIES. Purchaser understands and
acknowledges that:
(i) the sale of the Shares has not been registered
under the Act, and the Shares must be held indefinitely unless subsequently
registered under the Act or an exemption from such registration is available
and the Company is under no obligation to register the Shares;
(ii) the share certificate representing the Shares will
be stamped with the legends specified in Section 5 hereof; and
(iii) the Company will make a notation in its records of
the aforementioned restrictions on transfer and legends.
(e) DISPOSITION UNDER RULE 144. Purchaser understands that
the Shares are restricted securities within the meaning of Rule 144
promulgated under the Act; that unless the Shares have been issued pursuant
to Rule 701 promulgated under the Act the exemption from registration under
Rule 144 will not be available in any event for at least [one year] from the
date of purchase and payment of the Shares and even then will not be
available unless: (i) a public trading market then exists for the
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Common Stock of the Company; (ii) adequate information concerning the Company
is then available to the public; and (iii) other terms and conditions of Rule
144 are complied with; and that any sale of the Shares may be made only in
limited amounts in accordance with such terms and conditions.
(f) FURTHER LIMITATIONS ON DISPOSITION. Without in any way
limiting his representations set forth above, Purchaser further agrees that
he shall in no event make any disposition of all or any portion of the Shares
unless and until:
(i) (A) There is then in effect a registration
statement under the Act covering such proposed disposition and such
disposition is made in accordance with said registration statement; OR (B)(1)
Purchaser shall have notified the Company of the proposed disposition and
shall have furnished the Company with a detailed statement of the
circumstances surrounding the proposed disposition, (2) Purchaser shall have
furnished the Company with an opinion of Purchaser's counsel to the effect
that such disposition will not require registration of such shares under the
Act, and (3) such opinion of the Purchaser's counsel shall have been
concurred in by counsel for the Company and the Company shall have advised
Purchaser of such concurrence; AND
(ii) Purchaser shall have complied with the right of
first refusal set forth in Section 1 hereof.
7. "MARKET STAND-OFF" AGREEMENT. Purchaser hereby agrees that he
or she shall not, to the extent reasonably requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, sell or
otherwise transfer or dispose (other than to donees who agree to be similarly
bound) of any Shares during the one hundred eighty (180)-day period following
the effective date of a registration statement of the Company filed under the
Securities Act; provided, however, that: (a) all officers and directors of
the Company and all other persons with registration rights enter into similar
agreements; and (b) such agreement shall be applicable only to the first such
registration statement of the Company which covers shares (or securities) to
be sold on its behalf to the public in an underwritten offering. Such
agreement shall be in writing in a form satisfactory to the Company and such
underwriter. In order to enforce the foregoing covenant, the Company may
impose stop-transfer instructions with respect to the Shares of each
Shareholder (and the shares or securities of every other person subject to
the foregoing restriction) until the end of such one hundred eighty (180)-day
period.
8. CONSENT OF SPOUSE. If Purchaser is married on the date of
this Agreement, Purchaser's spouse shall execute a Consent of Spouse in the
form of Exhibit A hereto, effective on the date hereof. Such consent shall
not be deemed to confer or convey to the spouse any rights in the Shares that
do not otherwise exist by operation of law or the agreement of the parties.
If Purchaser should marry or remarry subsequent to the date of this
Agreement, Purchaser shall within thirty (30) days thereafter obtain his or
her new spouse's acknowledgment of and consent to the
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existence and binding effect of all restrictions contained in this Agreement
by signing a Consent of Spouse in the form of Exhibit A.
9. ENFORCEMENT. Purchaser agrees that a violation on his or her
part of any of the terms of this Agreement may cause irreparable damage to
the Company, the exact amount of which is impossible to ascertain, and for
that reason agrees that the Company shall be entitled to a decree of specific
performance of the terms hereof or an injunction restraining further
violation, said right to be in addition to any other remedies of said parties.
10. CONDITIONS UPON ISSUANCE OF SHARES. The Shares shall be
subject to the provisions of the Bylaws and the Restated Certificate of
Incorporation of the Company as of the date of grant of the Option or the
acquisition of the Shares by the Purchaser. The Shares shall be subject to
all amendments to the By-laws and Certificate of Incorporation made
thereafter which affect the Common Stock generally. Shares shall not be
issued with respect to an Option granted under the Plan unless the exercise
of such Option and the issuance and delivery of such Shares pursuant thereto
shall comply with all relevant provisions of law, including, without
limitation, the Securities Act, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the Shares may then be listed, and shall be further subject to the approval
of counsel for the Company with respect to such compliance. To the extent
that there may be any conflict between the provisions of this Agreement and
any provisions contained in the Company's Bylaws on the transfer or
restriction on transfer of Shares, the terms of this Agreement shall be
controlling. This Agreement may not be modified except by a writing signed
by the party to be bound.
11. OWNERSHIP, VOTING RIGHTS, DUTIES. This Agreement shall not
affect in any way the ownership, voting rights or other rights or duties of
Purchaser, except as specifically provided herein.
12. NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery or on the day sent by facsimile transmission if a true
and correct copy is sent the same day by first class mail, postage prepaid,
or by dispatch by an internationally recognized express courier service, to
the proper parties at the appropriate business addresses.
13. BINDING EFFECT. This Agreement shall apply to and be binding
upon Purchaser, his permitted transferees, heirs, legatees, executors,
administrators and legal successors, who shall hold the Shares subject to the
terms hereof, and is for the benefit of the Company and its successors and
assigns.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter of this Agreement.
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15. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
16. APPLICABLE LAW. This Agreement shall be governed by and
construed under the laws of the State of California as such laws are applied
to contracts entered into and performed in such state.
ATTORNEYS' FEES. In the event of litigation brought by either
party to enforce the provisions of this Agreement or for damages based upon
the breach thereof, the prevailing party shall be entitled to recover his
costs and reasonable attorneys' fees, as determined by the court.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
NETOBJECTS, INC. PURCHASER
By:
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Title: Address:
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PURCHASER'S SPOUSE
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EXHIBIT A
CONSENT OF SPOUSE
I, ________________, spouse of ______________________,
acknowledge that I have read the Restricted Stock Transfer Agreement dated as
of _______________, 19__, to which this Consent is attached as Exhibit A (the
"Agreement") and that I know its contents. I am aware that by its provisions
(a) my spouse and NetObjects, Inc. (the "Company") have the option to
purchase all the Shares of the Company of which I may become possessed as a
result of a gift from my spouse or a court decree and/or any property
settlement in any domestic litigation, (b) the Company has the option to
purchase certain Shares of the Company which my spouse owns pursuant to the
Agreement including any interest I might have therein, upon termination of
his employment under circumstances set forth in the Agreement, and (c)
certain other restrictions are imposed upon the sale or other disposition of
the Shares.
I hereby agree that my interest, if any, in the Shares subject
to the Agreement shall be irrevocably bound by the Agreement and further
understand and agree that any community property interest I may have in the
Shares shall be similarly bound by the Agreement.
Dated as of the ______ of ____________, 19__.
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ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, ____________________________ hereby
sells, assigns and transfers unto _____________________________
__________________ (___________) shares of the Common Stock of NetObjects,
Inc., a Delaware corporation, standing in the undersigned's name on the books
of said corporation represented by Certificate No. _______________, and do
hereby irrevocably constitute and appoint ______________________________ as
the undersigned's agent and attorney-in-fact to transfer the said stock on
the books of the said corporation with full power of substitution in the
premises.
Dated:____________, 19______
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ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, ____________________________ hereby
sells, assigns and transfers unto _____________________________
__________________ (___________) shares of the Common Stock of NetObjects,
Inc., a Delaware corporation, standing in the undersigned's name on the books
of said corporation represented by Certificate No. _______________, and do
hereby irrevocably constitute and appoint ______________________________ as
the undersigned's agent and attorney-in-fact to transfer the said stock on
the books of the said corporation with full power of substitution in the
premises.
Dated:____________, 19______
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