Exhibit 99.i.4
GLADSTONE CAPITAL CORPORATION
EARLY EXERCISE STOCK PURCHASE AGREEMENT
UNDER THE AMENDED AND RESTATED 2001 EQUITY INCENTIVE PLAN
THIS AGREEMENT is made by and between GLADSTONE CAPITAL CORPORATION, a
Maryland corporation ("COMPANY"), and _______________ ("PURCHASER").
WITNESSETH:
WHEREAS, Purchaser holds a stock option dated ________________ to
purchase shares of common stock ("COMMON STOCK") of the Company ("OPTION")
pursuant to the Company's Amended and Restated 2001 Equity Incentive Plan
("PLAN");
WHEREAS, the Option consists of a Stock Option Grant Notice and a Stock
Option Agreement;
WHEREAS, Purchaser desires to exercise the Option on the terms and
conditions contained herein;
WHEREAS, Purchaser wishes to take advantage of the early exercise
provision of the Purchaser's Option and therefore to enter into this Agreement.
NOW, THEREFORE, IT IS AGREED between the parties as follows:
1. INCORPORATION OF PLAN AND OPTION BY REFERENCE. This Agreement is
subject to all of the terms and conditions as set forth in the Plan and the
Option. If there is a conflict between the terms of this Agreement and/or the
Option and the terms of the Plan, the terms of the Plan shall control. If there
is a conflict between the terms of this Agreement and the terms of the Option,
the terms of the Option shall control. Defined terms not explicitly defined in
this Agreement but defined in the Plan shall have the same definitions as in the
Plan. Defined terms not explicitly defined in this Agreement or the Plan but
defined in the Option shall have the same definitions as in the Option.
2. PURCHASE AND SALE OF COMMON STOCK.
(a) AGREEMENT TO PURCHASE AND SELL COMMON STOCK. Purchaser
hereby agrees to purchase from the Company, and the Company hereby agrees to
sell to Purchaser, an aggregate of ____________ (________) shares of Common
Stock at $____ per share, for an aggregate purchase price of $______________,
payable as follows:
Cash $__________
Promissory Note $__________
Total Exercise Price $__________
(b) CLOSING. The closing hereunder, including payment for and
delivery of the Common Stock, shall occur at the offices of the Company
immediately following the execution of this Agreement, or at such other time and
place as the parties may mutually agree.
3. UNVESTED SHARE REPURCHASE OPTION
(a) REPURCHASE OPTION. In the event Purchaser's Continuous
Service terminates, then the Company shall have an irrevocable option
("REPURCHASE OPTION") for a period of ninety (90) days after said termination
[NOTE: REPURCHASE OPTION IS NOT DEPENDENT UPON THE TYPE OF TERMINATION (I.E.,
CAUSE, DISABILITY, DEATH) EXCEPT TO THE EXTENT THAT THE OPTION ITSELF PROVIDES
FOR ACCELERATION OF VESTING ON DESCRIBED TERMINATION EVENTS], or such longer
period as may be agreed to by the Company and the Purchaser, to repurchase from
Purchaser or Purchaser's personal representative, as the case may be, those
shares that Purchaser received pursuant to the exercise of the Option that has
not as yet vested as of such termination date in accordance with the Vesting
Schedule indicated on Purchaser's Stock Option Grant Notice, attached hereto as
EXHIBIT A ("UNVESTED SHARES").
(b) SHARES REPURCHASABLE AT PURCHASER'S ORIGINAL EXERCISE
PRICE. The Company may repurchase all or any of the Unvested Shares at a price
("OPTION PRICE") equal to the Purchaser's Exercise Price for such shares as
indicated on Purchaser's Stock Option Grant Notice.
4. EXERCISE OF REPURCHASE OPTION. The Repurchase Option shall be
exercised by written notice signed by an Officer of the Company and delivered or
mailed as provided herein. Such notice shall identify the number of shares of
Common Stock to be purchased and shall notify Purchaser of the time, place and
date for settlement of such purchase, which shall be scheduled by the Company
within the term of the Repurchase Option set forth above. The Company shall be
entitled to pay for any shares of Common Stock purchased pursuant to its
Repurchase Option at the Company's option in cash or by offset against any
indebtedness owing to the Company by Purchaser, or by a combination of both.
Upon delivery of such notice and payment of the purchase price in any of the
ways described above, the Company shall become the legal and beneficial owner of
the Common Stock being repurchased and all rights and interest therein or
related thereto, and the Company shall have the right to transfer to its own
name the Common Stock being repurchased by the Company, without further action
by Purchaser.
5. CAPITALIZATION ADJUSTMENTS TO COMMON STOCK. In the event of a
capitalization adjustment affecting the Company's outstanding Common Stock as a
class as designated in the Plan, then any and all new, substituted or additional
securities or other property to which Purchaser is entitled by reason of
Purchaser's ownership of Common Stock shall be immediately subject to the
Repurchase Option and be included in the word "Common Stock" for all purposes of
the Repurchase Option with the same force and effect as the shares of the
Common Stock presently subject to the Repurchase Option, but only to the extent
the Common Stock is, at the time, covered by such Repurchase Option. While the
total Option Price shall remain the same after each such event, the Option Price
per share of Common Stock upon exercise of the Repurchase Option shall be
appropriately adjusted.
6. CORPORATE TRANSACTION OR CHANGE IN CONTROL. In the event of a
"Corporate Transaction" or "Change in Control" transaction as defined in Section
2 of the Plan (for purposes of this Agreement, collectively referred to as
"CHANGE IN CONTROL"), then the Repurchase Option may be assigned by the Company
to the successor of the Company (or such successor's parent company), if any, in
connection with such Change in Control. To the extent the Repurchase Option
remains in effect following such Change in Control, it shall apply to the new
capital stock or other property received in exchange for the Common Stock in
consummation of the Change in Control, but only to the extent the Common Stock
was at the time covered by such right. Appropriate adjustments shall be made to
the price per share payable upon exercise of the Repurchase Option to reflect
the Change in Control upon the Company's capital structure; provided, however,
that the aggregate Option Price shall remain the same.
7. RIGHTS OF PURCHASER. Subject to the provisions of the Option and any
pledge agreement executed by the Purchaser, Purchaser shall exercise all rights
and privileges of a stockholder of the Company with respect to the shares.
Purchaser shall be deemed to be the holder of the shares for purposes of
receiving any dividends that may be paid with respect to such shares and for
purposes of exercising any voting rights relating to such shares, even if some
or all of such shares have not yet vested and been released from the Company's
Repurchase Option.
8. LIMITATIONS ON TRANSFER. In addition to any other limitation on
transfer created by applicable securities laws, or any other document which
restricts common stock transfers, Purchaser shall not sell, assign, hypothecate,
donate, encumber or otherwise dispose of any interest in the Common Stock while
the Common Stock is subject to the Repurchase Option. After any Common Stock has
been released from the Repurchase Option, Purchaser shall not sell, assign,
hypothecate, donate, encumber or otherwise dispose of any interest in the Common
Stock except in compliance with the provisions herein and applicable securities
laws. Any attempted transfer in violation of this provision shall be void and of
no legal force and, at the Company's discretion, shall result in forfeiture of
Purchaser's stock.
9. RESTRICTIVE LEGENDS. All certificates representing the Common
Stock shall have endorsed thereon legends in substantially the following forms
(in addition to any other legend which may be required by other agreements
between the parties hereto):
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
AN OPTION SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED
HOLDER, OR SUCH HOLDER'S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT
THE PRINCIPAL OFFICE OF THIS COMPANY. ANY TRANSFER OR ATTEMPTED TRANSFER OF ANY
SHARES SUBJECT TO SUCH
OPTION IS VOID WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF THE COMPANY."
(b) Any legend required by appropriate blue sky officials.
10. SECTION 83(b) ELECTION. Purchaser understands that Section 83(a) of
the Code, taxes as ordinary income the difference between the amount paid for
the Common Stock and the fair market value of the Common Stock as of the date
any restrictions on the Common Stock lapse. In this context, "restriction"
includes the right of the Company to buy back the Common Stock pursuant to the
Repurchase Option set forth above. Purchaser understands that Purchaser may
elect to be taxed at the time the Common Stock is purchased, rather than when
and as the Repurchase Option expires, by filing an election under Section 83(b)
(an "83(b) Election") of the Code with the Internal Revenue Service within
thirty (30) days from the date of purchase. Even if the fair market value of the
Common Stock at the time of the execution of this Agreement equals the amount
paid for the Common Stock, the 83(b) Election must be made to avoid income under
Section 83(a) in the future. Purchaser understands that failure to file such an
83(b) Election in a timely manner may result in adverse tax consequences for
Purchaser. Purchaser further understands that Purchaser must file an additional
copy of such 83(b) Election with his or her federal income tax return for the
calendar year in which the date of this Agreement falls. Purchaser acknowledges
that the foregoing is only a summary of the effect of United States federal
income taxation with respect to purchase of the Common Stock hereunder, and does
not purport to be complete. Purchaser further acknowledges that the Company has
directed Purchaser to seek independent advice regarding the applicable
provisions of the Code, the income tax laws of any municipality, state or
foreign country in which Purchaser may reside, and the tax consequences of
Purchaser's death. Purchaser assumes all responsibility for filing an 83(b)
Election and paying all taxes resulting from such election or the lapse of the
restrictions on the Common Stock.
11. REFUSAL TO TRANSFER. The Company shall not be required (a) to
transfer on its books any shares of Common Stock of the Company which shall have
been transferred in violation of any of the provisions set forth in this
Agreement or (b) 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.
12. NO EMPLOYMENT RIGHTS. This Agreement is not an employment contract
and nothing in this Agreement shall affect in any manner whatsoever the right or
power of the Company (or a parent or subsidiary of the Company) to terminate
Purchaser's employment for any reason at any time, with or without cause and
with or without notice.
13. MISCELLANEOUS.
(a) NOTICES. Any notice required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon personal delivery
or sent by telegram or fax or upon deposit in the United States Post Office, by
registered or certified mail with postage and fees prepaid, addressed to the
other party hereto at such party's address hereinafter shown below
its signature or at such other address as such party may designate by ten (10)
days' advance written notice to the other party hereto.
(b) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of the successors and assigns of the Company and, subject to the
restrictions on transfer herein set forth, be binding upon Purchaser,
Purchaser's successors, and assigns. The Company may assign the Repurchase
Option hereunder at any time or from time to time, in whole or in part.
(c) ATTORNEYS' FEES; SPECIFIC PERFORMANCE. Purchaser shall
reimburse the Company for all costs incurred by the Company in enforcing the
performance of, or protecting its rights under, any part of this Agreement,
including reasonable costs of investigation and attorneys' fees. It is the
intention of the parties that the Company, upon exercise of the Repurchase
Option and payment of the Option Price, pursuant to the terms of this Agreement,
shall be entitled to receive the Common Stock, in specie, in order to have such
Common Stock available for future issuance without dilution of the holdings of
other stockholders. Furthermore, it is expressly agreed between the parties that
money damages are inadequate to compensate the Company for the Common Stock and
that the Company shall, upon proper exercise of the Repurchase Option, be
entitled to specific enforcement of its rights to purchase and receive said
Common Stock.
(d) GOVERNING LAW; VENUE. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Virginia. The
parties agree that any action brought by either party to interpret or enforce
any provision of this Agreement shall be brought in, and each party agrees to,
and does hereby, submit to the jurisdiction and venue of, the appropriate state
or federal court for the district encompassing the Company's principal place of
business.
(e) FURTHER EXECUTION. The parties agree to take all such
further action(s) as may reasonably be necessary to carry out and consummate
this Agreement as soon as practicable, and to take whatever steps may be
necessary to obtain any governmental approval in connection with or otherwise
qualify the issuance of the securities that are the subject of this Agreement.
(f) INDEPENDENT COUNSEL. Purchaser acknowledges that this
Agreement has been prepared on behalf of the Company by Xxxxxx Godward LLP,
counsel to the Company and that Xxxxxx Godward LLP does not represent, and is
not acting on behalf of, Purchaser. Purchaser has been provided with an
opportunity to consult with Purchaser's own counsel with respect to this
Agreement.
(g) ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes
the entire agreement between the parties with respect to the subject matter
hereof and supersedes and merges all prior agreements or understandings, whether
written or oral. This Agreement may not be amended, modified or revoked, in
whole or in part, except by an agreement in writing signed by each of the
parties hereto.
(h) SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, then
(i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and
(iii) the balance of the Agreement shall be enforceable in accordance with its
terms.
(i) COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of _______________.
GLADSTONE CAPITAL CORPORATION
By
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Title
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Address: 0000 Xxxxxx Xxxxxxxxx
0xx Xxxxx
XxXxxx, Xxxxxxxx 00000
PURCHASER
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(Name)
Address:
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ATTACHMENTS:
Exhibit A Grant Notice
Exhibit B Stock Assignment
EXHIBIT A
GRANT NOTICE
EXHIBIT B
STOCK ASSIGNMENT
STOCK ASSIGNMENT
FOR VALUE RECEIVED, _______________________ hereby sells, assigns and
transfers unto Gladstone Capital Corporation, a Maryland corporation
("COMPANY"), pursuant to the Repurchase Option under that certain Early Exercise
Stock Purchase Agreement, dated _______________ by and between the undersigned
and the Company ("AGREEMENT"), _______________ (_______________) shares of
Common Stock of the Company standing in the undersigned's name on the books of
the Company and does hereby irrevocably constitute and appoint the Company's
Secretary attorney-in-fact to transfer said Common Stock on the books of the
Company with full power of substitution in the premises. This Assignment may be
used only in accordance with and subject to the terms and conditions of the
Agreement, in connection with the repurchase of shares of Common Stock issued to
the undersigned pursuant to the Agreement, and only to the extent that such
shares remain subject to the Company's Repurchase Option under the Agreement.
Dated: _______________
