EXHIBIT 10.8
XXXxXXXX.XXX, INC.
RESTRICTED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made effective the 12 day of May, 1999 (the "Effective
Date") between XXXxXXXX.xxx, Inc., a Delaware corporation (the "Company") and
Xxxxxx Xxxxxxxxx (the "Purchaser").
WHEREAS the Purchaser is an employee of the Company and her continued
participation is considered by the Company to be important for the Company's
continued growth; and
WHEREAS in order to give the Purchaser an opportunity to acquire an equity
interest in the Company as an incentive for the Purchaser to participate in the
affairs of the Company, the Company is willing to sell to the Purchaser and the
Purchaser desires to purchase 387,283 shares of Common Stock according to the
terms and conditions hereof.
THEREFORE, the parties agree as follows:
1. Sale of Stock. The Company hereby agrees to sell to the Purchaser
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and the Purchaser hereby agrees to purchase an aggregate of 387,283 shares
of the Company's Common Stock (the "Shares"), at the price of $0.20 per
share for an aggregate purchase price of $77,456.60 (the "Purchase Price").
2. Payment of Purchase Price. The Purchase Price for the Shares
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shall be paid by delivery to the Company at the time of execution of this
Agreement of a check or wire transfer.
3. Issuance of Shares. Upon receipt by the Company of the Purchase
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Price, the Company shall issue a duly executed certificate evidencing the
Shares in the name of the Purchaser to be held in escrow until expiration
of the Company's repurchase option as described in this Agreement.
4. Repurchase Option.
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(1) All of the Shares are subject to the Company's repurchase
option defined in this section. In the event of the voluntary or
involuntary termination of the Purchaser's employment with or
services to the Company for any or no reason (including death or
disability) before all of the Shares are released from the
Company's repurchase option under Section 5, the Company shall,
upon the date of such termination (as reasonably fixed and
determined by the Company) have an irrevocable, exclusive option
for a period of 90 days from such date to repurchase all or any
portion of the Shares which have not been released from the
repurchase option
at such time at the original purchase price per share ($0.05)
("Repurchase Option"). Said Repurchase Option shall be exercised
by the Company by written notice to the Purchaser or his executor
(with a copy to the Escrow Holder (as defined below)) and, at the
Company's option, (i) by delivery to the Purchaser or his executor
with such notice of a check in the amount of the repurchase price
for the Shares being repurchased, or (ii) by cancellation by the
Company of an amount of the Purchaser's indebtedness to the
Company equal to the repurchase price for the Shares being
repurchased, or (iii) by a combination of (i) and (ii) so that the
combined payment and cancellation of indebtedness equals such
repurchase price. Upon delivery of such notice and the payment of
the repurchase price in any of the ways described above, the
Company shall become the legal and beneficial owner of the Shares
being repurchased and all rights and interests therein or relating
thereto, and the Company shall have the right to retain and
transfer to its own name the number of Shares being repurchased by
the Company.
(2) Whenever the Company shall have the right to repurchase
Shares hereunder, the Company may designate and assign one or more
employees, officers, directors or stockholders of the Company or
other persons or organizations to exercise all or a part of the
Company's repurchase rights under this Agreement and purchase all
or a part of such Shares.
5. Release of Shares From Repurchase Option.
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(1) 20% of the Shares shall be released from the Company's
Repurchase Option at the Effective Date and 20% of the remaining
Shares shall be released on each anniversary of the Effective Date
until all of the Shares have been released, provided in each case
that the Purchaser's services as an employee of or consultant to
the Company have not been terminated prior to the date of any such
release.
(2) Upon the merger or consolidation of the Company with or
into another corporation, entity or person or the sale of all or
substantially all of the Company's assets to another corporation,
entity or person, where immediately after such merger,
consolidation or sale of assets, less than 50% of the capital
stock or equity interests in such other corporation, entity or
person are owned by persons who owned in the aggregate more than
50% of the capital stock of the Company immediately before such
merger, consolidation or sale of assets, the surviving entity
shall assume the rights and obligations of the Company's
Repurchase Option and the Purchaser shall remain subject to the
conditions set forth herein.
(3) Notwithstanding the foregoing, if Purchaser's employment
with the Company terminates involuntarily by the Purchaser or as a
result of an "Involuntary Termination" (as defined herein) at any
time within six (6) months after a "Change of Control" (as defined
herein), then 50% of the shares that have not been released from
the Repurchase Option shall be released as of the date of such
termination.
For this purpose, "Change of Control" of the Company is
defined as: (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under said Act), directly or indirectly, of securities of
the Company representing 50% or more of the total voting power
represented by the Company's then outstanding voting securities;
or (ii) a change in the composition of the Board of Directors of
the Company occurring within a two-year period, as a result of
which fewer than a majority of the directors are Incumbent
Directors. "Incumbent Directors" shall mean directors who either
(A) are directors of the Company as of the date hereof, or (B) are
elected, or nominated for election, to the Board of Directors of
the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination
(but shall not include an individual whose election or nomination
is in connection with an actual or threatened proxy contest
relating to the election of directors to the Company); or (iii)
the date of the consummation of a merger or consolidation of the
Company with any other corporation that has been approved by the
stockholders of the Company, other than a merger or consolidation
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent (50%)
of the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the Company
approve a plan of complete liquidation of the Company; or (iv) the
date of the consummation of the sale or disposition by the Company
of all or substantially all the Company's assets.
For this purpose, "Involuntary Termination" shall mean
(i) without Purchaser's consent, the significant reduction of her
duties or responsibilities relative to her duties or
responsibilities in effect immediately prior to such reduction;
(ii) without Purchaser's consent, a significant reduction by the
Company in her base salary as in effect immediately prior to such
reduction; (iii) a significant reduction by the Company in the
kind or level of employee benefits to which Purchaser is entitled
immediately prior to such reduction with the result that
Purchaser's overall benefits package is significantly reduced; or
(iv) any purported termination of Purchaser by the Company which
is not effected by virtue of her death, permanent and total
disability, or for "Cause" (as defined herein).
For this purpose, "Cause" is defined as (i) an act of
dishonesty made by Purchaser in connection with Purchaser's
responsibilities as an employee, (ii) Purchaser's conviction of,
or plea of nolo contendere to, a felony, (iii) Purchaser's serious
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misconduct, (iv) Purchaser's continued violations of her
employment duties after Purchaser has received a written demand
for performance from the Company
which specifically sets forth the factual basis for the Company's
belief that Purchaser has not substantially performed her duties,
or (v) Purchaser's death or permanent and total disability.
6. Restriction on Transfer. Except for the escrow described in
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Section 7 or transfer of the Shares to the Company or its assignees
contemplated by this Agreement, none of the Shares nor any beneficial
interest therein shall be transferred, encumbered or otherwise disposed
of in any way until the release of such Shares from the Company's
Repurchase Option in accordance with the provisions of this Agreement.
7. Escrow of Shares.
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(1) The Shares issued under this Agreement shall be held by the
Secretary of the Company as escrow holder ("Escrow Holder"), along
with a stock assignment executed by the Purchaser in blank, until
the expiration of the Company's Repurchase Option with respect to
such Shares as set forth above.
(2) The Escrow Holder is hereby directed to permit transfer of
the Shares only in accordance with this Agreement or instructions
signed by both parties. In the event further instructions are
desired by the Escrow Holder, he shall be entitled to rely upon
directions executed by a majority of the authorized number of the
Company's Board of Directors. 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.
(3) If the Company or any assignee exercises its Repurchase
Option hereunder, the Escrow Holder, upon receipt of written
notice of such option exercise from the proposed transferee, shall
take all steps necessary to accomplish such transfer.
(4) When the Repurchase Option has been exercised or expires
unexercised or a portion of the Shares has been released from such
Repurchase Option, upon Purchaser'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
Purchaser.
(5) Subject to the terms hereof, the Purchaser shall have all the
rights of a stockholder 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 the Company'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 the
Company, any and all new, substituted or additional securities to
which the Purchaser 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 the Company's repurchase option.
8. Legends. The share certificate evidencing the Shares issued
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hereunder shall be endorsed with the following legends:
(1) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION
WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR
DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933."
(2) "THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED
ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY."
(3) Any legend required to be placed thereon by applicable state
securities laws.
9. Investment Representations; Restriction on Transfer.
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(1) In connection with the purchase of the Shares, the Purchaser
represents to the Company the following:
(1) She is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to acquire
the securities. She is purchasing these securities for investment
for her 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 (the "Securities Act").
(2) She understands that the securities 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. In
this connection, she understands that, in view of the Securities
and Exchange Commission (the "Commission"), the statutory basis
for such exemption may not be present if his representations meant
that his present intention was to hold these securities for a
minimum capital gains period under the tax statutes, for a
deferred sale, for a market rise, for a sale if the market does
not rise, or for a year or any other fixed period in the future.
(3) She further acknowledges and understands that the securities
must be held indefinitely unless they are subsequently registered
under the Securities Act or an
exemption from such registration is available. She further
acknowledges and understands that the Company is under no
obligation to register the securities. She understands that the
certificate evidencing the securities will be imprinted with a
legend which prohibits the transfer of the securities unless they
are registered or such registration is not required in the opinion
of counsel for the Company.
(4) She is aware of the adoption of Rule 144 by the 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.
(5) She further acknowledges that in the event all of the
requirements of Rule 144 are not met, compliance with Regulation A
or some other 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.
(2) The Purchaser agrees, in connection with the Company's initial
public offering of the Company's securities, (i) not to sell, make
short sales of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock of the Company
held by the Purchaser (other than those shares included in the
registration) without the prior written consent of the Company or
the underwriters managing such initial underwritten public
offering of the Company's securities for up to one hundred eighty
(180) days from the effective date of such registration and (ii)
further agrees to execute any agreement reflecting (i) above as
may be requested by the underwriters at the time of the public
offering.
10. Adjustment for Stock Split. All references to the number of
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Shares and the 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 the Company after the
date of this Agreement.
11. General Provisions.
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(1) This Agreement shall be governed by the internal laws of the
State of California. This Agreement represents the entire
agreement between the parties with respect to the purchase of
Common Stock by the Purchaser, may only be modified or amended in
writing signed by both parties and satisfies all of the Company's
obligations to the Purchaser with regard to the issuance or sale
of securities.
(2) Any notice, demand or request required or permitted to be
given by either the Company or the Purchaser 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 of the parties 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 the Company's address
with a copy to the other party not sending the notice.
(3) The rights and benefits of the Company 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 the Company's successors and assigns. The rights and
obligations of the Purchaser under this Agreement may only be assigned
with the prior written consent of the Company.
(4) 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.
(5) The Purchaser agrees upon request to execute any further documents
or instruments necessary or desirable to carry out the purposes or
intent of this Agreement.
(6) The Purchaser understands that she (and not the Company) shall be
responsible for her own federal, state, local or foreign tax liability
and any of the other tax consequences that may arise as a result of
the transactions contemplated by this Agreement. The Purchaser shall
rely solely on the determinations of her tax advisors or her own
determinations, and not on any statements or representations by the
Company or any of its agents, with regard to all such tax matters. The
Purchaser shall notify the Company in writing if the Purchaser files
an election pursuant to Section 83(b) of the Internal Revenue Code of
1986, as amended, with the Internal Revenue Service within thirty (30)
days from the date of the sale of the Shares hereunder. The Company
intends, in the event it does not receive from the Purchaser evidence
of such filing, to claim a tax deduction for any amount which would be
taxable to the Purchaser in the absence of such an election.
(7) THE PURCHASER UNDERSTANDS THAT THE SALE OF THE SECURITIES WHICH ARE
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE
ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF
THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL
UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION
25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS
OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH
QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first set forth above.
PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT THIS DOCUMENT REPRESENTS THE
DEFINITIVE AGREEMENT BETWEEN THE PURCHASER AND THE COMPANY WITH REGARD TO THE
ISSUANCE OF COMPANY SECURITIES TO THE PURCHASER AND THAT IT SUPERSEDES ANY OTHER
AGREEMENT, EITHER ORAL OR WRITTEN, RELATING TO THE PURCHASER'S RIGHTS TO COMPANY
SECURITIES. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT ANY AND ALL FUTURE
ISSUANCES OF COMPANY SECURITIES TO THE PURCHASER MUST BE APPROVED BY THE
COMPANY'S BOARD OF DIRECTORS AND EVIDENCED BY AN EXECUTED WRITTEN AGREEMENT IN
ORDER TO BECOME BINDING ON THE COMPANY.
XXXXXXXXXX.XXX, INC.
a Delaware corporation PURCHASER: Xxxxxx Xxxxxxxxx
By: /s/ Xxx XxXxxxxx /s/ Xxxxxx Xxxxxxxxx
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Xxx XxXxxxxx, Jr. (Signature)
President
000 Xxx Xxxxxxx #0
Xxxxxxxx, XX 00000
CONSENT OF SPOUSE
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I, ____________________, spouse of Xxxxxx Xxxxxxxxx, have read and approve the
foregoing Agreement. In consideration of granting of the right to my spouse to
purchase shares of Xxxxxxxxxx.xxx, Inc. Common Stock, as set forth in the
Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the
exercise of any rights under the Agreement and agree to be bound by the
provisions of the Agreement insofar as I may have any rights in said Agreement
or any shares issued pursuant thereto under the community property laws of the
State of California or similar laws relating to marital property in effect in
the state of our residence as of the date of the signing of the foregoing
Agreement.
Dated:____________________
_______________________________
Signature
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, Xxxxxx Xxxxxxxxx hereby sell, assign and transfer to
_____________________ (________) shares of the Common Stock of Xxxxxxxxxx.xxx,
Inc. (the "Company") standing in my name on the books of the Company represented
by Certificate No. __________ and do hereby irrevocably constitute and appoint
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, attorney, to transfer said stock on the books
of the Company with full power of substitution in the premises.
This Assignment Separate from Certificate may only be used in accordance with
the Restricted Stock Purchase Agreement dated May ___, 1999.
Dated:____________, ____.
Signature:___________________________
Instruction: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise the
Repurchase Right set forth in the Agreement without requiring additional
signature on the part of Purchaser.
ELECTION UNDER SECTION 83(b)
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OF THE INTERNAL REVENUE CODE OF 1986
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The undersigned taxpayer hereby elects, pursuant to the above-referenced Federal
Code, to include in her gross income for the current taxable year, the amount of
any compensation taxable to her in connection with her receipt of the property
described below:
1. The name, address, taxpayer identification number and taxable year of the
undersigned are as follows:
NAME: TAXPAYER: Xxxxxx Xxxxxxxxx SPOUSE:
ADDRESS:
IDENTIFICATION NO.: TAXPAYER: SPOUSE:
TAXABLE YEAR: 1999
2. The property with respect to which the election is made is described as
follows:
387,283 shares of Common Stock (the "Shares"), par value $0.001, of
Xxxxxxxxxx.xxx, Inc., a Delaware corporation (the "Company").
3. The date on which the property was transferred is: ______________________.
4. The property is subject to the following restrictions:
The Company has the right to repurchase a portion of the Shares upon the
happening of certain events. This right of repurchase lapses with regard
to a portion of the Shares over time.
5. The fair market value at the time of transfer, determined without regard to
any restriction other than a restriction which by its terms will never
lapse, of such property is: $77,456.60
6. The amount (if any) paid for such property: $77,456.60
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
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except with the consent of the Commissioner.
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Dated: _________________________ ________________________________
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated: _________________________ ________________________________
Spouse of Taxpayer
