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EXHIBIT 10.9
SIMPLEX SOLUTIONS, INC.
1995 STOCK PLAN
RESTRICTED STOCK PURCHASE AGREEMENT
This Restricted Stock Purchase Agreement (the "Agreement") is made as of
February 12, 1998, by and between Simplex Solutions, Inc., a Delaware
corporation (the "Company"), and Xxx Xxxxxxxx ("Purchaser") pursuant to the
Company's 1995 Stock Plan. To the extent any capitalized terms used in this
Agreement are not defined, they shall have the meaning ascribed to them in the
1995 Stock Plan.
1. SALE OF STOCK. Subject to the terms and conditions of this Agreement,
on the Purchase Date (as defined below) the Company will issue and sell to
Purchaser, and Purchaser agrees to purchase from the Company, 750,000 shares of
the Company's Common Stock (the "Shares") at a purchase price of $0.68 per Share
for a total purchase price of $510,000. The per share purchase price of the
Shares shall be not less than 85% of the Fair Market Value of the Shares as of
the date of the offer of such Shares to Purchaser, or, in the case of any person
owning stock representing more than 10% of the total combined voting power of
all classes of stock of the Company (or any affiliated company), the per share
purchase price shall be not less than 100% of the Fair Market Value of the
Shares as of such date. The term "Shares" refers to the purchased Shares and all
securities received in replacement of or in connection with the Shares pursuant
to stock dividends or splits, all securities received in replacement of the
Shares in a recapitalization, merger, reorganization, exchange or the like, and
all new, substituted or additional securities or other properties to which
Purchaser is entitled by reason of Purchaser's ownership of the Shares.
2. PURCHASE AND SALE OF THE SHARES. The purchase and sale of the Shares
under this Agreement shall occur at the principal office of the Company
simultaneously with the execution of this Agreement by the parties, or on such
other date as the Company and Purchaser shall agree (the "Purchase Date"). On
the Purchase Date, the Company will deliver to Purchaser a certificate
representing the Shares to be purchased by Purchaser (which shall be issued in
Purchaser's name) against payment of the purchase price therefor by Purchaser by
(a) check made payable to the Company, (b) cancellation of indebtedness of the
Company to Purchaser, or (c) by a combination of the foregoing.
3. LIMITATIONS ON TRANSFER. In addition to any other limitation on
transfer created by applicable securities laws, Purchaser shall not assign,
encumber or dispose of any interest in the Shares while the Shares are subject
to the Company's Repurchase Option (as defined below). After any Shares have
been released from such Repurchase Option, Purchaser shall not assign, encumber
or dispose of any interest in such Shares except in compliance with the
provisions below and applicable securities laws.
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(a) REPURCHASE OPTION.
(i) In the event of the voluntary or involuntary
termination of Purchaser's employment or consulting relationship with the
Company for any reason (including death or disability), with or without cause,
the Company shall upon the date of such termination (the "Termination Date")
have an irrevocable, exclusive option (the "Repurchase Option") for a period of
60 days from such date to repurchase all or any portion of the Shares held by
Purchaser as of the Termination Date which have not yet been released from the
Company's Repurchase Option at the original purchase price per Share specified
in Section 1 (adjusted for any stock splits, stock dividends and the like).
(ii) The Repurchase Option shall be exercised by the
Company by written notice to Purchaser or Purchaser's executor and, at the
Company's option, (A) by delivery to Purchaser or Purchaser's executor with such
notice of a check in the amount of the purchase price for the Shares being
purchased, or (B) in the event Purchaser is indebted to the Company, by
cancellation by the Company of an amount of such indebtedness equal to the
purchase price for the Shares being repurchased, or (C) by a combination of (A)
and (B) so that the combined payment and cancellation of indebtedness equals
such purchase price. 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 Shares 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 number of Shares being repurchased by the Company, without
further action by Purchaser.
(iii) 100% of the Shares shall initially be subject to
the Repurchase Option. One-fourth (1/4th) of the total number of Shares shall be
released from the Repurchase Option on the twelve-month anniversary of the
Vesting Commencement Date (as set forth on the signature page of this
Agreement), and an additional 1/48th of the total number of Shares shall be
released from the Repurchase Option each month thereafter on the Monthly Vesting
Date (as set forth on the signature page of this Agreement), until all Shares
are released from the Repurchase Option. Fractional shares shall be rounded to
the nearest whole share.
(b) RIGHT OF FIRST REFUSAL. Before any Shares held by Purchaser
or any transferee of Purchaser (either being sometimes referred to herein as the
"Holder") may be sold or otherwise transferred (including transfer by gift or
operation of law), the Company or its assignee(s) shall have a right of first
refusal to purchase the Shares on the terms and conditions set forth in this
Section 3(b) (the "Right of First Refusal").
(i) NOTICE OF PROPOSED TRANSFER. The Holder of the
Shares shall deliver to the Company a written notice (the "Notice") stating: (A)
the Holder's bona fide intention to sell or otherwise transfer such Shares; (B)
the name of each proposed purchaser or other transferee ("Proposed Transferee");
(C) the number of Shares to be transferred to each Proposed Transferee; and (D)
the terms and conditions of each proposed sale or transfer. The Holder shall
offer the Shares at the same price (the "Offered Price") and upon the same terms
(or terms as similar as reasonably possible) to the Company or its assignee(s).
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(ii) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time
within 30 after receipt of the Notice, the Company and/or its assignee(s) may,
by giving written notice to the Holder, elect to purchase all, but not less than
all, of the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection
(iii) below.
(iii) PURCHASE PRICE. The purchase price ("Purchase
Price") for the Shares purchased by the Company or its assignees) under this
Section 3(b) shall be the Offered Price. If the Offered Price includes
consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in
good faith.
(iv) PAYMENT. Payment of the Purchase Price shall be
made, at the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company (or, in the case of repurchase by an assignee, to the assignee),
or by any combination thereof within 30 days after receipt of the Notice or in
the manner and at the times set forth in the Notice.
(v) HOLDER'S RIGHT TO TRANSFER. If all of the Shares
proposed in the Notice to be transferred to a given Proposed Transferee are not
purchased by the Company and/or its assignee(s) as provided in this Section
3(b), then the Holder may sell or otherwise transfer such Shares to that
Proposed Transferee at the Offered Price or at a higher price, provided that
such sale or other transfer is consummated within 60 days after the date of the
Notice and provided further that any such sale or other transfer is effected in
accordance with any applicable securities laws and the Proposed Transferee
agrees in writing that the provisions of this Section 3 shall continue to apply
to the Shares in the hands of such Proposed Transferee. If the Shares described
in the Notice are not transferred to the Proposed Transferee within such period,
or if the Holder proposes to change the price or other terms to make them more
favorable to the Proposed Transferee, a new Notice shall be given to the
Company, and the Company and/or its assignees shall again be offered the Right
of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.
(vi) EXCEPTION FOR CERTAIN FAMILY TRANSFERS. Anything to
the contrary contained in this Section 3(b) notwithstanding, the transfer of any
or all of the Shares during Purchaser's lifetime or on Purchaser's death by will
or intestacy to Purchaser's Immediate Family (as defined below) or a trust for
the benefit of Purchaser's Immediate Family shall be exempt from the provisions
of this Section 3(b). "Immediate Family" as used herein shall mean spouse,
lineal descendant or antecedent, father, mother, brother or sister. In such
case, the transferee or other recipient shall receive and hold the Shares so
transferred subject to the provisions of this Section, and there shall be no
further transfer of such Shares except in accordance with the terms of this
Section 3.
(c) INVOLUNTARY TRANSFER.
(i) COMPANY'S RIGHT TO PURCHASE UPON INVOLUNTARY
TRANSFER. In the event, at any time after the date of this Agreement, of any
transfer by operation of law or
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other involuntary transfer (including divorce or death, but excluding, in the
event of death, a transfer to Immediate Family as set forth in Section 3(b)(vi)
above) of all or a portion of the Shares by the record holder thereof, the
Company shall have the right to purchase all of the Shares transferred at the
greater of the purchase price paid by Purchaser pursuant to this Agreement or
the Fair Market Value of the Shares on the date of transfer. Upon such a
transfer, the person acquiring the Shares shall promptly notify the Secretary of
the Company of such transfer. The right to purchase such Shares shall be
provided to the Company for a period of 30 days following receipt by the Company
of written notice by the person acquiring the Shares.
(ii) PRICE FOR INVOLUNTARY TRANSFER. With respect to any
stock to be transferred pursuant to Section 3(c)(i), the price per Share shall
be a price set by the Board of Directors of the Company that will reflect the
current value of the stock in terms of present earnings and future prospects of
the Company. The Company shall notify Purchaser or his or her executor of the
price so determined within 30 days after receipt by it of written notice of the
transfer or proposed transfer of Shares. However, if Purchaser does not agree
with the valuation as determined by the Board of Directors of the Company,
Purchaser shall be entitled to have the valuation determined by an independent
appraiser to be mutually agreed upon by the Company and Purchaser and whose fees
shall be borne equally by the Company and Purchaser.
(d) ASSIGNMENT. The right of the Company to purchase any part of
the Shares may be assigned in whole or in part to any stockholder or
stockholders of the Company or other persons or organizations; provided,
however, that an assignee, other than a corporation that is the Parent or a 100%
owned Subsidiary of the Company, must pay the Company, upon assignment of such
right, cash equal to the difference between the original purchase price and Fair
Market Value, if the original purchase price is less than the Fair Market Value
of the Shares subject to the assignment.
(e) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of
Shares or any interest therein will receive and hold such Shares or interest
subject to the provisions of this Agreement, including, insofar as applicable,
the Repurchase Option. Any sale or transfer of the Shares shall be void unless
the provisions of this Agreement are satisfied.
(f) TERMINATION OF RIGHTS. The Right of First Refusal and the
Company's right to repurchase the Shares in the event of an involuntary transfer
pursuant to Section 3(c) above shall terminate upon the first sale of Common
Stock of the Company to the general public pursuant to a registration statement
filed with and declared effective by the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act"). Upon
termination of the Right of First Refusal and the expiration or exercise of the
Repurchase Option, a new certificate or certificates representing the Shares not
repurchased shall be issued, on request, without the legend referred to in
Section 6(a)(ii) below and delivered to Purchaser.
4. ESCROW OF UNVESTED SHARES. For purposes of facilitating the
enforcement of the provisions of Section 3 above, Purchaser agrees, immediately
upon receipt of the certificates) for the Shares subject to the Repurchase
Option, to deliver such certificate(s), together with an Assignment Separate
from Certificate in the form attached to this Agreement as Exhibit A
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executed by Purchaser and by Purchaser's spouse (if required for transfer), in
blank, to the Secretary of the Company, or the Secretary's designee, to hold
such certificates) and Assignment Separate from Certificate in escrow and to
take all such actions and to effectuate all such transfers and/or releases as
are in accordance with the terms of this Agreement. Purchaser hereby
acknowledges that the Secretary of the Company, or the Secretary's designee, is
so appointed as the escrow holder with the foregoing authorities as a material
inducement to make this Agreement and that said appointment is coupled with an
interest and is accordingly irrevocable. Purchaser agrees that said escrow
holder shall not be liable to any party hereof (or to any other party). The
escrow holder may rely upon any letter, notice or other document executed by any
signature purported to be genuine and may resign at any time. Purchaser agrees
that if the Secretary of the Company, or the Secretary's designee, resigns as
escrow holder for any or no reason, the Board of Directors of the Company shall
have the power to appoint a successor to serve as escrow holder pursuant to the
terms of this Agreement.
5. INVESTMENT AND TAXATION REPRESENTATIONS. In connection with the
purchase of the Shares, Purchaser represents to the Company the following:
(a) Purchaser 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 Shares. Purchaser is
purchasing the Shares for investment for his or 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.
(b) Purchaser understands that the Shares 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
Purchaser's investment intent as expressed herein.
(c) Purchaser understands that the Shares are "restricted
securities" under applicable U.S. federal and state securities laws and that,
pursuant to these laws, Purchaser must hold the Shares indefinitely unless they
are registered with the Securities and Exchange Commission and qualified by
state authorities, or an exemption from such registration and qualification
requirements is available. Purchaser acknowledges that the Company has no
obligation to register or qualify the Shares for resale. Purchaser further
acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, and
requirements relating to the Company which are outside of Purchaser's control,
and which the Company is under no obligation and may not be able to satisfy.
(d) Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser's purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted any tax consultants Purchaser
deems advisable in connection the purchase or disposition of the Shares and that
Purchaser is not relying on the Company for any tax advice.
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6. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
(a) LEGENDS. The certificate or certificates representing the
Shares shall bear the following legends (as well as any legends required by
applicable state and federal corporate and securities laws):
(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO
OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933.
(ii) 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.
(b) STOP-TRANSFER NOTICES. Purchaser agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) REFUSAL TO TRANSFER. The Company shall not be required (i)
to transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Agreement or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.
7. NO EMPLOYMENT RIGHTS. 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 or consulting relationship,
for any reason, with or without cause.
8. SECTION 83(b) ELECTION. Purchaser understands that Section 83(a) of
the internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary
income the difference between the amount paid for the Shares and the Fair Market
Value of the Shares as of the date any restrictions on the Shares lapse. In this
context, "restriction" means the right of the
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Company to buy back the Shares pursuant to the Repurchase Option set forth in
Section 3(a) of this Agreement. Purchaser understands that Purchaser may elect
to be taxed at the time the Shares are 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 30 days from the
date of purchase. Even if the Fair Market Value of the Shares at the time of the
execution of this Agreement equals the amount paid for the Shares, the election
must be made to avoid income under Section 83(a) in the future. Purchaser
understands that failure to file such an election in a timely manner may result
in adverse tax consequences for Purchaser. Purchaser further understands that an
additional copy of such election form should be filed 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 Shares
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 agrees that he will execute and deliver to the Company
with this executed Agreement a copy of the Acknowledgment and Statement of
Decision Regarding Section 83(b) Election (the "Acknowledgment"), attached
hereto as Exhibit B. Purchaser further agrees that Purchaser will execute and
submit with the Acknowledgment a copy of the 83(b) Election, attached hereto as
Exhibit C, if Purchaser has indicated in the Acknowledgment his or her decision
to make such an election.
9. MARKET STANDOFF AGREEMENT. In connection with the initial public
offering of the Company's securities and upon request of the Company or the
underwriters managing such underwritten offering of the Company's securities,
Purchaser agrees not to sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any Shares (other than those included
in the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of such registration as may be requested by the
Company or such managing underwriters and to execute an agreement reflecting the
foregoing as may be requested by the underwriters at the time of the Company's
initial public offering.
10. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.
(b) ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS. This Agreement sets
forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in
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writing signed by the parties to this Agreement. The failure by either party to
enforce any rights under this Agreement shall not be construed as a waiver of
any rights of such party.
(c) 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.
(d) CONSTRUCTION. This Agreement is the result of negotiations
between and has been reviewed by each of the parties hereto and their respective
counsel, if any; accordingly, this Agreement shall be deemed to be the product
of all of the parties hereto, and no ambiguity shall be construed in favor of or
against any one of the parties hereto.
(e) NOTICES. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient when delivered personally or
sent by telegram or fax or 48 hours after being deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the party
to be notified at such party's address as set forth below or as subsequently
modified by written notice.
(f) 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.
(g) SUCCESSORS AND ASSIGNS. The rights and benefits of this
Agreement shall inure to the benefit of, and be enforceable by the Company's
successors and assigns. The rights and obligations of Purchaser under this
Agreement may only be assigned with the prior written consent of the Company.
(h) CALIFORNIA CORPORATE SECURITIES LAW. 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
THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO THE 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 THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
[Signature Page Follows]
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The parties have executed this Agreement as of the date first set forth
above.
SIMPLEX SOLUTIONS, INC.
By: /s/ [ILLEGIBLE]
-------------------------------------
Title: President & CEO
----------------------------------
Address:
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
PURCHASER:
XXX XXXXXXXX
/s/ XXX XXXXXXXX
-----------------------------------------
(Signature)
Address:
00000 Xxxxx Xx
Xxxxxxxx, XX, 00000
Vesting Commencement
Date: August 13, 1997
Monthly Vesting
Date: the 13th day of each month
I, N/A , spouse of Xxx Xxxxxxxx, have read and hereby approve the foregoing
Agreement. In consideration of the Company's granting my spouse the right to
purchase the Shares set forth in the Agreement, I hereby agree to be irrevocably
bound by the Agreement and further agree that any community property or similar
interest that I may have in the Shares shall be similarly bound by the
Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any
amendment or exercise of any rights under the Agreement.
-----------------------------------------
Spouse of Xxx Xxxxxxxx
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EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Purchase
Agreement between the undersigned ("Purchaser") and Simplex Solutions, Inc. (the
"Company") dated _____________, 1998 (the "Agreement"), Purchaser hereby sells,
assigns and transfers unto the Company _______________(__________) shares of the
Common Stock of the Company, standing in Purchaser's name on the books of the
Company and represented by Certificate No.______, and does hereby irrevocably
constitute and appoint_____________________________________________ to transfer
said stock on the books of the Company with full power of substitution in the
premises. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND
THE EXHIBITS THERETO.
Dated:
----------------
Signature:
/s/ XXX XXXXXXXX
-----------------------------------------
Xxx Xxxxxxxx
N/A
-----------------------------------------
Spouse of Xxx Xxxxxxxx (if applicable)
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 its repurchase
option set forth in the Agreement without requiring additional signatures on the
part of Purchaser.
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RECEIPT
Simplex Solutions, Inc. hereby acknowledges receipt of a check in the amount of
$510,000.00 given by Xxx Xxxxxxxx as consideration for Certificate No. ___ for
750,000 shares of Common Stock of Simplex Solutions, Inc.
Dated:
------------------
Simplex Solutions, Inc.
By: /s/ [ILLEGIBLE]
-------------------------------------
Title: President & CEO
----------------------------------
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RECEIPT AND CONSENT
The undersigned hereby acknowledges receipt of a photocopy of
Certificate No. _____ for 750,000 shares of Common Stock of Simplex Solutions,
Inc. (the "Company").
The undersigned further acknowledges that the Secretary of the Company,
or his or her designee, is acting as escrow holder pursuant to the Restricted
Stock Purchase Agreement Purchaser has previously entered into with the Company.
As escrow holder, the Secretary of the Company, or his or her designee, holds
the original of the aforementioned certificate issued in the undersigned's name.
Dated:
------------------
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Xxx Xxxxxxxx
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PLEDGE AND SECURITY AGREEMENT
This Pledge and Security Agreement (the "Agreement") is entered into
this 12th day of February, 1998 by and between Simplex Solutions, Inc., a
Delaware corporation (the "Company") and Xxx Xxxxxxxx ("Purchaser").
RECITALS
In connection with Purchaser's purchase of a full recourse, secured
promissory note of even date herewith (the "Note") in the aggregate principal
amount of $509,250.00, the Company requires that such Note be secured by a
pledge of collateral on the terms set forth below. Purchaser and the Company
have agreed that such collateral shall be 750,000 shares of the Company's Common
Stock, par value $0.001 per share (as adjusted for subsequent stock splits,
reverse stock splits and recapitalizations) now or hereafter held by Purchaser
while the Note is outstanding (the "Shares").
AGREEMENT
In consideration of the Company's acceptance of the Shares as collateral
for the Note, and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. The Note shall become payable in full, except as modified by the
second paragraph of the Note, upon the voluntary or involuntary termination or
cessation of employment of Purchaser with the Company, for any reason, with or
without cause (including death or disability).
2. Purchaser shall deliver to the Secretary of the Company, or his or
her designee (hereinafter referred to as the "Pledge Holder"), all certificates
representing the Shares, together with an Assignment Separate from Certificate
in the form attached to this Agreement as Attachment A executed by Purchaser and
by Purchaser's spouse (if required for transfer), in blank, for use in
transferring all or a portion of the Shares to the Company if, as and when
required pursuant to this Agreement. In addition, if Purchaser is married,
Purchaser's spouse shall execute the signature page attached to this Agreement.
3. As security for the payment of the Note and any renewal, extension or
modification of the Note, Purchaser hereby grants to the Company a security
interest in and pledges with and delivers to the Company Purchaser's Shares
(sometimes referred to herein as the "Collateral").
4. Except as required to enable the Company to exercise its rights as a
secured party, none of the Shares pledged under Section 3 may be sold,
transferred, pledged, hypothecated or otherwise disposed of by Purchaser.
5. In the event that during the term of the pledge any stock dividend,
reclassification, readjustment or other changes are declared or made in the
capital structure of the Company, all new, substituted and additional shares or
other securities issued by reason
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of any such change shall be delivered to and held by the Pledge Holder under the
terms of this Agreement in the same manner as the Shares originally pledged
hereunder. In the event of substitution of such securities, Purchaser, the
Company and Pledge Holder shall cooperate and execute such documents as are
reasonable so as to provide for the substitution of such Collateral and, upon
such substitution, references to "Shares" in this Agreement shall include the
substituted shares of capital stock of the Company held by Purchaser as a result
thereof.
6. In the event that, during the term of this pledge, subscription
warrants or other rights or options shall be issued in connection with the
pledged Shares, such rights, warrants and options shall be the property of
Purchaser and, if exercised by Purchaser, all new stock or other securities so
acquired by Purchaser as it relates to the pledged Shares then held by Pledge
Holder shall be immediately delivered to Pledge Holder, to be held under the
terms of this Agreement in the same manner as the Shares pledged.
7. In the event that Purchaser prepays all or a portion of the Note, in
accordance with the provisions thereof, Purchaser intends, unless written notice
to the contrary is delivered to the Pledge Holder, that the Shares represented
by the portion of the Note so repaid, including annual interest thereon, shall
continue to be so held by the Pledge Holder, to serve as independent collateral
for the outstanding portion of the Note for the purpose of commencing the
holding period set forth in Rule 144(d) promulgated under the Securities Act of
1933, as amended (the "Securities Act").
8. In the event of any foreclosure of the security interest created by
this Agreement, the Company may sell the Shares at a private sale or may
repurchase the Shares itself. The parties agree that, prior to the establishment
of a public market for the Shares of the Company, the securities laws affecting
sale of the Shares make a public sale of the Shares commercially unreasonable.
The parties further agree that the repurchasing of such Shares by the Company,
or by any person to whom the Company may have assigned its rights under this
Agreement, is commercially reasonable if made at a price determined by the Board
of Directors in its discretion, fairly exercised, representing what would be the
Fair Market Value of the Shares reduced by any limitation on transferability,
whether due to the size of the block of shares or the restrictions of applicable
securities laws.
9. In the event of default in payment when due of any indebtedness under
the Note, the Company may elect then, or at any time thereafter, to exercise all
rights available to a secured party under the California Commercial Code
including the right to sell the Collateral at a private or public sale or
repurchase the Shares as provided above. The proceeds of any sale shall be
applied in the following order:
(a) To the extent necessary, proceeds shall be used to pay all
reasonable expenses of the Company in enforcing this Agreement and the Note,
including, without limitation, reasonable attorney's fees and legal expenses
incurred by the Company.
(b) To the extent necessary, proceeds shall be used to satisfy
any remaining indebtedness under Purchaser's Note.
(c) Any remaining proceeds shall be delivered to Purchaser.
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15
10. Upon full payment by Purchaser of all amounts due under the Note,
Pledge Holder shall deliver to Purchaser all Shares in Pledge Holder's
possession belonging to Purchaser, and Pledge Holder shall thereupon be
discharged of all FURTHER OBLIGATIONS UNDER this Agreement; provided, however,
that Pledge Holder shall nevertheless retain the Shares as escrow agent if at
the time of full payment by Purchaser said Shares are still subject to a
Repurchase Option in favor of the Company.
11. Purchaser and the Company agree that all of the terms of this
Agreement shall be binding on their respective successors and assigns, and that
the term "Purchaser" and the term "Company" as used herein shall be deemed to
include, for all purposes, the respective designees, successors, assigns, heirs,
executors and administrators.
12. This Agreement shall be interpreted and governed under the laws of
the State of California.
[Signature Page Follows]
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The parties have executed this Pledge and Security Agreement as of the
date first set forth above.
SIMPLEX SOLUTIONS, INC.
By: XXXXX XXXXXXXX
-------------------------------------
Name: XXXXX XXXXXXXX
-----------------------------------
(print)
Title: President & CEO
----------------------------------
Address:
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
PURCHASER:
XXX XXXXXXXX
/s/ XXX XXXXXXXX
-----------------------------------------
(Signature)
XXX XXXXXXXX
-----------------------------------------
(Print Name)
Address:
00000 Xxxxx Xx
Xxxxxxxx, XX, 00000
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ATTACHMENT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Pledge and Security
Agreement between the undersigned ("Purchaser") and Simplex Solutions, Inc. (the
"Company") dated __________________, 1998 (the "Agreement"), Purchaser hereby
sells, assigns and transfers unto the Company ________________(_______________ )
shares of the Common Stock of the Company, standing in Purchaser's name on the
books of the Company and represented by Certificate No. ____, and hereby
irrevocably constitutes and appoints ___________________________________ to
transfer said stock on the books of the Company with full power of substitution
in the premises. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE
AGREEMENT.
Dated:
-------------
Signature:
/s/ XXX XXXXXXXX
-----------------------------------------
Xxx Xxxxxxxx
N/A
-----------------------------------------
Spouse of Xxx Xxxxxxxx (if applicable)
Instruction: Please do not fill in any blanks other than the signature line. The
purpose of this assignment is to perfect the security interest of the Company
pursuant to the Agreement.
18
SECURED PROMISSORY NOTE
$509,250.00 Sunnyvale, California
FEBRUARY 12, 1998
For value received, the undersigned ("Purchaser") promises to pay
Simplex Solutions, Inc., a Delaware corporation (the "Company"), at its
principal office the principal sum of $509,250.00 with interest from the date
hereof at a rate of 6.0% per annum, compounded annually, on the unpaid balance
of such principal sum. Such principal and interest shall be due and payable on
the fourth anniversary of the date hereof, unless forgiven prior thereto by the
Company in accordance with the second paragraph of this promissory note (this
"Note").
The Company shall forgive up to a total of $375,000 of the outstanding
principal under this Note and such amount shall no longer be payable to the
Company in accordance with the terms set forth in this paragraph. Provided that
Purchaser continues to be employed by the Company on a full-time basis, $93,750
of the outstanding principal indebtedness under this Note shall be forgiven on
the twelve-month anniversary of the Vesting Commencement Date (as set forth
below), and an additional $7,812.50 of the outstanding principal indebtedness
shall be forgiven each month thereafter on the Monthly Vesting Date (as set
forth below), until a total of $375,000 of principal indebtedness shall have
been forgiven under this Note. Such forgiveness of debt shall be reported as
ordinary income to Purchaser by the Company, and shall be subject to applicable
tax withholding by the Company. If Purchaser's employment with the Company is
terminated before the full $375,000 of principal indebtedness is forgiven in
accordance with the terms hereunder, only the amount of principal indebtedness
forgiven in accordance with this paragraph as of the date of Purchaser's
termination of employment shall not be due and payable to the Company by
Purchaser upon Purchaser's termination of employment.
If Purchaser's employment relationship with the Company is terminated
voluntarily or involuntarily, for any reason, with or without cause (including
death or disability), prior to payment in full of this Note, this Note shall be
immediately due and payable, except as modified by the preceding paragraph of
this Note.
Principal and interest are payable in lawful money of the United States
of America. AMOUNTS DUE UNDER THIS NOTE MAY BE PREPAID AT ANY TIME WITHOUT
PREMIUM OR PENALTY.
Should suit be commenced to collect any sums due under this Note, such
sum as the Court may deem reasonable shall be added hereto as attorneys' fees.
The makers and endorsers have severally waived presentment for payment, protest,
notice of protest and notice of nonpayment of this Note.
19
This Note, which is full recourse, is secured by a pledge of certain
shares of Common Stock of the Company and is subject to the terms of a Pledge
and Security Agreement between the undersigned and the Company of even date
herewith.
/s/ XXX XXXXXXXX
-----------------------------------------
Xxx Xxxxxxxx
Vesting Commencement
Date: August 13, 1997
Monthly Vesting
Date: the 13th day of each month
ACCEPTED AND AGREED:
Simplex Solutions, Inc.
By: XXXXX XXXXXXXX
------------------------------
Title: PRESIDENT & CEO
------------------------------
Date: Feb. 12, 1998
------------------------------
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SIMPLEX SOLUTIONS, INC.
SECURED LOAN AGREEMENT
This Secured Loan Agreement is made February 12, 1998 by and between
Simplex Solutions, Inc., a Delaware corporation (the "Company") and Xxx Xxxxxxxx
("Borrower").
RECITALS
Borrower desires to borrow, and the Company desires to lend to Borrower
up to an aggregate of $509,250.00 (the "Borrowed Amount"). The parties desire
that such loan shall be secured by up to an aggregate of 750,000 shares of the
Company's Common Stock (as adjusted for subsequent stock splits, reverse stock
splits and recapitalizations) now or hereafter held by Borrower while any
Borrowed Amount is outstanding (the "Shares") on the terms and conditions
contained herein.
NOW, THEREFORE, it is agreed as follows:
1. Agreement to Lend. Subject to the terms and conditions contained
herein and upon execution of this Agreement, the Company agrees to issue to
Borrower a check or other readily available funds in the Borrowed Amount upon
the date of this Agreement.
2. Promissory Note. In consideration of the Company's delivery of the
Borrowed Amount, Borrower will execute a secured promissory note in the form
attached hereto as Exhibit A (a "Note"), in the principal amount of such
Borrowed Amount and bearing interest at the applicable adjusted federal rate,
compounded annually.
3. Security Agreement. Borrower will additionally execute the Pledge and
Security Agreement in the form attached hereto as Exhibit B (the "Security
Agreement") as security for Borrower's obligation to repay the Borrowed Amount,
and will deliver, or cause to be delivered, all certificates representing Shares
to the Company or its designee as pledge holder of the Shares, together with
such other documents of assignment and other documents as may be reasonably
requested by the Company. The Shares will be held by the Company or its designee
as pledge holder and shall be released according to the terms of the Security
Agreement.
4. Successors or Assigns. Borrower and the Company agree that all of the
terms of this Agreement shall be binding on their successors and assigns, and
that the term "Borrower" and the term "Company" as used herein shall be deemed
to include as to each party, for all purposes, the designees, successors,
assigns, heirs, executors and administrators of such party.
5. Governing Law. This Agreement shall be interpreted and governed under
the laws of the State of California.
21
6. Amendment. This Agreement may be amended only by a written instrument
signed by each party hereto.
[Signature Page Follows]
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22
IN WITNESS WHEREOF, the parties hereto have executed this Secured Loan
Agreement as of the day and year first above written.
"BORROWER" XXX XXXXXXXX
/s/ XXX XXXXXXXX
-----------------------------------------
(Signature)
Address: 00000 Xxxxx Xx
--------------------------------
Xxxxxxxx XX 00000
-----------------------------------------
"COMPANY" SIMPLEX SOLUTIONS, INC.
By: XXXXX XXXXXXXX
-------------------------------------
Title: President & CEO
----------------------------------
Address: 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
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