EXHIBIT 10.04
FORM OF
VERITAS SOFTWARE CORPORATION
RESTRICTED STOCK ISSUANCE AGREEMENT
AGREEMENT made this _____ day of ______________, by and between
VERITAS Software Corporation, a Delaware corporation, and
_________________________, a Participant in the Corporation's 2003 Stock
Incentive Plan.
All capitalized terms in this Agreement shall have the meaning
assigned to them in this Agreement or in the attached Appendix.
A. PURCHASE OF SHARES
1. PURCHASE. Participant hereby purchases _____________ shares of
Common Stock (the "Purchased Shares") pursuant to the provisions of the Stock
Issuance Program at the purchase price of $______ per share (the "Purchase
Price").
2. PAYMENT. Concurrently with the delivery of this Agreement to
the Corporation, Participant shall pay the Purchase Price for the Purchased
Shares in cash or check payable to the Corporation and shall deliver a duly
executed blank Assignment Separate from Certificate (in the form attached hereto
as Exhibit I) with respect to the Purchased Shares.
3. STOCKHOLDER RIGHTS. Until such time as the Corporation
exercises the Repurchase Right, Participant (or any successor in interest) shall
have all the rights of a stockholder (including voting, dividend and liquidation
rights) with respect to the Purchased Shares, subject, however, to the transfer
restrictions of this Agreement.
4. ESCROW. The Corporation shall have the right to hold the
Purchased Shares in escrow until those shares have vested in accordance with the
Vesting Schedule.
5. COMPLIANCE WITH LAW. Under no circumstances shall shares of
Common Stock or other assets be issued or delivered to Participant pursuant to
the provisions of this Agreement unless, in the opinion of counsel for the
Corporation or its successors, there shall have been compliance with all
applicable requirements of applicable securities laws, all applicable listing
requirements of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock is at the time listed for trading and all
other requirements of law or of any regulatory bodies having jurisdiction over
such issuance and delivery.
B. TRANSFER RESTRICTIONS
1. RESTRICTION ON TRANSFER. Except for any Permitted Transfer,
Participant shall not transfer, assign, encumber or otherwise dispose of any of
the Purchased Shares which are subject to the Repurchase Right.
2. RESTRICTIVE LEGEND. The stock certificate for the Purchased
Shares shall be endorsed with the following restrictive legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE UNVESTED AND SUBJECT
TO CERTAIN REPURCHASE RIGHTS GRANTED TO THE CORPORATION AND ACCORDINGLY
MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED, OR IN ANY MANNER
DISPOSED OF EXCEPT IN CONFORMITY WITH THE TERMS OF A WRITTEN AGREEMENT
DATED ____________, ______ BETWEEN THE CORPORATION AND THE REGISTERED
HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). A
COPY OF SUCH AGREEMENT IS MAINTAINED AT THE CORPORATION'S PRINCIPAL
CORPORATE OFFICES."
3. TRANSFEREE OBLIGATIONS. Each person (other than the
Corporation) to whom the Purchased Shares are transferred by means of a
Permitted Transfer must, as a condition precedent to the validity of such
transfer, acknowledge in writing to the Corporation that such person is bound by
the provisions of this Agreement and that the transferred shares are subject to
the Repurchase Right to the same extent such shares would be so subject if
retained by Participant.
C. REPURCHASE RIGHT
1. GRANT. The Corporation is hereby granted the right (the
"Repurchase Right"), exercisable at any time during the ninety (90)-day period
following the date Participant ceases for any reason to remain in Service, to
repurchase at the Repurchase Price any or all of the Purchased Shares in which
Participant is not, at the time of his or her cessation of Service, vested in
accordance with the Vesting Schedule set forth in Paragraph C.3 of this
Agreement or the special vesting acceleration provisions of Paragraph C.5 of
this Agreement (such shares to be hereinafter referred to as the "Unvested
Shares").
2. EXERCISE OF THE REPURCHASE RIGHT. The Repurchase Right shall
be exercisable by written notice delivered to each Owner of the Unvested Shares
prior to the expiration of the ninety (90)-day exercise period. The notice shall
indicate the number of Unvested Shares to be repurchased, the Repurchase Price
per share and the date on which the repurchase is to be effected, such date to
be not more than thirty (30) days after the date of such notice. The
certificates representing the Unvested Shares to be repurchased shall be
delivered to the Corporation on the closing date specified for the repurchase.
Concurrently with the receipt of such stock certificates, the Corporation shall
pay to Owner, in cash or cash equivalent, an amount equal to the Repurchase
Price for the Unvested Shares to be repurchased from Owner.
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3. TERMINATION OF THE REPURCHASE RIGHT. The Repurchase Right
shall terminate with respect to any Unvested Shares for which it is not timely
exercised under Paragraph C.2. In addition, the Repurchase Right shall terminate
and cease to be exercisable with respect to any and all Purchased Shares in
which Participant vests in accordance with the following Vesting Schedule:
(i) Upon Participant's completion of one (1) year of
Service measured from ______________, _______, Participant shall acquire a
vested interest in, and the Repurchase Right shall lapse with respect to,
twenty-five percent (25%) of the Purchased Shares.
(ii) Participant shall acquire a vested interest in,
and the Repurchase Right shall lapse with respect to, the remaining
Purchased Shares in a series of thirty six (36) successive equal monthly
installments upon Participant's completion of each additional month of
Service over the thirty-six (36)-month period measured from the initial
vesting date under subparagraph (i) above.
4. RECAPITALIZATION. Any new, substituted or additional
securities or other property (including cash paid other than as a regular cash
dividend) which is by reason of any Recapitalization distributed with respect to
the Purchased Shares shall be immediately subject to the Repurchase Right and
any escrow requirements hereunder, but only to the extent the Purchased Shares
are at the time covered by such right or escrow requirements. Appropriate
adjustments to reflect such distribution shall be made to the number and/or
class of securities subject to this Agreement and to the Repurchase Price per
share to be paid upon the exercise of the Repurchase Right in order to reflect
the effect of any such Recapitalization upon the Corporation's capital
structure; provided, however, that the aggregate Repurchase Price shall remain
the same.
5. CHANGE IN CONTROL.
(a) Immediately prior to the consummation of any Change in
Control, the Repurchase Right shall automatically lapse in its entirety and the
Purchased Shares shall vest in full, except to the extent the Repurchase Right
is to be assigned to the successor corporation (or parent thereof) or is
otherwise to be continued in full force and effect pursuant to the terms of the
Change in Control transaction.
(b) To the extent the Repurchase Right remains in effect
following a Change in Control, such right shall apply to the new capital stock
or other property (including any cash payments) received in exchange for the
Purchased Shares in consummation of the Change in Control, but only to the
extent the Purchased Shares are at the time covered by such right. Appropriate
adjustments shall be made to the Repurchase Price per share payable upon
exercise of the Repurchase Right to reflect the effect (if any) of the Change in
Control upon the Corporation's capital structure; provided, however, that the
aggregate Repurchase Price shall remain the same. The new securities or other
property (including cash payments) issued or distributed with respect to the
Purchased Shares in consummation of the Change in Control shall immediately be
deposited in escrow with the Corporation (or the successor entity) and shall not
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be released from escrow until Participant vests in such securities or other
property in accordance with the same Vesting Schedule in effect for the
Purchased Shares.
D. SPECIAL TAX ELECTION
1. SECTION 83(b) ELECTION. Under Code Section 83, the excess of
the fair market value of the Purchased Shares on the date any forfeiture
restrictions applicable to such shares lapse over the Purchase Price paid for
such shares will be reportable as ordinary income on the lapse date. For this
purpose, the term "forfeiture restrictions" includes the right of the
Corporation to repurchase the Purchased Shares pursuant to the Repurchase Right.
Participant may elect under Code Section 83(b) to be taxed at the time the
Purchased Shares are acquired, rather than when and as such Purchased Shares
cease to be subject to such forfeiture restrictions. Such election must be filed
with the Internal Revenue Service within thirty (30) days after the date of this
Agreement. Even if the fair market value of the Purchased Shares on the date of
this Agreement equals the Purchase Price paid (and thus no tax is payable), the
election must be made to avoid adverse tax consequences in the future. THE FORM
FOR MAKING THIS ELECTION IS ATTACHED AS EXHIBIT II HERETO. PARTICIPANT
UNDERSTANDS THAT FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY
(30)-DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME AS THE
FORFEITURE RESTRICTIONS LAPSE.
2. FILING RESPONSIBILITY. PARTICIPANT ACKNOWLEDGES THAT IT IS
PARTICIPANT'S SOLE RESPONSIBILITY, AND NOT THE CORPORATION'S, TO FILE A TIMELY
ELECTION UNDER CODE SECTION 83(b), EVEN IF PARTICIPANT REQUESTS THE CORPORATION
OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS OR HER BEHALF.
E. GENERAL PROVISIONS
1. ASSIGNMENT. The Corporation may assign the Repurchase Right to
any person or entity selected by the Board, including (without limitation) one
or more stockholders of the Corporation.
2. AT WILL EMPLOYMENT. Nothing in this Agreement or in the Plan
shall confer upon Participant any right to continue in Service for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Corporation (or any Parent or Subsidiary employing or retaining
Participant) or of Participant, which rights are hereby expressly reserved by
each, to terminate Participant's Service at any time for any reason, with or
without cause.
3. NOTICES. Any notice required to be given under this Agreement
shall be in writing and shall be deemed effective upon personal delivery or upon
deposit in the U.S. mail, registered or certified, postage prepaid and properly
addressed to the party entitled to such notice at the address indicated below
such party's signature line on this Agreement or at such other address as such
party may designate by ten (10) days advance written notice under this paragraph
to all other parties to this Agreement.
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4. NO WAIVER. The failure of the Corporation in any instance to
exercise the Repurchase Right shall not constitute a waiver of any other
repurchase rights that may subsequently arise under the provisions of this
Agreement or any other agreement between the Corporation and Participant. No
waiver of any breach or condition of this Agreement shall be deemed to be a
waiver of any other or subsequent breach or condition, whether of like or
different nature.
5. CANCELLATION OF SHARES. If the Corporation shall make
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Purchased Shares to be repurchased in
accordance with the provisions of this Agreement, then from and after such time,
the person from whom such shares are to be repurchased shall no longer have any
rights as a holder of such shares (other than the right to receive payment of
such consideration in accordance with this Agreement). Such shares shall be
deemed purchased in accordance with the applicable provisions hereof, and the
Corporation shall be deemed the owner and holder of such shares, whether or not
the certificates therefor have been delivered as required by this Agreement.
6. PARTICIPANT UNDERTAKING. Participant hereby agrees to take
whatever additional action and execute whatever additional documents the
Corporation may deem necessary or advisable in order to carry out or effect one
or more of the obligations or restrictions imposed on either Participant or the
Purchased Shares pursuant to the provisions of this Agreement.
7. AGREEMENT IS ENTIRE CONTRACT. This Agreement constitutes the
entire contract between the parties hereto with regard to the subject matter
hereof. This Agreement is made pursuant to the provisions of the Plan and shall
in all respects be construed in conformity with the terms of the Plan.
8. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California without resort
to that State's conflict-of-laws rules.
9. 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.
10. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Corporation and its successors
and assigns and upon Participant, Participant's assigns and the legal
representatives, heirs and legatees of Participant's estate, whether or not any
such person shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first indicated above.
VERITAS SOFTWARE CORPORATION
By:_______________________________
Title:____________________________
Address:__________________________
__________________________________
PARTICIPANT
__________________________________
Signature
Address:__________________________
__________________________________
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SPOUSAL ACKNOWLEDGMENT
The undersigned spouse of the Participant has read and hereby
approves the foregoing Stock Issuance Agreement. In consideration of the
Corporation's granting the Participant the right to acquire the Purchased Shares
in accordance with the terms of such Agreement, the undersigned hereby agrees to
be irrevocably bound by all the terms of such Agreement, including (without
limitation) the right of the Corporation (or its assigns) to purchase any
Purchased Shares in which the Participant is not vested at the time of his or
her termination of Service.
_____________________________________
PARTICIPANT'S SPOUSE
Address:_____________________________
_____________________________________
EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED _______________________ hereby sell(s), assign(s) and
transfer(s) unto VERITAS Software Corporation (the "Corporation"),
_____________________ (________) shares of the Common Stock of the Corporation
standing in his or her name on the books of the Corporation represented by
Certificate No. ______________ herewith and do(es) hereby irrevocably constitute
and appoint ______________________________ Attorney to transfer the said stock
on the books of the Corporation with full power of substitution in the premises.
Dated: _________________, _____.
Signature___________________________
INSTRUCTION: Please do not fill in any blanks other than the signature line.
Please sign exactly as you would like your name to appear on the issued stock
certificate. The purpose of this assignment is to enable the Corporation to
exercise the Repurchase Right without requiring additional signatures on the
part of Participant.
EXHIBIT II
SECTION 83(b) TAX ELECTION
This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Taxpayer Ident. No.:
(2) The property with respect to which the election is being made is
____________ shares of the common stock of VERITAS Software Corporation
(3) The property was issued on _________________, _________.
(4) The taxable year in which the election is being made is the calendar year
_________.
(5) The property is subject to a repurchase right pursuant to which the issuer
has the right to acquire the property at the LOWER of the purchase price
paid per share or the fair market value per share, if for any reason
taxpayer's service with the issuer terminates. The issuer's repurchase
right will lapse in a series of annual and monthly installments over a
forty-eight (48)-month period ending on ______________, ____.
(6) 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) is $________ per share.
(7) The amount paid for such property is $___________ per share.
(8) A copy of this statement was furnished to VERITAS Software Corporation for
whom taxpayer rendered the services underlying the transfer of property.
(9) This statement is executed on ________________________, _______.
_____________________________ ___________________________
Spouse (if any) Taxpayer
This election must be filed with the Internal Revenue Service Center with which
taxpayer files his or her Federal income tax returns and must be made within
thirty (30) days after the execution date of the Stock Issuance Agreement. This
filing should be made by registered or certified mail, return receipt requested.
Participant must retain two (2) copies of the completed form for filing with his
or her Federal and state tax returns for the current tax year and an additional
copy for his or her records.
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Issuance Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean a change in ownership or control
of the Corporation effected through any of the following transactions:
(i) a merger, consolidation or other reorganization approved
by the Corporation's stockholders, unless securities representing more
than fifty percent (50%) of the total combined voting power of the voting
securities of the successor corporation are immediately thereafter
beneficially owned, directly or indirectly and in substantially the same
proportion, by the persons who beneficially owned the Corporation's
outstanding voting securities immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation, or
(iii) any transaction or series of related transactions
pursuant to which any person or any group of persons comprising a "group"
within the meaning of Rule 13d-5(b)(1) under the 1934 Act (other than the
Corporation or a person that, prior to such transaction or series of
related transactions, directly or indirectly controls, is controlled by or
is under common control with, the Corporation) becomes directly or
indirectly the beneficial owner (within the meaning of Rule 13d-3 under
the 0000 Xxx) of securities possessing (or convertible into or exercisable
for securities possessing) more than fifty percent (50%) of the total
combined voting power of the Corporation's securities outstanding
immediately after the consummation of such transaction or series of
related transactions, whether such transaction involves a direct issuance
from the Corporation or the acquisition of outstanding securities held by
one or more of the Corporation's stockholders.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean shares of the Corporation's common
stock.
F. CORPORATION shall mean VERITAS Software Corporation, a
Delaware corporation, and any successor corporation to all or substantially all
of the assets or voting stock of VERITAS Software Corporation, which shall be
appropriate action adopt the Plan.
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G. FAIR MARKET VALUE per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock at the close of regular hours trading on
the Nasdaq National Market on the date in question, as such price is
reported by the National Association of Securities Dealers. If there is no
closing selling price for the Common Stock on the date in question, then
the Fair Market Value shall be the closing selling price at the close of
regular hours trading on the last preceding date for which such quotation
exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price
per share of Common Stock at the close of regular hours trading on the
date in question on the Stock Exchange determined by the Plan
Administrator to be the primary market for the Common Stock, as such price
is officially quoted in the composite tape of transactions on such
exchange. If there is no closing selling price for the Common Stock on the
date in question, then the Fair Market Value shall be the closing selling
price at the close of regular trading hours on the last preceding date for
which such quotation exists.
H. OWNER shall mean Participant and all subsequent holders of the
Purchased Shares who derive their chain of ownership through a Permitted
Transfer from Participant.
I. PARENT shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
J. PARTICIPANT shall mean the person to whom the Purchased Shares
are issued under the Stock Issuance Program.
K. PERMITTED TRANSFER shall mean (i) a gratuitous transfer of the
Purchased Shares, provided and only if Participant obtains the Corporation's
prior written consent to such transfer, (ii) a transfer of title to the
Purchased Shares effected pursuant to Participant's will or the laws of
inheritance following Participant's death or (iii) a transfer to Participant's
spouse pursuant to a domestic relations order effecting a division of marital
property.
L. PLAN shall mean the Corporation's 2003 Stock Incentive Plan,
as amended from time to time.
M. PLAN ADMINISTRATOR shall mean either the Board or a committee
of the Board acting in its administrative capacity under the Plan.
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N. PURCHASE PRICE shall have the meaning assigned to such term in
Paragraph A.1.
O. PURCHASED SHARES shall have the meaning assigned to such term
in Paragraph A.1.
P. RECAPITALIZATION shall mean any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the Corporation's outstanding Common Stock as a class without the
Corporation's receipt of consideration.
Q. REPURCHASE PRICE shall mean the LOWER of (i) the Purchase
Price paid per share or (ii) the Fair Market Value per share of Common Stock on
the date of the Participant's cessation of Service.
R. REPURCHASE RIGHT shall mean the right granted to the
Corporation in accordance with Article C.
S. SERVICE shall mean the Participant's performance of services
for the Corporation (or any Parent or Subsidiary) in the capacity of an
employee, subject to the control and direction of the employer entity as to both
the work to be performed and the manner and method of performance, a
non-employee member of the board of directors or an independent consultant. For
purposes of this Agreement, Participant shall be deemed to cease Service
immediately upon the occurrence of the either of the following events: (i)
Participant no longer performs services in any of the foregoing capacities for
the Corporation (or any Parent or Subsidiary) or (ii) the entity for which
Participant performs such services ceases to remain a Parent or Subsidiary of
the Corporation, even though Participant may subsequently continue to perform
services for that entity. Service shall not be deemed to cease during a period
of military leave, sick leave or other personal leave approved by the
Corporation; provided, however, that except to the extent otherwise required by
law or expressly authorized by the Plan Administrator, no Service credit shall
be given for purposes of the Vesting Schedule hereunder for any period the
Participant is on a leave of absence.
T. STOCK ISSUANCE PROGRAM shall mean the Stock Issuance Program
under the Plan.
U. SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
V. UNVESTED SHARES shall have the meaning assigned to such term
in Paragraph C.1.
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W. VESTING SCHEDULE shall mean the vesting schedule specified in
Paragraph C.3, pursuant to which the Purchased Shares are to vest in a series of
installments over Participant's period of Service.
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