EXHIBIT 10.13
RESTRICTED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of November 24, 1998 by and between Fresh
Enterprises, Inc., a California corporation (the "Company"), and Xxxx
Xxxxxxxxxx, an Employee of the Company (the "Holder").
RECITALS
WHEREAS, the Company has established the 1998 Stock Plan of Fresh
Enterprises, Inc. (as amended, the "Plan"); and
WHEREAS, the Company wishes to carry out the Plan (the terms of which
are hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Plan provides for the issuance of shares of the Company's
Common Stock (as defined herein) subject to certain restrictions thereon; and
WHEREAS, the Committee appointed to administer the Plan has determined
that it would be to the advantage and in the best interest of the Company and
its shareholders to grant Restricted Stock to the Holder as provided for herein;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Wherever the following terms are used in this Agreement they shall have
the meanings specified below, unless the context clearly indicates otherwise.
Capitalized terms not defined herein shall have the meanings assigned to such
terms in the Plan.
1.1 Acceleration Event. "Acceleration Event" shall mean any of the
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following transactions:
(a) a "Qualified Initial Public Offering" as defined in the
Shareholders' Agreement or the consummation of any initial public offering of
Common Stock in which the holders of Series A Stock receive proceeds of at least
$10 million; or
(b) a "Change of Control" as defined in the Shareholders'
Agreement; or
(c) the consummation of a merger or consolidation of the Company
with any other corporation (or other entity), 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 66-2/3% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of the Company
(or similar transaction) in which no person acquires more than 25% of the
combined voting power of the Company's then outstanding securities shall not
constitute an Acceleration Event; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or the consummation of the sale or disposition by the
Company of all or substantially all of the Company's assets.
1.2 Board. "Board" shall mean the Board of Directors of the Company.
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1.3 California Securities Act. "California Securities Act" shall mean
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the California Corporate Securities Law of 1968, as amended.
1.4 Code. "Code" shall mean the Internal Revenue Code of 1986, as
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amended.
1.5 Committee. "Committee" shall mean the Compensation Committee of
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the Board, or another committee or subcommittee of the Board, appointed to
administer the Plan, unless the Board has assumed the authority for
administration of the Plan generally as provided in the Plan.
1.6 Common Stock. "Common Stock" shall mean the Common Stock of the
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Company, no par value per share.
1.7 Company. "Company" shall mean Fresh Enterprises, Inc., a
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California corporation.
1.8 Director. "Director" shall mean a member of the Board.
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1.9 Employee. "Employee" shall mean any officer or other employee (as
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defined in accordance with Section 3401(c) of the Code) of the Company, or of
any corporation which is a Subsidiary.
1.10 Employment Agreement. "Employment Agreement" shall mean that
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certain Employment Agreement dated as of November 24, 1998 by and between the
Holder and the Company, as in effect from time to time.
1.11 Exchange Act. "Exchange Act" shall mean the Securities Exchange
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Act of 1934, as amended.
1.12 Fair Market Value. "Fair Market Value" of a share of Common Stock
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as of a given date shall be (i) the closing price of a share of Common Stock on
the principal exchange on which shares of Common Stock are then trading, if any
(or as reported on any composite index which includes such principal exchange),
on the trading day previous to such date, or if shares were not traded on the
trading day previous to such date, then on the next preceding date on which a
trade occurred, or (ii) if Common Stock is not traded on an exchange but is
quoted on NASDAQ or a successor quotation system, the mean between the closing
representative bid and asked prices for the Common Stock on the trading day
previous to such date as reported by NASDAQ or such successor quotation system;
or (iii) if Common Stock is not publicly traded on
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an exchange and not quoted on NASDAQ or a successor quotation system, the Fair
Market Value of a share of Common Stock as established by the Committee acting
in good faith.
1.13 Plan. "Plan" shall mean the 1998 Stock Plan of Fresh Enterprises,
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Inc.
1.14 Repurchase Right. "Repurchase Right" shall mean the right of the
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Company to repurchase shares of Restricted Stock as set forth in Section 3.1.
1.15 Restricted Stock. "Restricted Stock" shall mean the shares of
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Common Stock issued under the Agreement.
1.16 Restrictions. "Restrictions" shall mean the restrictions on sale
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or other transfer set forth in Section 3.3 and the exposure to forfeiture set
forth in Section 3.1.
1.17 Securities Act. "Securities Act" shall mean the Securities Act of
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1933, as amended.
1.18 Shareholders' Agreement. "Shareholders' Agreement" shall mean
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that certain Shareholders' Agreement dated as of November 24,1998 by and among
the Company, the Holder and the other holders of the issued and outstanding
capital stock of the Company listed on Schedule A thereto, as in effect from
time to time.
1.19 Subsidiary. "Subsidiary" shall mean any corporation in an
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unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then owns
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.
1.20 Termination of Employment. "Termination of Employment" shall mean
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the time when the employee-employer relationship between the Holder and the
Company or any Subsidiary is terminated for any reason, with or without just
cause (as defined in the Employment Agreement), including, but not by way of
limitation, a termination by resignation, discharge, death, disability or
retirement; but excluding (i) a termination where there is a simultaneous
reemployment or continuing employment of the Holder by the Company or any
Subsidiary, (ii) at the discretion of the Committee, a termination which results
in a temporary severance of the employee-employer relationship, and (iii) at the
discretion of the Committee, a termination which is followed by the simultaneous
establishment of a consulting relationship by the Company or a Subsidiary with
the former employee. All determinations as to the effect of any Termination of
Employment shall be as set forth in the Employment Agreement. Notwithstanding
any other provision of the Plan or this Agreement, the Company or any Subsidiary
has an absolute and unrestricted right to terminate the Holder's employment at
any time for any reason whatsoever, with or without just cause, except to the
extent expressly provided otherwise in the Employment Agreement or other written
agreement between the Company and the Holder.
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ARTICLE II.
ISSUANCE OF RESTRICTED STOCK
2.1 Sale of Stock. The Company hereby agrees to sell to the Holder and
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the Holder hereby agrees to purchase from the Company an aggregate of 130,844
shares of the Company's Common Stock, no par value per share (the "Restricted
Stock"), for an aggregate purchase price of $889,739.20.
2.2 Payment of Purchase Price. The payment of the purchase price shall
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be by execution by the Holder of a secured promissory note in the form attached
hereto as Exhibit A (the "Note") together with a repayment and stock pledge
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agreement in the form attached hereto as Exhibit B (the "Pledge Agreement").
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ARTICLE III.
REPURCHASE RIGHT AND OTHER RESTRICTIONS ON RESTRICTED STOCK
3.1 Repurchase Right. In the event of the Holder's Termination of
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Employment for any reason, including by the Company without "just cause" (as
defined under the Employment Agreement), before the first anniversary of the
date hereof, the Company shall have an irrevocable, exclusive right, but not the
obligation, for a period of 90 days from such Termination of Employment to
repurchase all or any portion of the Unvested Shares (as defined below in
Section 3.2) at the original purchase price per share (the "Repurchase Price").
The Repurchase Right shall be exercisable by the Company by written notice to
the Holder or the Holder's executor and shall be payable, at the Company's
option, (i) by delivery to the Holder or the Holder's executor with such notice
of a check in the amount of the Repurchase Price for the Unvested Shares being
repurchased, or (ii) by cancellation by the Company of an amount of the Holder's
indebtedness, if any, to the Company equal to the Repurchase Price for the
Unvested Shares being repurchased, or (iii) by a combination of (i) and (ii) so
that the combined payment and cancellation of indebtedness equals the Repurchase
Price times the number of shares to be repurchased (the "Aggregate Repurchase
Price"). Upon delivery of such notice and the payment of the Aggregate
Repurchase Price in any of the ways described above, the repurchased Restricted
Stock shall become available for future grant under the Plan.
3.2 Release of Shares From Repurchase Right.
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(a) As of the date of this Agreement, 65,422 shares of the
Restricted Stock shall be held free of the Company's Repurchase Right. The
remainder of the shares of Restricted Stock shall be released from the
Repurchase Right on the first anniversary of the date of this Agreement provided
the Holder was continuously employed by the Company as an Employee through such
date; provided, however, that upon the occurrence of an Acceleration Event prior
to the Holder's Termination of Employment, all of the Restricted Stock shall be
released from the Company's Repurchase Right.
(b) Shares of Restricted Stock which have not been released from
the Repurchase Right pursuant to subsection (a) are referred to herein as
"Unvested Shares."
3.3 Restriction on Transfer. The Holder hereby agrees and acknowledges
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that the shares of Restricted Stock are subject to the provisions of the
Shareholders' Agreement,
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including, without limitation, the restrictions on transfer set forth therein.
Notwithstanding any provision to the contrary in this Agreement, none of the
Restricted Stock or any beneficial interest therein shall be transferred,
encumbered or otherwise disposed of in any manner other than in accordance with
the provisions of this Agreement, the Shareholders' Agreement and the Pledge
Agreement.
3.4 Voting Arrangements. The Holder hereby agrees and acknowledges
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that the shares of Restricted Stock are subject to certain restrictions and
obligations regarding the voting thereof, as set forth in the Shareholder's
Agreement.
ARTICLE IV.
REPRESENTATIONS, LEGENDS
4.1 Investment Representations. In connection with the purchase of the
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Restricted Stock, the Holder represents to the Company the following:
(a) The Holder 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 Restricted Stock.
The Holder is purchasing the Restricted Stock for investment for the Holder's
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) The Holder understands that the Restricted Stock has 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 the
Holder's investment intent as expressed herein. In this connection, the Holder
understands that, in view of the Securities and Exchange Commission
("Commission"), the statutory basis for such exemption may not be present if the
Holder's representations meant that the Holder's present intention was to hold
the Restricted Stock for a minimum capital gains period under applicable 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.
(c) The Holder further acknowledges and understands that the
Restricted Stock must be held indefinitely unless it is subsequently registered
under the Securities Act or an exemption from such registration is available.
The Holder further acknowledges and understands that except as set forth in that
certain Registration Rights Agreement dated as of November 24, 1998 by and among
Xxxxxxxxx-Xxxxx Partners III, Grunman Hill III L.P., Oak Investment Partners
VIII, Xxxxxx Xxxxx, the Holder, Xxxxx X. Xxxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx,
Xxxx Yonkich, the individuals listed on Schedule A attached thereto and the
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Company, as in effect from time to time, the Company is under no obligation to
register the Restricted Stock. The Holder understands that the certificate
evidencing the Restricted Stock will be imprinted with a legend which prohibits
the transfer of the Restricted Stock unless such shares are registered or such
registration is not required in the opinion of counsel satisfactory to the
Company.
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4.2 Stock Certificate Legends.
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(a) The share certificate evidencing the Restricted Stock issued
hereunder shall be endorsed with the following legends:
THE SECURITIES 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.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF ONE OR MORE AGREEMENTS BETWEEN THE COMPANY
AND THE STOCKHOLDER, COPIES OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.
(b) The share certificate evidencing the Restricted Stock issued
hereunder shall also be endorsed with any legend required by any applicable
state securities laws, including, without limitation, the California Securities
Act.
4.3 Market Stand-Off Agreement. The Holder agrees in connection with
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any registration of the Company's securities (other than a registration of
securities in a Rule 145 transaction or with respect to an employee benefit
plan) that, upon request of the underwriters managing any underwritten offering
of the Company's securities, not to sell, make any short sale of, loan, pledge
or otherwise hypothecate or encumber, grant any option for the purchase of, or
otherwise dispose of any Restricted Stock (other than those shares included in
the registration) without the prior written consent of such underwriters, as the
case may be, for such period of time (not to exceed one hundred eighty (180)
days from the effective date of such registration in the case of a registration
for the Company's initial public offering and ninety (90) days from the
effective date of such registration in the case of other registrations) as may
be requested by such managing underwriters.
4.4 Adjustment for Stock Split. All references to the number of shares
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of Restricted Stock and the purchase price of the Restricted Stock in this
Agreement shall be appropriately adjusted to reflect any stock split, reverse
stock split or stock dividend or other similar change in the Restricted Stock
which may be made by the Company after the date of this Agreement.
4.5 Tax Consequences. The Holder has reviewed with the Holder's own
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tax advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. The Holder is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents. The Holder understands that the Holder (and
not the Company) shall be responsible for the Holder's own tax liability that
may arise as a result of this investment or the transactions contemplated by
this Agreement. The
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Holder understands that Code Section 83 taxes as ordinary income both (i) the
difference between the fair market value of the Restricted Stock when the
Company granted the Holder the right to purchase the Restricted Stock and the
fair market value of the Restricted Stock on the date of this Agreement, and,
(ii) the difference between the amount paid for the Restricted Stock and the
fair market value of the Restricted Stock as of the date certain restrictions on
the Restricted Stock lapse, unless the Holder properly makes an election to be
taxed at the time of purchase pursuant to Code Section 83(b). In this context,
"restriction" includes the right of the Company to buy back the Restricted Stock
pursuant to the Repurchase Right. In the event the Company has registered under
the Exchange Act, "restriction" with respect to officers, directors and 10%
stockholders also means the period after the purchase of the Restricted Stock
during which such officers, directors and 10% stockholders could be subject to
suit under Section 16(b) of the Exchange Act.
THE HOLDER ACKNOWLEDGES THAT IT IS THE HOLDER'S SOLE RESPONSIBILITY AND NOT THE
COMPANY'S TO TIMELY FILE THE ELECTION UNDER CODE SECTION 83(b), EVEN IF THE
HOLDER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE
HOLDER'S BEHALF.
4.6 Indemnification; Right to Offset. The Holder hereby agrees to hold
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the Company, its respective officers, directors, stockholders, agents,
employees, subsidiaries, parents, assigns, successors and predecessors
(collectively, the "Indemnitees") harmless and indemnify and reimburse the
Company and the other Indemnitees for any withholding taxes and interest and
penalties, if any, thereon (the "Taxes") with respect to income, if any,
recognized by the Holder from the transfer of Restricted Stock described herein.
Furthermore, and notwithstanding the foregoing, the Holder hereby agrees and
consents to the Company's right to offset and reduce any payment due to or on
behalf of the Holder by the amount of the Taxes.
ARTICLE V.
GENERAL PROVISIONS
5.1 Not a Contract of Employment.
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(a) Nothing in this Agreement or in the Plan shall confer upon the
Holder any right to continue in the employ of the Company or any Subsidiary.
(b) THE HOLDER ACKNOWLEDGES AND AGREES THAT THE LAPSING OF THE
REPURCHASE RIGHT PURSUANT TO SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING
SERVICE AS AN "AT WILL" EMPLOYEE OF THE COMPANY OR AS A CONSULTANT (AND NOT
THROUGH THE ACT OF BEING HIRED OR PURCHASING SHARES HEREUNDER). THE HOLDER
FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE REPURCHASE RIGHT SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE
FOR SUCH PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH THE
COMPANY'S RIGHT TO TERMINATE HOLDER'S EMPLOYMENT AT ANY TIME, WITH OR WITHOUT
JUST CAUSE.
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5.2 Administration. The Committee shall have the power to interpret
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the Plan and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret, amend or revoke any such rules. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon the Holder, the Company and all other interested persons.
No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
the Restricted Stock. In its sole discretion, the Board may at any time and from
time to time exercise any and all rights and duties of the Committee under the
Plan and this Agreement except with respect to matters which under Rule 16b-3 or
Section 162(m) of the Code, or any regulations or rules issued thereunder, are
required to be determined in the sole discretion of the Committee.
5.3 Escrow. The Secretary of the Company or such other escrow holder
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as the Committee may appoint shall retain physical custody of the certificates
representing the Restricted Stock until all of the Restrictions shall lapse or
shall have been removed; provided, however, that in no event shall the Holder
retain physical custody of any certificates representing Unvested Shares.
5.4 Governing Law. This Agreement shall be administered, interpreted
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and enforced under the internal laws of the state of California without regard
to conflicts of laws thereof.
5.5 Entire Agreement. The terms of this Agreement are intended by the
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parties to be the final expression of their agreement with respect to the
purchase of Restricted Stock by the Holder and may not be contradicted by
evidence of any prior or contemporaneous written or oral agreement. This parties
hereto further intend that this Agreement shall constitute the complete and
exclusive statement of its terms and that no extrinsic evidence whatsoever may
be introduced in any judicial, administrative or other legal proceeding to vary
the terms of this Agreement. In the event of any inconsistency between this
Agreement and the Employment Agreement, the terms of the Employment Agreement
shall govern.
5.6 Amendments; Waivers. This Agreement may not be modified, amended
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or terminated except by an instrument in writing signed by the Holder and the
Company. 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.
5.7 Notices. Any notice, demand or request required or permitted to be
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given by either the Company or the Holder 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.
5.8 Assignment. The rights and benefits of the Company under this
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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
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assigns. The rights and obligations of the Holder under this Agreement may only
be assigned with the prior written consent of the Company and any purported
transfer otherwise shall be null and void.
5.9 Cooperation, Assistance of Counsel.
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(a) The Holder agrees upon request to execute any further
documents or instruments necessary or desirable to carry out the purposes or
intent of this Agreement.
(b) The Holder has reviewed this Agreement in its entirety, has
had an opportunity to obtain the advice of counsel prior to executing this
Agreement and fully understands all provisions of this Agreement.
5.10 Section 162(m); Section 11.7 of the Plan. The parties hereby
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acknowledge and agree that without the consent of the Holder no modifications or
restrictions to the provisions in this Agreement may be made on account of
Section 162(m) of the Code which would adversely affect any rights of the Holder
hereunder. The parties hereto further acknowledge and agree that Section 11.7 of
the Plan shall not apply to the Restricted Stock.
[signature page follows]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first set forth above.
FRESH ENTERPRISES, INC. HOLDER:
a California corporation
By: /s/ Xxxxx X. Xxxx, Xx. By: /s/ Xxxx Xxxxxxxxxx
_______________________________ ________________________________
Xxxxx X. Xxxx, Xx. Xxxx Xxxxxxxxxx
Title: Secretary
_______________________________
Address:
0000 Xxxxxx Xxx
____________________________________
Xxxxxx Is. XX 00000
____________________________________
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