EXHIBIT 10.15
SHAREHOLDER'S AGREEMENT
THIS SHAREHOLDER'S AGREEMENT (the "Agreement") is made as of the 27th day
of July, 1989, by and between Southwest Network Services, Inc., a Delaware
corporation (the "Company"), and Xxxxxx X. Xxxxx (the "Purchaser").
WHEREAS, the Purchaser has been granted an option to purchase shares of
Common Stock of the Company pursuant to the terms of that certain Stock Option
Agreement (the "Stock Option Agreement") dated of even date herewith by and
between the Company and the Purchaser; and
WHEREAS, the Company and the Purchaser desire to set forth certain
understandings with respect to the purchase and sale of such stock and
Purchaser's ownership thereof;
NOW, THEREFORE, IT IS HEREBY AGREED:
1. Sale and Purchase of Shares. Pursuant to the terms and conditions of
this Agreement, upon exercise of the option granted pursuant to the Stock Option
Agreement, the Purchaser shall purchase, and the Company shall sell to
Purchaser, up to 40,000 shares of Common Stock of the Company (the "Shares") for
a cash consideration of $.06 per share.
2. Company's Right to Repurchase. The Shares shall be subject to the
following right ("Repurchase Right"):
(a) If the Purchaser should cease to be a director of the Company for
any reason, including without limitation termination of such engagement by
either Purchaser or the Company for any reason or on reason, with or
without cause, the Company (or, as provided in (c) below, its designee)
shall have the right to repurchase from the Purchaser, or the Purchaser's
personal representative as the case may be, all of the Shares subject to
the Repurchase Right. The starting date for determination of the percentage
of the Shares which are subject to the Repurchase Right shall be July 27,
1989 (the "Vesting Commencement Date").
(b) The percentage of the Shares which are subject to the Repurchase
Right shall be determined as follows:
Length of Time Purchaser
Has Been a Director of Percentage of
the Company Since the Shares Subject to
Vesting Commencement Date Repurchase Right
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Less than 1 complete quarter 100%
1 completed quarter 87.5%
2 completed quarters 75%
3 completed quarters 62.5%
4 completed quarters 50%
5 completed quarters 37.5%
6 completed quarters 25%
7 completed quarters 12.5%
8 or more completed quarters None
(c) Within sixty (60) days after the date Purchaser ceases to be a
director of the Company, upon notice to Purchaser specifying the time,
place and date for settlement, the Company (or, to the extent the Company
is legally prohibited from exercising such right, its designee) shall
repurchase from the Purchaser, in cash, at Purchaser's original purchase
price per share as set forth in Paragraph 1 above, the Shares which are
subject to the Repurchase Right. If the Company is prohibited by law from
fully exercising, or the Company (or its designee) fails to fully exercise
within such 60 day period, its Repurchase Right, the Repurchase Right shall
expire as to all Shares.
(d) Nothing in this Agreement shall affect in any manner whatsoever
the right or power of the Company to terminate Purchaser's engagement as a
consultant to the Company for any reason or no reason with or without
cause.
3. Rights as Stockholder; Escrow.
(a) Subject to the terms and conditions of this Agreement, the
Purchaser shall have all of the rights of a stockholder of the Company with
respect to the Shares from and after the date of issuance of the Shares
until repurchase or other disposition of the Shares as provided for herein.
At all times after the date of this Agreement, whenever submitted to the
stockholders of the Company for vote thereon, the Purchaser agrees to vote
the Shares in accordance with the terms of Section 8 of the Stock Purchase
Agreement (the terms of which, as they may be amended from time to time
pursuant to such agreement, are incorporated herein by reference) as though
he were a party thereto.
(b) Purchaser shall deliver all certificates representing the Shares
to the Secretary of the Company for safekeeping. Each such certificate
shall be accompanied by a duly executed stock power authorizing any officer
to effect the transfer of such Shares on the books of the Company in
accordance with the terms of this Agreement. If Purchaser so requests, such
Secretary will deliver to Purchaser certificates representing such number
of Shares as are not then subject to the Repurchase Right. Within five (5)
days after the exercise or lapse without exercise of the Repurchase Right,
the Company will direct its Secretary to deliver to Purchaser a
certificate(s) representing the aggregate number of Shares, if any, not
repurchased by the Company.
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4. Stock Splits, Recapitalizations, Etc. If during the term of the
Repurchase Right:
(a) There is any stock dividend, stock split, recapitalization or
other change in the character or amount of the outstanding securities of
the Company; or
(b) There is any consolidation, merger or sale of all, or
substantially all, of the assets of the Company;
then, in such event, any and all new, substituted or additional securities or
property to which the Purchaser is entitled by reason of ownership of the Shares
shall be immediately subject to this Agreement and be included in the term
"Shares" for all purposes of this Agreement, and the repurchase price per share
specified in Paragraph 2(c) shall be appropriately adjusted by the Board of
Directors of the Company.
5. Purchase of Additional Stock. If the Purchaser at any time after the
date of this Agreement acquires any capital stock of the Company, in addition to
that described in Paragraphs 1 and 4 above (other than capital stock acquired on
the open market or from an unrelated third party, and capital stock acquired
from the Company which the Board of Directors of the Company, in its discretion,
expressly designates as not subject to this Agreement), or any options, rights
or warrants therefor ("Additional Stock"), such Additional Stock shall be
immediately subject to this Agreement and included in the term "Shares" for all
purposes of this Agreement; provided, however, that:
(a) the repurchase price per share of such Additional Stock shall be
the purchase price paid or to be paid by the Purchaser therefor;
(b) any such Additional Stock purchased pursuant to a vested option
shall be deemed to be fully vested and not subject to the Repurchase Right;
and
(c) the "Vesting Commencement Date" for purposes of the Repurchase
Right shall be the date of purchase by, or issuance to, Purchaser of such
Additional Stock unless otherwise specified by the Company's Board of
Directors at the time of such purchase or issuance.
6. Right of First Refusal. Shares subject to the Repurchase Right may not
be transferred. Before any Shares held by the Purchaser and not subject to the
Repurchase Right may be sold or otherwise transferred (including, but not
limited to, any transfer by operation of law and any transfer at death or by
inheritance, but excluding a transfer described in Paragraph 6(e) hereof), such
Shares shall first be offered to the Company in the following manner:
(a) Purchaser shall deliver to the Company a notice (the "Notice")
stating (i) his bona fide intention to sell or otherwise transfer such
Shares; (ii) the number of Shares to be transferred; (iii) the name of the
proposed transferee; and (iv) the price or other consideration for which
Purchaser proposes to transfer the Shares.
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(b) At any time within 60 days after receipt of the Notice, the
Company, upon notice to Purchaser specifying the time, place and date for
settlement, may elect to purchase all of the Shares specified in the Notice
at the price per share specified therein, or if no price is specified, at
the fair market value thereof as determined in good faith by the Company's
Board of Directors.
(c) The Company's right of first refusal provided for in this
Paragraph 6 shall not be assignable, except that if the Company does not,
for any reason, exercise its right of first refusal within 30 days after
receipt of the Notice, the Company hereby assigns such right as of that
date to the Investors, or their heirs, executors, guardians, successors and
assigns, who are then holders of the Company's Preferred Stock or Common
Stock of the Company into which such stock has been converted. The Company
may also, by written agreement, assign such right (on a pro rata basis) to
subsequent purchasers of the Company's Preferred Stock. The right shall be
exercisable by each such assignee, upon notice to Purchaser specifying the
time, place and date for settlement, with respect to the number of Shares
subject to such right in the proportion which the number of shares of
Common Stock owned (or which would be owned upon conversion of the
Preferred Stock) by such assignee at the time of exercise, bears to the
total number of shares of Common Stock so owned or deemed to be owned by
all such assignees. Each such assignee which exercises its right to
purchase all of the Shares purchasable by it hereunder may, in addition,
exercise such right as to the Shares not purchased by other assignees
hereunder, pro rata based upon the number of shares of Common Stock so
owned (or deemed to be owned) by each assignee exercising its right
hereunder. The sale by Purchaser to the Company or its assignees shall be
consummated within 60 days after receipt by the Company of the Notice.
(d) If all of the Shares to which the Notice refers are not purchased
by the Company or such assignees within such 60 day period, then such right
of first refusal shall terminate and Purchaser may sell such Shares to any
person named in the Notice at the price specified therein, or at a higher
price, provided that such sale or transfer is consummated within 90 days of
the date of the Notice to the Company, and provided further, that any such
sale is in accordance with all the terms and conditions hereof. If the
Purchaser does not consummate the sale or transfer within such 90-day
period, the right of first refusal provided herein shall be deemed to be
revived with respect to such Shares and no sale or transfer shall be
effected without first offering the Shares in accordance herewith.
(e) There shall be excepted from this right of first refusal any gift
or donation to a member of Purchaser's family, or to a trust established
for the benefit of Purchaser or a member or members of his family, provided
that any such transfer to a child who is then under twenty-one (21) years
of age must be conditioned upon the Purchaser retaining and reserving for
himself the right to do any act with respect to the transferred Shares on
behalf of such transferee that is permitted, authorized or required by this
Agreement. For purposes
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hereof, the term "family" shall mean the spouse, natural or adopted
children and other lineal descendants, parents, parents-in-law, brothers,
sisters, nephews, and nieces of Purchaser.
(f) Notwithstanding the above, neither the Company nor its assignees
shall have any right under this Paragraph 6 at any time subsequent to the
closing of a bona fide, firm commitment underwritten public offering of the
Common Stock of the Company pursuant to a Registration Statement on Form S-
1, or its then equivalent, declared effective under the Securities Act of
1933, as amended.
7. Investment Representations of Purchaser. Purchaser hereby represents
and warrants that he is acquiring the Shares with his own funds for investment
for an indefinite period for his own account, not as a nominee or agent, and not
with a view to the sale or distribution of any part thereof, and that he has no
present intention of selling, granting participation in, or otherwise
distributing the same, but subject, nevertheless, to any requirement of law that
the disposition of his property shall at all times be within his control.
Purchaser further represents that he does not have any contract, undertaking,
agreement or arrangement to sell, transfer, or grant participations to any third
person, with respect to any of the Shares.
Purchaser represents that he is able to fend for himself in the transaction
contemplated by this Agreement, has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of his
investment, has the ability to bear the economic risks of his investment and has
been furnished with and has had access to such information as would be made
available in the form of a registration statement, together with such additional
information as is necessary to verify the accuracy of the information supplied
and to have all questions answered by the Company.
Purchaser understands that the Shares have not been registered under the
Securities Act of 1933, as amended (the "Act"), on the ground that the sale
provided for in this Agreement is exempt pursuant to Section 3(b) or 4(2) of the
Act, and that the Company's reliance on such exemption is predicated on his
representations set forth herein.
Purchaser understands that if the Company does not register with the
Securities and Exchange Commission pursuant to Sections 12 or 15 of the
Securities Exchange Act of 1934 or if a registration statement covering the
Shares (or a filing pursuant to the exemption from registration under Regulation
A of the Act) under the Act is not in effect when he desires to sell the Shares,
he may be required to hold the Shares for an indeterminate period. The Purchaser
also acknowledges that he understands that any sale of the Shares which might be
made by him in reliance upon Rule 144 under the Act may be made only in limited
amounts in accordance with the terms and conditions of that Rule and that he may
not be able to sell the Shares at the time or in the amount he so desires.
Purchaser is familiar with Rule 144 and understands that the Shares constitute
"restricted securities" within the meaning of that Rule.
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Purchaser agrees that in no event will he make a disposition of any of the
Shares unless and until (a) he shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition, and (b) he shall have
furnished the Company with an opinion of counsel satisfactory to the Company to
the effect that (i) such disposition will not require registration of such
Shares under the Act, or (ii) that appropriate action necessary for compliance
with the Act has been taken, or (c) the Company shall have waived, expressly and
in writing, its rights under clauses (a) and (b) of this subparagraph. Except as
provided in Section 7.3 of the Stock Purchase Agreement, the Company shall be
under no obligation to register such Shares.
8. Restrictive Legends. All certificates representing any Shares subject
to the provisions of this Agreement shall have endorsed thereon the following
legends:
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A CERTAIN SHAREHOLDER'S AGREEMENT WHICH, AMONG
OTHER THINGS, INCLUDES A RIGHT OF REPURCHASE OF THESE SECURITIES, A
RIGHT OF FIRST REFUSAL ON THE SALE OF THE SECURITIES AND REQUIRES THAT
THESE SECURITIES BE VOTED AS THEREIN PROVIDED. COPIES OF THE AGREEMENT
MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
CORPORATION."
(b) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR
RESALE, AND MAY NOT BE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT COVERING SUCH SHARES UNDER THE SECURITIES ACT OF 1933, OR
PURSUANT TO RULE 144 UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT REGISTRATION IS NOT REQUIRED
UNDER SUCH ACT."
(c) Any legend required to be placed thereon by applicable state
securities laws.
9. No Obligation to Transfer. The Company shall not be required (i) to
transfer on its books any Shares which shall have been sold or transferred in
violation of any of the provisions set forth in this Agreement, or (ii) to treat
as owner of such Shares or to accord the right to vote as such owner or to pay
dividends to any transferee to whom such Shares shall have been so transferred.
10. Purchaser Deemed to be a Consultant. As a director of the Company,
Purchaser shall be deemed to be a consultant to the Company for purposes of
Section 6(c)(ii) of the Company's Designation of the Series A Preferred Stock,
Section 6(c)(ii) of the Company's Designation of the Series B Preferred Stock
and Section 9.5(d) of that certain Series B Preferred Stock Purchase
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Agreement dated as of October 18, 1988 by and among the Company and the
Investors (as defined herein).
11. Further Assurances. The parties agree to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement.
12. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail, with
postage and fees prepaid, addressed to the other party hereto at the address
shown below his signature or at such other address as such party may designate
by 10 days' advance written notice to the other party hereto.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED, GOVERNED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT TO THE EXTENT
THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE IS APPLICABLE.
14. Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof. This Agreement may only
be amended with the written consent of the parties hereto and the written
consent of the Investors, or their respective successors or assigns, who are
then holders of at least a majority of the Series A and Series B Preferred Stock
or Common Stock of the Company into which such stock has been converted; and no
oral waiver or amendment shall be effective under any circumstances whatsoever.
15. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, heirs, executors,
administrators, guardians and personal representatives. Nothing in this
Agreement shall be construed to give any person or entity other than the parties
hereto and their respective successors any legal or equitable right, remedy or
claim under this Agreement.
16. Headings. Headings of the several sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SOUTHWEST NETWORK SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, President
0000 Xxxxxxxxx Xxxxxxx Xxxx,
Xxxxx 0000
Xxxxxx, Xxxxx 00000
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PURCHASER
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Address:
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