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EXHIBIT 10.4
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (the "Agreement") is entered into as of
this ____ day of _________, 19___, between ___________________ (hereinafter
referred to as "Purchaser"), and KOFAX IMAGE PRODUCTS, a California corporation
(hereinafter referred to as the "Company"), with reference to the following
facts:
R E C I T A L S :
A. Purchaser is an employee of the Company and in connection therewith
has rendered services for and on behalf of the Company.
B. The Company desires, by affording the Purchaser an opportunity to
purchase shares of Common Stock of the Company (hereinafter called "Shares"), as
hereinafter provided, to carry out the purpose of the "Amended and Restated
Incentive Stock Option, Nonqualified Stock Option and Restricted Stock Purchase
Plan", a copy of which is attached hereto as Exhibit A (the "Plan").
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, and for other good and valuable consideration, the parties hereto have
agreed, and do hereby agree, as follows:
1. ISSUANCE OF SHARES.
The Company hereby offers to issue to Purchaser an aggregate of
______________ (_____ ) shares of the Common Stock, without par value, of the
Company (the "Shares") on the terms and conditions herein set forth. Unless this
offer is earlier revoked in writing by the Company, Purchaser shall have ninety
(90) days from the date of the delivery of this Agreement to Purchaser to accept
the offer of the Company by executing and delivering to the Company two copies
of this Agreement, without condition or reservation of any kind whatsoever,
together with the consideration to be delivered by Purchaser pursuant to Section
2 below.
2. CONSIDERATION.
The purchase price for the Shares shall be $____ per share, or $______
in the aggregate, which shall be paid by the delivery of Purchaser's check
payable to the Company, receipt of which is hereby acknowledged.
3. RECONVEYANCE UPON TERMINATION OF EMPLOYMENT.
(a) RECONVEYANCE OPTION. If at any time prior to four years from
__________ (the "Employment Commencement Date"), Purchaser should cease to be an
employee of the Company or a parent or its subsidiaries, for any reason
(hereinafter referred to
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as the "Termination Date"), the Company and/or all other shareholders of the
Company holding more than 100,000 shares of common stock of the Company or
shares of any other class or series having voting power equivalent to more than
100,000 shares of common stock of the Company (as adjusted for any change in the
capital structure of the Company) ("Purchasing Shareholders" herein) shall have
the option to acquire (hereinafter referred to as the "Reconveyance Option")
from Purchaser all, but not less than all (unless Purchaser consents), of the
Shares subject to the Reconveyance Option on the following basis:
(i) If the Termination Date should occur on or before one
year from the Employment Commencement Date, one hundred percent (100%) of
the Shares shall be subject to the Reconveyance Option;
(ii) If the Termination Date should occur after one year
from the Employment Commencement Date, but on or before two years from the
Employment Commencement Date, seventy-five percent (75%) of the Shares
shall be subject to the Reconveyance Option;
(iii) If the Termination Date should occur after two years
from the Employment Commencement Date, but on or before three years from
the Employment Commencement Date, fifty percent (50%) of the Shares shall
be subject to the Reconveyance Option;
(iv) If the Termination Date should occur after three years
from the Employment Commencement Date, but on or before four years from the
Employment Commencement Date, twenty-five percent (25%) of the Shares shall
be subject to the Reconveyance Option;
(v) If the Termination Date should occur after four years
from the Employment Commencement Date, none of the Shares shall be subject
to the Reconveyance Option.
(b) ADDITIONAL VESTING IN THE EVENT OF DEATH OR DISABILITY. If
during the term of his employment with the Company, Purchaser shall die or
become physically or mentally disabled such that he is unable to fulfill the
duties of his or her position with the Company (as certified by a competent,
licensed physician or psychiatrist reasonably satisfactory to the Company), the
Termination Date shall be deemed to have occurred one year beyond the actual
date of death or disability and Purchaser's Shares shall be deemed to be vested
to the extent of one year beyond the actual date of such death or disability.
(c) CONSIDERATION FOR RECONVEYANCE OPTION. The Company and/or the
Purchasing Shareholders shall pay Purchaser as consideration for the Shares to
be acquired upon exercise of the Reconveyance Option the original purchase price
paid by Purchaser plus five percent (5%) simple interest (without compounding)
per annum from the date of issuance of the Shares until the date of payment.
(d) PROCEDURE FOR EXERCISE OF RECONVEYANCE OPTION. The Company
shall have the right to exercise the Reconveyance Option by acquiring all, but
not less than all (unless Purchaser consents), of the Shares subject to the
Reconveyance Option by delivery to
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Purchaser and/or any other person obligated to transfer the Shares written
notice of election to purchase the Shares or any portion thereof within thirty
(30) days following the Termination Date. In the event any of the Shares are not
being purchased by the Company, the Company shall notify all other Purchasing
Shareholders in writing within five (5) days of the expiration of the Company's
30-day option exercise period. If any of the other Purchasing Shareholders
desire to exercise the Reconveyance Option as to any of the remaining Shares
which are not being purchased by the Company, they shall each deliver to the
Company within thirty (30) days after the required date of delivery of the
notice from the Company, a written notice of election to purchase the Shares or
a specified number thereof. If such notices specify in the aggregate more shares
than are subject to purchase by the Purchasing Shareholders, the Shares shall be
allocated in accordance with Section 4(c). After such allocation, the Company
shall deliver to the Purchaser and/or any other person obligated to transfer the
Shares, within ten (10) days following the expiration of the Purchasing
Shareholders' 30-day option exercise period a written notice indicating the
number of Shares to be purchased by the Company and each of the other Purchasing
Shareholders. In the event that the Company and the Purchasing Shareholders do
not elect to exercise the Reconveyance Option as to all or part of the Shares
under the provisions of this Section 3 by written notice to Purchaser within
seventy-five (75) days following the Termination Date, the Reconveyance Option
shall expire as to all Shares which the Company and/or the Purchasing
Shareholders have not elected to acquire.
(e) NOTIFICATION AND SETTLEMENT. In the event that the Company
and/or the Purchasing Shareholders have elected to exercise the Reconveyance
Option as to part or all of the Shares within the period described above, the
Company shall notify Purchaser and/or any other person obligated to transfer the
Shares as set forth in paragraph (d) above within seventy-five (75) days from
the Termination Date and Purchaser or such other person shall deliver to the
Company and/or the Purchasing Shareholders certificate(s) representing the
Shares to be acquired by the Company and/or the Purchasing Shareholders within
ten (10) days following the date of the notice from the Company. The Company
and/or the Purchasing Shareholders shall deliver to Purchaser against delivery
of the Shares, checks of the Company and/or the Purchasing Shareholders payable
to Purchaser and/or any other person obligated to transfer the Shares in the
aggregate amount of the purchase price to be paid as set forth in paragraph (c)
above.
(f) DEPOSIT OF UNVESTED SHARES. Purchaser shall deposit with the
Company certificates representing the unvested Shares, together with a duly
executed stock assignment separate from certificate in blank, which shall be
held by the Secretary of the Company pending the vesting of such Shares.
Purchaser shall be entitled to vote and to receive dividends and distributions
on all such deposited Shares.
4. RIGHT OF FIRST REFUSAL.
(a) Unless otherwise required or permitted by this Agreement,
Purchaser shall not sell, transfer, assign, hypothecate, or in any way alienate
any of the Shares which are not subject to the Reconveyance Option, or any right
or interest therein, unless Purchaser delivers a notice, as provided in Section
7 hereof, to the Company and/or the Purchasing Shareholders stating the price,
terms and conditions of the proposed transfer, and the identity of the proposed
transferee (the "Offer Notice") and, except as hereinafter provided, the Company
and/or the Purchasing Shareholders shall not have agreed to purchase Purchaser's
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Shares as provided hereinafter. Delivery of the Offer Notice to the Company
and/or the Purchasing Shareholders shall be deemed to be an offer by Purchaser
to sell the Shares to the Company and/or the Purchasing
Shareholders (the shares subject to such offer to be hereinafter referred to as
the "Target Shares").
(b) If the Company desires to exercise the option, it must
exercise the option to at least the lesser of (i) all of the Target Shares
offered; or (ii) the greatest number of the Target Shares offered that the
Company can legally purchase under applicable law. If the Company desires to
exercise the option, the secretary of the Company shall give written notice, in
the manner set forth in Section 7 below, of that fact to Purchaser within
fifteen (15) days following receipt of the Offer Notice. The Company may not
elect to purchase any smaller amount of the Target Shares.
(c) If any of the Shares are not being purchased by the Company,
the Company shall notify the Purchasing Shareholders within five days after the
expiration of the Company's 15-day option exercise period. Within fifteen days
after the expiration of the Company's 15-day option period, if any of the other
Purchasing Shareholders desire to acquire any of the Target Shares pursuant to
the terms of the Offer Notice, they each shall deliver to the Company a written
notice of election to purchase such Target Shares or a specified number thereof.
If such notices specify in the aggregate more Target Shares than are subject to
purchase by the Purchasing Shareholders, the Target Shares shall be allocated as
follows:
(i) Each Purchasing Shareholder electing to purchase Shares
shall be allocated a number of Target Shares equal to the lesser of (a) the
number of Target Shares which that shareholder has offered to purchase, or
(b) the number of Target Shares which bears the same ratio to the number of
Target Shares which are not being purchased by the Company as the number of
shares owned by that Shareholder bears to the number of shares owned by all
shareholders who have elected to purchase Target Shares.
(ii) If any Target Shares remain to be allocated after the
application of subsection (i) above, they shall be allocated to Purchasing
Shareholders who elected to purchase more Target Shares than were allocated
to them. Each such Purchasing Shareholder shall be allocated a number of
Target Shares equal to the lesser of (a) the number of Target Shares which
that Purchasing Shareholder elected to purchase less the number of Target
Shares already allocated to that Purchasing Shareholder, or (b) the number
of Target Shares which bears the same ratio to the number of Target Shares
which have not yet been allocated as the number of shares owned by that
Purchasing Shareholder bears to the total number of shares owned by all
Purchasing Shareholders who have elected to purchase more Target Shares
than were allocated to them. If, as a result of the foregoing provisions of
this subsection (ii) all of the Target Shares subject to the Offer Notice
not being purchased by the Company have not been allocated, the balance
shall be allocated by successively applying this subsection (ii) as many
times as is necessary to allocate all of the Target Shares subject to the
Offer Notice.
(iii) For the purposes of subsection (i) and subsection
(ii), shares owned by any Purchasing Shareholder shall include all shares
of common stock and all shares of any class or series which are convertible
or exchangeable for shares of
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common stock, determined as if such convertible or exchangeable shares have
been converted or exchanged for shares of common stock.
(iv) After such allocation, the Company shall deliver to
Purchaser, within ten days from the expiration of the 15-day option period
of the Purchasing Shareholders, a written notice indicating the number of
Target Shares to be purchased by the Company and each of the Purchasing
Shareholders.
(d) If such right is exercised with respect to all the Target
Shares specified in the notice of intended disposition, the Company (or its
assignees) and/or the Purchasing Shareholders shall, except as provided below,
effect the repurchase of the Target Shares, including payment of the purchase
price, not more than ten (10) days after the expiration of the fifteen (15)-day
option period of the Purchasing Shareholders or fifteen (15) days after the
expiration of the fifteen (15)-day option period of the Company if the Company
elects to exercise the option with respect to all of the Target Shares; and at
such time the Purchaser shall deliver to the Company the certificates
representing the Target Shares to be repurchased, each certificate to be
properly endorsed for transfer. The Target Shares so purchased shall thereupon
be cancelled and cease to be issued and outstanding shares of the Company's
Common Stock. However, (i) should the purchase price specified in the notice of
intended disposition be payable in property other than cash or evidences of
indebtedness, the Company (or its assignees) and/or the Purchasing Shareholders
shall have the right to pay the purchase price in the form of cash equal in
amount to the value of such property, and (ii) if there is no purchase price for
the intended disposition, the Company (or its assignees) and/or the Purchasing
Shareholders shall have the right to purchase any or all of the Target Shares
for a purchase price in the form of cash equal in amount to the value of such
Target Shares. If the Purchaser and the Company (or its assignees) and/or the
Purchasing Shareholders cannot agree on such cash value within ten (10) days
after the Company's receipt of the notice of intended disposition, the valuation
shall be made by an appraiser of recognized standing selected by the Purchaser
and the Company (or its assignees) or, if they cannot agree on an appraiser
within twenty (20) days after the Company's receipt of such notice, each shall
select an appraiser of recognized standing and the two appraisers shall
designate a third appraiser of recognized standing, whose appraisal shall be
determinative of such value. In the event that the valuation is made by an
appraiser, the fees associated with such appraisal shall be borne by the
Company. The closing shall then be held on the later of (i) the fifth business
day following the Company's (or its assignees') exercise of its purchase rights
hereunder or (ii) the fifteenth day after such cash valuation shall have been
made.
(e) In the event written notice of exercise of the Company's
and/or the Purchasing Shareholder's right of first refusal is not given to the
Purchaser within forty-five (45) days following the date of the Company's
receipt of the notice of intended disposition under Section 4(a), the Purchaser
shall, for a period of ninety-five (95) days thereafter, have the right to sell
or otherwise dispose of the Target Shares upon terms and conditions (including
the purchase price) no more favorable to the third party purchaser than those
specified in the notice of intended disposition given to the Company; provided,
however, that any such sale or disposition must not be effected in contravention
of the representations made by the Purchaser in Section 5 of this Agreement. The
third party purchaser shall acquire the Target Shares free and
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clear of all the terms and provisions of this Agreement (including the Company's
first refusal rights hereunder). In the event Purchaser does not sell or
otherwise dispose of the Target Shares within the specified ninety-five (95) day
period, the Company's right of first refusal shall continue to be applicable to
any subsequent disposition of the Target Shares by the Purchaser until such
right lapses in accordance with Section 4(h).
(f) All proposed judicial transfers and sales of the Shares by
order of any court or referee in bankruptcy ("Order") shall be subject to the
terms and provisions of Section 4 of this Agreement. In the event a sale or
transfer is proposed pursuant to an Order, all of the terms of this Section 4
shall apply, with the following modification. Instead of a notice of intent to
transfer being delivered to the Company, a copy of the Order shall be delivered
to the Company by the proposed transferee, which shall state the name and
address of the proposed transferee and shall specify the number of the Shares to
be sold and the consideration per Share. For other purposes of this Section 4,
the receipt of the Order shall be treated as the receipt of the notice of
intended disposition as set forth in Section 4(a) above. All proposed transfers
pursuant to an Order which do not set forth the purchase price capable of
valuation which would allow the Company to exercise its rights of first refusal
are expressly prohibited. Any purported transfer in contravention of this
Section 4(f) shall be null and void and shall pass no title to the proposed
transferee.
(g) In the event the Company (or its assignees) and/or the
Purchasing Shareholders make a timely exercise of its first refusal rights
hereunder with respect to a portion, but not all, of the Target Shares specified
in the Purchaser's notice of intended disposition, the Purchaser shall have the
option, exercisable by written notice to the Company delivered within sixty (60)
days after the date of the initial notice of intended disposition, to effect the
sale of the Target Shares pursuant to one of the following alternatives:
(i) sale or other disposition of all the Target Shares to a
third-party purchaser in compliance with the requirements of Section 4(a),
as if the Company and/or the Purchasing Shareholders did not exercise their
respective first refusal rights hereunder; or
(ii) sale to the Company (or its assignees) and/or the
Purchasing Shareholders of the portion of the Target Shares which the
Company (or its assignees) and/or the Purchasing Shareholders have elected
to purchase, such sale to be effected in substantial conformity with the
provisions of Sections 4(b), (c) and (d) and, at the option of Purchaser,
sale of the remaining portion of the Target Shares to a third-party
purchaser in compliance with Section 4(e).
Failure of the Purchaser to deliver timely notification to the Company
under this Section 4(g) shall be deemed to be an election by the Purchaser to
sell the Target Shares pursuant to alternative (i) above.
(h) LAPSE. The Company's right of first refusal under this
Section 4 shall lapse and cease to have effect upon the closing of an
underwritten public offering pursuant to an effective registration statement
under the 1933 Act covering the offer and sale of common stock for the account
of the Company.
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(i) Restrictive Legend. Until such time as the Company's
right of first refusal lapses and ceases to have effect pursuant to the
provisions of Section 4(g), the stock certificate for the Shares shall be
endorsed with the following additional legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
ASSIGNED, TRANSFERRED, PLEDGED OR ENCUMBERED, EXCEPT IN
CONFORMITY WITH THE TERMS OF A RESTRICTED STOCK AGREEMENT BETWEEN
THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR HIS
PREDECESSOR IN INTEREST). SUCH AGREEMENT GRANTS CERTAIN RIGHTS OF
FIRST REFUSAL TO THE COMPANY (OR ITS ASSIGNS) UPON THE SALE,
ASSIGNMENT, TRANSFER, PLEDGE OR ENCUMBRANCE OF THE SHARES. A COPY
OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY.
5. INVESTMENT REPRESENTATIONS.
(a) Purchaser represents and warrants that he or she is
acquiring the Shares for his or her own account, not as a nominee or agent, for
investment and not with a view to or for resale in connection with, any
distribution or public offering thereof within the meaning of the Securities Act
of 1933 (the "1933 Act").
(b) Purchaser understands that (i) the Shares have not been
registered under the 1933 Act by reason of a specific exemption therefrom, that
they must be held by Purchaser indefinitely, and that Purchaser must therefore
bear the economic risk of such investment indefinitely, unless a subsequent
disposition thereof is registered under the 1933 Act or is exempt from such
registration; (ii) each certificate representing the Shares will be endorsed
with the following legends:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933; THEY HAVE BEEN
ACQUIRED BY THE HOLDER FOR INVESTMENT AND MAY NOT BE PLEDGED,
HYPOTHECATED, SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT
AS MAY BE AUTHORIZED UNDER THE SECURITIES ACT OF 1933, AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER.
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY,
OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION
THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER
OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED
IN THE COMMISSIONER'S RULES.
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and (iii) the Company will instruct any transfer agent not to register the
transfer of any of the Shares unless the conditions specified in the foregoing
legend are satisfied.
(c) Purchaser is a key employee of the Company and has been
furnished with such materials and has been given access to such information
relating to the Company as Purchaser or Purchaser's qualified representative has
requested and Purchaser has been afforded the opportunity to ask questions
regarding the Company and the Shares, all as Purchaser has found necessary to
make an informed investment decision.
(d) Purchaser represents and warrants that Purchaser is
either an accredited investor within the meaning of Regulation D under the 1933
Act, or by reason of Purchaser's business or financial experience, or the
business or financial experience of Purchaser's professional advisor, Purchaser
has the capacity to protect Purchaser's own interests in connection with this
transaction.
6. SHARES FREE AND CLEAR.
All Shares purchased by the Company and/or the Purchasing
Shareholders pursuant to this Agreement shall be delivered by Purchaser free and
clear of all claims, liens and encumbrances of every nature (except the
provisions of this Agreement and any conditions concerning the Shares relating
to compliance with applicable federal or state securities laws), and the
purchaser thereof shall acquire full and complete title and right to all of the
shares, free and clear of any claims, liens and encumbrances of every nature
(again except for the provisions of this Agreement and such securities laws).
7. NOTICE.
All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered or mailed, by United States certified or registered mail, prepaid, to
the parties or their assignees at the addresses set forth opposite their
signatures below (or such other address as shall be given in writing by either
party to the other).
8. BINDING OBLIGATIONS.
All covenants and agreements herein contained by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
9. CAPTIONS AND PARAGRAPH HEADINGS.
Captions and paragraph headings used herein are for
convenience only, and are not part of this Agreement and shall not be used in
construing it.
10. ENTIRE AGREEMENT.
This instrument contains the entire agreement of the
parties. This Agreement may be amended only by an agreement in writing signed by
all of the parties.
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11. ASSIGNMENT.
No party hereto shall have the right, without the prior
written consent of the other party, to sell, assign, mortgage, pledge or
otherwise transfer any interest or right created hereby. This Agreement is made
solely for the benefit of the parties hereto, and no other person, partnership,
association or corporation shall acquire or have any right under or by virtue of
this Agreement.
12. COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one agreement and any party hereto
may execute this Agreement by signing any such counterpart. This Agreement shall
be binding upon Purchaser and the Company at such time as the Agreement, in
counterpart or otherwise, is executed by Purchaser and the Company.
13. APPLICABLE LAW.
This Agreement shall be construed under, and enforced in
accordance with and governed by the laws of the State of California.
14. TAX ELECTIONS.
Purchaser acknowledges that Purchaser has considered the
advisability of all tax elections in connection with the purchase of the Shares
hereunder, including the making of an election under Section 83(b) under the
Internal Revenue Code of 1986, as amended, and that the Company has no
responsibility for the making of any such election.
15. REPORTS TO PURCHASER.
Until the expiration of the right to purchase the Shares as
provided in Section 1 above, the Company will furnish to Purchaser copies of all
annual and other periodic reports that the Company distributes generally to its
shareholders.
16. MARKET STANDOFF AGREEMENT.
Purchaser agrees in connection with any registration of the
Company's securities that, upon the request of the Company or the underwriters
managing any public offering of the Company's securities, Purchaser will not
sell or otherwise dispose of any Shares without the prior written consent of the
Company or such underwriters, as the case may be, for a period of time (not to
exceed 90 days) from the effective date of such registration as the Company or
the underwriters may specify.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
THE COMPANY:
KOFAX IMAGE PRODUCTS
Address:
0 Xxxxxx Xxxxxx
Xxxxxx, XX 00000 By
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PURCHASER:
Address:
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CONSENT AND RATIFICATION OF SPOUSE
The undersigned, the spouse of _____________, a party to the attached
Restricted Stock Agreement (the "Agreement"), dated as of _____________, hereby
consents to the execution of said Agreement by such party; and ratifies,
approves, confirms and adopts said Agreement, and agrees to be bound by each and
every term and condition thereof as if the undersigned had been a signatory to
said Agreement, with respect to the Shares (as defined in the Agreement) made
the subject of said Agreement in which the undersigned has an interest,
including any community property interest herein.
Date:_______________ _______________________
