EXHIBIT 10.10
EMPLOYEE STOCK PURCHASE AGREEMENT
This Agreement is made as of the 13th day of March, 1996, by and among
UniPhy Healthcare, Inc., a Tennessee corporation (the "Corporation"), and R.
Xxxx Xxxxxxx (the "Purchaser").
1. PURCHASES OF SHARES
1.1 Purchase. The Purchaser has purchased, and the Corporation
has sold to the Purchaser, 40,000 shares of the Corporation's Common Stock (the
"Purchased Shares") at a purchase price of $.01 per share (the "Purchase
Price").
1.2 Legend. The certificates representing the Purchased Shares
purchased hereunder shall be marked with appropriate legends indicating that
such shares are subject to this Agreement and are restricted as provided herein.
1.3 Other Agreements. The Purchaser and the Corporation
acknowledge that they are parties to a Series A Preferred Stock Purchase
Agreement, an Investors' Rights Agreement, a Right of First Refusal and Co-Sale
Agreement and a Voting Agreement executed simultaneously herewith (collectively
the "Related Agreements"), and the shares covered hereby shall also be held
pursuant to the applicable terms of the Related Agreements.
2. SECURITIES LAW COMPLIANCE
2.1 Exemption from Registration. The Purchased Shares have not
been registered under the Securities Act of 1933, as amended (the "1933 Act"),
and are being issued to Purchaser in reliance upon the exemption from such
registration provided by Rule 701 of the Securities and Exchange Commission (the
"Commission") for stock issuances under compensatory benefit arrangements such
as this Agreement. Purchaser hereby acknowledges receipt of a copy of this
Agreement.
2.2 Restricted Securities. Purchaser hereby confirms that
Purchaser has been informed that the Purchased Shares are "restricted
securities" under the 1933 Act and may not be resold or transferred unless the
Purchased Shares are first registered under the federal securities laws or
unless an exemption from such registration is available. Accordingly, Purchaser
hereby acknowledges that Purchaser is prepared to hold the Purchased Shares for
an indefinite period and that Purchaser is aware that Rule 144 of the Commission
issued under the 1933 Act is not presently available to exempt the offer and
sale by the Purchases of the Purchased Shares from the registration requirements
of the 1933 Act. Purchaser is aware of the adoption of Rule 144 by the
Commission, promulgated under the Securities Act, which permits limited public
resales of securities acquired in a nonpublic offering, subject to the
satisfaction of certain conditions. Purchaser
understands that under Rule 144, the conditions currently include, among other
things: the availability of certain current public information about the issuer,
the resale occurring not fewer than two years after the party has purchased and
paid for the securities to be sold, the sale being through a broker in an
unsolicited "broker's transaction" and the amount of securities being sold
during any three-month period not exceeding specified limitations. Purchaser
acknowledges and understands that the Company may not satisfy the current public
information requirement of Rule 144 at the time Purchaser wishes to sell the
Purchased Shares or other conditions under Rule 144 which are required of the
Company and Purchaser understands that Purchaser will thereby be precluded from
selling the securities under Rule 144 even if the two-year holding period of
said Rule has been satisfied. Prior to Purchaser's acquisition of the Purchased
Shares, Purchaser represents and warrants that he acquired sufficient
information about the Company to reach an informed knowledgeable decision to
acquire the Purchased Shares. Purchaser has such knowledge and experience in
financial and business matters as to make Purchaser capable of utilizing said
information to evaluate the risks of the prospective investment and to make an
informed investment decision. Purchaser is able to bear the economic risk of the
entire loss of the Purchaser's investment in the Purchased Stock.
3. SPECIAL PROVISIONS
3.1 Stockholder Rights. Until such time as the Corporation
actually exercises its repurchase rights under this Agreement, Purchaser (or any
successor in interest) shall have all the rights of a stockholder (including
voting and dividend rights) with respect to the Purchased Shares subject,
however, to any applicable transfer restrictions.
3.2 Section 83(b) Election. Purchaser understands that under
Section 83 of the Internal Revenue Code of 1986, as amended (the "Code"), the
difference between the Purchase Price paid for the Purchased Shares and their
fair market value on the date any forfeiture restrictions applicable to such
shares lapse will be reportable as ordinary income at the time. For this
purpose, the term "forfeiture restrictions" includes the right of the
corporation to repurchase the Purchased Shares pursuant to its Repurchase Right
under Article 4 of this Agreement. Purchaser understands that Purchaser may
elect to be taxed at the time the Purchased Shares are acquired to the extent,
if any, the fair market value of the Purchased Shares differs from the Purchase
Price rather than when and as such Purchased Shares cease to be subject to such
forfeiture restrictions, by filing an election under Section 83(b) of the code
with the I.R.S. within thirty (30) days after the date of purchase hereunder. If
the fair market value of the Purchased Shares at the date of purchase 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 available from the Company upon request. Purchaser understands that failure
to make this filing within the thirty (30) day period will result in the
recognition of
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ordinary income by the Purchaser (in the event the fair market value of the
Purchased Shares increases after tile date of purchase) as [lie forfeiture
restrictions lapse. PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE
RESPONSIBILITY, AND NOT THE CORPORATION'S, TO FILE A TIMELY ELECTION UNDER
SECTION 83(b), EVEN IF PURCHASER REQUESTS THE CORPORATION OR ITS REPRESENTATIVES
TO MAKE THIS FILING ON PURCHASER'S BEHALF. PURCHASER IS RELYING SOLELY ON
PURCHASER'S ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT TO FILE
AN 83(b) ELECTION.
4. REPURCHASE RIGHT
4.1 Grant. The Corporation is hereby granted the right (the
"Repurchase Right"), exercisable at any time during the sixty (60) day period
following the date the Purchaser ceases for any reason to be an employee of the
Corporation (or such longer period of time mutually agreed to by the parties) to
repurchase at the Purchase Price all or (at the discretion of the Corporation
any portion of the Purchased Shares in which the Purchaser has not acquired a
vested interest in accordance with the vesting provisions of Section 4.3 (such
shares to be hereinafter called the "Unvested Shares").
4.2 Exercise of the Repurchase Right. The Repurchase right shall
be exercisable by written notice delivered to the Purchaser prior to the
expiration of the applicable sixty (60) day period specified in Section 4.1. The
notice shall indicate the number of Unvested Shares to be repurchased 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 notice. To the extent one or more
certificates representing Unvested Shares may be held by the Purchaser, then
Purchaser shall, prior to the close of business on the date specified for the
repurchase, deliver to the Secretary of the Corporation the certificates
representing, the Unvested Shares to be repurchased, each certificate to be
properly endorsed for transfer. The Corporation shall, concurrently with the
receipt of such stock certificates, pay to Purchaser in cash or cash equivalents
(including the cancellation of any purchase-money indebtedness), an amount equal
to the original Purchase Price for the Unvested Shares that are to be
repurchased.
4.3 Termination of the Repurchase Right.
(a) The Repurchase Right shall terminate with respect to
any Unvested Shares for which it is not timely exercised under Section 4.2. In
addition, the Repurchase Right shall terminate, and cease to be exercisable,
with respect to any and all Purchased Shares in which the Purchaser vests in
accordance with the schedule below. Accordingly, provided the Purchaser
continues to be an employee of the Corporation, the Purchaser shall acquire a
vested interest in, and the
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Repurchase Right shall lapse with respect to, the Purchased Shares in accordance
with the following provisions:
(i) The Purchaser shall not acquire any vested
interest in, nor shall the Repurchase Right lapse with respect to, any Purchased
Shares during the initial one month period measured from the date of the Initial
Closing of the Series A Stock Purchase Agreement to which Purchaser and the
Corporation are parties (the "Vesting Measurement Date").
(ii) From and after the expiration of the initial
one month period measured from the Vesting Measurement Date, the Purchaser shall
acquire a vested interest in, and the Repurchase right shall lapse with respect
to, the remaining Purchased Shares in a series of forty-eight equal successive
monthly installments.
(b) All Purchased Shares as to which the Repurchase Right
lapses shall, however, continue to be subject to any rights of the Corporation
or any other party under the Related Agreements or other agreements between the
Corporation and the Purchaser and may continue to be subject to the resale
restrictions under Rule 144 of the 1933 Act.
4.4 Fractional Purchased Shares. No fractional shares shall be
repurchased by the Corporation. Accordingly, should the Repurchase Right extend
to a fractional share (in accordance with the vesting computation provisions of
Section 4.3), then such fractional share shall be added to any fractional share
in which the Purchaser is at such time vested in order to make one whole vested
share no longer subject to the Repurchase Right.
4.5 Additional Purchased Shares or Substituted Securities. In the
event of any stock dividend, stock split, recapitalization or other change
affecting the Corporation's outstanding Common Stock as a class effected without
receipt of consideration, then any new, substituted or additional securities or
other property (including money paid other than as a regular cash dividend)
which is by reason of any such transaction distributed with respect to the
Purchased Shares shall be immediately subject to the Repurchase Right, but only
to the extent the Purchased Shares are at the time covered by such right.
Appropriate adjustments to reflect the distribution of such securities or
property shall be made to the number of Purchased Shares hereunder and to the
price per share to be paid upon the exercise of the Repurchase Right in order to
reflect the effect of any such transaction upon the Corporation's capital
structure: provided, however, that the aggregate Purchase Price for the shares
subject to the Repurchase Right shall remain the same.
4.6 Corporate Transaction. In the event of any of the following
transactions (a "Corporate Transaction"): the sale, transfer or other
disposition of all or substantially all of the assets of the Corporation, or any
merger or
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consolidation of the Corporation with or into any other corporation or
corporations in which the holders of shares of the Corporation's outstanding
capital stock prior to such merger or consolidation own less than fifty percent
(500) of the outstanding capital stock of the surviving corporation following
such merger or consolidation, then the Repurchase Right shall automatically
lapse in its entirety, and the Purchaser shall acquire a vested interest in all
the Purchased Shares upon the consummation of such Corporate Transaction.
4.7 Transfer Restrictions on Unvested Shares. The Purchaser shall
not transfer by sale, assignment, hypothecation, donation or otherwise any of
the Stock or any interest therein subject to the Repurchase Right without the
prior express written consent of the Corporation. The Corporation shall not be
required (i) to transfer on its books any Purchased Shares which shall have been
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.
5. GENERAL PROVISIONS
5.1 Assignment. The Corporation may assign its Repurchase Rights
under Article 4 to the Shareholders of the Corporation on a pro-rata basis.
5.2 Definitions. For purposes of this Agreement, the following
provisions shall be applicable in determining the parent and subsidiary
corporations of the Corporation:
(a) Any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation shall be considered
to be a parent corporation of the Corporation, provided each such 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.
(b) Each corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation shall be
considered to be a subsidiary of the Corporation, provided each such 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.
5.3 No Employment or Service Contract. Nothing in this Agreement
shall confer upon the Purchaser any right to continue in the service of the
Corporation (or any parent or subsidiary corporation of the Corporation
employing or retaining Purchaser) for any period of time or interfere with or
restrict in any way the rights of the Corporation (or any parent or subsidiary
corporation of the Corporation employing or retaining Purchaser) or the
Purchaser: which rights are hereby
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expressly reserved by each, to terminate the employment status of Purchaser at
any time for any reason whatsoever, with or without cause.
5.4 Notices. Any notice required in connection with (i) the
Repurchase Right or (ii) the disposition of any Purchased Shares covered thereby
shall be given in writing and shall be deemed effective upon personal delivery
or upon deposit in the United States mail, registered or certified, postage
prepaid and 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 Section 5.4 to all other parties to this Agreement.
5.5 No Waiver. The failure of the Corporation (or its assignees)
in any instance to exercise the Repurchase Rights granted under Article 4 shall
not constitute a waiver of and, other repurchase rights that may subsequently
arise under the provisions of this Agreement or ally other agreement between the
Corporation and the Purchaser. 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.
5.6 Cancellation of Shares. If the Corporation (or its assignees)
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), and such
shares shall be deemed purchased in accordance with the applicable provisions
hereof and the Corporation (or its assignees) 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. MISCELLANEOUS PROVISIONS
6.1 Purchaser Undertaking. Purchaser hereby agrees to take
whatever additional action and execute whatever additional documents the
Corporation may in its judgment deem necessary or advisable in order to carry
out or effect one or more of the obligations car restrictions imposed on either
the Purchaser or the Purchased Shares pursuant to the express provisions of this
Agreement.
6.2 Agreement Is Entire Contract. This Agreement and the Related
Agreements constitutes the entire contract between the parties hereto with
regard to the subject matter hereof'.
6.3 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Tennessee, as such laws
are applied to contracts entered into and performed in such State.
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6.4 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.
6.5 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 the Purchaser and the Purchaser's legal representatives, heirs,
legatees, distributees, assigns and transferees by operation of law, 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 and conditions hereof.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the day
and year first indicated above.
UNIPHY HEALTHCARE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
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Its: Chief Executive Officer
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PURCHASER
/s/ R. Xxxx Xxxxxxx
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R. Xxxx Xxxxxxx
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