EXHIBIT 3
RESTRICTED STOCK PURCHASE AGREEMENT
Agreement between E-Newco, Inc., a Delaware corporation (the "Company")
and Xxx X. Xxxxxxx (the "Purchaser") dated the 27th day of March, 2000.
SECTION 1. ACQUISITION OF SHARES.
(a) TRANSFER. On the terms and conditions set forth in the
Employment Agreement between parties of even date herewith (the "Employment
Agreement") and this Agreement, the Company agrees to transfer to the
Purchaser 110 shares of common stock of the Company (the "Purchased
Shares"). The transfer shall occur at the offices of the Company on the
date hereof or at such other place and time as the parties may agree.
(b) CONSIDERATION. The Purchaser agrees to pay a purchase price of
$3,735.955 for each Purchased Share (the "Purchase Price"). The Purchase
Price is agreed to be at least 100% of the fair market value of the
Purchased Shares. Payment shall be made in the form of a promissory note
(the "Note") substantially in the form of Exhibit I hereto.
SECTION 2. RIGHT OF REPURCHASE
(a) SCOPE OF REPURCHASE RIGHT. Unless they have become vested in
accordance with Subsection (c) below, the Shares acquired under this
Agreement initially shall be Restricted Shares and shall be subject to a
right (but not an obligation) of repurchase by the Company (the "Right of
Repurchase"). The Purchaser shall not transfer, assign, encumber or
otherwise dispose of any Restricted Shares, except as provided in the
following sentence. The Purchaser may transfer Restricted Shares (i) by
beneficiary designation, will or intestate succession or (ii) to the
Purchaser's spouse, children or grandchildren or to a trust established by
the Purchaser for the benefit of the Purchaser or the Purchaser's spouse,
children or grandchildren, provided in either case that the transferee
agrees in writing on a form prescribed by the Company to be bound by all
provisions of this Agreement. If the Purchaser transfers any Restricted
Shares, then this Section 2 shall apply to the transferee to the same
extent as to the Purchaser.
(b) CONDITION PRECEDENT TO EXERCISE. Unless otherwise provided in
the Employment Agreement of even date herewith between the Company and
Purchaser (the "Employment Agreement"), the Right of Repurchase shall be
exercisable with respect to any Restricted Shares only during the 90-day
period next following the later of:
(i) The date when the Purchaser's service terminates for any
reason other than death or Disability, a termination by the Company
without Cause or by the Purchaser for Good Reason (as such terms are
defined in the Employment Agreement); or
(ii) The date when such Restricted Shares were purchased by
the Purchaser, the executors or administrators of the Purchaser's
estate or any person who has acquired the Restricted Shares directly
from the Purchaser by bequest, inheritance or beneficiary
designation.
(c) LAPSE OF REPURCHASE RIGHT. The Right of Repurchase shall lapse
with respect to one-thirty-sixth of the number of the Shares purchased
hereunder at the end of each calendar month, commencing with April 30,
2000, so that shares shall be vested on March 31, 2003. The Right of
Repurchase shall also lapse in its entirety upon Purchaser's death or
Disability or in the event of his termination of employment by the Company
without Cause or by the Purchaser for Good Reason (as such terms are
defined in the Employment Agreement). The Right of Repurchase shall also
lapse in its entirety upon a Change of Control of the Company. "Change of
Control" means the first to occur of any one of the events set forth in the
following clauses (i) through (iv): (i) any Person (other than one or more
Excluded Persons) is or becomes the "Beneficial Owner" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), directly or indirectly, of securities of the Company (not including
in the securities Beneficially Owned by such Person any securities acquired
directly from the Company) representing 30% or more of the combined voting
power of the Company's then outstanding securities, excluding any Person
who becomes such a Beneficial Owner in connection with a transaction
described in clause (A) of clause (iii) hereof; or (ii) the following
individuals cease for any reason to constitute a majority of the number of
directors then serving: individuals who, on June 30, 2000, constitute the
Board of Directors and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose appointment or
election by the Board of Directors or nomination for election by the
Company's stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors on June 30, 2000 or whose appointment, election or nomination for
election was previously so approved or recommended; or (iii) there is
consummated a merger or consolidation of the Company with any other
corporation other than (A) a merger or consolidation which results in the
directors of the Company immediately prior to such merger or consolidation
continuing to constitute at least a majority of the board of directors of
the Company, the surviving entity or any parent thereof, or (B) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person (other than one or more Excluded
Persons) is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities Beneficially
Owned by such Person any securities acquired directly from the Company)
representing 30% or more of the combined voting power of the Company's then
outstanding securities; or (iv) the stockholders of the Company approve a
plan of complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the Company of all
or substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the Company's
assets to an entity at least a majority of the board of directors of which
comprises individuals who were directors of the Company immediately prior
to such sale or disposition. "Excluded Person" shall mean any stockholder
of the Company as of the date hereof and any of their respective
affiliates. "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
(d) REPURCHASE COST. If the Company exercises the Right of
Repurchase, it shall pay the Purchaser an amount equal to the Purchase
Price for each of the Restricted Shares being repurchased.
(e) EXERCISE OF REPURCHASE RIGHT. The Right of Repurchase shall be
exercisable only by written notice delivered to the Purchaser prior to the
expiration of the 90-day period specified in Subsection (b) above. The
notice shall set forth the date on which the repurchase is to be effected.
Such date shall not be more than 30 days after the date of the notice. The
certificate(s) representing the Restricted Shares to be repurchased shall,
prior to the close of business on the date specified for the repurchase, be
delivered to the Company properly endorsed for transfer. The Company shall,
concurrently with the receipt of such certificate(s), pay to the Purchaser
the purchase price determined according to Subsection (d) above. Payment
shall be made in cash or cash equivalents or by canceling indebtedness to
the Company incurred by the Purchaser in the Purchase of the Restricted
Shares. The Right of Repurchase shall terminate with respect to any
Restricted Shares for which it has not been timely exercised pursuant to
this Subsection (e).
(f) ADDITIONAL SHARES OR SUBSTITUTED SECURITIES. In the event of
the declaration of a stock dividend, the declaration of an extraordinary
dividend payable in a form other than stock, a spin-off, a stock split, an
adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company's outstanding securities without receipt of
consideration, any new, substituted or additional securities or other
property (including money paid other than as an ordinary cash dividend)
which are by reason of such transaction distributed with respect to any
Restricted Shares or into which such Restricted Shares thereby become
convertible shall immediately be subject to the Right of Repurchase.
Appropriate adjustments to reflect the distribution of such securities or
property shall be made to the number and/or class of the Restricted Shares.
Appropriate adjustments shall also, after each such transaction, be made to
the price per share to be paid upon the exercise of the Right of Repurchase
in order to reflect any change in the Company's outstanding securities
effected without receipt of consideration therefor; provided, however, that
the aggregate purchase price payable for the Restricted Shares shall remain
the same.
(g) TERMINATION OF RIGHTS AS STOCKHOLDER. If the Company makes
available, at the time and place and in the amount and form provided in
this Agreement, the consideration for the Restricted Shares to be
repurchased in accordance with this Section 2, then after such time the
person from whom such Restricted Shares are to be repurchased shall no
longer have any rights as a holder of such Restricted Shares (other than
the right to receive payment of such consideration in accordance with this
Agreement). Such Restricted Shares shall be deemed to have been repurchased
in accordance with the applicable provisions hereof, whether or not the
certificate(s) therefor have been delivered as required by this Agreement.
(h) ESCROW. Upon issuance, the certificates for Restricted Shares
shall be deposited in escrow with the Company to be held in accordance with
the provisions of this Agreement and the Pledge Agreement attached as part
of Exhibit II hereto. Any new, substituted or additional securities or
other property described in Subsection (f) above shall immediately be
delivered to the Company to be held in escrow, but only to the extent the
Shares are at the time Restricted Shares. All regular cash dividends on
Restricted Shares (or other securities at the time held in escrow) shall be
paid directly to the Purchaser and shall not be held in escrow. Restricted
Shares, together with any other assets or securities held in escrow
hereunder, shall be (i) surrendered to the Company for repurchase and
cancellation upon the Company's exercise of its Right of Repurchase or (ii)
released to the Purchaser upon the Purchaser's request to the extent the
Shares are no longer Restricted Shares (but not more frequently than once
every six months). In any event, all Shares which have vested (and any
other vested assets and securities attributable thereto) shall be released
within 90 days after the Purchaser's cessation of service.
SECTION 3. OTHER RESTRICTIONS ON TRANSFER.
(a) PURCHASER REPRESENTATIONS. In connection with the issuance and
acquisition of Shares under this Agreement, the Purchaser hereby represents
and warrants to the Company as follows:
(i) The Purchaser is acquiring and will hold the Purchased
Shares for investment for his account only and not with a view to, or
for resale in connection with, any "distribution" thereof within the
meaning of the Securities Act of 1933, as amended (the "Securities
Act").
(ii) The Purchaser understands that the Purchased Shares have
not been registered under the Securities Act by reason of a specific
exemption therefrom and that the Purchased Shares must be held
indefinitely, unless they are subsequently registered under the
Securities Act or the Purchaser obtains an opinion of counsel, in
form and substance satisfactory to the Company and its counsel, that
such registration is not required. The Purchaser further acknowledges
and understands that the Company is under no obligation to register
the Purchased Shares.
(iii) The Purchaser is aware of the adoption of Rule 144 by the
Securities and Exchange Commission under the Securities Act, which
permits limited public resales of securities acquired in a non-public
offering, subject to the satisfaction of certain conditions,
including (without limitation) the availability of certain current
public information about the issuer, the resale occurring only after
the holding period required by Rule 144 has been satisfied, the sale
occurring through an unsolicited "broker's transaction," and the
amount of securities being sold during any three-month period not
exceeding specified limitations. The Purchaser acknowledges and
understands that the conditions for resale set forth in Rule 144 have
not been satisfied and that the Company has no plans to satisfy these
conditions in the foreseeable future.
(iv) The Purchaser will not sell, transfer or otherwise
dispose of the Purchased Shares in violation of the Securities Act,
the Securities Exchange Act of 1934, or the rules promulgated
thereunder, including Rule 144 under the Securities Act. The
Purchaser agrees that he will not dispose of the Purchased Shares
unless and until he has complied with all requirements of this
Agreement applicable to the disposition of Purchased Shares and he
has provided the Company with written assurances, in substance and
form satisfactory to the Company, that the proposed disposition does
not require registration of the Purchased Shares under the Securities
Act or all appropriate action necessary for compliance with the
registration requirements of the Securities Act or with any exemption
from registration available under the Securities Act (including Rule
144) has been taken.
(v) The Purchaser has been furnished with, and has had access to,
such information as he considers necessary or appropriate for deciding
whether to invest in the Purchased Shares, and the Purchaser has had
an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the issuance of the Purchased
Shares.
(vi) The Purchaser is aware that his investment in the Company
is a speculative investment which has limited liquidity and is
subject to the risk of complete loss. The Purchaser is able, without
impairing his financial condition, to hold the Purchased Shares for
an indefinite period and to suffer a complete loss of his investment
in the Purchased Shares.
(b) SECURITIES LAW RESTRICTIONS. Regardless of whether the
offering and sale of Shares under the Plan have been registered under the
Securities Act or have been registered or qualified under the securities
laws of any state, the Company at its discretion may impose restrictions
upon the sale, pledge or other transfer of the Purchased Shares (including
the placement of appropriate legends on stock certificates or the
imposition of stop-transfer instructions) if, in the judgment of the
Company, such restrictions are necessary or desirable in order to achieve
compliance with the Securities Act, the securities laws of any state or any
other law.
(c) RIGHTS OF THE COMPANY. The Company shall not be required to
(i) transfer on its books any Purchased Shares that have been sold or
transferred in contravention of this Agreement or (ii) treat as the owner
of Purchased Shares, or otherwise to accord voting, dividend or liquidation
rights to, any transferee to whom Purchased Shares have been transferred in
contravention of this Agreement.
SECTION 4. SUCCESSORS AND ASSIGNS.
Except as otherwise expressly provided to the contrary, the
provisions of this Agreement shall inure to the benefit of, and be binding
upon, the Company and its successors and assigns and be binding upon the
Purchaser and the Purchaser's legal representatives, heirs, legatees,
distributes, assigns and transferees by operation of law, whether or not
any such person has become a party to this Agreement or has agreed in
writing to join herein and to be bound by the terms, conditions and
restrictions hereof. It is expressly understood by the parties that if the
Company engages in a transaction (whether pursuant to a merger or
otherwise) pursuant to which it becomes a wholly owned subsidiary of
another entity, such parent entity shall succeed to the Company's rights
and obligations hereunder and thereafter references to the "Company" shall
be to such parent entity.
SECTION 5. TAX ELECTION.
The acquisition of the Purchased Shares may result in adverse
tax consequences that may be avoided or mitigated by filing an election
under Section 83(b) of the Internal Revenue Code of 1986, as amended (the
"Code"). To be effective, the Code Section 83(b) election must be filed
within 30 days after the date of purchase. The form for making the Code
Section 83(b) election is attached to this Agreement as an Exhibit I. THE
PURCHASER SHOULD CONSULT WITH HIS TAX ADVISOR TO DETERMINE THE TAX
CONSEQUENCES OF ACQUIRING THE PURCHASED SHARES AND THE ADVANTAGES AND
DISADVANTAGES OF FILING THE CODE SECTION 83(B) ELECTION. THE PURCHASER
ACKNOWLEDGES THAT IT IS HIS SOLE RESPONSIBILITY, AND NOT THE COMPANY'S, TO
FILE A TIMELY ELECTION UNDER CODE SECTION 83(B), EVEN IF THE PURCHASER
REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS
BEHALF.
SECTION 6. LEGENDS.
All certificates evidencing Purchased Shares shall bear the
following legends:
"THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN
COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY
AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN
INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY CERTAIN
RIGHTS OF REPURCHASE UPON TERMINATION OF SERVICE WITH THE COMPANY.
THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY
OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE."
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND
ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
If required by the authorities of any state in connection with the
issuance of the Purchased Shares, the legend or legends required by
such state authorities shall also be endorsed on all such
certificates.
SECTION 7. NOTICE.
Any notice required by the terms of this Agreement shall be
given in writing and shall be deemed effective upon personal delivery or
upon deposit with the United States Postal Service, by registered or
certified mail, with postage and fees prepaid. Notice shall be addressed to
the Company at its principal executive office and to the Purchaser at the
address that he most recently provided to the Company.
SECTION 8. ENTIRE AGREEMENT.
This Agreement, the Note and the Pledge Agreement attached as
Exhibit II hereto and the Employment Agreement constitute the entire
contract between the parties hereto with regard to the subject matter
hereof. They supersede any other agreements, representations or
understandings (whether oral or written and whether express or implied)
which relate to the subject matter hereof.
SECTION 9. CHOICE OF LAW.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, as such laws are
applied to contracts entered into and performed in such State.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement on the day and year first above written.
/s/ Xxx X. Xxxxxxx
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XXX X. XXXXXXX
E-NEWCO, INC.
By: /s/ Xxx X. Xxxxxxx
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