Exhibit 10.4
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AMENDED AND RESTATED
STOCK RESTRICTION AGREEMENT
This Agreement is made effective the 1st day of March, 2000 (the "Effective
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Date"), between XxxxxxxxXxxxxx.xxx, Inc., a Delaware corporation (the
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"Company"), and Xxxx Xxxxxx (the "Employee").
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WHEREAS, the Employee owns 3,535,218 shares (the "Shares") of the Company's
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Common Stock, par value $.001 per share (the "Common Stock") which he acquired
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for a purchase price of $.001 per share, of which 1,981,774 of the Shares are
vested and are not subject to repurchase by the Company upon execution of this
Agreement;
WHEREAS, all Share numbers set forth herein reflect a one-for-two reverse
stock split effected by the Company on February 29, 2000; and
WHEREAS, in recognition of the Employee's contributions to the successful
launch of the Company's business and the Employee's contributions to the
consummation of the Company's Series B preferred stock financing, the Company
and the Employee have agreed to (a) enter into an employment agreement (the
"Employment Agreement") and (b) enter into this Agreement which will set forth
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the vesting provisions which will apply to the Shares of the Employee that are
not vested as of the Effective Date;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, and for other valuable consideration, receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. Option of Company upon Termination of Employment.
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a. In the event that the Employee shall cease to be employed by the
Company (including a parent or subsidiary of the Company) for any or no reason,
including, without limitation, death, disability, or involuntary removal with or
without Cause, the Company shall have the right and option (the "Purchase
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Option"), within 60 days after the date that the Employee ceases to be employed
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by the Company, to purchase from the Employee at the purchase price per share
($.001) paid therefor by the Employee (the "Purchase Price"), up to 1,553,444
Shares (such number of Shares being subject to equitable adjustment for any
stock split, stock dividend, combination of shares or the like based upon Common
Stock or Common Stock equivalents), other than any of such Shares which become
Vested Shares, as defined in Section 1(b).
b. "Vested Shares" shall mean the product obtained by multiplying
1,553,444 Shares by a fraction, the numerator of which is the number of calendar
months from March 1, 2000 (the "Commencement Date") to the end of the calendar
month during which the Employee ceases to be employed by the Company, and the
denominator of which is 16, provided, however,
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in the event that the Employee is terminated or discharged without Cause by the
Company, or the Employee resigns for Good Reason (i) prior to June 28, 2000,
such numerator shall be the number of calendar months from the Commencement Date
to the Termination Date plus twelve, or (ii) after June 28, 2000, all of the
remaining Shares covered hereby shall immediately become Vested Shares.
For purposes of this Section 1(b), the following definitions shall apply:
(a) "Cause" shall mean (i) the commission by the Employee of any
embezzlement or other deliberate and premeditated act of dishonesty against
the financial or business interests of the Company; (ii) the habitual drug
addiction or intoxication of the Employee; (iii) the conviction by the
Employee of, or the pleading by the Employee of nolo contendere to, a
felony; (iv) the willful failure or refusal of the Employee to carry out
the duties of the Employee or to follow reasonable directives of the Board
of Directors which failure or refusal is not cured within 30 days
subsequent to written notice from the Company to the Employee; or (v) the
material breach by the Employee of this Agreement or the Employment
Agreement.
(b) "Good Reason" shall mean any of the following: (i) a material
diminution in the Employee's responsibilities, duties or authority, which
shall include but not be limited to the demotion of the Employee below the
level of Executive Vice President, to which the Employee has not consented
and which remains unremedied for 10 days after the receipt by the Company's
Board of Directors of written notice thereof from the Employee (it being
understood that the Company's demotion of the Employee from the position of
CEO as a result of the hiring of another CEO shall not by itself be
considered a "material diminution" in his responsibilities); (ii) any other
action taken in bad faith by the Company for the purpose of interfering
with the performance of the responsibilities of the Employee, if such
action in fact materially and adversely affects the performance of such
responsibilities, and which remains unremedied for 10 days after the
receipt by the Company's Board of Directors of written notice thereof from
the Employee; (iii) the relocation of the Employee by the Company outside
the Company's main office without the Employee's written consent; or (iv) a
decrease in the Employee's compensation without the Employee's written
consent.
(c) If the Company desires to exercise its Purchase Option, it shall
do so by communicating in writing its election to purchase to the Employee,
which communication shall state the number of Shares the Company is electing to
purchase and shall be delivered in person or mailed to the Employee at the
address set forth on the signature page hereto. The sale of the Shares to be
sold to the Company pursuant to this Section 1 shall be made at the offices of
the Company on the 20th day following the date of the Company's written election
to purchase (or if such 20th day is not a business day, then on the next
succeeding business day). Such sale shall be effected by the Employee's
delivery to the Company of a certificate or certificates evidencing the Shares
to be purchased by it, duly endorsed for transfer to the Company, against
payment to the Employee by the Company at the Option Price for each Share to be
purchased by the Company.
(d) The Employee agrees not to transfer any Shares if, on the date of
such transfer, such Shares do not constitute "Vested Shares" as defined above.
(e) If the Employee becomes obligated to sell any Shares to the
Company under this Agreement and fails to deliver such Shares in accordance with
the terms of this Agreement, the Company may, at its option, in addition to all
other remedies it may have, send to the Employee the Purchase Price for such
Shares as herein specified. Thereafter, the Company upon written notice to the
Employee, (i) shall cancel on its books the certificate or certificates
representing the Shares to be sold and (ii) shall issue, in lieu thereof, in the
name of the Company a new certificate or certificates representing such Shares,
and thereupon all of the Employee's rights in and to such Shares shall
terminate.
2. Legends. The certificate(s) representing the Shares will bear the
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following legend with respect to the foregoing:
The shares of stock represented by this certificate are subject to an
option to purchase such shares and certain restrictions upon transfer
contained in a certain Amended and Restated Stock Restriction Agreement, a
copy of which the Company will furnish to the holder of this certificate
upon request and without charge.
3. Rights as Stockholder. Subject to the provisions of this Agreement,
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the Employee shall, during the term of this Agreement, exercise all rights and
privileges of a stockholder of the Company.
4. Continuation of Employment. Nothing in this Agreement shall create an
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obligation on the Company to continue the Employee's employment with the
Company.
5. Notices. Any notice required or permitted hereunder shall be given in
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writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by registered or certified mail with postage
and fees prepaid, addressed to the other party hereto, if to the Employee, at
the Employee's residence address as reflected on the records of the Company, and
if to the Company, at the address of its principal offices on the date upon
which such notice is given.
6. Entire Agreement and Amendment. This Agreement constitutes the entire
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agreement of the parties with respect to the subject matter hereof and neither
this Agreement nor any provision hereof may be waived, modified, amended or
terminated except by a written agreement signed by the parties hereto. This
Agreement is the sole agreement to which the Employee is a party regarding the
subject matter hereof and supersedes any prior agreements between the Employee
and the Company as to such subject matter.
7. Dispute Resolution. Any controversy or claim arising out of or
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relating to this Agreement, or the breach thereof, shall be submitted to and
determined by a single arbitrator in
the city of Boston, Massachusetts in accordance with the rules of the American
Arbitration Association, and judgment upon the award shall be final, binding,
and conclusive upon the parties and may be entered in any court having competent
jurisdiction thereof.
8. Specific Performance. Without intending to limit the remedies
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available to the Company, the Employee agrees that damages at law will be an
insufficient remedy to the Company in the event that the Employee violates the
terms of this Agreement and that the Company may apply for and obtain immediate
injunctive relief in any court of competent jurisdiction or restrain the breach
or threatened breach of, or otherwise to specifically enforce, any of the
agreements and covenants contained in this Agreement.
9. Governing Law. This Agreement shall be governed by and construed in
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accordance with the internal laws of The Commonwealth of Massachusetts without
regard to the conflict of laws provisions thereof.
10. This Agreement hereby supersedes the Stock Restriction Agreement
between the Company and the Employee in its entirety.
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[Stock Restriction Agreement]
This Agreement shall take effect as an instrument under seal, and shall be
binding upon the heirs, personal representatives, successors and assigns of the
Employee.
XXXXXXXXXXXXXX.XXX, INC.
By: /s/ Xxx Xxxxxxxxx
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Name: Xxxxxxxx Xxxxxxxxx
Title: CEO
EMPLOYEE:
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx