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EXHIBIT 10.8
STOCK OWNERSHIP AGREEMENT
STOCK OWNERSHIP AGREEMENT ("Agreement") made this 8th day of
April, 1997, between Bindview Development Corporation, a Texas corporation (the
"Company"), and Xxxxxx Xxxxx ("Employee") and his spouse.
WHEREAS, Employee is the owner 19,500 shares of the issued and
outstanding stock of the Company; and
WHEREAS, the Company and Employee have agreed to impose certain
restrictions and obligations on the shares of stock of the Company owned by
Employee;
NOW, THEREFORE, in consideration of the mutual promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed as follows:
1.0 ARTICLE I: DEFINITIONS
I.I Definitions.
(a) "Adverse Tax Effect" shall mean any change in
ownership such that the Company would not qualify or
would no longer qualify to make or maintain an
election to be taxed as a partnership pursuant to
subchapter S of the Internal Revenue Code of 1986, as
amended.
(b) "Board of Directors" or "Board" shall mean the Board
of Directors of Company.
(c) "Disability" means the inability of Employee through
physical or mental illness or other cause, to
continue in the employment of the Company performing
all of his normal duties for a consecutive period of
three (3) months. If the Board of Directors makes a
determination that Employee is disabled, it shall
notify Employee of such determination. If Employee
does not disagree with such determination within
thirty (30) days after being so notified, Employee
shall be deemed to be disabled for purposes hereof
effective as of the date indicated in the notice from
the Board of Directors. If Employee disagrees with
such determination of disability, then within thirty
(30) days after receiving the notice from the Board
of Directors, Employee shall notify the Board of
Directors of such disagreement and each the Board of
Directors and Employee shall promptly appoint a
physician. The Company shall pay the cost of the
physician selected by the Board of Directors and
Employee shall pay the cost of the physician selected
by Employee. Such two physicians shall proceed to
promptly examine Employee and make a joint
determination of whether Employee is disabled as
defined herein. If such two appointed physicians
cannot agree on such determination within thirty (30)
days after the date Employee's notice of disagreement
is given to the Board of Directors, then such two
physicians shall promptly appoint a third physician
who shall make the determination of whether Employee
is disabled as defined herein. The cost of such
third physician shall be paid one-half by the Company
and one-half by Employee. The decision of the two
physicians or the decision of the third physician, as
the case may be, shall be final and binding on all
parties.
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(d) "Disposition" shall mean any inter vivos transfer,
pledge, mortgage or other encumbrance, or any other
disposition of Stock whatsoever, whether voluntary or
involuntary. A Disposition shall be deemed to be
involuntary if it involves any transaction,
proceeding, or action by or in which the Employee or
holder shall be involuntarily deprived or divested of
any right, title, or interest in or to any shares of
Stock (including, without limitation, any seizure
under levy of attachment or execution, transfer in
connection with bankruptcy or other court proceeding
to a trustee in bankruptcy or receiver or other
officer or agency or any transfer to a state or to a
public officer or agency pursuant to any statute
pertaining to escheat or abandoned property).
(e) "Fair Market Value" as of any date and in respect to
any shares of Stock means the fair market value of
shares of Stock determined pursuant to the following
valuation formula. The value of the entire Company
as of any date shall be an amount equal to 1.56 times
the net sales of Company for the twelve month period
ending as of the last day of the calendar month
immediately preceding the calendar month in which the
valuation date occurs. The Fair Market Value of a
share of Stock as of such date shall be equal to the
quotient obtained by dividing the value of the entire
Company so determined by the sum of the total number
of outstanding shares of common stock of the Company
and the total number of outstanding Units awarded
pursuant to the Company's Phantom Stock Plan and any
other phantom stock plan maintained by Company as of
such date.
(f) "Repurchase Value" as of any date and in respect to
any shares of Stock means 1.5 times the Fair Market
Value per share calculated pursuant to subparagraph
(e) hereof.
(g) "Stock" shall mean all issued and outstanding shares
of stock of the Company, together with all shares of
stock of the Company of any class or series which may
hereafter be issued. Moreover, all references herein
to Stock owned by Employee includes the community
interest, if any, of the spouse of Employee in such
Stock.
(h) "Termination Date" means the date of Employee's
severance from employment with the Company by death,
disability, resignation, discharge or otherwise.
(i) "Triggering Events" shall mean any of the events
described in Paragraph 2.1 of this Agreement.
2.0 ARTICLE II: Purchase Option. Without first receiving the express
written consent of the Company, Employee shall not make any Disposition of any
Stock (i) which would have an Adverse Tax Effect and (ii) without first
complying with the provisions of this Agreement.
2.1 Triggering Events. Upon the occurrence of any of the events
described in paragraphs 2.1(a), (b), (d), (e) or (f) below,
the Employee or Employee's estate or personal representative
shall immediately notify the Company of the occurrence of such
Triggering Event. Upon receipt of such notice, the Company
shall have the option, exercisable within sixty (60) days
after receipt of such notice, to purchase from Employee all
(but not less than all) of the Stock owned by Employee. Upon
the occurrence of the termination of employment of Employee
the Company shall have the option, exercisable within sixty
(60) days after the date of termination of employment, to
purchase from Employee all (but not less than all) of the
Stock owned by Employee. In the event the Company shall elect
not to purchase all of the Employee's Stock within the sixty
(60) day exercise
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period, then the option to purchase such Stock shall lapse and
such Stock shall be retained by Employee or the personal
representative of Employee, as the case may be, or transferred
in accordance with the terms of Section 2.1(e) or (f),
whichever is applicable. Any Stock retained by Employee,
Employee's estate or the personal representative of Employee
after a failure of the Company to exercise its option
hereunder shall remain subject to the terms hereof, such that,
for example (without limitation), Stock not purchased by the
Company pursuant to Paragraph 2.1(a) shall remain subject to
the provisions of Paragraphs 2.1(e) and (f). Any option
granted to Company hereby shall be exercisable by notice from
Company in writing of its desire to exercise such option being
delivered, or mailed, properly addressed, to Employee or the
personal representative of Employee, as the case may be. The
date of exercise shall be the date the notice of exercise is
personally delivered or the date it is placed in the U.S.
mail, as the case may be. The purchase of the Stock shall be
deemed to have occurred on the date of exercise and the Stock
shall be transferred on the Company's stock ledger as of such
date.
(a) Death of Employee. If the Company exercises its
option upon the death of Employee, the purchase price
shall be the Repurchase Value per share (as described
in paragraph 1.1 (f) of this Agreement) as of the
date of death and shall be paid by the Company to
personal representative of Employee's estate, in
equal annual installments over a five-year period,
with the first such annual installment being due six
months following the date of Employee's death and an
additional annual installment being due on each
annual anniversary date of such first installment
until all five annual installment payments have been
made. The amount due shall bear interest from the
date of death until paid with accrued interest being
due with each installment payment of principal.
Subject to the minimum and maximum interest rates
hereinafter set forth, the interest shall initially
be computed at a rate equal to the national prime
rate as published in the Wall Street Journal on the
date of death (or the next business day if the date
of death is not a business day). Such rate of
interest shall be applicable for one year after the
date of death. The rate of interest shall be
adjusted on the date exactly one year after the date
of death and on each annual anniversary date
thereafter to the national prime rate as published in
the Wall Street Journal on such date (or the next
business day if such date is not a business day).
Each time the interest rate is adjusted, it shall be
applicable for the one year period following the date
of adjustment. Notwithstanding the preceding
language of this paragraph 2.1(a), in no event shall
the interest rate ever be less than seven percent
(7%) per annum or more than thirteen percent (13%)
per annum. The Company may prepay the amount due at
any time without premium or penalty.
(b) Disability of Employee. If the Company exercises its
option upon the disability of Employee, the purchase
price shall be the Repurchase Value per share (as
described in paragraph 1.1(f) of this Agreement) as
of the date the employment with Company terminated
and shall be paid by the Company to Employee in equal
annual installments over a five-year period, with the
first such annual installment being due six months
following the date Employee's employment with Company
terminates and an additional annual installment shall
be due on each annual anniversary date of such first
installment until all five annual installment
payments have been made. The amount due shall bear
interest from the date Employee's employment with
Company terminates until paid with accrued interest
being due with each installment payment of principal.
Subject to the minimum and maximum interest rates
hereinafter set forth, the interest shall initially
be computed at a rate equal to the national prime
rate as published in the Wall Street
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Journal on the date such disabled Employee's
employment with Company terminates (or the next
business day if such date is not a business date).
Such rate of interest shall be applicable for one
year after the date Employee's employment with the
Company terminates. The rate of interest shall be
adjusted on the date exactly one year after the date
such disabled Employee's employment with the Company
terminates and on each annual anniversary date
thereafter to the national prime rate as published in
the Wall Street Journal on such date (or the next
business day if such date is not a business day).
Each time the interest rate is adjusted, it shall be
applicable for the one year period following the date
of adjustment. Notwithstanding the preceding
language of this paragraph 2.1(b), in no event shall
the interest rate ever be less than seven percent
(7%) per annum or more than thirteen percent (13%)
per annum. The Company may prepay the amount due at
any time without premium or penalty. In the event
Employee dies during the five-year pay-out period,
any remaining unpaid installments shall be paid in
accordance with Paragraph 2.1(a) hereof.
(c) Termination of Employment. In the event Employee's
employment with the Company is terminated for any
reason other than pursuant to Paragraph 2.1(a) or
2.1(b), if the Company exercises its option, the
purchase price shall be the Repurchase Value per
share (as described in paragraph 1.1(f) of this
Agreement) as of the date of termination of
employment and shall be paid by the Company to
Employee in equal monthly installments over a
twenty-four (24) month period with the first such
monthly installment being due one month following the
date of termination of employment and an additional
monthly installment shall be due on the same date of
each calendar month thereafter until all twenty-four
(24) monthly installment payments have been made.
The amount due to Employee shall bear interest from
the date of termination of employment until paid with
accrued interest being due with each installment of
principal. Subject to the minimum and maximum
interest rates hereinafter set forth, the interest
shall initially be computed at a rate equal to the
national prime rate as published in the Wall Street
Journal on the date of termination of employment (or
the next business day if such date is not a business
day). Such rate of interest shall be applicable for
one year after the date of termination of employment.
The rate of interest shall be adjusted on the date
exactly one year after the date of termination of
employment to the national prime rate as published in
the Wall Street Journal on such date (or the next
business day if such date is not a business day).
Each time the interest rate is adjusted, it shall be
applicable for the one year period following the date
of adjustment. Notwithstanding the preceding
language of this paragraph 2.1(c), in no event shall
the interest rate ever be less than seven percent
(7%) per annum or more than thirteen percent (13%)
per annum. The Company may prepay the amount due at
any time without premium or penalty.
(d) Divorce: Death of Spouse.
(i) The Spouse of Employee ("Spouse") hereby
agrees that in the event of their divorce or
of Spouse's death, Employee shall have the
right and option to purchase all or any part
of any interest in the Stock owned by
Employee to which Spouse (or Spouse's estate)
is entitled by virtue of any marital property
laws or any decree of separation, divorce or
property division. Such option period shall
commence on the date of entry of a decree of
divorce, in the event of a divorce, or upon
the date of qualification of the personal
representative of the Spouse, in the event of
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Spouse's death, and shall extend for sixty
(60) days. The purchase price of such
interest shall be the Repurchase Value per
share (as described in paragraph 1.1(f) of
this Agreement) to which such Spouse is
entitled. In the event Employee shall fail
to purchase all of the Spouse's interest as
provided in this Paragraph 2.1(d), then
Employee or the Spouse shall notify the
Company of the same and the Company shall
have the option for an additional sixty (60)
days after the date it receives such notice
to purchase such Spouse's interest not
purchased by Employee at the purchase price
stated hereinabove. Notwithstanding the
preceding language, if Spouse shall die and
the ownership interest of the deceased Spouse
in the Stock of Employee is transferred to
Employee by the terms of the Spouse's Will or
by operation of law, or in the event of a
divorce and Employee is awarded the entire
ownership interest in all such Stock, then as
to all such Stock in which the entire
ownership interest is acquired by Employee,
no option to purchase such Stock shall come
into existence.
(ii) The option granted to Employee and the
Company by the Spouse under this Agreement
shall be considered as exercised when notice
in writing thereof has been delivered or
mailed, properly addressed, to the Spouse, or
personal representative of the Spouse, as the
case may be. The purchase of all of the
interest of the Spouse in Stock with regard
to which the option is exercised shall be
deemed to have occurred when the option is
exercised.
(iii) The purchase price stated in subparagraph (i)
of this Paragraph 2.1(d) shall be paid, at
the election of the purchaser either (i) in
one lump sum payable within forty-five (45)
days from the date the Spouse or the Spouse's
representative is notified of the exercise of
Employee's or the Company's option, as the
case may be, or (ii) in twenty-four (24)
equal monthly installments with the first
such monthly installment being due one month
following the date of exercise of the option
and an additional monthly installment being
due on the same date of each subsequent
calendar month thereafter until all
twenty-four (24) monthly installment payments
have been made. The amount due hereunder
shall bear interest from the date of the
exercise of the option until paid with
accrued interest being due with each
installment of principal. Subject to the
minimum and maximum interest rates
hereinafter set forth, the interest shall
initially be computed at a rate equal to the
national prime rate as published in the Wall
Street Journal on the date of exercise of
option (or the next business day if such date
is not a business day). Such rate of
interest shall be applicable for one year
after the date of exercise of the option.
The rate of interest shall be adjusted on the
date exactly one year after the date of
exercise of the option to the national prime
rate as published in the Wall Street Journal
on such date (or the next-business day if
such date is not a business day). Each time
the interest rate is adjusted, it shall be
applicable for the one year period following
the date of adjustment. Notwithstanding the
preceding language of this paragraph
2.l(d)(iii), in no event shall the interest
rate ever be less than seven percent (7%) per
annum or more than thirteen percent (13%) per
annum. The purchaser may prepay the amount
due at any time without premium or penalty.
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(e) Voluntary Disposition. In the event Employee (for
the purposes of this Paragraph such term includes
Employee's estate or the heirs thereof holding Stock
from Employee and his personal representative)
receives a bona fide offer from a third party to
purchase his shares of Stock and Employee desires to
accept such Offer, Employee shall first make an offer
(the "Offer") to sell such Stock to the Company by
providing notice as provided above and including
therein the number of shares involved, the names of
any proposed purchasers and the purchase price and
terms of such proposed purchase. If the Company
exercises its option, the price per share to be paid
upon the purchase of Stock and the other terms
relating thereto shall be the price to be paid and
terms offered by any proposed purchasers of the
Stock; provided that any non-cash consideration
offered by a proposed purchaser may be paid by the
Company in cash in an amount equal to the fair value
of such property as agreed by the Company and
Employee. The Offer may be withdrawn prior to the
exercise of the Company's option. If the Company
does not purchase all the Stock subject to an Offer,
Employee shall be permitted, at any time or times
within, but not after, six months after the lapse of
the option arising in connection with such Offer to
sell the Stock which was the subject of such Offer;
provided, however, that no such sale shall be made at
a lower price or to any person other than specified
in such Offer. If after the lapse of the six-month
period such Stock has not been sold, Employee must
make a new offer prior to selling such Stock.
(f) Involuntary Disposition. Prior to or upon any
involuntary Disposition of Stock, Employee (for the
purposes of this Paragraph such term includes
Employee's estate or the heirs thereof holding Stock
from Employee and his personal representative) shall
send notice thereof as provided above disclosing in
full to the Company the nature and details of such
involuntary Disposition. If the Company exercises
its option to purchase such Stock, the purchase price
shall be the Repurchase Value per share (as described
in paragraph 1.1(f) of this Agreement) as of the date
of such notice and shall be paid by the Company to
the holder of the Stock, if such involuntary
Disposition has occurred, or Employee, if it has not,
in equal annual installments over a five-year period,
with the first such annual installment being due six
months following the date of the purchase and an
additional annual installment being due on each
annual anniversary date of such first installment
until all five annual installment payments have been
made. The amount due shall bear interest from the
date of purchase until paid with accrued interest
being due with each installment payment of principal.
Subject to the minimum and maximum interest rates
hereinafter set forth, the interest shall initially
be computed at a rate equal to the national prime
rate as published in the Wall Street Journal on the
date of purchase. Such rate of interest shall be
applicable for one year after the date of purchase.
The rate of interest shall be adjusted on the date
exactly one year after the date of purchase and on
each annual anniversary date thereafter to the
national prime rate as published in the Wall Street
Journal on such date (or the next business day if
such date is not a business day). Each time the
interest rate is adjusted, it shall be applicable for
the one year period following the date of adjustment.
Notwithstanding the preceding language of this
paragraph 2.1(f), in no event shall the interest rate
ever be less than seven percent (7%) per annum or
more than thirteen percent (13%) per annum. The
Company may prepay the amount due at any time without
premium or penalty.
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3.0 ARTICLE V: MISCELLANEOUS
3.1 Governing Law. The validity, construction, interpretation and
effect of this Agreement and all rights of any and all persons
having or claiming to have any interest in this Agreement
shall be governed by the laws of the State of Texas.
3.2 Severability. All provisions herein are severable and in the
event any one of them shall be held invalid by any court of
competent jurisdiction, this Agreement shall be interpreted as
if such invalid provision was not contained herein.
3.3 Headings. The headings of the sections of this Agreement are
inserted for convenience only and shall not be deemed to
constitute a part of this Agreement.
3.4 Non-Waiver. Failure on the part of any party in any one or
more instances to enforce any of its rights which arise in
connection with this Agreement or to insist upon the strict
performance of any of its terms, conditions, or covenants of
this Agreement shall not be construed as a waiver or a
relinquishment for the future of any such rights, terms,
conditions, or covenants. No waiver of any condition of this
Agreement shall be valid unless it is in writing.
3.5 Agreement on File. The Company shall place this Agreement on
file in the office of its principal place of business.
3.6 Notices. Any notices to be given hereunder by either party to
the other may be effected either by personal delivery in
writing or by mail, registered or certified, postage prepaid
with return receipt requested. Mailed notices shall be
addressed to the parties at the addresses set forth on the
signature pages hereto. Each party may change his address by
written notice in accordance with this paragraph. Notices
delivered personally shall be deemed communicated as of the
actual receipt; mailed notices shall be deemed communicated as
of the date of mailing.
3.7 Endorsement of Stock Certificates. All certificates of Stock
of the Company now owned or that may hereafter be acquired by
Employee shall be endorsed on the back thereof either as
follows or as otherwise required by law:
"BY AGREEMENT AMONG THE CORPORATION AND THE HOLDER OF
THE SHARES REPRESENTED BY THIS CERTIFICATE, RESTRICTIONS HAVE
BEEN PLACED UPON THE TRANSFER OF THESE SHARES. A COPY OF THE
AGREEMENT, WHICH CONTAINS A FULL STATEMENT OF THE
RESTRICTIONS, IS ON FILE AT THE PRINCIPAL BUSINESS OFFICE OF
THE CORPORATION. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO
ANY HOLDER UPON WRITTEN REQUEST."
Such certificates shall be endorsed on the front thereof as
follows:
"SEE RESTRICTIONS ON TRANSFER HEREOF ON REVERSE SIDE."
3.8 Successors and Assigns. This Agreement shall be binding upon
the Company, Employee, the spouse of the Employee and their
heirs, executors, administrators, successors and assigns.
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3.9 Amendment. This Agreement may be amended from time to time by
an instrument in writing signed by all those who are parties
to this Agreement at the time of such amendment, such
instrument being designated on its face as an "Amendment" to
this Agreement.
3.10 Termination. This Agreement may also be terminated by an
instrument in writing signed by all those who are parties to
this Agreement at the time of the signing of such instrument.
3.11 Spousal Consent. The spouse of Employee is fully aware of,
understands, and fully consents and agrees to the provisions
of this Agreement and its binding effect upon any community
property interests she may now or hereafter own, and agree
that the termination of the marital relationship with Employee
for any reason shall not have the effect of removing any Stock
of the Company otherwise subject to this Agreement from the
coverage hereof and that her awareness, understanding, consent
and agreement are evidenced by her signing this Agreement
3.12 Dispositions in Breach of Agreement. Any attempted
Disposition in breach of this Agreement shall be void and of
no effect, and shall trigger the options established herein,
is appropriate, constitute an Offer, and provided that the
date of the notice shall be deemed to be the date as of which
the Company has actual knowledge of such attempted
Disposition. Each party hereto acknowledges that a remedy at
law for any breach or attempted breach of any section of this
Agreement will be inadequate, agrees that each other party
hereto shall be entitled to specific performance and
injunctive and other equitable relief in case of any such
breach or attempted breach and further agrees to waive any
requirement for the securing or posting of any bond in
connection with the obtaining of any such injunctive or other
equitable relief.
3.13 Arbitration. Any dispute, controversy or claim arising out of
or relating to this Agreement shall be finally settled by
arbitration in Houston, Texas, U.S.A. in accordance with the
Commercial Arbitration Rules of the American Arbitration
Association in effect on the date of this Agreement and
judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first set forth above.
Date: 8 Apr 1997 /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
/s/ Xxxx Xxxxx
---------------------------------------
Spouse
Printed Name: Xxxx Xxxxx
--------------------------
Address: 00000 Xxxx Xxxxx Xx.
--------------------------
Xxxxxxx, XX 00000
--------------------------
--------------------------
--------------------------
BINDVIEW DEVELOPMENT CORPORATION
/s/ Xxxx Xxxxxxx
---------------------------------------
Xxxx Xxxxxxx, President
BINDVIEW DEVELOPMENT CORPORATION
0000 Xxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
[Notarize signature of Spouse]
THE STATE OF TEXAS )
)
COUNTY OF XXXXXX )
BEFORE ME, the undersigned authority, on this day personally appeared
Xxxxxx Xxxxx/Xxxx Xxxxx, known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that he or she executed the
same for the purposes and consideration therein expressed.
GIVEN under my hand and seal of office this 26 day of March, 1997.
/s/ Xxxx Xxxxxx
-------------------------------------------
Notary Public in and for the State of Texas
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