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EXHIBIT 99.11
DIGITAL FURNACE CORPORATION
AMENDED & RESTATED STOCK INCENTIVE PLAN
EXERCISE AND SHAREHOLDER AGREEMENT
This Exercise and Shareholder Agreement (the "Exercise Agreement") is
made this day of , 199___ by and between Digital Furnace Corporation (the
"Company") and the optionee named below ("Optionee") pursuant to that certain
Stock Option Grant described below which was granted to Optionee under the
Digital Furnace Corporation Amended & Restated Stock Incentive Plan (the
"Plan").
Optionee: ____________________________
Social Security Number: ____________________________
Address: ____________________________
____________________________
____________________________
Number of Shares Purchased: ____________________________
Price Per Share $____________________________
Aggregate Purchase Price: $____________________________
Date of Stock Option Grant: ____________________________
Optionee hereby delivers to the Company the Aggregate Purchase Price in
a form permitted in the Option (provided, that payment other than by cash or
check is subject to approval by the Board of Directors of the Company (the
"Board"), in its sole discretion and in writing) as follows (check as applicable
and complete):
[___] in cash or check in the amount of $___________, receipt of which is
acknowledged by the Company.
[___] by hereby instructing the Company to withhold ___________ Shares of
Common Stock otherwise issuable pursuant to this exercise of the Option,
valued at the current fair market value of $____________ per Share (as
determined by the Board in good faith).
[___] by the waiver hereby of compensation due or accrued for services
rendered in the amount of $____________.
[___] by the execution of a promissory note in favor of the Company in a form
acceptable to the Company.
The Company and Optionee hereby agree as follows:
1. PURCHASE OF SHARES. On this date and subject to the terms and
conditions of this Exercise Agreement and the Plan, Optionee hereby exercises,
subject to the contingencies below, the Stock Option Grant between the Company
and Optionee dated as of the "Date of Stock Option Grant" set forth above (the
"Option") with respect to the "Number of Shares Purchased" set forth
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above of the Company's Common Stock at the "Aggregate Purchase Price" set forth
above (the "Purchase Price") and the "Price per Share" set forth above (the
"Purchase Price Per Share"). The term "Shares" refers to the shares of the
Company's $0.01 par value common stock purchased under this Exercise Agreement
and includes all securities received (a) in replacement of the Shares and (b) as
a result of stock dividends or stock splits in respect of the Shares.
Capitalized terms used in this Exercise Agreement that are not defined herein
have the definitions ascribed to them in the Plan and the Option.
2. REPRESENTATIONS OF PURCHASER. Optionee represents and warrants to the
Company that:
(a) Optionee acknowledges that Optionee has received, read and
understood the Plan and the Option and agrees to abide by and be bound by their
terms and conditions;
(b) Optionee is purchasing the Shares for Optionee's own account
for investment purposes only and not with a view to, or for sale in connection
with, a distribution of the Shares within the meaning of the Securities Act of
1933, as amended (the "1933 Act");
(c) Optionee has no present intention of selling or otherwise
disposing of all or any portion of the Shares;
(d) Optionee is fully aware of (i) the highly speculative nature
of the investment in the Shares; (ii) the financial hazards involved in the
investment of the Shares; and (iii) the lack of liquidity of the Shares and the
restrictions on transferability of the Shares (e.g., that Optionee may not be
able to sell or dispose of the Shares or use them as collateral for loans); and
(e) Optionee is capable of evaluating the merits and risks of
this investment, has the ability to protect Optionee's own interests in this
transaction and is financially capable of bearing a total loss of this
investment.
3. VESTING AND OWNERSHIP RIGHTS IN SHARES. Optionee understands, agrees
and acknowledges that ownership of the Shares shall vest in Optionee as set
forth below depending upon the "Continuous Service" of the Optionee:
CONTINUOUS SERVICE OF OPTIONEE FOLLOWING DATE
OF GRANT OF UNDERLYING OPTION PERCENTAGE OF VESTING IN SHARES
----------------------------- -------------------------------
Less than 12 months 0%
Greater than or equal to 12 months but less 25%
than 24 months
Greater than or equal to 24 months but less 50%
than 36 months
Greater than or equal to 36 months but less 75%
than 48 months
Greater than or equal to 48 months 100%
For purposes of the above vesting chart, "Continuous Service" means a period of
continuous performance of services by Optionee for the Company, a Parent, or a
Subsidiary, as determined by the Board. Only with respect to vested Shares shall
an Optionee have full rights of ownership, be able to vote and receive
dividends. To the extent that Shares have not vested, Optionee hereby agrees and
acknowledges that he shall not have a right to receive dividends or to vote as a
shareholder with respect to such Shares. Further, Optionee shall not have the
right to transfer or assign in any manner any Shares, or any interest therein,
that have not vested.
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4. COMPANY'S RIGHT OF FIRST REFUSAL. Before any Shares held by
Optionee or any transferee (either being sometimes referred to herein as the
"Holder") may be sold or otherwise transferred (including transfer by gift or
operation of law), the Company shall have an assignable right of first refusal
to purchase such Shares on the terms and conditions set forth in this Section 4
(the "Right of First Refusal").
(a) Notice of Proposed Transfer. The Holder of the Shares shall
deliver to the Company a written notice (the "Notice") stating (i) the Holder's
bona fide intention to sell or otherwise transfer such Shares, (ii) the name of
each proposed purchaser or other transferee ("Proposed Transferee"), (iii) the
number of Shares to be transferred to each Proposed Transferee, and (iv) the
bona fide cash price or other consideration for which the Holder proposes to
transfer the Shares (the "Offered Price"); in addition, by providing the Notice,
the Holder is deemed to be offering to sell the Shares at the Offered Price to
the Company.
(b) Exercise of Right of First Refusal. At any time within thirty
(30) days after receipt of the Notice, the Company or its assignee may, by
giving written notice to the Holder, elect to purchase any or all of the Shares
proposed to be transferred to any one or more of the Proposed Transferees, at
the purchase price determined in accordance with Subsection (c) below.
(c) Purchase Price. The purchase price for the Shares purchased
under this Section 4 shall be the Offered Price. If the Offered Price includes
consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board in good faith.
(d) Payment. Payment of the purchase price shall be made, at the
option of the Company or its assignee, either (i) in cash (by check), by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company or such assignee, or by any combination thereof within thirty
(30) days after receipt of the Notice or (ii) in the manner and at the time(s)
set forth in the Notice.
(e) Holder's Right to Transfer. If all of the Shares proposed in
the Notice to be transferred to a given Proposed Transferee are not purchased by
the Company and/or its assignee as provided in this Section 4, then the Holder
may sell or otherwise transfer such Shares to that Proposed Transferee at the
Offered Price or at a higher price, provided that such sale or other transfer is
consummated within one hundred and twenty (120) days after the date of the
Notice and provided further that any such sale or other transfer is effected in
accordance with any applicable securities laws and the Proposed Transferee
agrees in writing that the provisions of this Section 4 shall continue to apply
to the Shares in the hands of such Proposed Transferee. If the Shares described
in the Notice are not transferred to the Proposed Transferee within such period,
a new Notice shall be given to the Company, and the Company shall again be
offered the Right of First Refusal, before any Shares held by the Holder may be
sold or otherwise transferred.
(f) Exception for Certain Family Transfers. Anything to the
contrary contained in this Section 4 notwithstanding, the transfer of any or all
of the Shares, during Optionee's lifetime or on Optionee's death by will or
intestacy, to Optionee's immediate family or to a trust for the benefit of
Optionee or Optionee's immediate family shall be exempt from the provisions of
this Section; provided, that as a condition to receiving the Shares, the
transferee or other recipient shall agree in writing to receive and hold the
Shares so transferred subject to the provisions of this Agreement, and to
transfer such Shares no further except in accordance with the terms of this
Agreement. As used herein, "immediate family" shall mean the Optionee's spouse,
lineal descendant or antecedent, father, mother, brother or sister.
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(g) Termination of Right of First Refusal. The Right of First
Refusal shall terminate as to any Shares ninety (90) days after the first sale
of common stock of the Company to the general public pursuant to a registration
statement filed with and declared effective by the Securities and Exchange
Commission (other than a registration statement solely covering an employee
benefit plan or corporate reorganization).
(h) Optionee Subject to Vesting Restrictions. Notwithstanding
anything in this Section 4 to the contrary, no unvested Shares may be
transferred by Optionee.
5. COMPANY'S REPURCHASE OPTION. The Company shall have the option to
repurchase all or a portion of the Shares on the terms and conditions set forth
in this Section 5 (the "Repurchase Option") if Optionee should cease to be
employed by the Company or cease to perform services for the Company, a Parent
or a Subsidiary for any reason, or no reason, including without limitation
Optionee's death, disability, voluntary resignation or termination by the
Company with or without cause.
(a) Right of Termination Unaffected. Nothing in this Agreement
shall be construed to limit or otherwise affect in any manner whatsoever the
right or power of the Company to terminate Optionee's employment or association
with the Company at any time, for any reason or no reason, with or without
cause. For purposes of this Agreement, Optionee shall be considered to be
employed by the Company or associated with the Company if Optionee is an
officer, director or full-time employee of the Company or any Parent or
Subsidiary of the Company or if the Board determines that Optionee is rendering
substantial services as a part-time employee, consultant, contractor or advisor
to the Company or any Parent or Subsidiary of the Company. The Board shall have
discretion to determine whether Optionee has ceased to be employed by or
associated with the Company or any Parent or Subsidiary and the effective date
on which such employment or association is terminated (the "Termination Date").
(b) Exercise of Repurchase Option. At any time within sixty (60)
days after the Termination Date, the Company may elect to repurchase any or all
of the Shares by giving Optionee written notice of exercise of the Repurchase
Option.
(c) Calculation of Repurchase Price for Vested Shares.
(i) In the event Optionee's employment with the Company
terminates as a result of (1) the death or disability of Optionee or (2)
the termination of Optionee's employment by the Company other than "with
cause" (as defined below), the Company or its assignee shall have the
option to repurchase from Optionee (or from Optionee's personal
representative as the case may be) any or all of the vested Shares at a
price equal to the "fair market value" of such Shares on the Termination
Date. For purposes of this Section 5, "fair market value" of the Shares
shall be determined in the sole discretion of the Board.
(ii) In the event Optionee's employment with the Company
terminates as result of (1) Optionee's resignation from employment or
voluntary termination of association with the Company or (2) termination
of Optionee's employment or association by the Company "with cause", the
Company or its assignee shall have the option to repurchase from
Optionee (or from Optionee's personal representative as the case may be)
any or all of the vested Shares at a price equal to the lower of (1) the
"fair market value" of such Shares on the Termination Date and (2) the
"book value", as defined below, of such Shares on the Termination Date.
For purposes of this Section 5, "with cause" shall mean termination by
the Company of Optionee's employment or association with the Company as
a result of termination of the Optionee's employment under any one or
more of the following events: (a) Optionee's knowing and wilful
misconduct with respect to the
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business and affairs of the Company; (b) any material violation by
Optionee of any policy of the Company relating to ethical conduct or
practices or fiduciary duties of a similarly situated executive; (c)
knowing and wilful material breach of any provision his Employment
Agreement (if any) which is not remedied within thirty (30) days after
Optionee's receipt of notice thereof; (d) Optionee's commission of a
felony or any illegal act involving moral turpitude or fraud or
Optionee's dishonesty which may reasonably be expected to have a
material adverse effect on the Company; or (e) failure to comply with
reasonable directives of the Board which are consistent with the
Optionee's duties, if not remedied within thirty (30) days after the
Optionee's receipt of notice thereof. For purposes of this Section 5,
"book value" of the Shares shall be determined in the sole discretion of
the Board.
(d) Calculation of Repurchase Price for Unvested Shares. In the
event Optionee's employment with the Company terminates for any reason
whatsoever, the Company or its assignee shall have the option to repurchase from
Optionee (or from Optionee's personal representative as the case may be) any or
all of the unvested Shares at a price equal to the price paid by Optionee for
such unvested Shares.
(e) Payment of Repurchase Price. The repurchase price shall be
payable, at the option of the Company or its assignee, by (i) check, (ii) by
cancellation of all or a portion of any outstanding indebtedness of Optionee to
the Company or such assignee, (iii) by delivery of a promissory note of the
Company payable in equal annual installments over a four (4) year period from
the date of repurchase at per annum interest rate equal to the prime rate as
announced by the Company's principal bank as of the Termination Date or, if the
Company has no principal bank, that rate announced as of the Termination Date by
the Wall Street Journal as the prevailing "prime rate" of interest per annum, or
(iv) any combination of the above.
(f) Termination of Repurchase Rights. The Right of Repurchase
shall terminate as to any Shares ninety (90) days after the first sale of common
stock of the Company to the general public pursuant to a registration statement
filed with and declared effective by the Securities and Exchange Commission
(other than a registration statement solely covering an employee benefit plan or
corporate reorganization).
6. COMPLIANCE WITH FEDERAL AND STATE SECURITIES LAWS. Optionee
understands and acknowledges that, in reliance upon the representations and
warranties made by Optionee herein, the Shares have not been registered with the
Securities and Exchange Commission ("SEC") under the 1933 Act, but have been
issued under an exemption or exemptions from the registration requirements of
the 1933 Act which impose certain restrictions on Optionee's ability to transfer
the Shares and have not been registered under any Georgia securities laws or the
securities laws of any other state. Optionee understands that Optionee may not
transfer any Shares unless such Shares are registered under the 1933 Act and the
securities laws of Georgia (or the securities laws of any other state, if
applicable) or unless, in the opinion of counsel to the Company, an exemption
from such registration is available. Optionee understands that only the Company
may file a registration statement with the SEC or Georgia (or other applicable
states), and that the Company is under no obligation to do so with respect to
the Shares. Optionee has also been advised that an exemption from registration
may not be available or may not permit Optionee to transfer all or any of the
Shares in the amounts or at the times proposed by Optionee.
7. LOCKUP AGREEMENT. Optionee agrees, in connection with any public
offering of the Company's securities, upon request of the Company or the
underwriters managing any underwritten offering of the Company's securities, not
to sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any Shares without the prior written consent of the Company
or such underwriters, as the case may be, from the effective date of such
registration for so long as the Company or the underwriters may specify, but in
any event not to
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exceed 365 days. Optionee agrees to execute and deliver such other documents and
agreements as the Company or such underwriters may reasonably request to further
evidence these commitments.
8. ESCROW. As security for the faithful performance of this Exercise
Agreement, Optionee agrees, immediately upon receipt of the certificate(s)
evidencing the Shares, to deliver such certificate(s), to the Secretary of the
Company or its designee ("Escrow Holder"), who is hereby appointed to hold such
certificate(s) in escrow and to take all such actions and to effectuate all such
transfers and/or releases of such Shares as are in accordance with the terms of
this Exercise Agreement. Optionee and the Company agree that Escrow Holder shall
not be liable to any party to this Exercise Agreement (or to any other party)
for any actions or omissions unless Escrow Holder is grossly negligent relative
thereto. The Escrow Holder may rely upon any letter, notice or other document
executed by any signature reported to be genuine and may rely upon advice of
counsel and obey any order of any court with respect to the transactions
contemplated herein. The Shares shall be released from escrow upon termination
of both the Right of First Refusal set forth in Section 4 and the Repurchase
Option set forth in Section 5; provided, however, that such release shall not
affect the rights of the Company with respect to any pledge of Shares to the
Company. Optionee hereby irrevocably constitutes and appoints Escrow Holder as
Optionee's agent and attorney-in-fact for the purpose of executing and
delivering any and all documents necessary to transfer any Shares purchased
hereunder to the Company pursuant to the terms of this Exercise Agreement and to
record such transfer on the books of the Company, such appointment being made
with full power of substitution in the premises.
9. LEGENDS. Optionee understands and agrees that the certificate(s)
representing the Shares will bear legends in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE GEORGIA SECURITIES ACT OF 1973, AS AMENDED ("GEORGIA
ACT"), UNDER ANY OTHER STATE SECURITIES LAW, OR UNDER THE SECURITIES
ACT OF 1933, AS AMENDED ("FEDERAL ACT"). THESE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
HYPOTHECATED, SOLD OR TRANSFERRED, NOR WILL ANY ASSIGNEE OR
TRANSFEREE THEREOF BE RECOGNIZED BY THE CORPORATION AS HAVING AN
INTEREST IN SUCH SHARES, IN THE ABSENCE OF (I) AN EFFECTIVE
REGISTRATION STATEMENT WITH RESPECT TO THE SHARES UNDER THE FEDERAL
ACT, OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED, AND (II) AN EFFECTIVE
REGISTRATION STATEMENT WITH RESPECT TO THE SHARES UNDER THE GEORGIA
ACT AND UNDER ANY OTHER APPLICABLE STATE LAW, OR AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH SHARES WILL BE
OFFERED FOR SALE, HYPOTHECATED, SOLD OR TRANSFERRED ONLY IN A
TRANSACTION WHICH IS EXEMPT UNDER, OR WHICH IS OTHERWISE IN
COMPLIANCE WITH, THE GEORGIA ACT AND ANY OTHER APPLICABLE STATE
SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THAT
CERTAIN EXERCISE AGREEMENT AND EMPLOYEE SHAREHOLDER AGREEMENT DATED
THE _____ DAY OF _______________, 19___, A COPY OF WHICH IS ON FILE
WITH THE CORPORATION," AND WHICH CONTAINS CERTAIN VESTING
RESTRICTIONS THEREIN.
10. STOP-TRANSFER NOTICES. Optionee understands and agrees that, in
order to ensure compliance with the restrictions referred to herein, the Company
may issue appropriate "stop-transfer" instructions to its transfer agent, if
any, and that, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.
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11. TAX CONSEQUENCES. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER
ADVERSE TAX CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF
THE SHARES. OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX
CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR
ANY FINANCIAL, TAX OR OTHER ADVICE. OPTIONEE ALSO WARRANTS AND REPRESENTS THAT
OPTIONEE HAS CONSULTED WITH A TAX ADVISOR CONCERNING THE POSSIBILITY OF MAKING
AN ELECTION UNDER SECTION 83(B) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, WITH RESPECT TO THE SHARES.
12. ENTIRE AGREEMENT. The Plan and the Option are incorporated herein by
reference. This Exercise Agreement, the Plan and the Option constitute the
entire agreement of the parties and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and are governed by Georgia law except for that body of
law pertaining to conflict of laws.
Submitted by: Accepted by:
OPTIONEE: DIGITAL FURNACE CORPORATION
_______________________________
By:____________________________________
Title:_________________________________
_______________________________
(signature) Dated:_________________________________
Dated:_________________
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