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EXHIBIT 99.5
FORM OF STOCK OPTION AGREEMENT OF PIVOTAL TECHNOLOGIES CORP.
PIVOTAL TECHNOLOGIES CORP.
1998 STOCK OPTION PLAN
STOCK OPTION AGREEMENT -- EARLY EXERCISE ALTERNATIVE
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Stock Option Agreement.
I. PRINCIPAL TERMS OF STOCK OPTION GRANT
You have been granted an option to purchase Common Stock of the
Company, subject to the terms and conditions of the Plan and this Stock Option
Agreement, as follows:
<TABLE>
<S> <C>
Date of Grant
Vesting Commencement Date
Exercise Price per Share $
Total Number of Shares Granted
Total Exercise Price $
Type of Option X Incentive Stock Option
---
--- Nonstatutory Stock Option
Term/Expiration Date
</TABLE>
Vesting Schedule:
SUBJECT TO THE PROVISIONS OF THE PLAN, THIS OPTION MAY BE EXERCISED
IMMEDIATELY, IN WHOLE OR IN PART, CONDITIONED UPON OPTIONEE ENTERING INTO A
RESTRICTED STOCK PURCHASE AGREEMENT WITH RESPECT TO ANY UNVESTED OPTION SHARES.
THE SHARES SUBJECT TO THIS OPTION SHALL VEST, BE RELEASED FROM THE COMPANY'S
REPURCHASE OPTION AND THEREBY BECOME "VESTED SHARES," AS SET FORTH IN THE
RESTRICTED STOCK PURCHASE AGREEMENT, IN ACCORDANCE WITH THE FOLLOWING SCHEDULE:
SUBJECT TO THE PROVISIONS OF THE PLAN, TWENTY-FIVE PERCENT (25%) OF THE
SHARES SUBJECT TO THE OPTION SHALL VEST TWELVE MONTHS AFTER THE VESTING
COMMENCEMENT DATE, AND AN ADDITIONAL ONE FORTY-EIGHTH (1/48TH) OF THE SHARES
SUBJECT TO THE OPTION SHALL VEST ON THE FIRST OF EACH MONTH THEREAFTER.
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Termination Period:
THIS OPTION MAY BE EXERCISED FOR 30 DAYS AFTER TERMINATION OF
OPTIONEE'S EMPLOYMENT OR CONSULTING RELATIONSHIP, OR SUCH LONGER PERIOD AS MAY
BE APPLICABLE UPON DEATH OR DISABILITY OF OPTIONEE AS PROVIDED IN THE PLAN (THE
"TERMINATION PERIOD"), BUT IN NO EVENT LATER THAN THE TERM/EXPIRATION DATE AS
PROVIDED ABOVE.
II. AGREEMENT
1. Grant of Option. Pivotal Technologies Corp., a Delaware corporation
(the "Company"), hereby grants to the Optionee (the "Optionee") named in the
Principal Terms of the Stock Option Grant (the "Principal Terms"), an option
(the "Option") to purchase the total number of shares of Common Stock (the
"Shares") set forth in the Principal Terms, at the exercise price per share set
forth in the Principal Terms (the "Exercise Price") subject to the terms,
definitions and provisions of the Pivotal Technologies Corp. 1998 Stock Option
Plan (the "Plan") adopted by the Company, which is incorporated herein by
reference.
If designated in the Notice of Grant as an Incentive Stock Option, this
Option is intended to qualify as an Incentive Stock Option as defined in Section
422 of the Code. However, if this Option is intended to be an Incentive Stock
Option, to the extent that it exceeds the $100,000 rule of Code Section 422(d)
it shall be treated as a Nonstatutory Stock Option.
2. Exercise of Option. This Option shall be exercisable during its term
and shall vest in accordance with the Vesting Schedule set out in the Principal
Terms and with the provisions of the Plan as follows:
2.1 Right to Exercise.
2.1.1 SUBJECT TO SUBSECTIONS 2.1.2 THROUGH 2.1.5
BELOW, THIS OPTION SHALL BE EXERCISABLE CUMULATIVELY ACCORDING TO THE VESTING
SCHEDULE SET OUT IN THE PRINCIPAL TERMS. ALTERNATIVELY, SUBJECT TO SUBSECTIONS
2.1.2 THROUGH 2.1.5 BELOW, AT THE ELECTION OF THE OPTIONEE, THIS OPTION MAY BE
EXERCISED IN WHOLE OR IN PART AT ANY TIME AS TO SHARES WHICH HAVE NOT YET
VESTED. FOR PURPOSES OF THIS STOCK OPTION AGREEMENT, SHARES SUBJECT TO OPTION
SHALL VEST BASED ON CONTINUED EMPLOYMENT OR CONSULTING RELATIONSHIP OF OPTIONEE
WITH THE COMPANY. VESTED SHARES SHALL NOT BE SUBJECT TO THE COMPANY'S REPURCHASE
RIGHT (AS SET FORTH IN THE RESTRICTED STOCK PURCHASE AGREEMENT, ATTACHED HERETO
AS EXHIBIT 2.1.1).
2.1.2 As a condition to exercising this Option for
unvested Shares, the Optionee shall execute the Restricted Stock Purchase
Agreement attached hereto as Exhibit 2.1.2.
2.1.3 This Option may not be exercised for a fraction
of a Share.
2.1.4 In the event of Optionee's death, disability or
other termination of the employment or consulting relationship, the
exercisability of the Option is governed by Sections 6, 7 and 8 below, subject
to the limitation contained in subsection 2.1.3.
2.1.5 In no event may this Option be exercised after
the date of expiration of the term of this Option as set forth in the Principal
Terms.
2.2 Method of Exercise. This Option shall be exercisable by
written notice (in the form attached as Exhibit 2.2) which shall state the
election to exercise the Option, the number of Shares in respect of which the
Option is being exercised, and such other representations and agreements as to
the holder's investment intent with respect to such shares of Common Stock as
may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by Optionee and together with an executed copy of
the Restricted Stock Purchase Agreement, if applicable, shall be delivered in
person or by certified mail to the Secretary of the
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Company. The written notice and Restricted Stock Purchase Agreement shall be
accompanied by payment of the Exercise Price. This Option shall be deemed to be
exercised upon receipt by the Company of such written notice and Restricted
Stock Purchase Agreement accompanied by the Exercise Price.
No Shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant provisions
of law and the requirements of any stock exchange upon which the Shares may then
be listed. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to Optionee on the date on which the Option is exercised
with respect to such Shares.
3. Optionee's Representations. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion of this Option, deliver to the Company his or her Investment
Representation Statement in the form attached hereto as Exhibit 3.
4. Method of Payment. Payment of the Exercise Price shall be by any of
the following, or a combination thereof, at the election of Optionee: cash,
check or any other legal consideration approved by the committee of the Board of
Directors that administers the Plan.
5. Restrictions On Exercise. THIS OPTION MAY NOT BE EXERCISED UNTIL
SUCH TIME AS THE PLAN HAS BEEN APPROVED BY THE STOCKHOLDERS OF THE COMPANY, OR
IF THE ISSUANCE OF SUCH SHARES UPON SUCH EXERCISE OR THE METHOD OF PAYMENT OF
CONSIDERATION FOR SUCH SHARES WOULD CONSTITUTE A VIOLATION OF ANY APPLICABLE
FEDERAL OR STATE SECURITIES OR OTHER LAW OR REGULATION, INCLUDING ANY RULE UNDER
PART 207 OF TITLE 12 OF THE CODE OF FEDERAL REGULATIONS ("REGULATION G") AS
PROMULGATED BY THE FEDERAL RESERVE BOARD. AS A CONDITION TO THE EXERCISE OF THIS
OPTION, THE COMPANY MAY REQUIRE OPTIONEE TO MAKE ANY REPRESENTATION AND WARRANTY
TO THE COMPANY AS MAY BE REQUIRED BY ANY APPLICABLE LAW OR REGULATION.
6. Termination Of Relationship. IN THE EVENT AN OPTIONEE'S CONTINUOUS
STATUS AS AN EMPLOYEE OR CONSULTANT TERMINATES, OPTIONEE MAY, TO THE EXTENT THE
OPTION WAS VESTED AT THE DATE OF SUCH TERMINATION (THE "TERMINATION DATE"),
EXERCISE THIS OPTION DURING THE TERMINATION PERIOD SET FORTH IN THE PRINCIPAL
TERMS. TO THE EXTENT THAT OPTIONEE WAS NOT VESTED IN THIS OPTION AT THE DATE OF
SUCH TERMINATION, OR IF OPTIONEE DOES NOT EXERCISE THIS OPTION WITHIN THE TIME
SPECIFIED HEREIN, THE OPTION SHALL TERMINATE, AND THE SHARES COVERED BY SUCH
OPTION SHALL REVERT TO THE PLAN.
7. Disability of Optionee. Notwithstanding the provisions of Section 6
above, in the event an Optionee's Continuous Status as an Employee or Consultant
terminates as a result of his or her disability, Optionee may, but only within
six (6) months from the date of such termination (and in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent the Option was vested at the date
of such termination; provided, however, that if such disability is not a
"disability" as such term is defined in Section 22(e)(3) of the Code, in the
case of an Incentive Stock Option, such Incentive Stock Option shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option on the day three months and one day following such
termination. To the extent that Optionee was not vested in the Option at the
date of termination, or if Optionee does not exercise such Option within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
8. Death of Optionee. In the event of termination of Optionee's
Continuous Status as an Employee or Consultant as a result of the death of
Optionee, the Option may, but only within twelve (12) months following the date
of death (and in no event later than the date of expiration of the term of this
Option as set forth in the Option Agreement), be exercised by Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, to the extent Optionee was vested at the date of death.
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To the extent that Optionee is not vested in the Option at the date of
death, or if the Option is not exercised within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.
9. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of Optionee.
10. Company Rights Of First Refusal And Repurchase On Shares. THE
SHARES ISSUABLE UPON EXERCISE OF THIS OPTION ARE SUBJECT TO CERTAIN RIGHTS OF
FIRST REFUSAL IN FAVOR OF THE COMPANY AS SET OUT AT SECTION 4 OF THE EXERCISE
NOTICE AND, IN THE EVENT THIS OPTION IS EXERCISED FOR UNVESTED SHARES, SECTION 1
OF THE RESTRICTED STOCK PURCHASE AGREEMENT ATTACHED HERETO AS EXHIBIT 2.1.1.
11. Lockup Agreement. In consideration of the granting of this Option
to Optionee and regardless of whether Optionee exercises this Option or not,
Optionee agrees, upon the request of the Company or the underwriters managing a
firmly underwritten public 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 of the Shares, any of the Common Stock or any derivative security
thereof (other than those included in the registration) without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed 180 days) from the effective date of such
registration as the Company or underwriters may specify.
12. Term of Option. This Option may be exercised only within the term
set out in the Principal Terms, and may be exercised during such term only in
accordance with the Plan and the terms of this Option. The limitations set out
in Section 7 of the Plan regarding Options designated as Incentive Stock Options
and Options granted to more than ten percent (10%) stockholders shall apply to
this Option.
13. Tax Consequences. Set forth below is a brief summary as of the date
of this Option of some of the federal and state tax consequences of exercise of
this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.
13.1 Exercise of Incentive Stock Option. If this Option
qualifies as an Incentive Stock Option, there will be no regular federal income
tax liability or state income tax liability upon the exercise of the Option,
although the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price will be treated as an adjustment to the
alternative minimum tax for federal tax purposes and may subject Optionee to the
alternative minimum tax in the year of exercise.
13.2 Exercise of Incentive Stock Option Following Disability.
If Optionee's Continuous Status as an Employee or Consultant terminates as a
result of disability that is not total and permanent disability as defined in
Section 22(e)(3) of the Code, to the extent permitted on the date of
termination, Optionee must exercise an Incentive Stock Option within three
months of such termination for the Incentive Stock Option to be qualified as an
Incentive Stock Option.
13.3 Exercise Of Non-Qualified Stock Option. THERE MAY BE A
REGULAR FEDERAL INCOME TAX LIABILITY AND STATE INCOME TAX LIABILITY UPON THE
EXERCISE OF A NON-QUALIFIED STOCK OPTION. OPTIONEE WILL BE TREATED AS HAVING
RECEIVED COMPENSATION INCOME (TAXABLE AT ORDINARY INCOME TAX RATES) EQUAL TO THE
EXCESS, IF ANY, OF THE FAIR MARKET VALUE OF THE SHARES ON THE DATE OF EXERCISE
OVER THE EXERCISE PRICE. IF OPTIONEE IS AN EMPLOYEE OR A FORMER EMPLOYEE, THE
COMPANY WILL BE REQUIRED TO WITHHOLD FROM OPTIONEE'S COMPENSATION OR COLLECT
FROM OPTIONEE AND PAY TO THE APPLICABLE TAXING AUTHORITIES AN AMOUNT IN CASH
EQUAL TO A PERCENTAGE OF THIS COMPENSATION INCOME AT THE TIME OF EXERCISE, AND
MAY REFUSE TO HONOR THE EXERCISE AND REFUSE TO DELIVER SHARES IF SUCH
WITHHOLDING AMOUNTS ARE NOT
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DELIVERED AT THE TIME OF EXERCISE. IF THE OPTIONEE IS SUBJECT TO SECTION 16 OF
THE EXCHANGE ACT, THE DATE OF INCOME RECOGNITION MAY BE DEFERRED FOR UP TO SIX
MONTHS.
13.4 Disposition of Shares. In the case of an Nonstatutory Stock
Option, if Shares are held for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
and state income tax purposes. In the case of an Incentive Stock Option, if
Shares transferred pursuant to the Option are held for at least one year after
exercise and are disposed of at least two years after the Date of Grant, any
gain realized on disposition of the Shares will also be treated as long-term
capital gain for federal and California income tax purposes. If Shares purchased
under an Incentive Stock Option are disposed of within such one-year period or
within two years after the Date of Grant, any gain realized on such disposition
will be treated as compensation income (taxable at ordinary income rates) to the
extent of the difference between the Exercise Price and the lesser of (1) the
Fair Market Value of the Shares on the date of exercise, or (2) the sale price
of the Shares.
13.5 Notice of Disqualifying Disposition of Incentive Stock Option
Shares. If the Option granted to Optionee herein is an Incentive Stock Option,
and if Optionee sells or otherwise disposes of any of the Shares acquired
pursuant to the Incentive Stock Option on or before the later of (1) the date
two years after the Date of Grant, or (2) the date one year after the date of
exercise, Optionee shall immediately notify the Company in writing of such
disposition. Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by Optionee.
13.6 Section 83(B) Election For Unvested Shares Purchased Pursuant To
Nonqualified Stock Options. WITH RESPECT TO THE EXERCISE OF A NONQUALIFIED STOCK
OPTION FOR UNVESTED SHARES, AN ELECTION MAY BE FILED BY THE OPTIONEE WITH THE
INTERNAL REVENUE SERVICE AND, IF NECESSARY, THE PROPER STATE TAXING AUTHORITIES,
WITHIN 30 DAYS OF THE PURCHASE OF THE SHARES, ELECTING PURSUANT TO SECTION 83(B)
OF THE CODE (AND SIMILAR STATE TAX PROVISIONS IF APPLICABLE) TO BE TAXED
CURRENTLY ON ANY DIFFERENCE BETWEEN THE PURCHASE PRICE OF THE SHARES AND THEIR
FAIR MARKET VALUE ON THE DATE OF PURCHASE. THIS WILL RESULT IN A RECOGNITION OF
TAXABLE INCOME TO THE OPTIONEE ON THE DATE OF EXERCISE, MEASURED BY THE EXCESS,
IF ANY, OF THE FAIR MARKET VALUE OF THE SHARES, AT THE TIME THE OPTION IS
EXERCISED OVER THE PURCHASE PRICE FOR THE SHARES. ABSENT SUCH AN ELECTION,
TAXABLE INCOME WILL BE MEASURED AND RECOGNIZED BY OPTIONEE AT THE TIME OR TIMES
ON WHICH THE COMPANY'S REPURCHASE OPTION LAPSES. OPTIONEE IS STRONGLY ENCOURAGED
TO SEEK THE ADVICE OF HIS OR HER OWN TAX CONSULTANTS IN CONNECTION WITH THE
PURCHASE OF THE SHARES AND THE ADVISABILITY OF FILING OF THE ELECTION UNDER
SECTION 83(B) AND SIMILAR TAX PROVISIONS. A FORM OF ELECTION UNDER SECTION 83(B)
IS ATTACHED HERETO AS EXHIBIT 8(A) FOR REFERENCE.
13.7 SECTION 83(B) ELECTION FOR UNVESTED SHARES PURCHASED PURSUANT TO
INCENTIVE STOCK OPTIONS. WITH RESPECT TO THE EXERCISE OF AN INCENTIVE STOCK
OPTION FOR UNVESTED SHARES, AN ELECTION MAY BE FILED BY THE OPTIONEE WITH THE
INTERNAL REVENUE SERVICE AND, IF NECESSARY, THE PROPER STATE TAXING AUTHORITIES,
WITHIN 30 DAYS OF THE PURCHASE OF THE SHARES, ELECTING PURSUANT TO SECTION 83(B)
OF THE CODE (AND SIMILAR STATE TAX PROVISIONS IF APPLICABLE) TO BE TAXED
CURRENTLY ON ANY DIFFERENCE BETWEEN THE PURCHASE PRICE OF THE SHARES AND THEIR
FAIR MARKET VALUE ON THE DATE OF PURCHASE FOR ALTERNATIVE MINIMUM TAX PURPOSES.
THIS WILL RESULT IN A RECOGNITION OF INCOME TO THE OPTIONEE ON THE DATE OF
EXERCISE, FOR ALTERNATIVE MINIMUM TAX PURPOSES, MEASURED BY THE EXCESS, IF ANY,
OF THE FAIR MARKET VALUE OF THE SHARES, AT THE TIME THE OPTION IS EXERCISED,
OVER THE PURCHASE PRICE FOR THE SHARES. ABSENT SUCH AN ELECTION, ALTERNATIVE
MINIMUM TAXABLE INCOME WILL BE MEASURED AND RECOGNIZED BY OPTIONEE AT THE TIME
OR TIMES ON WHICH THE COMPANY'S REPURCHASE OPTION LAPSES. OPTIONEE IS STRONGLY
ENCOURAGED TO SEEK THE ADVICE OF HIS OR HER TAX CONSULTANTS IN CONNECTION WITH
THE PURCHASE OF THE SHARES AND THE ADVISABILITY OF FILING OF THE ELECTION UNDER
SECTION 83(B) AND SIMILAR TAX PROVISIONS. A FORM OF ELECTION UNDER SECTION 83(B)
FOR ALTERNATIVE MINIMUM TAX PURPOSES IS ATTACHED HERETO AS EXHIBIT 8(B) FOR
REFERENCE.
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OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE'S SOLE RESPONSIBILITY AND NOT
THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF OPTIONEE
REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON OPTIONEE'S
BEHALF.
14. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, including but not limited to the grant or
promise of any right or option to purchase shares of capital stock of the
Company to Optionee pursuant to any employment agreement or offer letter
delivered by the Company to Optionee or otherwise, and may not be modified
adversely to Optionee's interest except by means of a writing signed by the
Company and Optionee. This agreement is governed by California law except for
that body of law pertaining to conflict of laws.
PIVOTAL TECHNOLOGIES CORP.
a Delaware corporation
By:____________________________
Title:_________________________
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OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE
WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS
OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S 1998 STOCK OPTION PLAN
WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT
WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR
SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT
CAUSE.
OPTIONEE ACKNOWLEDGES AND AGREES THAT THIS OPTION HEREBY ENTIRELY
SUPERSEDES ANY OPTION FOR THE SAME NUMBER OF SHARES PREVIOUSLY PURPORTED TO BE
GRANTED TO OPTIONEE.
Optionee acknowledges receipt of a copy of the Plan and represents that
he is familiar with the terms and provisions thereof, and hereby accepts this
Option subject to all of the terms and provisions thereof. Optionee has reviewed
the Plan and this Option in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option and fully understands all
provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions arising under the Plan or this Option. Optionee further agrees to
notify the Company upon any change in the residence address indicated below.
Dated: ________________ ___________________________
Optionee
Residence Address:
___________________________
___________________________
___________________________
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CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and hereby approves the
terms and conditions of the Plan and this Option Agreement. In consideration of
the Company's granting his or her spouse the right to purchase Shares as set
forth in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.
Dated: ____________________
___________________________
Spouse of Optionee
___________________________
[Print Name]
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EXHIBIT 2.1.1
1998 STOCK OPTION PLAN
RESTRICTED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made between ____________________
("Purchaser") and PIVOTAL TECHNOLOGIES CORP. (the "Company") as of
_____________, 199___.
RECITALS
(1) Pursuant to the exercise of the stock option granted to
Purchaser under the Company's 1998 Stock Option Plan(the "Plan") and pursuant to
the Stock Option Agreement (the "Option Agreement") dated ____________________,
19__ by and between the Company and Purchaser with respect to such grant, which
Option Agreement is hereby incorporated by reference, Purchaser has elected to
purchase _____________________ of those shares which have not become vested
under the vesting schedule set forth in the Option Agreement ("Unvested
Shares"). The Unvested Shares and the shares subject to the Option Agreement
which have become vested are sometimes collectively referred to herein as the
"Shares."
(2) As required by the Option Agreement, as a condition to
Purchaser's election to exercise the option, Purchaser must execute this
Restricted Stock Purchase Agreement, which sets forth the rights and obligations
of the parties with respect to Shares acquired upon exercise of the Option.
1. Repurchase Option.
1.1 IF PURCHASER'S EMPLOYMENT OR CONSULTING
RELATIONSHIP WITH THE COMPANY IS TERMINATED FOR ANY REASON, INCLUDING FOR CAUSE,
DEATH, AND DISABILITY, AND SUBJECT TO THE PROVISIONS OF THE PLAN, THE COMPANY
SHALL HAVE THE RIGHT AND OPTION TO PURCHASE FROM PURCHASER, OR PURCHASER'S
PERSONAL REPRESENTATIVE, AS THE CASE MAY BE, ALL OF THE PURCHASER'S UNVESTED
SHARES AS OF THE DATE OF SUCH TERMINATION AT THE PRICE PAID BY THE PURCHASER FOR
SUCH SHARES (THE "REPURCHASE OPTION").
1.2 UPON THE OCCURRENCE OF A TERMINATION, THE COMPANY
MAY EXERCISE ITS REPURCHASE OPTION BY DELIVERING PERSONALLY OR BY REGISTERED
MAIL, TO PURCHASER (OR HIS TRANSFEREE OR LEGAL REPRESENTATIVE, AS THE CASE MAY
BE), WITHIN NINETY (90) DAYS OF THE TERMINATION, A NOTICE IN WRITING INDICATING
THE COMPANY'S INTENTION TO EXERCISE THE REPURCHASE OPTION AND SETTING FORTH A
DATE FOR CLOSING NOT LATER THAN THIRTY (30) DAYS FROM THE MAILING OF SUCH
NOTICE. THE CLOSING SHALL TAKE PLACE AT THE COMPANY'S OFFICE. AT THE CLOSING,
THE HOLDER OF THE CERTIFICATES FOR THE UNVESTED SHARES BEING TRANSFERRED SHALL
DELIVER THE STOCK CERTIFICATE OR CERTIFICATES EVIDENCING THE UNVESTED SHARES,
AND THE COMPANY SHALL DELIVER THE PURCHASE PRICE THEREFOR.
1.3 At its option, the Company may elect to make
payment for the Unvested Shares to a bank selected by the Company or by
cancellation of any indebtedness of Purchaser to the Company. The Company shall
avail itself of this option by a notice in writing to Purchaser stating the name
and address of the bank, if applicable, date of closing, and waiving the closing
at the Company's office.
1.4 If the Company does not elect to exercise the
Repurchase Option conferred above by giving the requisite notice within ninety
(90) days following the termination, the Repurchase Option shall terminate.
1.5 THE REPURCHASE OPTION SHALL TERMINATE IN
ACCORDANCE WITH THE VESTING SCHEDULE IN OPTIONEE'S STOCK OPTION AGREEMENT.
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2. Transferability of the Shares; Escrow.
2.1 Purchaser hereby authorizes and directs the
secretary of the Company, or such other person designated by the Company, to
transfer the Unvested Shares as to which the Repurchase Option has been
exercised from Purchaser to the Company.
2.2 To insure the availability for delivery of
Purchaser's Unvested Shares upon repurchase by the Company pursuant to the
Repurchase Option under Section 1, Purchaser hereby appoints the secretary, or
any other person designated by the Company as escrow agent, as its
attorney-in-fact to sell, assign and transfer unto the Company, such Unvested
Shares, if any, repurchased by the Company pursuant to the Repurchase Option and
shall, upon execution of this Agreement, deliver and deposit with the secretary
of the Company, or such other person designated by the Company, the share
certificates representing the Unvested Shares, together with the stock
assignment duly endorsed in blank, attached hereto as Exhibit 2.2A. The Unvested
Shares and stock assignment shall be held by the secretary in escrow, pursuant
to the Joint Escrow Instructions of the Company and Purchaser attached as
Exhibit 2.2.B hereto, until the Company exercises its purchase right as provided
in Section 1, until such Unvested Shares are vested, or until such, time as this
Agreement no longer is in effect. As a further condition to the Company's
obligations under this Agreement, the spouse of the Purchaser, if any, shall
execute and deliver to the Company the Consent of Spouse attached hereto as
Exhibit 2.2.C. Upon vesting of the Unvested Shares, the escrow agent shall
promptly deliver to the Purchaser the certificate or certificates representing
such Shares in the escrow agent's possession belonging to the Purchaser, and the
escrow agent shall be discharged of all further obligations hereunder; provided,
however, that the escrow agent shall nevertheless retain such certificate or
certificates as escrow agent if so required pursuant to other restrictions
imposed pursuant to this Agreement.
2.3 The Company, or its designee, shall not be liable
for any act it may do or omit to do with respect to holding the Shares in escrow
and while acting in good faith and in the exercise of its judgment.
2.4 Transfer or sale of the Shares is subject to
restrictions on transfer imposed by any applicable state and federal securities
laws. Any transferee shall hold such Shares subject to all the provisions hereof
and the Exercise Notice executed by the Purchaser with respect to any Unvested
Shares purchased by Purchaser and shall acknowledge the same by signing a copy
of this Agreement.
3. Ownership, Voting Rights, Duties. This Agreement shall not
affect in any way the ownership, voting rights or other rights or duties of
Purchaser, except as specifically provided herein.
4. Legends. The share certificate evidencing the Shares issued
hereunder shall be endorsed with the following legend (in addition to any legend
required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND RIGHTS OF FIRST REFUSAL
AND REPURCHASE HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET
FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE
ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE
OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
RESTRICTIONS, RIGHTS OF FIRST REFUSAL AND REPURCHASE ARE
BINDING ON TRANSFEREES OF THESE SHARES.
5. Adjustment for Stock Split. All references to the number of
Shares and the purchase price of the Shares in this Agreement shall be
appropriately adjusted to reflect any stock split, stock dividend or other
change in the Shares which may be made by the Company after the date of this
Agreement.
6. Notices. Notices required hereunder shall be given in
person or by registered mail to the address of Purchaser shown on the records of
the Company, and to the Company at their respective principal executive offices.
<PAGE> 11
7. Survival of Terms. This Agreement shall apply to and bind
Purchaser and the Company and their respective permitted assignees and
transferees, heirs, legatees, executors, administrators and legal successors.
8. Section 83(b) Elections.
PURCHASER HEREBY ACKNOWLEDGES THAT HE OR SHE HAS BEEN INFORMED
THAT, WITH RESPECT TO THE EXERCISE OF A NONQUALIFIED STOCK OPTION FOR UNVESTED
SHARES, THAT UNLESS AN ELECTION IS FILED BY THE PURCHASER WITH THE INTERNAL
REVENUE SERVICE AND, IF NECESSARY, THE PROPER STATE TAXING AUTHORITIES, WITHIN
30 DAYS OF THE PURCHASE OF THE SHARES, ELECTING PURSUANT TO SECTION 83(B) OF THE
CODE (AND SIMILAR STATE TAX PROVISIONS IF APPLICABLE) TO BE TAXED CURRENTLY ON
ANY DIFFERENCE BETWEEN THE PURCHASE PRICE OF THE SHARES AND THEIR FAIR MARKET
VALUE ON THE DATE OF PURCHASE, THERE WILL BE A RECOGNITION OF TAXABLE INCOME TO
THE OPTIONEE, MEASURED BY THE EXCESS, IF ANY, OF THE FAIR MARKET VALUE OF THE
SHARES, AT THE TIME THE COMPANY'S REPURCHASE OPTION LAPSES OVER THE PURCHASE
PRICE FOR THE SHARES. OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED ANY TAX
CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OF THE
SHARES OR THE FILING OF THE ELECTION UNDER SECTION 83(B) AND SIMILAR TAX
PROVISIONS. FORMS OF ELECTION UNDER SECTION 83(B) ARE ATTACHED HERETO AS
EXHIBITS 8(A) and 8(B) FOR REFERENCE.
PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b), EVEN IF PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS
FILING ON PURCHASER'S BEHALF.
9. Representations. PURCHASER HAS REVIEWED WITH HIS OWN TAX
ADVISORS THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THIS
INVESTMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. PURCHASER IS
RELYING SOLELY ON SUCH ADVISORS AND NOT ON ANY STATEMENTS OR REPRESENTATIONS OF
THE COMPANY OR ANY OF ITS AGENTS. PURCHASER UNDERSTANDS THAT HE (AND NOT THE
COMPANY) SHALL BE RESPONSIBLE FOR HIS OWN TAX LIABILITY THAT MAY ARISE AS A
RESULT OF THIS INVESTMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
10. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with applicable state laws.
Purchaser represents that he has read this Agreement and is
familiar with its terms and provisions. Purchaser hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board upon
any questions arising under this Agreement.
<PAGE> 12
IN WITNESS WHEREOF, this Agreement is deemed made as of the
date first set forth above.
"COMPANY"
PIVOTAL TECHNOLOGIES CORP.
By:________________________
Title:_____________________
"PURCHASER"
___________________________
Address:___________________
___________________________
Soc. Sec. No.:_____________
<PAGE> 13
EXHIBIT 2.2
1998 STOCK OPTION PLAN
EXERCISE NOTICE
Pivotal Technologies Corp.
70 South Lake Avenue, Suite 900
Pasadena, California 91101
Attention: Secretary
1. Exercise of Option. Effective as of today, ___________, 19__, the
undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase
_________ shares of the Common Stock (the "Shares") of Pivotal Technologies
Corp. (the "Company") under and pursuant to the Pivotal Technologies Corp. 1998
Stock Option Plan, (the "Plan") and the [ ] Incentive [ ] Non-qualified Stock
Option Agreement dated _______________, 19___ (the "Option Agreement"). All
capitalized terms not defined in this Exercise Notice shall have the meaning set
forth in the Option Agreement or the Plan.
2. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
3. Rights as Stockholder. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such stock certificate promptly
after the Option is exercised. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock certificate
is issued, except as provided in Section 11 of the Plan.
Optionee shall enjoy rights as a stockholder until such time as Optionee
disposes of the Shares or the Company and/or its assignee(s) exercises the Right
of First Refusal or Right of Repurchase hereunder. Upon such exercise, Optionee
shall have no further rights as a holder of the Shares so purchased except the
right to receive payment for the Shares so purchased in accordance with the
provisions of this Agreement, and Optionee shall forthwith cause the
certificate(s) evidencing the Shares so purchased to be surrendered to the
Company for transfer or cancellation.
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 OR ITS ASSIGNEE(S) SHALL HAVE A RIGHT OF FIRST REFUSAL TO
PURCHASE THE SHARES ON THE TERMS AND CONDITIONS SET FORTH IN THIS SECTION (THE
"RIGHT OF FIRST REFUSAL").
4.1 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") and a copy
of an executed agreement between the Holder and the Proposed Transferee for
transfer of such Shares; (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"), and
the Holder shall offer the Shares at the Offered Price to the Company or its
assignee(s).
4.2 Exercise of Right of First Refusal. AT ANY TIME WITHIN THIRTY
(30) DAYS AFTER RECEIPT OF THE NOTICE, THE COMPANY AND/OR ITS ASSIGNEE(S) MAY,
BY GIVING WRITTEN NOTICE TO THE HOLDER, ELECT TO PURCHASE ALL, BUT NOT LESS THAN
ALL, OF THE
<PAGE> 14
SHARES PROPOSED TO BE TRANSFERRED TO ANY ONE OR MORE OF THE PROPOSED
TRANSFEREES, AT THE PURCHASE PRICE DETERMINED IN ACCORDANCE WITH SUBSECTION 4.3
BELOW.
4.3 Purchase Price. THE PURCHASE PRICE ("PURCHASE PRICE") FOR THE
SHARES PURCHASED BY THE COMPANY OR ITS ASSIGNEE(S) UNDER THIS SECTION SHALL BE
THE LOWER OF THE OFFERED PRICE AND A PRICE PER SHARE EQUAL TO THE PRICE AT WHICH
OPTIONS FOR SHARES OF COMMON STOCK HAVE MOST RECENTLY BEEN GRANTED TO AN
EMPLOYEE PRIOR TO DELIVERY OF THE NOTICE. IF THE OFFERED PRICE INCLUDES
CONSIDERATION OTHER THAN CASH, THE CASH EQUIVALENT VALUE OF THE NON-CASH
CONSIDERATION SHALL BE DETERMINED BY THE BOARD OF DIRECTORS OF THE COMPANY IN
GOOD FAITH.
4.4 Payment. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within thirty-five (35) days after receipt of the Notice or
in the manner and at the times set forth in the Notice.
4.5 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(s) as provided in this Section, then the Holder may
sell or otherwise transfer such Shares to that Proposed Transferee at the
Offered Price, provided that such sale or other transfer is consummated within
sixty (60) 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 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 and/or its assignees shall again be offered the Right
of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.
4.6 Exception for Certain Family Transfers. NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED IN THIS SECTION, THE TRANSFER OF ANY OR ALL OF THE
SHARES THAT ARE AT THE TIME OF SUCH TRANSFER VESTED DURING OPTIONEE'S LIFETIME
OR ON OPTIONEE'S DEATH BY WILL OR INTESTACY TO OPTIONEE'S IMMEDIATE FAMILY OR A
TRUST FOR THE BENEFIT OF OPTIONEE'S IMMEDIATE FAMILY SHALL BE EXEMPT FROM THE
PROVISIONS OF THIS SECTION PROVIDED THAT THE COMPANY IS NOTIFIED IN WRITING OF
SAID TRANSFER WITHIN THIRTY (30) DAYS OF SAID TRANSFER. "IMMEDIATE FAMILY" AS
USED HEREIN SHALL MEAN SPOUSE, LINEAL DESCENDANT OR ANTECEDENT, FATHER, MOTHER,
BROTHER OR SISTER. IN SUCH CASE, THE TRANSFEREE OR OTHER RECIPIENT SHALL RECEIVE
AND HOLD THE SHARES SO TRANSFERRED SUBJECT TO THE PROVISIONS OF THIS SECTION AND
SECTION 5 BELOW, AND THERE SHALL BE NO FURTHER TRANSFER OF SUCH SHARES EXCEPT IN
ACCORDANCE WITH THE TERMS OF THIS SECTION OR SECTION 5 BELOW.
4.7 Termination of Right of First Refusal. THE RIGHT OF FIRST
REFUSAL SHALL TERMINATE AS TO ANY SHARES UPON THE CLOSING OF: (I) 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 UNDER THE SECURITIES ACT OF 1933, AS AMENDED; (II) THE SALE OF ALL OR
SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY; OR (III) THE MERGER,
CONSOLIDATION OR OTHER REORGANIZATION OF THE COMPANY WITH OR INTO ANY OTHER
CORPORATION OR CORPORATIONS IN WHICH THE HOLDERS OF THE CAPITAL STOCK OF THE
COMPANY IMMEDIATELY PRIOR TO SUCH TRANSACTION HOLD LESS THAN FIFTY PERCENT (50%)
OF THE VOTING SECURITIES OF THE SURVIVING CORPORATION AFTER SUCH TRANSACTION.
5. Tax Consultation. 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 CONSULTANTS
<PAGE> 15
OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE
SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.
6. Restrictive Legends and Stop-Transfer Orders.
6.1 Legends. Optionee understands and agrees that the Company shall
cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares together
with any other legends that may be required by the Company or by state or
federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND RIGHTS OF FIRST REFUSAL AND REPURCHASE
HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE
NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A
COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER.
SUCH TRANSFER RESTRICTIONS, RIGHTS OF FIRST REFUSAL AND REPURCHASE
ARE BINDING ON TRANSFEREES OF THESE SHARES.
6.2 Stop-Transfer Notices. Optionee 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.
6.3 Refusal to Transfer. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.
7. Successors and Assigns. The Company may assign any of its rights under
this Agreement to single or multiple assignees, and this Agreement shall inure
to the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
Optionee and his or her heirs, executors, administrators, successors and
assigns.
8. Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by Optionee or by the Company forthwith to the
Company's Board of Directors or the committee thereof that administers the Plan
, which shall review such dispute at its next regular meeting. The resolution of
such a dispute by the Board or committee shall be final and binding on the
Company and on Optionee.
9. Governing Law; Severability. This Agreement shall be governed by and
construed in accordance with the laws of the State of California excluding that
body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.
<PAGE> 16
10. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.
11. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
12. Delivery of Payment. Optionee herewith delivers to the Company the
full Exercise Price for the Shares.
13. Entire Agreement. The Plan and Principal Terms/Option Agreement are
incorporated herein by reference. This Agreement, the Plan, the Option
Agreement, the Restricted Stock Purchase Agreement and the Investment
Representation Statement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and may not be modified adversely to the Optionee's
interest except by means of a writing signed by the Company and Optionee.
Submitted by: Accepted by:
OPTIONEE: PIVOTAL TECHNOLOGIES CORP.
By:
(Signature) Its:
SPOUSE OF OPTIONEE (if any)
(Signature)
Address Address
70 South Lake Avenue, Suite 900
Pasadena, California 91101
<PAGE> 17
EXHIBIT 2.2.A
TO RESTRICTED STOCK PURCHASE AGREEMENT
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, _________________________________, hereby
sell, assign and transfer unto _______________ (______) shares of the Common
Stock of Pivotal Technologies Corp. standing in my name of the books of said
corporation represented by Certificate No. herewith and do hereby irrevocably
constitute and appoint __________________ to transfer the said stock on the
books of the within named corporation with full power of substitution in the
premises.
This Stock Assignment may be used only in accordance with the
Restricted Stock Purchase Agreement between Pivotal Technologies Corp. and
the undersigned dated _________, 19___.
Dated: ___________, 19___
Signature:
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
"repurchase option, "as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.
<PAGE> 18
EXHIBIT 2.2.B
TO RESTRICTED STOCK PURCHASE AGREEMENT
JOINT ESCROW INSTRUCTIONS
____________, 19____
Pivotal Technologies Corp.
70 South Lake Avenue, Suite 900
Pasadena, California 91101
Attention: Secretary
Dear Secretary:
As Escrow Agent for both Pivotal Technologies Corp. (the "Company"),
and the undersigned purchaser of stock of the Company (the "Purchaser"), you are
hereby authorized and directed to hold the documents delivered to you pursuant
to the terms of that certain Restricted Stock Purchase Agreement ("Agreement")
between the Company and the undersigned, in accordance with the following
instructions:
1. In the event the Company and/or any assignee of the Company
(referred to collectively for convenience herein as the "Company") exercises the
Company's repurchase option set forth in the Agreement, the Company shall give
to Purchaser and you a written notice specifying the number of shares of stock
to be purchased, the purchase price, and the time for a closing hereunder at the
principal office of the Company. Purchaser and the Company hereby irrevocably
authorize and direct you to close the transaction contemplated by such notice in
accordance with the terms of said notice.
2. At the closing, you are directed (a) to date the stock
assignments necessary for the transfer in question, (b) to fill in the number of
shares being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, against the simultaneous delivery to you of the purchase price for the
number of shares of stock being purchased pursuant to the exercise of the
Company's repurchase option.
3. Purchaser irrevocably authorizes the Company to deposit with you
any certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer of,
the securities. Subject to the provisions of this paragraph 3, Purchaser shall
exercise all rights and privileges of a stockholder of the Company while the
stock is held by you.
4. Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's repurchase option has been exercised, you
will deliver to Purchaser a certificate or certificates representing so many
shares of stock as are not then subject to the Company's repurchase option.
Within 120 days after cessation of Purchaser's continuous employment by or
consulting services to the Company, or any parent or subsidiary of the Company,
you will deliver to Purchaser a certificate or certificates representing the
aggregate number of shares held or issued pursuant to the Agreement and not
purchased by the Company or its assignees pursuant to exercise of the Company's
repurchase option.
5. If at the time of termination of this escrow you should have in
your possession any documents, securities, or other property belonging to
Purchaser, you shall deliver all of the same to Purchaser and shall be
discharged of all further obligations hereunder.
<PAGE> 19
6. Your duties hereunder may be altered, amended, modified or
revoked only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith,
and any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree, you
shall not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the
identity, authorities or rights of the parties executing or delivering or
purporting to execute or deliver the Agreement or any documents or papers
deposited or called for hereunder.
10. You shall not be liable for the outlawing of any rights under
the Statute of Limitations with respect to these Joint Escrow Instructions or
any documents deposited with you.
11. You shall be entitled to employ such legal counsel and other
experts as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.
12. Your responsibilities as Escrow Agent hereunder shall terminate
if you shall cease to be an officer or agent of the Company or if you shall
resign by written notice to each party. In the event of any such termination,
the Company shall appoint a successor Escrow Agent.
13. If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
15. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties hereunto
entitled at the following addresses or at such other addresses as a party may
designate by ten days' advance written notice to each of the other parties
hereto.
COMPANY: Corporate Secretary
Pivotal Technologies Corp.
70 South Lake Avenue, Suite 900
Pasadena, California 91101
<PAGE> 20
Attention: Secretary
PURCHASER:
ESCROW AGENT: Pivotal Technologies Corp.
70 South Lake Avenue, Suite 900
Pasadena, California 91101
Attention: Secretary
16. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.
17. This instrument shall be binding upon and inure to the benefit
of the parties hereto, and their respective successors and permitted assigns.
<PAGE> 21
18. These Joint Escrow Instructions shall be governed by, and
construed and enforced in accordance with, the laws of the State of California.
PIVOTAL TECHNOLOGIES CORP.
By:
Title:
Purchaser:
(Signature)
(Typed or Printed Name)
Escrow Agent:
PIVOTAL TECHNOLOGIES CORP.
By:
Title: Secretary
<PAGE> 22
EXHIBIT 2.2.C
TO RESTRICTED STOCK PURCHASE AGREEMENT
CONSENT OF SPOUSE
I, ______________, spouse of _____________________________, have
read and approve the foregoing Agreement. In consideration of granting of the
right to my spouse to purchase shares of Pivotal Technologies Corp., as set
forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact in
respect to the exercise of any rights under the Agreement and agree to be bound
by the provisions of the Agreement insofar as I may have any rights in said
Agreement or any shares issued pursuant thereto under the community property
laws or similar laws relating to marital property in effect in the state of our
residence as of the date of the signing of the foregoing Agreement.
Dated: _______________, 19___
[Print Name]
<PAGE> 23
EXHIBIT 3
INVESTMENT REPRESENTATION STATEMENT
<TABLE>
<S> <C> <C>
OPTIONEE :
COMPANY : PIVOTAL TECHNOLOGIES CORP.
SECURITY : COMMON STOCK
AMOUNT :
DATE :
</TABLE>
In connection with the purchase of the above-listed Securities, the
undersigned Optionee represents to the Company the following:
(1) Optionee is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Securities. Optionee
is acquiring these Securities for investment for Optionee's own 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").
(2) Optionee acknowledges and understands that the Securities
constitute "restricted securities" under the Securities Act and have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of Optionee's investment intent as expressed herein. In this connection,
Optionee understands that, in the view of the Securities and Exchange
Commission, the statutory basis for such exemption may be unavailable if
Optionee's representation was predicated solely upon a present intention to hold
these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to register
the Securities. Optionee understands that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is not required in
the opinion of counsel satisfactory to the Company, a legend prohibiting their
transfer without the consent of the Commissioner of Corporations of the State of
California and any other legend required under applicable state securities laws.
(3) Optionee is familiar with the provisions of Rule 701 and Rule
144, each promulgated under the Securities Act, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of the grant of the Option to Optionee, the
exercise will be exempt from registration under the Securities Act. In the event
the Company becomes subject to the reporting requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such
longer period as any market stand-off agreement may require) the Securities
exempt under Rule 701 may be resold, subject to the satisfaction of certain of
the conditions specified by Rule 144, including: (1) the resale being made
through a broker in an unsolicited "broker's transaction" or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934); and, in the case of an affiliate, (2) the availability of
certain public information about the Company, (3) the amount of Securities being
sold during any three month period not exceeding the limitations specified in
Rule 144(e), and (4) the timely filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701
at the time of grant of the Option, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144,
<PAGE> 24
which requires the resale to occur not less than one year after the later of the
date the Securities were sold by the Company or the date the Securities were
sold by an affiliate of the Company, within the meaning of Rule 144; and, in the
case of acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than two years, the satisfaction of the
conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.
(4) Optionee hereby agrees that if so requested by the Company or
any representative of the underwriters in connection with any registration of
the offering of any securities of the Company under the Securities Act, Optionee
shall not sell, make any short sale of, loan, grant any option for the purchase
of or otherwise dispose of any of the Shares, any of the Common Stock or any
derivative security thereof (other than those included in the registration)
without the prior written consent of the Company or such underwriters, as the
case may be, for such period of time (not to exceed 180 days) from the effective
date of such registration as the Company or underwriters may specify. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such 180-day period.
<PAGE> 25
(5) Optionee further understands that in the event all of the
applicable requirements of Rule 701 or 144 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.
Signature of Optionee:
Date: ________________, 19__
<PAGE> 26
EXHIBIT 8(A) (TO BE USED WITH NON-STATUTORY OPTIONS)
TO RESTRICTED STOCK PURCHASE AGREEMENT
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income
for the current taxable year the amount of any compensation taxable to taxpayer
in connection with taxpayer's receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year of the
undersigned are as follows:
<TABLE>
<S> <C> <C>
NAME: TAXPAYER: SPOUSE:
ADDRESS:
IDENTIFICATION NO.: TAXPAYER: SPOUSE:
TAXABLE YEAR:
</TABLE>
2. The property with respect to which the election is made is described as
follows: _________ shares (the "Shares") of the Common Stock of PIVOTAL
TECHNOLOGIES CORP. (the "Company").
3. The date on which the property was transferred is: ______________, 19____.
4. The property is subject to the following restrictions:
The Shares may not be transferred and are subject to forfeiture under the
terms of an agreement between the taxpayer and the Company. These
restrictions lapse upon the satisfaction of certain conditions contained
in such agreement.
5. The fair market value at the time of transfer, determined without regard
to any restriction other than a restriction which by its terms will never
lapse, of such property is:
$________________________.
6. The amount (if any) paid for such property is:
$________________________.
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.
Dated:___________________, 19____
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated:___________________, 19____
Spouse of Taxpayer
<PAGE> 27
EXHIBIT 8(B) (TO BE USED WITH INCENTIVE STOCK OPTIONS)
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to the provisions of Sections
55-56 and 83(b) of the Internal Revenue Code of 1986, as amended, to include in
taxpayer's alternative minimum taxable income for the current taxable year, as
compensation for services, the excess, if any, of the fair market value of the
property described below at the time of transfer over the amount paid for such
property.
1. The name, address, taxpayer identification number and taxable year of the
undersigned are as follows:
<TABLE>
<S> <C> <C>
NAME: TAXPAYER: SPOUSE:
ADDRESS:
IDENTIFICATION NO.: TAXPAYER: SPOUSE:
TAXABLE YEAR:
</TABLE>
2. The property with respect to which the election is made is described as
follows: shares (the "Shares") of the Common Stock of PIVOTAL TECHNOLOGIES
CORPORATION (the "Company").
3. The date on which the property was transferred is: .
4. The property is subject to the following restrictions:
The Shares may be repurchased by the Company, or its assignee, at its
original purchase price, on certain events. This right lapses with regard
to a portion of the Shares over time.
5. The fair market value at the time of transfer, determined without regard
to any restriction other than a restriction which by its terms will never
lapse, of such property is:
$_______________
6. The amount paid for such property is:
$_______________
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.
Dated:___________________, 19____
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated:___________________, 19____
Spouse of Taxpayer
