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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission File Number 0-19640
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RETIX
(Exact name of Registrant as specified in its charter)
CALIFORNIA 95-3948704
(State or other jurisdiction of ( I.R.S. Employer Identification Number)
incorporation or organization)
2401 COLORADO AVENUE
SANTA MONICA, CALIFORNIA 90404
(Address of principal executive offices)
Registrant's telephone number, including area code: (310) 828-3400
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period as the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past ninety days.
YES X NO
---- ----
As of May 10, 1996 there were 22,077,485 shares of common stock
outstanding.
Total number of sequential pages: 13
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RETIX
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
ASSETS
DECEMBER 31, MARCH 31,
1995 1996
---- ----
Current assets: (unaudited)
Cash and short-term investments. . . . . . . . . $14,950 $17,050
Trade accounts receivable (net of allowances
of $1,878 as of December 31, 1995 and
$1,778 as of March 31, 1996) . . . . . . . . . 5,445 5,269
Inventories. . . . . . . . . . . . . . . . . . . 2,855 3,350
Prepaid expenses and other current assets. . . . 1,730 1,689
--------- --------
Total current assets . . . . . . . . . . . . . . . . 24,980 27,358
Property and equipment, net . . . . . . . . . . . . . 3,073 2,871
Other assets . . . . . . . . . . . . . . . . . . . . 1,345 1,349
--------- --------
$29,398 $31,578
--------- --------
--------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term obligations . . . . . $ 54 $ 38
Accounts payable . . . . . . . . . . . . . . . . . 1,336 1,791
Accrued wages and related liabilities . . . . . . 1,060 1,081
Accrued restructuring expenses . . . . . . . . . . 4,334 3,110
Other accrued liabilities . . . . . . . . . . . . 3,012 3,236
Deferred revenue . . . . . . . . . . . . . . . . . 1,058 1,082
--------- --------
Total current liabilities . . . . . . . . . . 10,854 10,338
Long-term obligations, less current portion . . . . . 4,184 3,999
--------- --------
Total liabilities . . . . . . . . . . . . . . 15,038 14,337
--------- --------
Shareholders' equity:
Preferred stock, par value $.01, 2,000,000 shares
authorized; none issued and outstanding . . . --- ---
Common stock, par value $.01, 50,000,000 shares
authorized; shares issued and outstanding
1995, 18,052,582; 1996, 21,913,332 . . . . . . 181 220
Additional paid-in capital . . . . . . . . . . . . 65,821 75,002
Accumulated deficit . . . . . . . . . . . . . . . (50,009) (51,418)
Cumulative translation adjustment. . . . . . . . . (1,633) (1,661)
--------- --------
Total . . . . . . . . . . . . . . . . . . . 14,360 22,143
Less notes receivable from issuance of
common stock. . . . . . . . . . . . . . . . . --- (4,902)
--------- --------
Total shareholders' equity. . . . . . . . . . 14,360 17,241
--------- --------
$29,398 $31,578
--------- --------
--------- --------
See accompanying notes to consolidated financial statements
2
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RETIX
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
THREE MONTHS ENDED MARCH 31,
1995 1996
------- ------
Revenues . . . . . . . . . . . . . . . . . . . $13,128 $7,581
Cost of revenues . . . . . . . . . . . . . . . 6,184 2,778
------- ------
Gross profit . . . . . . . . . . . . . . . . . 6,944 4,803
------- ------
Operating expenses:
Research and development. . . . . . . . . . 3,181 2,533
Sales and marketing . . . . . . . . . . . . 4,460 2,552
General and administrative . . . . . . . . 1,359 1,228
------- ------
Total . . . . . . . . . . . . . . . . . 9,000 6,313
------- ------
Loss from operations . . . . . . . . . . . . . (2,056) (1,510)
Other income, net . . . . . . . . . . . . . . 242 101
------- ------
Loss before provision for income taxes . . . . (1,814) (1,409)
Provision for income taxes . . . . . . . . . . --- ---
------- ------
Net loss . . . . . . . . . . . . . . . . . . . $(1,814) $(1,409)
------- ------
------- ------
Net loss per common and
common equivalent share . . . . . . . . . . $( .10) $( .07)
------- ------
Common and common equivalent shares used
in computing per share amount . . . . . . . 17,715 19,423
------- ------
See accompanying notes to consolidated financial statements.
3
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RETIX
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
THREE MONTHS ENDED MARCH 31,
1995 1996
---- ----
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . $(1,814) $(1,409)
Adjustments to reconcile net loss to net cash
provided by (used for) operating activities:
Depreciation and amortization . . .. . . . 906 566
Reserve for returns and bad debts. . . . . (829) (100)
Changes in operating assets and liabilities
(Note 5) . . . . . . . . . . . . . . . 971 (793)
------- -------
Net cash (used for) operating activities . (766) (1,736)
------- -------
Cash flows from investing activities:
Decrease (increase) in short-term investments . 1,736 (74)
Additions to property and equipment . . . . . . (445) (245)
Increase in other assets. . . . . . . . . . . . (91) (124)
------- -------
Net cash provided by (used for)
investing activities. . . . . . . . . . 1,200 (443)
------- -------
Cash flows from financing activities:
Repayment of long term obligations. . . . . . . --- (84)
Proceeds from issuance of common stock. . . . . 666 4,317
------- -------
Net cash provided by financing activities. . 666 4,233
------- -------
Effect of exchange rate changes on cash. . . . . . 145 (28)
------- -------
Net increase in cash and cash equivalents. . . . . 1,245 2,026
Cash and cash equivalents, beginning of period . . 12,695 5,518
------- -------
Cash and cash equivalents, end of period . . . . . $13,940 $ 7,544
------- -------
------- -------
See accompanying notes to consolidated financial statements.
4
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RETIX
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. GENERAL
The consolidated financial statements include the accounts of Retix and its
wholly-owned subsidiaries (the "Company"). All significant intercompany
balances and transactions have been eliminated in consolidation. The interim
consolidated financial statements are unaudited. In the opinion of management,
the interim financial statements include all adjustments, consisting of only
normal, recurring adjustments, necessary for a fair presentation of the
Company's financial position, results of operations and cash flows. The
Company's fiscal year ends on the Saturday nearest to December 31. For
simplicity of presentation, the Company has described the fiscal year ended
December 30, 1995 as December 31, 1995 and has described the thirteen weeks
ended April 1, 1995 and March 30, 1996 as the three months ended March 31, 1995
and 1996, respectively.
It is suggested that these consolidated financial statements and the
accompanying notes be read in conjunction with the audited consolidated
financial statements and the accompanying notes for the year ended December 31,
1995 included in the Company's Annual Report. The results of operations for the
three month period ended March 31, 1996 are not necessarily indicative of
results that may be expected for the full year.
2. CASH AND SHORT-TERM INVESTMENTS
Cash and short term investments consist of the following (in thousands):
December 31, March 31,
1995 1996
---- ----
(unaudited)
Cash and cash equivalents . . . . $ 5,518 $ 7,544
Short-term investments. . . . . . 9,432 9,506
------- -------
$14,950 $17,050
------- -------
------- -------
Cash equivalents consist of short term investments with original maturities of
three months or less.
3. INVENTORIES
Inventories consist of the following (in thousands):
December 31, March 31,
1995 1996
---- ----
(unaudited)
Raw materials and component parts. . . $ 1,718 $ 760
Work-in-process. . . . .. . . . .. . . 491 1,677
Finished goods . . . . . . . . . . . . 646 913
------- -----
$ 2,855 $ 3,350
------- -----
------- -----
Work-in-process and finished goods inventories consist of material, direct
labor and overhead associated with the manufacturing process.
5
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RETIX
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
4. STATEMENT OF CASH FLOWS
Increases (decreases) in operating cash flows arising from changes in
operating assets and liabilities consist of the following (in thousands):
Three Months Ended March 31,
1995 1996
---- ----
Trade accounts receivable. . . . . . . . . . $2,433 $ 276
Inventories. . . . . . . . . . . . . . 1,148 (495)
Prepaid expenses and other current assets. . (129) 42
Accounts payable . . . . . . . . . . . . . . (1,009) 455
Accrued wages and related liabilities. . . . (408) 21
Accrued restructuring expenses . . . . . . . --- (1,224)
Other accrued liabilities. . . . . . . . . . (1,328) 107
Deferred revenue . . . . . . . . . . . . . . 264 25
------ ------
Increase (decrease) in operating assets
and liabilities. . . . . . . . . . . . $ 971 $ (793)
------ ------
------ ------
Financing and investing activities during the three months ended March 30, 1995
and 1996 which affected recognized assets or liabilities but that did not result
in cash receipts or cash payments were not significant, except as noted in Note
5, Shareholders' Equity.
5. SHAREHOLDERS' EQUITY
Effective January 30, 1996, Sierra Ventures V, L.P. ("Sierra"), a venture
capital firm, purchased 2,000,000 shares of the Company's Common Stock in a
private placement at $2.00 per share. Additionally, Sierra was granted a
warrant to purchase an additional 2,000,000 shares of the Company's Common Stock
at prices ranging from $2.00 to $5.00 per share over the three year term of the
warrant. Sierra's equity investment totaled $4.2 million and was recorded in
common stock and additional paid-in capital.
Notes receivable from issuance of common stock arose from the exercise of
stock options. During the first quarter of 1996, the Board of Directors
approved the exercise of stock options held and outstanding by certain key
employees and consultants in exchange for promissory notes. The common stock
issued upon such exercise of options is subject to repurchase by the Company
based upon continuation of the terms of employment or consultancy agreements,
with vesting on a cumulative basis from original date of option grant at a
rate of 25% one year after the vesting commencement date and 1/48th of the
shares subject to the option in equal monthly installments thereafter.
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Except for the historical information contained in this Quarterly Report on
Form 10-Q, the matters discussed herein are forward-looking statements that are
subject to certain risks and uncertainties that could cause the actual results
to differ materially from those projected. Factors that could cause actual
results to differ materially include, but are not limited to, the timing of
orders and shipments, the timely development and market acceptance of new
products, the impact of competitive products and pricing, and other risks
detailed below and included from time to time in the Company's other SEC reports
and press releases, copies of which are available from the Company upon request.
The Company assumes no obligation to update any forward-looking statements
contained herein.
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the unaudited
consolidated financial statements and accompanying notes, included in Part I -
Item 1 of this Quarterly Report, and the audited consolidated financial
statements and accompanying notes and Management's Discussion and Analysis of
Financial Condition and Results of Operations for the year ended December 31,
1995 contained in the Company's Annual Report.
NET REVENUES. Net revenues decreased 42.3% to $7,581,000 for the three
months ended March 31, 1996 as compared to $13,128,000 for the three months
ended March 31, 1995. Revenues generated by the Company's software product
lines, including TMN and wireless data products, increased to $3,777,000, or
49.8% of net revenues, during the first quarter of 1996 from $3,686,000, or
28.1% of net revenues, during the comparable period of 1995. Sales of
internetworking products totaled $3,804,000, or 50.2% of net revenues, for the
three months ended March 31, 1996 as compared to $9,442,000, or 71.9% of net
revenues, for the same period of 1995.
Sales of OSI related product lines declined during 1995 as compared to prior
periods, but through the Company's wholly-owned subsidiary, Vertel, continued to
demonstrate an upward trend in the sale of telecommunication management networks
(TMN) products during the first quarter of 1996 as compared to the corresponding
period of 1995. Sales of TMN and OSI related product lines totaled $3,380,000
for the three months ended March 31, 1996, an increase of 15.3% from $2,931,000
in revenues for the same period of 1995. This trend is the result of an ongoing
effort to shift Vertel's product development and distribution focus from mature
OSI related products towards the emerging TMN market.
Wireless data product revenues totaled $397,000 for the three months ended
March 31, 1996, representing a decrease of 47.4% from $755,000 for the same
period of 1995. The decline in wireless revenues during the first quarter of
1996 was attributable to the transition from engineering project-based revenues
to sales of wireless data networking software products. Additionally, the
Company announced enhancements to its wireless data technology for narrowband
PCS based software applications and services in an effort to allow wireless
communication providers to enhance service offerings and expand the customer
base for such products within the two-way messaging marketplace.
Software product line revenues, including TMN, OSI and wireless data
products, may continue to fluctuate from period to period due to nonrecurring
software license agreements or royalties derived from these agreements or
certain government contracts. Additionally, there can be no assurance that
software product markets will attain broad acceptance or generate long-term
growth opportunities in line with the Company's past performance or future
objectives.
Internetworking revenues are primarily comprised of sales of multi-protocol
router, local and remote LAN bridges, Ethernet switch and broadband products.
As a consequence of declining revenues, the Company initiated a significant
restructuring of its internetworking business unit in the fourth quarter of
1995. Such activities included staff reductions focused primarily within the
business unit's selling, general and administrative functions and a
consolidation within its channels of distribution in an effort to leverage field
selling activities and increase return on sales. Router and bridge product
sales decreased 61.3% and 61.0%, respectively, from the three month period
ended March 31, 1996 versus the same period for 1995. Router and bridge product
revenues represented 49.1% and 26.3%, respectively, of net internetworking
revenues during the first quarter of 1996 as compared to 51.1% and 27.1%,
respectively, of such revenues during the three months ended March 31, 1995.
Ethernet switch product revenues declined 46.6% during the first quarter of
1996 versus the three months ended March 31, 1995 and represented 8.8% and
6.6%, respectively, of net
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
internetworking revenues during such periods. Broadband product revenues,
including MetroLAN and FibeRing products, increased 13.6% during the three
months ended March 31, 1996 as compared to the same period of 1995 and
represented 12% and 4.3%, respectively of net internetworking revenues during
such periods. Despite the Company's aggressive restructuring activities to
downsize staffing and facility levels, revenues generated by the internetworking
business unit demonstrated sequential growth of 7% during the three months ended
March 31, 1996 as compared to the fourth quarter of 1995.
The change in mix of the Company's internetworking product revenues reflects
the development of networking technologies, convergence of bridging, Ethernet
switching and routing technologies and market trends towards solutions that are
expandable, modular and provide high-speed connections with increasing
bandwidth. Revenues from the Company's bridge and router sales may continue to
decrease as networking technologies advance. Although the Company believes the
features of its products are competitive, greater marketing and distribution
resources of larger competitors, increasing price pressures and delays in
releasing new products and features in previous quarters have affected the
Company's ability to gain or retain market share. Increased internetworking
revenues will be primarily dependent on the success of the Company with regard
to enhancing its presence in the rapidly evolving networking markets through the
development of broad channels of product distribution and innovative products to
increase competitiveness of its enterprise networking product lines. The
Company plans to develop on its core engineering competencies and leverage its
technologies in routing combined with bridging and Ethernet switching to target
integrated solutions that capitalize on industry available components, are
standards-based, upgradable, expandable modular and stackable.
Sales to third party customers outside of North America comprised
approximately 62.2% of net revenues for the three months ended March 31, 1996 as
compared to 56.1% for the same period in 1995. The Company's high percentage of
sales to customers outside of North America has historically been due primarily
to relatively strong demand for internetworking products within Europe and Asia
Pacific and to strong international demand for its TMN and OSI technology
software.
GROSS MARGIN. Cost of revenues consists primarily of manufacturing costs
(material, labor, packaging, documentation and overhead) and, to a lesser
extent, royalties paid under licensing agreements and warranty costs. Gross
margin increased to 63.4% of net revenues for the three months ended March 31,
1996, from 52.9% for the same period in 1995. The increase in gross margin was
attributable primarily to a shift in revenue mix towards software based products
which have significantly higher gross margins than engineering services or
internetworking products. Improving margins were also attributable to the
consolidation within the Company's channels of distribution to certain customers
and territories eliminating nonperforming selling infrastructure costs.
Additionally, product margins were directly impacted by the reduction in the
capacity and associated costs of the Company's manufacturing operations
subsequent to restructuring activities undertaken in the fourth quarter of 1995.
The Company intends to shift to an outsourcing strategy for the manufacture of
its products during 1996. Failure to make this shift on a timely basis or any
difficulties experienced by the Company's manufacturing partners, on which the
Company could become solely dependent for the supply of its products, could
adversely affect the Company's operating results. The Company anticipates
continued pricing pressures in the Ethernet switch and low-end router product
areas and while the Company is responding with reductions in manufacturing
overhead and product costs as well as changes to pricing structures and
distribution strategies, margins may decline in future periods.
RESEARCH AND DEVELOPMENT. The Company continues to make significant
investments in research and development to develop new internetworking products,
as well as to expand its expertise in TMN and wireless data technologies and to
support its product offerings. The major components of research and development
expenses are engineering salaries, employee benefits and associated overhead.
For the three months ended March 31, 1996, the Company's research and
development expenses decreased 20.4% to $2,533,000 from $3,181,000 for the same
period in 1995. As a percentage of revenue, research and development expenses
were 33.4% for the three months ended March 31, 1996 as compared to 24.2% for
the same period in 1995. The decrease in research and development expense for
the three months ended March 31, 1996 as compared to the same period in 1995 is
primarily due to reductions in spending within the Company's internetworking
business unit due to consolidation of facilities and reductions in staffing
levels as a result of the restructuring activities announced and executed in
late 1995. This decrease was offset by a reduction in engineering costs
reimbursed by customers in connection with nonrecurring engineering projects.
The Company expects to continue significant investments in the development of
new products and feature enhancements to existing product lines.
8
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The markets for the Company's products are characterized by rapidly changing
technology and frequent new product introductions. Accordingly, the Company
believes that its future success will depend on its ability to enhance its
existing products and to develop and introduce in a timely fashion new products
that achieve market acceptance. Delays in new product introductions or product
enhancements, or the introduction of unsuccessful products, could adversely
affect the Company. The Company's revenues are dependent on, among other
things, the acceptance of these products by customers, and no assurance
concerning their acceptance can be given.
SALES AND MARKETING. Sales and marketing expenses decreased 42.8% to
$2,552,000 for the three months ended March 31, 1996 as compared to
$4,460,000 for the same period in 1995. Sales and marketing expenses as a
percentage of net revenues remained relatively unchanged at 33.7% for the
three months ended March 31, 1996 as compared to 34.0% for the same period in
1995. The significant decrease in the absolute amount of sales and marketing
expenses in the first quarter of 1996 as compared to the same period of 1995
reflected efforts to restructure the Company's internetworking sales and
marketing functions, including the consolidation of field sales offices,
reductions in staffing levels and elimination of other nonperforming selling
infrastructure costs worldwide. Partially offsetting these efficiencies was
the increased staffing of sales and marketing functions by Vertel during the
three months ended March 31, 1996, as compared to the first quarter of 1995,
due to market demands for its TMN products.
Sales and marketing expenses consist primarily of personnel and related costs
relative to the selling, sales support and marketing activities, including
marketing programs such as trade shows and other promotional costs. The Company
believes that substantial sales and marketing expenditures are essential to
developing the opportunities for revenue growth and to renewing the Company's
competitive position. Sales and marketing expenses are expected to continue to
comprise a significant percentage of the Company's total expenses because of
costs associated with supporting a worldwide organization of sales and service
functions necessary to meet the needs of the Company's customer base and to
respond to the opportunities in the rapidly growing enterprise networking
marketplace.
GENERAL AND ADMINISTRATIVE. General and administrative expenses decreased
9.6% to $1,228,000 for the three months ended March 31, 1996 as compared to
$1,359,000 for the same period in 1995. General and administrative expenses
as a percentage of net revenues increased to 16.2% for the three months ended
March 31, 1996 as compared to 10.4% for the same period in 1995 due to the
corresponding 42.3% decrease in net revenues. The decrease in absolute
spending for general and administrative costs in the first quarter of 1996 as
compared to the same period of 1995 is primarily attributable to the net
effect of headcount reductions from restructuring efforts executed in late
1995 related to the Company's internetworking business unit partially
offset by increases in spending by the Company's subsidiary, Vertel.
LOSS FROM OPERATIONS. The Company incurred a loss from operations of
$1,409,000, or $.07 per share, for the three months ended March 31, 1996 as
compared to $1,814,000, or $.10 per share for the same period of 1995 despite a
42.3% decline in quarterly revenues for the comparable periods. The losses from
operations are attributable to declines in net revenues and gross profit, offset
by an increase in gross margin percentages and significant decreases in
operating expenses as a result of the execution of restructuring activities
within the Company's internetworking business unit. Total operating expenses
decreased 29.9% to $6,313,000 for the three months ended March 31, 1996 as
compared to $9,000,000 for the same period of 1995.
In 1994, 1995 and the first quarter of 1996, the Company has experienced
operating losses and a decrease in revenues from the results of the prior year.
There can be no assurance that the Company will be able to regain profitability
or resume revenue growth on a quarterly or annual basis. The Company's expense
levels are based in part on its expectation of future revenues. As a result of
failure to meet these expectations, the Company has had to undertake several
reorganizations in the past, including in 1995. Delays in new product
introductions or product enhancements or the introduction of unsuccessful
products could adversely affect the Company. If revenues are below expectations,
results of operations may be adversely affected.
9
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
PROVISION FOR INCOME TAXES. The Company recorded no provision for income
taxes on a loss before income taxes of $1,409,000 in the first quarter of 1996.
A valuation allowance against the total amount of net deferred tax assets has
been established. As a result of the increase in the valuation allowance, the
Company has net deferred tax assets of approximately $23.3 million for which no
benefit has been provided at March 31, 1996. These net deferred tax assets will
be realized to the extent that the Company operates profitably in the future
during the respective carryforward periods.
OTHER INCOME. For the three months ended March 31, 1996 other income,
consisting of interest income, net of interest expense, currency gains and
losses, and various other items decreased by $141,000, or 58.3% as compared to
the same period in 1995. The decrease is primarily due to the decreases in
interest income as a result of cash balances during the corresponding periods.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1996 the Company's principal sources of liquidity consisted of
$17,050,000 in cash, cash equivalents and short-term investments. The Company's
cash management system includes a sweep account which enables the Company to
consolidate its operating cash into a central account daily and advance cash to
the Company's subsidiaries to fund operating cash requirements.
Cash, cash equivalents and short-term investments increased $2,100,000 during
the three months ended March 31, 1996. The increase in cash is primarily
attributable to a $4,200,000 equity investment by Sierra Ventures V, L.P.
("Sierra"), a venture capital firm, in exchange for 2,000,000 shares of the
Company's Common Stock in a private placement at $2.00 per share and a warrant
to purchase an additional 2,000,000 shares of the Company's Common Stock at
prices ranging from $2.00 to $5.00 per share over the three year term of the
warrant.
The use of cash for operations was attributable primarily to the loss from
operations of $1,510,000 for the three months ended March 31, 1996. The largest
component of the use of cash from operations was $1,224,000 in payments for
restructuring activities within the internetworking business unit. The
restructuring activities, announced in October, 1995, related to streamlining of
specific sales channels, territories and product lines, included costs of
elimination of excess manufacturing capacity, inventory reductions related to
product line and distribution streamlining, facility and asset consolidation,
employee severance pay and other related charges. The restructuring plan
entailed work force reductions of 108 employees within manufacturing,
engineering, sales, marketing and administration, as well as the disposition of
various sales, service and engineering facilities. As of March 31, 1996,
$3,073,000 of the restructuring costs had been paid and substantially all
reserves related to the write down of inventories and fixed assets were
utilized. Also, as of March 31, 1996, 90 positions had been eliminated while
the remaining reserves relating to severance totaled $567,000 and are expected
to be paid in the remainder of 1996. Facility reduction costs include the lease
cost of vacated space for the estimated period of time to sublet the facilities.
Of the $2,486,000 in facility related reserves remaining as of March 31, 1996,
$1,286,000 are expected to be incurred in the remainder of 1996. The Company is
attempting to sublease or renegotiate all remaining lease terms for affected
facilities. Other restructuring reserves remaining as of March 31, 1996 totaled
$1,258,000, primarily related to costs associated with customer returns,
consolidation of repair depots and warranties, and are expected to require
approximately $350,000 in cash disbursements in 1996.
Additionally, cash from operations was utilized for increasing inventory
levels for the Company's internetworking business unit. Such purchases were
made to utilize fully the Company's manufacturing facility prior to conversion
of the plant functions to an outsource strategy. These payments were partially
offset by a net increase in accounts payable due to timing of inventory
purchases and a net decrease in trade accounts receivable of $276,000. The
decrease in trade receivables was attributable to decreased sales levels from
the prior year and the positive impact of efforts to reduce the average number
of days sales included in accounts receivable during the year.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
In response to the operating losses experienced over the past three years,
the Company commenced a major restructuring of its internetworking business unit
during the fourth quarter of 1995. The Company believes that the quarterly cost
reductions gained as a result of the 1995 restructuring and the $4,200,000
capital infusion resulting from the private placement of Retix's common stock in
January 1996 along with existing sources of liquidity, capital resources and
funds from operations will satisfy the Company's anticipated cash needs for at
least the next twelve months. From time to time, the Company may also consider
the acquisition of, or evaluate investments in, certain products and businesses
complementary to the Company's business. Any such acquisition or investment may
require additional capital resources.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Neither the Company nor any of its subsidiaries is a party to, nor is
their property the subject of, any material pending legal proceedings.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
10.2 1991 Directors' Stock Option Plan and forms of option
agreement thereunder, as amended to date.
10.32 1996 Directors' Stock Option Plan and forms of option
agreement thereunder.
10.33 Form of Exercise Notice and Stock Purchase Agreement between
the Company and M.Y. Stephan, dated January 30, 1996.
10.34 Form of Exercise Notice and Stock Purchase Agreement between the
Company and M.Y. Stephan, dated March 18, 1996.
10.35 Form of Exercise Notice and Stock Purchase Agreement between the
Company and M.Y. Stephan, dated March 18, 1996.
10.36 Form of Exercise Notice and Stock Purchase Agreement between
the Company and Philip Mantle, dated January 30, 1996.
11
<PAGE>
PART II. OTHER INFORMATION
(CONTINUED)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS (continued)
10.37 Form of Exercise Notice and Stock Purchase Agreement between
the Company and Philip Mantle, dated March 18, 1996.
10.38 Form of Exercise Notice and Stock Purchase Agreement between
the Company and Steven M. Waszak, dated March 18, 1996.
10.39 Form of Exercise Notice and Stock Purchase Agreement between
the Company and Steven M. Waszak, dated January 30, 1996.
10.40 Form of Exercise Notice and Stock Purchase Agreement between
the Company and Steven M. Waszak, dated February 21, 1996.
10.41 Form of Exercise Notice and Stock Purchase Agreement between
the Company and Steven M. Waszak, dated March 26, 1996.
10.42 Form of Exercise Notice and Stock Purchase Agreement between
the Company and Steven M. Waszak, dated March 26, 1996.
10.43 Form of Exercise Notice and Stock Purchase Agreement between
the Company and Steven M. Waszak, dated March 26, 1996.
10.44 Form of Exercise Notice and Stock Purchase Agreement between
the Company and Steven M. Waszak, dated March 26, 1996.
(b) REPORTS ON FORM 8-K
None.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RETIX
(Registrant)
Date: May 13, 1996 /s/ Steven M. Waszak
-------------------------
Steven M. Waszak
Vice President of Finance and Administration
and Chief Financial Officer
(Principal Financial and Accounting Officer)
13
<PAGE>
RETIX
INDEX TO EXHIBITS
Exhibit
Number Description
- ------- --------------------------
10.2 1991 Directors' Stock Option Plan and forms of option
agreement thereunder, as amended to date.
10.32 1996 Directors' Stock Option Plan and forms of option
agreement thereunder.
10.33 Form of Exercise Notice and Stock Purchase Agreement
between the Company and M.Y. Stephan, dated January 30, 1996.
10.34 Form of Exercise Notice and Stock Purchase Agreement
between the Company and M.Y. Stephan, dated March 18, 1996.
10.35 Form of Exercise Notice and Stock Purchase Agreement
between the Company and M.Y. Stephan, dated March 18, 1996.
10.36 Form of Exercise Notice and Stock Purchase Agreement
between the Company and Philip Mantle, dated January 30, 1996.
10.37 Form of Exercise Notice and Stock Purchase Agreement
between the Company and Philip Mantle, dated March 18, 1996.
10.38 Form of Exercise Notice and Stock Purchase Agreement
between the Company and Steven M. Waszak, dated March 18, 1996.
10.39 Form of Exercise Notice and Stock Purchase Agreement
between the Company and Steven M. Waszak, dated January 30, 1996.
10.40 Form of Exercise Notice and Stock Purchase Agreement
between the Company and Steven M. Waszak, dated February 21, 1996.
.
10.41 Form of Exercise Notice and Stock Purchase Agreement
between the Company and Steven M. Waszak, dated March 26, 1996.
10.42 Form of Exercise Notice and Stock Purchase Agreement
between the Company and Steven M. Waszak, dated March 26, 1996.
10.43 Form of Exercise Notice and Stock Purchase Agreement
between the Company and Steven M. Waszak, dated March 26, 1996.
10.44 Form of Exercise Notice and Stock Purchase Agreement
between the Company and Steven M. Waszak, dated March 26, 1996.
14
<PAGE>
EXHIBIT 10.2
RETIX
1991 DIRECTORS' STOCK OPTION PLAN
1. PURPOSES OF THE PLAN. The purposes of this Directors' Stock Option
Plan are to attract and retain the best available personnel for service as
Directors of the Company, to provide additional incentive to the Outside
Directors of the Company to serve as Directors, and to encourage their
continued service on the Board.
All options granted hereunder shall be "nonstatutory stock options".
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "BOARD" shall mean the Board of Directors of the Company.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(c) "COMMON STOCK" shall mean the Common Stock of the Company.
(d) "COMPANY" shall mean Retix, a California corporation.
(e) "CONTINUOUS STATUS AS A DIRECTOR" shall mean the absence of any
interruption or termination of service as a Director.
(f) "DIRECTOR" shall mean a member of the Board.
(g) "EMPLOYEE" shall mean any person, including officers and
Directors, employed by the Company or any Parent or Subsidiary of the
Company. The payment of a director's fee by the Company shall not be
sufficient in and of itself to constitute "employment" by the Company.
(h) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
(i) "OPTION" shall mean a stock option granted pursuant to the Plan.
(j) "OPTIONED STOCK" shall mean the Common Stock subject to an
Option.
(k) "OPTIONEE" shall mean an Outside Director who receives an Option.
(1) "OUTSIDE DIRECTOR" shall mean a Director who is not an Employee.
(m) "PARENT" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(n) "PLAN" shall mean this 1991 Directors' Stock Option Plan.
<PAGE>
(o) "SHARE" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(p) "SUBSIDIARY" shall mean a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 11
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 250,000 Shares (the "Pool") of Common Stock. The
Shares may be authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were
subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan. If Shares which were acquired
upon exercise of an Option are subsequently repurchased by the Company, such
Shares shall not in any event be returned to the Plan and shall not become
available for future grant under the Plan.
4. ADMINISTRATION OF AND GRANTS OF OPTIONS UNDER THE PLAN.
(a) ADMINISTRATOR. Except as otherwise required herein, the Plan
shall be administered by the Board.
(b) PROCEDURE FOR GRANTS. All grants of Options hereunder shall be
automatic and nondiscretionary and shall bemade strictly in accordance with
the following provisions:
(i) No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to be
covered by Options granted to Outside Directors.
(ii) Each Outside Director shall be automatically granted an
Option to purchase 20,000 Shares (the "First Option") on the date on which
the later of the following events occurs: (A) the effective date of this
Plan, as determined in accordance with Section 6 hereof, or (B) the date on
which such person first becomes an Outside Director, whether through election
by the shareholders of the Company or appointment by the Board of Directors
to fill a vacancy.
(iii) After the First Option has been granted to an Outside
Director, such Outside Director shall thereafter be automatically granted an
Option to purchase 5,000 Shares (a "Subsequent Option") on December 31 of
each year, if on such date, he or she shall have served on the Board for at
least six (6) months.
(iv) Notwithstanding the provisions of subsections (ii) and
(iii) hereof, in the event that a grant would cause the number of Shares
subject to outstanding Options plus the number of Shares previously purchased
upon exercise of Options to exceed the Pool, then each such automatic grant
shall be for that number of Shares determined by dividing the total
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<PAGE>
number of Shares remaining available for grant by the number of Outside
Directors on the automatic grant date. Any further grants shall then be
deferred until such time, if any, as additional Shares become available for
grant under the Plan through action of the shareholders to increase the
number of Shares which may be issued under the Plan or through cancellation
or expiration of Options previously granted hereunder.
(v) Notwithstanding the provisions of subsections (ii) and (iii)
hereof, any grant of an Option made before the Company has obtained
stockholder approval of the Plan in accordance with Section 17 hereof shall
be conditioned upon obtaining such stockholder approval of the Plan in
accordance with Section 17 hereof.
(vi) The terms of a First Option granted hereunder shall be
as follows:
(A) the First Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof.
(B) the exercise price per Share shall be 100% of the fair
market value per Share on the date of grant of the First Option.
(C) the First Option shall become exercisable in
installments cumulatively as to 25% of the Shares subject to the First Option
on each of the first, second, third and fourth anniversaries of the date of
grant of the First Option.
(vii) The terms of a Subsequent Option granted hereunder shall
be as follows:
(A) the Subsequent Option shall be exercisable only while
the Outside Director remains a Director of the Company, except as set forth
in Section 9 hereof.
(B) the exercise price per Share shall be 100% of the fair
market value per Share on the date of grant of the Subsequent Option.
(C) the Subsequent Option shall become exercisable as to
one hundred percent (100%) of the Shares subject to the Subsequent Option on
the fourth anniversary of the date of grant of the Subsequent Option.
(c) POWERS OF THE BOARD. Subject to the provisions and restrictions
of the Plan, the Board shall have the authority, in its discretion: (i) to
determine, upon review of relevant information and in accordance with Section
8(b) of the Plan, the fair market value of the Common Stock; (ii) to
determine the exercise price per share of Options to be granted, which
exercise price shall be determined in accordance with Section 8(a) of the
Plan; (iii) to interpret the Plan; (iv) to prescribe, amend and rescind
rules and regulations relating to the Plan; (v) to authorize any person to
execute on behalf of the Company any instrument required to effectuate the
grant of an Option previously granted hereunder; and (vi) to make all other
determinations deemed necessary or advisable for the administration of the
Plan.
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<PAGE>
(d) EFFECT OF BOARD'S DECISION. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and
any other holders of any Options granted under the Plan.
(e) SUSPENSION OR TERMINATION OF OPTION. If the President or his
or her designee reasonably believes that an Optionee has committed an act of
misconduct, the President may suspend the Optionee's right to exercise any
option pending a determination by the Board of Directors (excluding the
Outside Director accused of such misconduct). If the Board of Directors
(excluding the Outside Director accused of such misconduct) determines an
Optionee has committed an act of embezzlement, fraud, dishonesty, nonpayment
of an obligation owed to the Company, breach of fiduciary duty or deliberate
disregard of the Company rules resulting in loss, damage or injury to the
Company, or if an Optionee makes an unauthorized disclosure of any Company
trade secret or confidential information, engages in any conduct constituting
unfair competition, induces any Company customer to breach a contract with
the Company or induces any principal for whom the Company acts as agent to
terminate such agency relationship, neither the Optionee nor his or her
estate shall be entitled to exercise any option whatsoever. In making such
determination, the Board of Directors (excluding the Outside Director accused
of such misconduct) shall act fairly and shall give the Optionee an
opportunity to appear and present evidence on Optionee's behalf at a hearing
before the Board or a committee of the Board.
5. ELIGIBILITY. Options may be granted only to Outside Directors. All
Options shall be automatically granted in accordance with the terms set forth
in Section 4(b) hereof. An Outside Director who has been granted an Option
may, if he or she is otherwise eligible, be granted an additional Option or
Options in accordance with such provisions.
The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director,
nor shall it interfere in any way with any rights which the Director or the
Company may have to terminate his or her directorship at any time.
6. TERM OF PLAN; EFFECTIVE DATE. The Plan shall become effective on
December 31, 1991. It shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 13 of the Plan.
7. TERM OF OPTION. The term of each Option shall be ten (10) years
from the date of grant thereof.
8. EXERCISE PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. The per Share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be 100% of the fair market
value per Share on the date of grant of the Option.
(b) FAIR MARKET VALUE. The fair market value shall be determined by
the Board in its discretion; provided, however, that where there is a public
market for the Common Stock, the fair market value per Share shall be the
mean of the bid and asked prices of the
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<PAGE>
Common Stock in the over-the-counter market on the date of grant, as reported
in THE WALL STREET JOURNAL (or, if not so reported, as otherwise reported by
the National Association of Securities Dealers Automated Quotation ("NASDAQ")
System) or, in the event the Common Stock is traded on the NASDAQ National
Market System or listed on a stock exchange, the fair market value per Share
shall be the closing price on such system or exchange on the date of grant of
the Option, as reported in THE WALL STREET JOURNAL.
(c) FORM OF CONSIDERATION. The consideration to be paid for the
Shares to be issued upon exercise of an Option shall consist entirely of
cash, check, other Shares of Common Stock having a fair market value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised (which, if acquired from the Company,
shall have been held for at least six months), or any combination of such
methods of payment and/or any other consideration or method of payment as
shall be permitted under applicable corporate law.
9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE' RIGHTS AS A STOCKHOLDER. Any Option
granted hereunder shall be exercisable at such times as are set forth in
Section 4(b) hereof; provided, however, that no Options shall be exercisable
until stockholder approval of the Plan in accordance with Section 17 hereof
has been obtained.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment
allowable under Section 8(c) of the Plan. Until the issuance (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such
Shares, 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. A share certificate for the number of Shares so
acquired shall be issued to the Optionee as soon as practicable after
exercise of the Option. 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.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) TERMINATION OF STATUS AS A DIRECTOR. If an Outside Director
ceases to serve as a Director, he or she may, but only within three (3)
months (or such other period of time not exceeding six (6) months as is
determined by the Board) after the date he or she ceases to be a Director of
the Company, exercise his or her Option to the extent that he or she was
entitled to exercise it at the date of such termination. Notwithstanding the
foregoing, in no event may the
-5-
<PAGE>
Option be exercised after its term set forth in Section 7 has expired. To
the extent that such Outside Director was not entitled to exercise an Option
at the date of such termination, or does not exercise such Option (which he
or she was entitled to exercise) within the time specified herein, the Option
shall terminate.
(c) DISABILITY OF OPTIONEE. Notwithstanding the provisions of
Section 9(b) above, in the event a Director is unable to continue his or her
service as a Director with the Company as a result of his or her total and
permanent disability (as defined in Section 22(e)(3) of the Internal Revenue
Code), he or she may, but only within six (6) months (or such other period of
time not exceeding twelve (12) months as is determined by the Board) from the
date of such termination, exercise his or her Option to the extent he or she
was entitled to exercise it at the date of such termination. Notwithstanding
the foregoing, in no event may the Option be exercised after its term set
forth in Section 7 has expired. To the extent that he or she was not
entitled to exercise the Option at the date of termination, or if he or she
does not exercise such Option (which he or she was entitled to exercise)
within the time specified herein, the Option shall terminate.
(d) DEATH OF OPTIONEE. In the event of the death of an Optionee:
(i) during the term of the Option who is, at the time of his or
her death, a Director of the Company and who shall have been in Continuous
Status as a Director since the date of grant of the Option, the Option may be
exercised, at any time within six (6) months (or such lesser period of time
as is determined by the Board) following the date of death, by the Optionee's
estate or by a person who acquired the right to exercise the Option by
bequest or inheritance, but only to the extent of the right to exercise that
would have accrued had the Optionee continued living and remained in
Continuous Status as Director for six (6) months (or such lesser period of
time as is determined by the Board) after the date of death. Notwithstanding
the foregoing, in no event may the Option be exercised after its term set
forth in Section 7 has expired.
(ii) within three (3) months (or such lesser period of time as
is determined by the Board) after the termination of Continuous Status as a
Director, the Option may be exercised, at any time within six (6) months
following the date of death, by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only
to the extent of the right to exercise that had accrued at the date of
termination. Notwithstanding the foregoing, in no event may the option be
exercised after its term set forth in Section 7 has expired.
10. NONTRANSFERABILITV OF OPTIONS. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than
by will or by the laws of descent or distribution. The designation of a
beneficiary by an Optionee does not constitute a transfer. An Option may be
exercised during the lifetime of an Optionee only by the Optionee or a
transferee permitted by this Section.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. Subject to
any required action by the shareholders of the Company, the number of shares
of Common Stock covered by
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<PAGE>
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have
yet been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock
covered by each such outstanding Option, shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion
of any convertible securities of the Company shall not be deemed to have
"effected without receipt of consideration." Such adjustment shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number of price of shares of
Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the
Company, the Option will terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Board. The Board may,
in the exercise of its sole discretion in such instances, declare that any
Option shall terminate as of a date fixed by the Board and give each Optionee
the right to exercise his or her Option as to all or any part of the Optioned
Stock, including Shares as to which the Option would not otherwise be
exercisable. In the event of a proposed sale of all or substantially all of
the assets of the Company, or the merger of the Company with or into another
corporation, the Option shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board determines, in the exercise of its
sole discretion and in lieu of such assumption or substitution, that the
Optionee shall have the right to exercise the Option as to some or all of the
Optioned Stock, including Shares as to which the Option would not otherwise
be exercisable. If the Board makes an Option exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Board shall notify the Optionee that the Option shall be exercisable for a
period of fifteen (15) days from the date of such notice, and the Option will
terminate upon the expiration of such period.
12. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date determined in accordance with Section 4(b) hereof.
Notice of the determination shall be given to each Outside Director to whom
an Option is so granted within a reasonable time after the date of such grant.
13. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable,
provided that, to the extent necessary and desirable to comply with Rule
16b-3 under the Exchange Act (or any other applicable law or regulation), the
Company shall obtain approval of the shareholders of the Company to Plan
amendments to the extent and in the manner required by such law or
regulation. Notwithstanding the foregoing, the provisions set forth in
Section 4 of this Plan (and
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<PAGE>
any other Sections of this Plan that affect the formula award terms required
to be specified in this Plan by Rule 16b-3) shall not be amended more than
once every six months, other than to comport with changes in the Code, the
Employee Retirement Income Security Act of 1979, as amended, or the rules
thereunder.
(b) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan that would impair the rights of any Optionee shall
not affect Options already granted to such Optionee and such Options shall
remain in full force and effect as if this Plan had not been amended or
terminated, unless mutually agreed otherwise between the Optionee and the
Board, which agreement must be in writing and signed by the Optionee and the
Company.
14. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and
the issuance and delivery of such Shares pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the Securities
Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, state securities laws, and the requirements of any
stock exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any
of the aforementioned relevant provisions of law.
Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
15. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall
be sufficient to satisfy the requirements of the Plan.
16. OPTION AGREEMENT. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
17. STOCKHOLDER APPROVAL.
(a) Continuance of the Plan shall be subject to approval by the
shareholders of the Company at or prior to the first annual meeting of
shareholders held subsequent to the granting of an Option hereunder. If
such stockholder approval is obtained at a duly held shareholders' meeting,
it may be obtained by the affirmative vote of the holders of a majority of
the outstanding shares of the Company present or represented and entitled to
vote thereon. If
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<PAGE>
such stockholder approval is obtained by written consent, it may be obtained
by the written consent of the holders of a majority of the outstanding shares
of the Company.
(b) Any required approval of the shareholders of the Company shall
be solicited substantially in accordance with section 14(a) of the Exchange
Act and the rules and regulations promulgated thereunder.
18. INFORMATION TO OPTIONEES. The Company shall provide to each Optionee,
during the period for which such Optionee has one or more Options
outstanding, copies of all annual reports to shareholders, proxy statements
and other information provided to all shareholders of the Company.
<PAGE>
EXHIBIT 10.32
RETIX
1996 DIRECTORS' STOCK OPTION PLAN
1. PURPOSES OF THE PLAN. The purposes of this Directors' Stock Option
Plan are to attract and retain the best available personnel for service as
Directors of the Company, to provide additional incentive to the Outside
Directors of the Company to serve as Directors, and to encourage their
continued service on the Board.
All options granted hereunder shall be nonstatutory stock options.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "BOARD" shall mean the Board of Directors of the Company.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(c) "COMMON STOCK" shall mean the Common Stock of the Company.
(d) "COMPANY" shall mean Retix, a California corporation.
(e) "CONTINUOUS STATUS AS A DIRECTOR" shall mean the absence of any
interruption or termination of service as a Director.
(f) "DIRECTOR" shall mean a member of the Board.
(g) "EMPLOYEE" shall mean any person, including any officer or
director, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient in
and of itself to constitute "employment" by the Company.
(h) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
(i) "OPTION" shall mean a stock option granted pursuant to the Plan.
All options shall be nonstatutory stock options (i.e., options that are not
intended to qualify as incentive stock options under Section 422 of the Code).
(j) "OPTIONED STOCK" shall mean the Common Stock subject to an
Option.
(k) "OPTIONEE" shall mean an Outside Director who receives an Option.
(l) "OUTSIDE DIRECTOR" shall mean a Director who is not an Employee.
(m) "PARENT" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
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(n) "PLAN" shall mean this 1996 Directors' Stock Option Plan.
(o) "SHARE" shall mean a share of the Common Stock, as adjusted
in accordance with Section 11 of the Plan.
(p) "SUBSIDIARY" shall mean a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 11
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 360,000 Shares (the "POOL") of Common Stock. The
Shares may be authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were
subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan. If Shares which were acquired
upon exercise of an Option are subsequently repurchased by the Company, such
Shares shall not in any event be returned to the Plan and shall not become
available for future grant under the Plan.
4. ADMINISTRATION OF AND GRANTS OF OPTIONS UNDER THE PLAN.
(a) ADMINISTRATOR. Except as otherwise required herein, the Plan
shall be administered by the Board.
(b) PROCEDURE FOR GRANTS. All grants of Options hereunder shall be
automatic and nondiscretionary and shall be made strictly in accordance with
the following provisions:
(i) No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to be
covered by Options granted to Outside Directors.
(ii) Each Outside Director shall be automatically granted an
Option to purchase Shares (the "FIRST OPTION") as follows: (A) with respect
to persons who are Outside Directors on the effective date of this Plan, as
determined in accordance with Section 6 hereof, 40,000 shares on such
effective date, and (B) with respect to any other person, 40,000 shares on
the date on which such person first becomes an Outside Director.
(iii) After the First Option has been granted to an Outside
Director, such Outside Director shall thereafter be automatically granted an
Option to purchase 10,000 Shares (a "SUBSEQUENT OPTION") on January 1 of each
year, provided that, on such date, he or she shall have served on the Board
for at least six (6) months prior to the date of such Annual Meeting.
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(iv) Notwithstanding the provisions of subsections (ii) and (iii)
hereof, in the event that a grant would cause the number of Shares subject to
outstanding Options plus the number of Shares previously purchased upon
exercise of Options to exceed the Pool, then each such automatic grant shall
be for that number of Shares determined by dividing the total number of
Shares remaining available for grant by the number of Outside Directors
receiving an Option on such date on the automatic grant date. Any further
grants shall then be deferred until such time, if any, as additional Shares
become available for grant under the Plan through action of the shareholders
to increase the number of Shares which may be issued under the Plan or
through cancellation or expiration of Options previously granted hereunder.
(v) The terms of each First Option granted hereunder shall be
as follows:
(1) the First Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof;
(2) the exercise price per Share shall be 100% of the fair
market value per Share on the date of grant of the First Option, determined
in accordance with Section 8 hereof; and
(3) the First Option shall become exercisable in
installments cumulatively as to 25% of the Shares subject to the First Option
on each of the first, second, third and fourth anniversaries of the date of
grant of the Option.
(vi) The terms of each Subsequent Option granted hereunder
shall be as follows:
(1) the Subsequent Option shall be exercisable only while
the Outside Director remains a Director of the Company, except as set forth
in Section 9 hereof;
(2) the exercise price per Share shall be 100% of the fair
market value per Share on the date of grant of the Subsequent Option,
determined in accordance with Section 8 hereof; and
(3) the Subsequent Option shall become exercisable as to
one hundred percent (100%) of the Shares subject to the Subsequent Option on
the fourth anniversary of the date of grant of the Subsequent Option.
(c) POWERS OF THE BOARD. Subject to the provisions and restrictions
of the Plan, the Board shall have the authority, in its discretion: (i) to
determine, upon review of relevant information and in accordance with Section
8(b) of the Plan, the fair market value of the Common Stock; (ii) to
determine the exercise price per share of Options to be granted, which
exercise price shall be determined in accordance with Section 8(a) of the
Plan; (iii) to interpret the Plan; (iv) to prescribe, amend and rescind rules
and regulations relating to the Plan; (v) to authorize any person to execute
on behalf of the Company any instrument required to effectuate
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the grant of an Option previously granted hereunder; and (vi) to make all
other determinations deemed necessary or advisable for the administration of
the Plan.
(d) EFFECT OF BOARD'S DECISION. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and
any other holders of any Options granted under the Plan.
(e) SUSPENSION OR TERMINATION OF OPTION. If the President or his or
her designee reasonably believes that an Optionee has committed an act of
misconduct, the President may suspend the Optionee's right to exercise any
option pending a determination by the Board of Directors (excluding the
Outside Director accused of such misconduct). If the Board of Directors
(excluding the Outside Director accused of such misconduct) determines an
Optionee has committed an act of embezzlement, fraud, dishonesty, nonpayment
of an obligation owed to the Company, breach of fiduciary duty or deliberate
disregard of the Company rules resulting in loss, damage or injury to the
Company, or if an Optionee makes an unauthorized disclosure of any Company
trade secret or confidential information, engages in any conduct constituting
unfair competition, induces any Company customer to breach a contract with
the Company or induces any principal for whom the Company acts as agent to
terminate such agency relationship, neither the Optionee nor his or her
estate shall be entitled to exercise any option whatsoever. In making such
determination, the Board of Directors (excluding the Outside Director accused
of such misconduct) shall act fairly and shall give the Optionee an
opportunity to appear and present evidence on Optionee's behalf at a hearing
before the Board or a committee of the Board.
5. ELIGIBILITY. Options may be granted only to Outside Directors. All
Options shall be automatically granted in accordance with the terms set forth
in Section 4(b) hereof. An Outside Director who has been granted an Option
may, if he or she is otherwise eligible, be granted an additional Option or
Options in accordance with such provisions.
The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director,
nor shall it interfere in any way with any rights which the Director or the
Company may have to terminate his or her directorship at any time.
6. TERM OF PLAN; EFFECTIVE DATE. The Plan shall become effective upon
its adoption by the Board. It shall continue in effect for a term of ten
(10) years unless sooner terminated under Section 13 of the Plan.
7. TERM OF OPTIONS. The term of each Option shall be ten (10) years
from the date of grant thereof.
8. EXERCISE PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. The per Share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be 100% of the fair
market value per Share on the date of grant of the Option.
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(b) FAIR MARKET VALUE. The fair market value shall be determined by
the Board; PROVIDED, HOWEVER, that where there is a public market for the
Common Stock, the fair market value per Share shall be the mean of the bid
and asked prices of the Common Stock in the over-the-counter market on the
date of grant, as reported in THE WALL STREET JOURNAL (or, if not so
reported, as otherwise reported by the National Association of Securities
Dealers Automated Quotation ("Nasdaq") System) or, in the event the Common
Stock is traded on the Nasdaq National Market or listed on a stock exchange,
the fair market value per Share shall be the closing price on such system or
exchange on the date of grant of the Option (or, in the event that the Common
Stock is not traded on such date, on the immediately preceding trading date),
as reported in THE WALL STREET JOURNAL.
(c) FORM OF CONSIDERATION. The consideration to be paid for the
Shares to be issued upon exercise of an Option shall consist entirely of
cash, check, other Shares of Common Stock having a fair market value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised (which, if acquired from the Company,
shall have been held for at least six months), or any combination of such
methods of payment and/or any other consideration or method of payment as
shall be permitted under applicable corporate law.
9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option
granted hereunder shall be exercisable at such times as are set forth in
Section 4(b) hereof.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the terms
of the Option by the person entitled to exercise the Option and full payment
for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may consist of any consideration and
method of payment allowable under Section 8(c) of the Plan. Until the
issuance (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. A share certificate for
the number of Shares so acquired shall be issued to the Optionee as soon as
practicable after exercise of the Option. 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.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes
of the Plan and for sale under the Option, by the number of Shares as to
which the Option is exercised.
(b) TERMINATION OF STATUS AS A DIRECTOR. If an Outside Director
ceases to serve as a Director, he or she may, but only within ninety (90)
days after the date he or she ceases to be a Director of the Company,
exercise his or her Option to the extent that he or she was
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entitled to exercise it at the date of such termination. Notwithstanding
the foregoing, in no event may the Option be exercised after its term set
forth in Section 7 has expired. To the extent that such Outside Director was
not entitled to exercise an Option at the date of such termination, or does
not exercise such Option (which he or she was entitled to exercise) within
the time specified herein, the Option shall terminate.
(c) DISABILITY OF OPTIONEE. Notwithstanding Section 9(b) above,
in the event a Director is unable to continue his or her service as a
Director with the Company as a result of his or her total and permanent
disability (as defined in Section 22(e)(3) of the Code), he or she may, but
only within six (6) months (or such other period of time not exceeding twelve
(12) months as is determined by the Board) from the date of such termination,
exercise his or her Option to the extent he or she was entitled to exercise
it at the date of such termination. Notwithstanding the foregoing, in no
event may the Option be exercised after its term set forth in Section 7 has
expired. To the extent that he or she was not entitled to exercise the
Option at the date of termination, or if he or she does not exercise such
Option (which he or she was entitled to exercise) within the time specified
herein, the Option shall terminate.
(d) DEATH OF OPTIONEE. In the event of the death of an Optionee:
(i) During the term of the Option who is, at the time of his or
her death, a Director of the Company and who shall have been in Continuous
Status as a Director since the date of grant of the Option, the Option may be
exercised, at any time within six (6) months following the date of death, by
the Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent of the right to
exercise that would have accrued had the Optionee continued living and
remained in Continuous Status as Director for six (6) months (or such lesser
period of time as is determined by the Board) after the date of death.
Notwithstanding the foregoing, in no event may the Option be exercised after
its term set forth in Section 7 has expired.
(ii) Within (3) months after the termination of Continuous Status
as a Director, the Option may be exercised, at any time within six (6) months
following the date of death, by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only
to the extent of the right to exercise that had accrued at the date of
termination. Notwithstanding the foregoing, in no event may the option be
exercised after its term set forth in Section 7 has expired.
10. NONTRANSFERABILITY OF OPTIONS. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than
by will or by the laws of descent or distribution or pursuant to a qualified
domestic relations order (as defined by the Code or the rules thereunder).
The designation of a beneficiary by an Optionee does not constitute a
transfer. An Option may be exercised during the lifetime of an Optionee only
by the Optionee or a transferee permitted by this Section.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS.
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(a) ADJUSTMENT. Subject to any required action by the shareholders
of the Company, the number of shares of Common Stock covered by each
outstanding Option, the number of shares of Common Stock which have been
authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, and the number of shares of Common Stock to be
granted under the provisions set forth in Section 4 of the Plan, as well as
the price per share of Common Stock covered by each such outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number
of issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock,
or any other increase or decrease in the number of issued shares of Common
Stock effected without receipt of consideration by the Company; PROVIDED,
HOWEVER, that conversion of any convertible securities of the Company shall
not be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of shares of Common Stock subject to an Option.
(b) CORPORATE TRANSACTIONS. In the event of (i) a dissolution or
liquidation of the Company, (ii) a sale of all or substantially all of the
Company's assets, (iii) a merger or consolidation in which the Company is not
the surviving corporation, or (iv) any other capital reorganization in which
more than fifty percent (50%) of the shares of the Company entitled to vote
are exchanged, the Company shall give to the Eligible Director, at the time
of adoption of the plan for liquidation, dissolution, sale, merger,
consolidation or reorganization, either a reasonable time thereafter within
which to exercise the Option, including Shares as to which the Option would
not be otherwise exercisable, prior to the effectiveness of such liquidation,
dissolution, sale, merger, consolidation or reorganization, at the end of
which time the Option shall terminate, or the right to exercise the Option,
including Shares as to which the Option would not be otherwise exercisable
(or receive a substitute option with comparable terms), as to an equivalent
number of shares of stock of the corporation succeeding the Company or
acquiring its business by reason of such liquidation, dissolution, sale,
merger, consolidation or reorganization.
12. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date determined in accordance with Section 4(b) hereof.
Notice of the determination shall be given to each Outside Director to whom
an Option is so granted within a reasonable time after the date of such grant.
13. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable;
PROVIDED THAT, to the extent necessary and desirable to comply with Rule
16b-3 under the Exchange Act (or any other applicable law or regulation), the
Company shall obtain approval of the shareholders of the Company to Plan
amendments to the extent and in the manner required by such law or
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regulation. Notwithstanding the foregoing, the provisions set forth in
Section 4 of this Plan (and any other Sections of this Plan that affect the
formula award terms required to be specified in this Plan by Rule 16b-3)
shall not be amended more than once every six months, other than to comport
with changes in the Code, the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.
(b) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan that would impair the rights of any Optionee shall
not affect Options already granted to such Optionee and such Options shall
remain in full force and effect as if this Plan had not been amended or
terminated, unless mutually agreed otherwise between the Optionee and the
Board, which agreement must be in writing and signed by the Optionee and the
Company.
14. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and
the issuance and delivery of such Shares pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the Securities
Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, state securities laws, and the requirements of any
stock exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance. As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the
time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such
Shares, if, in the opinion of counsel for the Company, such a representation
is required by any of the aforementioned relevant provisions of law.
15. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall
be sufficient to satisfy the requirements of the Plan. Inability of the
Company to obtain authority from any regulatory body having jurisdiction,
which authority is deemed by the Company's counsel to be necessary to the
lawful issuance and sale of any Shares hereunder, shall relieve the Company
of any liability in respect of the failure to issue or sell such Shares as to
which such requisite authority shall not have been obtained.
16. OPTION AGREEMENT. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
17. SHAREHOLDER APPROVAL. To the extent permitted by Rule 16b-3 of the
Exchange Act (or any successor provision thereto) and in order to obtain the
benefits provided by such rule, the Company may, but shall not be required
to, obtain shareholder approval for Option grants made hereunder. To the
extent the Company obtains such shareholder approval, it shall be deemed to
apply with respect to Option grants made on or after the date of such
approval.
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RETIX
1996 DIRECTORS' STOCK OPTION PLAN
DIRECTOR NONSTATUTORY STOCK OPTION AGREEMENT
Optionee: "Optionee"
Address: "StreetAddress"
"CityAddress"
Total Shares Subject to Option: "Shares"
Exercise Price Per Share: "PricePerShare"
Date of Grant: "GrantDate"
Expiration Date: "ExpirationDate"
Type of Stock Option: Nonstatutory Stock Option
1. GRANT OF OPTION. Retix (the "Company"), a California corporation,
hereby grants to the Optionee named above ("Optionee") an option (the
"Option") to purchase a total of up to "SharesSpelledOut" ("Shares") shares of
Common Stock of the Company (the "Shares") at the exercise price per share
set forth above (the "Exercise Price"), subject to all of the terms and
conditions of this Director Nonstatutory Stock Option Agreement ("Agreement")
and the Company's 1996 Directors' Stock Option Plan (the "Plan"). The terms
defined in the Plan shall have the same defined meanings herein.
A. NATURE OF THE OPTION. This Option is a nonstatutory stock option
and is not intended to qualify for any special tax benefits to the Optionee.
B. EXERCISE PRICE. The exercise price is "PricePerShare" for each
share of Common Stock, which is 100% of the Fair Market Value of the Common
Stock as determined on the date of grant of this Option.
2. EXERCISE PERIOD OF OPTION. Subject to the terms and conditions of
the Plan and this Grant, this Option shall become exercisable as follows:
"VestingDate"
3. RESTRICTIONS ON EXERCISE. Exercise of this Option is subject to the
following limitations:
A. This Option may not be exercised unless such exercise is in
compliance with the Securities Act of 1933, as amended, and all applicable
state securities laws, as they are in effect on the date of exercise.
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B. If, at the time of the exercise of this Option, the Optionee is
subject to Section 16(b) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), then the Optionee must comply with Rule 16b-3 under the
Exchange Act and such additional conditions or restrictions as may be
required thereunder to qualify for the maximum exemption from Section 16 of
the Exchange Act with respect to Plan transactions.
4. TERMINATION OF STATUS AS A DIRECTOR. If an Outside Director ceases
to serve as a Director for any reason other than death or disability, he or
she may, but only within ninety (90) days after the date he or she ceases to
be a Director of the Company, exercise his or her Option to the extent that
he or she was entitled to exercise it at the date of such termination. To
the extent that he or she was not entitled to exercise an Option at the date
of such termination, or if he or she does not exercise such Option (which he
or she was entitled to exercise) within the time specified herein, the Option
shall terminate.
5. DISABILITY OF DIRECTOR. Notwithstanding Section 4 above, in the event
an Outside Director is unable to continue his or her service as a Director
with the Company as a result of total and permanent disability (as defined in
Section 22(e)(3) of the Code), he or she may, but only within six (6) months
from the date of termination of such service (but in no event later than the
date of expiration of the term of this Option as set forth in the Notice of
Stock Option Grant), exercise the Option to the extent otherwise so entitled
at the date of such termination. To the extent that he or she was not
entitled to exercise the Option at the date of termination, or if he or she
does not exercise such Option (to the extent otherwise so entitled) within
the time specified in this Agreement, the Option shall terminate.
6. DEATH OF DIRECTOR. Notwithstanding Section 4 above, in the event of
the death an Outside Director while serving as a Director of the Company or
within three (3) months of terminating such service, the Option may be
exercised, at any time within six (6) months following the date of death (but
in no event later than the date of expiration of the term of this Option as
set forth in the Notice of Stock Option Grant), by Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or
inheritance to the extent the Optionee was entitled to exercise such Option
on the date of death, provided, however, that if the Director dies while
serving as a Director, the Option will be exercisable to the extent of the
right to exercise that would have accrued had the Director continued living
and serving as a Director for six (6) months after the date of death.
7. MANNER OF EXERCISE.
A. This Option shall be exercisable by delivery to the Company of an
executed written Director Stock Option Exercise Notice and Agreement in the
form attached hereto as Exhibit A, or in such other form as may be approved
by the Company, which shall set forth Optionee's election to exercise this
Option, the number of Shares being purchased, any restrictions imposed on the
Shares and such other representations and agreements regarding Optionee's
investment intent and access to information as may be required by the Company
to comply with applicable securities laws.
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B. The Director Stock Option Exercise Notice and Agreement shall be
accompanied by full payment of the Exercise Price for the Shares being
purchased (i) in cash, (ii) by check, (iii) by delivery of other shares of
Common Stock having a fair market value on the date of surrender equal to the
aggregate exercise price of the Shares being purchased (which, if acquired
from the Company, shall have been held for at least six months) or (iv) by
any combination of the foregoing methods of payment.
C. Prior to the issuance of the Shares upon exercise of this Option,
Optionee must pay or make adequate provision for any applicable federal or
state withholding obligations of the Company.
D. Provided that such notice and payment are in form and substance
satisfactory to counsel for the Company, the Company shall issue the Shares
registered in the name of Optionee or Optionee's legal representative.
8. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of
Shares shall be subject to compliance by the Company and the Optionee with
all applicable requirements of federal and state securities laws and with all
applicable requirements of any stock exchange on which the Company's Common
Stock may be listed at the time of such issuance or transfer. Optionee
understands that the Company is under no obligation to register or qualify
the Shares with the Securities and Exchange Commission, any state securities
commission or any stock exchange to effect such compliance.
9. NONTRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner other than by will or by the laws of descent and distribution or
pursuant to a domestic relations order (as defined by the Code or the rules
thereunder) and may be exercised during the lifetime of the Optionee only by
the Optionee or a transferee permitted by Section 10 of the Plan. The terms
of this option shall be binding upon the executors, administrators,
successors and assigns of the Optionee.
10. FEDERAL TAX CONSEQUENCES. Set forth below is a brief summary as of
the date of this Option of some of the federal 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 HIS OR HER OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES. THIS SUMMARY DOES NOT DISCUSS STATE OR LOCAL TAX
CONSEQUENCES OF EXERCISE OF THIS OPTION AND DISPOSITION OF THE SHARES.
A. TAXATION UPON EXERCISE OF OPTION. Optionee understands that,
upon exercise of this Option, he or she will recognize income for tax
purposes in an amount equal to the excess of the then fair market value of
the Shares purchased over the exercise price paid for such Shares. Since the
Optionee is likely to be subject to Section 16(b) of the Securities Exchange
Act of 1934, as amended, the measurement and timing of such income may be
deferred, and the Optionee is advised to contact a tax adviser concerning the
desirability of filing an 83(b) election in connection with the exercise of
the Option. Upon a resale of such Shares by
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<PAGE>
the Optionee, any difference between the sale price and the exercise price of
the Shares, to the extent not included in income as described above, will be
treated as capital gain or loss, which will be long-term if the shares have
been held for more than one year.
11. INTERPRETATION. Any dispute regarding the interpretation of this
agreement shall be submitted by Optionee or 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.
12. ENTIRE AGREEMENT. The Plan and the Director Stock Option Exercise
Notice and Agreement attached as Exhibit A are incorporated herein by
reference. This Grant, the Plan and the Director Stock Option Exercise
Notice and Agreement constitute the entire agreement of the parties regarding
the Option and supersede all prior undertakings and agreements with respect
to the subject matter hereof.
RETIX
By:
-------------------------------------
Its:
------------------------------------
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ACCEPTANCE
Optionee hereby acknowledges receipt of a copy of the Plan, represents
that Optionee has read and understands the terms and provisions thereof, and
accepts this Option subject to all the terms and conditions of the Plan and
this Grant. Optionee acknowledges that there may be adverse tax consequences
upon exercise of this Option or disposition of the Shares and that Optionee
should consult a tax adviser prior to such exercise or disposition.
---------------------------
"Optionee"
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EXHIBIT A
DIRECTOR NONSTATUTORY STOCK OPTION EXERCISE NOTICE AND AGREEMENT
Retix
2401 Colorado Avenue
Santa Monica, CA 90404
Attention: Chief Financial Officer
1. EXERCISE OF OPTION. The undersigned ("Optionee") hereby elects to
exercise Optionee's option to purchase ______ shares of the Common Stock (the
"Shares") of Retix (the "Company") under and pursuant to the Company's 1996
Directors' Stock Option Plan and the Director Nonstatutory Stock Option
Agreement dated "GrantDate" (the "Grant Agreement").
2. REPRESENTATIONS OF OPTIONEE. Optionee acknowledges that Optionee has
received, read and understood the Grant Agreement.
3. FEDERAL RESTRICTIONS ON TRANSFER. Optionee understands that the
Shares must be held indefinitely unless they are registered under the
Securities Act of 1933, as amended (the "1933 Act") or unless an exemption
from such registration is available and that the certificate(s) representing
the Shares may bear a legend to that effect. Optionee understands that the
Company is under no obligation to register the Shares and that an exemption
may not be available or may not permit Optionee to transfer Shares in the
amounts or at the times proposed by Optionee.
4. 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 tax advice.
5. DELIVERY OF PAYMENT. Optionee herewith delivers to the Company the
aggregate purchase price for the Shares that Optionee has elected to purchase
and has made provision for the payment of any federal or state withholding
taxes required to be paid or withheld by the Company.
<PAGE>
6. ENTIRE AGREEMENT. The Grant Agreement is incorporated herein by
reference. This Agreement and the Grant Agreement 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. This Agreement and the Grant Agreement are governed
by California law except for that body of law pertaining to conflict of laws.
Submitted by: Accepted by:
OPTIONEE: RETIX
- ------------------------------- By:
"Optionee" ---------------------------
Its:
-------------------------
Address:
"StreetAddress"
"CityAddress"
Dated: Dated:
------------------------- ------------------------
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EXHIBIT 10.33
RETIX
EXERCISE NOTICE AND STOCK PURCHASE AGREEMENT
This Exercise Notice and Stock Purchase Agreement (the "AGREEMENT") is
made as of January 30, 1996 by and between Retix, a California corporation
(the "COMPANY"), and M.Y. Stephan (the "PURCHASER").
1. EXERCISE OF OPTION. Pursuant to the exercise of a stock option
(the "OPTION") granted to the Purchaser under the Company's 1995 Executive
Stock Option Plan (the "PLAN"), and pursuant to the Stock Option Agreement
dated December 29, 1995 (the "OPTION AGREEMENT") between the Company and the
Purchaser, the Purchaser has elected to purchase none of those shares which
have become vested under the vesting schedule set forth in the Option
Agreement (the "VESTED SHARES") and 750,000 of those shares which have not
yet vested under such schedule (the "UNVESTED SHARES"). (The Vested Shares
and the Unvested Shares are referred to collectively in this Agreement as the
"SHARES"). The purchase price for the Shares shall be $2.14 per Share for a
total purchase price of $1,605,000.00. The term "SHARES" refers to the
purchased Shares and all securities received in replacement of the Shares, or
as stock dividends or as a result of any stock splits, all securities
received in replacement of the Shares in a recapitalization, merger,
reorganization, exchange or the like, and all new, substituted or additional
securities or other properties to which Purchaser is entitled by reason of
Purchaser's ownership of the Shares. The Option Agreement shall be deemed
amended hereby to permit the early exercise of the Option and the purchase of
the Shares using a promissory note as contemplated hereby.
2. PAYMENT OF PURCHASE PRICE.
(a) The purchase price for the Shares shall be paid to the Company
at the time of execution of this agreement in cash, by check made payable to
the Company, by cancellation of indebtedness, by delivery to the Company of a
promissory note in the form attached to this Agreement (the "NOTE"), or by
some combination thereof. The form of such payment shall be at the
discretion of the Company.
(b) As security for the payment of the Note and any renewal,
extension, or modification thereof, the Purchaser hereby grants to the
Company a security interest in and pledges with and delivers to the Company
the certificate or certificates representing the Shares to be held pursuant
to the escrow described in Section 4 of this Agreement.
(c) In the event of any foreclosure of said security interest, the
Company may sell the Shares at a private sale and may itself repurchase any
or all of the Shares. The parties acknowledge that, if there is no
established public market for the Shares of the Company, the securities laws
applicable to the sale of the Shares may make a public sale of the Shares
commercially unreasonable. The parties agree that the repurchasing of said
Shares by the Company, or by any person to whom the Company may have assigned
its rights hereunder, is commercially reasonable if made at a price
determined by the Board of Directors of the Company in its discretion, fairly
exercised, representing what would be the fair market value of the Shares
diminished by such factors as the size of the block of Shares or the
restrictions of applicable securities laws.
(d) In the event of default in payment when due of any
indebtedness under the Note, the Company may elect then, or at any time
thereafter, to exercise all rights available to a secured party under the
California Commercial Code, including the right to sell the Shares at a
private sale or repurchase the Shares as provided above. The proceeds of any
sale shall be applied in the following order:
(i) To pay all reasonable expenses of the Company in
enforcing the Note and the security interest in the Shares, including without
limitation reasonable attorneys' fees and legal expenses incurred by the
Company.
(ii) In satisfaction of the remaining indebtedness under the
Note.
-3-
<PAGE>
(iii) To the Purchaser, any remaining proceeds.
(e) In the event that the Purchaser prepays all or a portion of
the Note, in accordance with the provisions thereof, the Purchaser intends
that the Shares represented by the portion of the Note so repaid, including
interest thereon, shall continue to be held in escrow, to serve as
independent collateral for a like amount of the outstanding portion of the
Note, for the purpose of commencing the holding period set forth in
Securities and Exchange Commission Rule 144(d).
3. LIMITATIONS ON TRANSFER.
In addition to any other limitation on transfer created by
applicable securities laws, Purchaser shall not assign, encumber or dispose
of any interest in the Shares while the Shares are subject to the Company's
repurchase option. After any Shares have been released from such repurchase
option, Purchaser shall not assign, encumber or dispose of any interest in
such Shares except in compliance with this Section 3 and applicable
securities laws.
(a) REPURCHASE OPTION. In the event of the voluntary or
involuntary termination of the position of Purchaser as an employee or
consultant of the Company for any reason, with or without cause (including
death or disability), the Company shall, upon the date of such termination,
have an irrevocable, exclusive option for a period of sixty (60) days from
such date to repurchase from Purchaser, at the original purchase price per
Share, up to that number of shares which would, if the option referenced in
Section 1 had not been so exercised, have been unvested as of the date of
termination. The Option Agreement is hereby incorporated by reference and
made a part of this Agreement. The option shall be exercised by the Company
by written notice to Purchaser or his or her executor and, at the Company's
option, (i) by delivery to the Purchaser or his or her executor, with such
Notice, of a check in the amount of the purchase price for the Shares being
repurchased, or (ii) in the event the Purchaser is indebted to the Company,
by cancellation by the Company of an amount of such indebtedness equal to the
purchase price for the Shares being repurchased, or (iii) by a combination of
(i) and (ii) so that the combined payment and cancellation of indebtedness
equals such purchase price. Upon delivery of such notice and payment of the
purchase price in any of the ways described above, the Company shall become
the legal and beneficial owner of the Shares being repurchased and all rights
and interest therein or related thereto, and the Company shall have the right
to transfer to its own name the number of Shares being repurchased by the
Company, without further action by Purchaser.
(b) ASSIGNMENT. The right of Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders
of the Company or other persons or organizations.
(c) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of
Shares or any interest therein will receive and hold such Shares or interest
subject to the provisions of this Agreement, including, insofar as
applicable, the Company's option to repurchase under this Section 3. Any
sale or transfer of the Company's Shares shall be void unless the provisions
of this Agreement are met.
4. ESCROW. For purposes of facilitating the enforcement of the
provisions of Section 3 above, Purchaser agrees, immediately upon receipt of
the certificate(s) for his or her Shares, to deliver such certificate(s),
together with two stock powers executed in blank by Purchaser and Purchaser's
spouse (if required for transfer) with respect to each such stock
certificate, to the Secretary of the Company, or its designee, to hold in
escrow, with the authority to take all such actions and to effectuate all
such transfers and/or releases as may be necessary or appropriate to
accomplish the objectives of this Agreement in accordance with the terms
hereof. Purchaser hereby acknowledges that the appointment of the Secretary
of the Company (or its designee) as the escrow holder hereunder with the
stated authorities is a material inducement to the Company to make this
Agreement and that such appointment is coupled with an interest and is
accordingly irrevocable. Purchaser agrees that such escrow holder shall not
be liable to any party hereto (or to any other party) for any actions or
omissions unless such escrow holder is grossly negligent relative thereto.
The escrow holder may rely upon any letter, notice or other document executed
by any signature purported to be genuine and may resign at any time.
-4-
<PAGE>
5. LEGENDS. The certificate or certificates representing the Shares
shall bear the following legend (as well as any legends required by
applicable corporate and securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
6. NO EMPLOYMENT RIGHTS. This Agreement shall not confer upon
Purchaser any right with respect to continuation of his or her position as an
employee or consultant of the Company or its subsidiaries, nor shall it
interfere in any way with the right of Purchaser or the Company, or any of
its subsidiaries, to terminate Purchaser's position as an employee or
consultant of the Company at any time.
7. SECTION 83(b) ELECTION. Purchaser hereby represents that he or she
understands (a) the contents and requirements of Section 83(b) of the
Internal Revenue Code of 1986, as amended ("SECTION 83(b)"), (b) the
application of Section 83(b) to the purchase of Shares by Purchaser pursuant
to this Agreement, and (c) the nature of the election to be made by Purchaser
under Section 83(b). Purchaser further represents that he or she intends to
file an election pursuant to Section 83(b) with the Internal Revenue Service
within 30 days following the date of this Agreement, and a copy of such
election with his or her federal tax return for the calendar year in which
the date of this Agreement falls. Purchaser acknowledges that his or her
failure to file such election in a timely manner may result in adverse tax
consequences for Purchaser.
8. MISCELLANEOUS.
(a) This Agreement may be amended only by written Agreement
between the Company and Purchaser.
(b) Any notice, demand or request required or permitted to be
given under this Agreement shall be in writing and shall be deemed sufficient
when delivered personally or sent by telegram or forty-eight (48) hours after
being deposited in the U.S. mail, as certified or registered mail, with
postage prepaid, and addressed, if to the Company, at its principal place of
business, attention the President, and if to Purchaser, at his or her address
as shown on the stock records of the Company.
(c) The rights and benefits of this Agreement shall inure to the
benefit of, and be enforceable by the Company's successors and assigns. The
rights and obligations of Purchaser under this Agreement may be assigned only
with the prior written consent of the Company.
(d) Both parties agree to execute any additional documents necessary
to carry out the purposes of this Agreement.
[SIGNATURE PAGE FOLLOWS]
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
RETIX
By:
---------------------------
Title:
------------------------
PURCHASER
-------------------------------
(Print Name)
-------------------------------
(Signature)
Address:
-----------------------
-----------------------
-6-
<PAGE>
ATTACHMENT A
CONSENT OF SPOUSE
I, _______________________, spouse of M.Y. Stephan, have read and
approved the foregoing Agreement. In consideration of the Company's granting
my spouse the right to purchase the Shares as set forth in the Agreement, I
hereby agree to be irrevocably bound by the Agreement and further agree that
any community property or other such interest shall be similarly bound by the
Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to
any amendment or exercise of any rights under the Agreement.
Dated: _________________ _______________________________
Spouse of Purchaser
<PAGE>
ATTACHMENT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and
Stock Purchase Agreement between the undersigned ("PURCHASER") and Retix
dated January 30, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and
transfers unto Retix _________________ shares of the Common Stock of Retix
standing in Purchaser's name on the books of said corporation represented by
Certificate No. ____ herewith and does hereby irrevocably constitute and
appoint _____________________________ to transfer said stock on the books of
the within-named corporation with full power of substitution in the premises.
THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE
EXHIBITS THERETO.
Dated: _________________ Signature:
----------------------------
----------------------------
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
CONSENT OF SPOUSE
I, _______________________, spouse of M.Y. Stephan, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated:
--------------------------
________________________________
Spouse of Purchaser
<PAGE>
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and
Stock Purchase Agreement between the undersigned ("PURCHASER") and Retix
dated January 30, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and
transfers unto Retix _________________ shares of the Common Stock of Retix
standing in Purchaser's name on the books of said corporation represented by
Certificate No. _____ herewith and does hereby irrevocably constitute and
appoint __________________________________ to transfer said stock on the
books of the within-named corporation with full power of substitution in the
premises. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT
AND THE EXHIBITS THERETO.
Dated: Signature:
--------------------------
--------------------------
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
RECEIPT
Retix hereby acknowledges receipt of a check or promissory note for
$1,605,000.00 given by M.Y. Stephan as consideration for certificate
number _____ for 750,000 shares.
Dated:
--------------------------
RETIX
By:
---------------------------
Title:
------------------------
<PAGE>
RECEIPT AND CONSENT
The undersigned hereby acknowledges receipt of a photocopy of certificate
number _____ for 750,000 shares of Common Stock of Retix (the "COMPANY").
The undersigned further acknowledges that the Company is acting as escrow
holder pursuant to the Purchaser's Exercise Notice and Stock Purchase Agreement
he/she has previously entered into with the Company. As escrow holder, the
Company holds the original of the aforementioned certificate issued in the
undersigned's name.
Dated:
---------------------- ------------------------------------
(Printed Name)
------------------------------------
(Signature)
<PAGE>
PROMISSORY NOTE
$1,605,000.00 Santa Monica, California
January 30, 1996
At the times hereinafter stated, for value received, the undersigned
promises to pay Retix, a California corporation (the "COMPANY"), or order, at
its principal office the principal sum of $1,605,000.00 with interest from
the date hereof at a rate of 5.73% per annum, compounded annually, on the
unpaid balance of said principal sum. This Note, which is full recourse, is
secured by a pledge of certain shares of Common Stock of the Company and is
subject to the terms of an Exercise Notice and Stock Purchase Agreement
between the undersigned and the Company of even date herewith (the "PURCHASE
AGREEMENT").
This Note shall be due and payable on December 29, 2005; provided,
however, that if the undersigned's employment by the Company or service as a
consultant or director of the Company is terminated prior to payment in full
of this Note, this Note shall be due and payable on such date as the exercise
period specified in the Option Agreement between the Purchaser and the
Company dated December 29, 1995 would have expired had the options granted
thereunder not been exercised pursuant to the Purchase Agreement of which
this Note is a part.
Principal and interest are payable in lawful money of the United States
of America. AT ANY TIME, THE PRIVILEGE IS RESERVED TO PAY MORE THAN THE SUM
DUE.
Should suit be commenced to collect this Note or any portion thereof,
such sum as the Court may deem reasonable shall be added hereto as attorneys'
fees. The makers and endorsers have severally waived presentment for payment,
protest, notice of protest, and notice of non-payment of this Note.
-------------------------------
M.Y. Stephan
<PAGE>
EXHIBIT 10.34
RETIX
EXERCISE NOTICE AND STOCK PURCHASE AGREEMENT
This Exercise Notice and Stock Purchase Agreement (the "AGREEMENT") is
made as of March 18, 1996 by and between Retix, a California corporation (the
"COMPANY"), and M.Y. Stephan (the "PURCHASER").
1. EXERCISE OF OPTION. Pursuant to the exercise of a stock option
(the "OPTION") granted to the Purchaser under the Company's 1995 Executive
Stock Option Plan (the "PLAN"), and pursuant to the Stock Option Agreement
dated March 18, 1996 (the "OPTION AGREEMENT") between the Company and the
Purchaser, the Purchaser has elected to purchase none of those shares which
have become vested under the vesting schedule set forth in the Option
Agreement (the "VESTED SHARES") and 250,000 of those shares which have not
yet vested under such schedule (the "UNVESTED SHARES"). (The Vested Shares
and the Unvested Shares are referred to collectively in this Agreement as the
"SHARES"). The purchase price for the Shares shall be $3.98 per Share for a
total purchase price of $995,000.00. The term "SHARES" refers to the
purchased Shares and all securities received in replacement of the Shares, or
as stock dividends or as a result of any stock splits, all securities
received in replacement of the Shares in a recapitalization, merger,
reorganization, exchange or the like, and all new, substituted or additional
securities or other properties to which Purchaser is entitled by reason of
Purchaser's ownership of the Shares. The Option Agreement shall be deemed
amended hereby to permit the early exercise of the Option and the purchase of
the Shares using a promissory note as contemplated hereby.
2. PAYMENT OF PURCHASE PRICE.
(a) The purchase price for the Shares shall be paid to the Company
at the time of execution of this agreement in cash, by check made payable to
the Company, by cancellation of indebtedness, by delivery to the Company of a
promissory note in the form attached to this Agreement (the "NOTE"), or by
some combination thereof. The form of such payment shall be at the
discretion of the Company.
(b) As security for the payment of the Note and any renewal,
extension, or modification thereof, the Purchaser hereby grants to the
Company a security interest in and pledges with and delivers to the Company
the certificate or certificates representing the Shares to be held pursuant
to the escrow described in Section 4 of this Agreement.
(c) In the event of any foreclosure of said security interest, the
Company may sell the Shares at a private sale and may itself repurchase any
or all of the Shares. The parties acknowledge that, if there is no
established public market for the Shares of the Company, the securities laws
applicable to the sale of the Shares may make a public sale of the Shares
commercially unreasonable. The parties agree that the repurchasing of said
Shares by the Company, or by any person to whom the Company may have assigned
its rights hereunder, is commercially reasonable if made at a price
determined by the Board of Directors of the Company in its discretion, fairly
exercised, representing what would be the fair market value of the Shares
diminished by such factors as the size of the block of Shares or the
restrictions of applicable securities laws.
(d) In the event of default in payment when due of any
indebtedness under the Note, the Company may elect then, or at any time
thereafter, to exercise all rights available to a secured party under the
California Commercial Code, including the right to sell the Shares at a
private sale or repurchase the Shares as provided above. The proceeds of any
sale shall be applied in the following order:
(i) To pay all reasonable expenses of the Company in
enforcing the Note and the security interest in the Shares, including without
limitation reasonable attorneys' fees and legal expenses incurred by the
Company.
(ii) In satisfaction of the remaining indebtedness under the
Note.
-2-
<PAGE>
(iii) To the Purchaser, any remaining proceeds.
(e) In the event that the Purchaser prepays all or a portion of
the Note, in accordance with the provisions thereof, the Purchaser intends
that the Shares represented by the portion of the Note so repaid, including
interest thereon, shall continue to be held in escrow, to serve as
independent collateral for a like amount of the outstanding portion of the
Note, for the purpose of commencing the holding period set forth in
Securities and Exchange Commission Rule 144(d).
3. LIMITATIONS ON TRANSFER.
In addition to any other limitation on transfer created by
applicable securities laws, Purchaser shall not assign, encumber or dispose
of any interest in the Shares while the Shares are subject to the Company's
repurchase option. After any Shares have been released from such repurchase
option, Purchaser shall not assign, encumber or dispose of any interest in
such Shares except in compliance with this Section 3 and applicable
securities laws.
(a) REPURCHASE OPTION. In the event of the voluntary or
involuntary termination of the position of Purchaser as an employee or
consultant of the Company for any reason, with or without cause (including
death or disability), the Company shall, upon the date of such termination,
have an irrevocable, exclusive option for a period of sixty (60) days from
such date to repurchase from Purchaser, at the original purchase price per
Share, up to that number of shares which would, if the option referenced in
Section 1 had not been so exercised, have been unvested as of the date of
termination. The Option Agreement is hereby incorporated by reference and
made a part of this Agreement. The option shall be exercised by the Company
by written notice to Purchaser or his or her executor and, at the Company's
option, (i) by delivery to the Purchaser or his or her executor, with such
Notice, of a check in the amount of the purchase price for the Shares being
repurchased, or (ii) in the event the Purchaser is indebted to the Company,
by cancellation by the Company of an amount of such indebtedness equal to the
purchase price for the Shares being repurchased, or (iii) by a combination of
(i) and (ii) so that the combined payment and cancellation of indebtedness
equals such purchase price. Upon delivery of such notice and payment of the
purchase price in any of the ways described above, the Company shall become
the legal and beneficial owner of the Shares being repurchased and all rights
and interest therein or related thereto, and the Company shall have the right
to transfer to its own name the number of Shares being repurchased by the
Company, without further action by Purchaser.
(b) ASSIGNMENT. The right of Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations.
(c) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares
or any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Company's option to repurchase under this Section 3. Any sale or transfer of
the Company's Shares shall be void unless the provisions of this Agreement are
met.
4. ESCROW. For purposes of facilitating the enforcement of the
provisions of Section 3 above, Purchaser agrees, immediately upon receipt of the
certificate(s) for his or her Shares, to deliver such certificate(s), together
with two stock powers executed in blank by Purchaser and Purchaser's spouse (if
required for transfer) with respect to each such stock certificate, to the
Secretary of the Company, or its designee, to hold in escrow, with the authority
to take all such actions and to effectuate all such transfers and/or releases as
may be necessary or appropriate to accomplish the objectives of this Agreement
in accordance with the terms hereof. Purchaser hereby acknowledges that the
appointment of the Secretary of the Company (or its designee) as the escrow
holder hereunder with the stated authorities is a material inducement to the
Company to make this Agreement and that such appointment is coupled with an
interest and is accordingly irrevocable. Purchaser agrees that such escrow
holder shall not be liable to any party hereto (or to any other party) for any
actions or omissions unless such escrow holder is grossly negligent relative
thereto. The escrow holder may rely upon any letter, notice or other document
executed by any signature purported to be genuine and may resign at any time.
-3-
<PAGE>
5. LEGENDS. The certificate or certificates representing the Shares
shall bear the following legend (as well as any legends required by applicable
corporate and securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
6. NO EMPLOYMENT RIGHTS. This Agreement shall not confer upon Purchaser
any right with respect to continuation of his or her position as an employee or
consultant of the Company or its subsidiaries, nor shall it interfere in any way
with the right of Purchaser or the Company, or any of its subsidiaries, to
terminate Purchaser's position as an employee or consultant of the Company at
any time.
7. SECTION 83(b) ELECTION. Purchaser hereby represents that he or she
understands (a) the contents and requirements of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("SECTION 83(b)"), (b) the application of
Section 83(b) to the purchase of Shares by Purchaser pursuant to this Agreement,
and (c) the nature of the election to be made by Purchaser under Section 83(b).
Purchaser further represents that he or she intends to file an election pursuant
to Section 83(b) with the Internal Revenue Service within 30 days following the
date of this Agreement, and a copy of such election with his or her federal tax
return for the calendar year in which the date of this Agreement falls.
Purchaser acknowledges that his or her failure to file such election in a timely
manner may result in adverse tax consequences for Purchaser.
8. MISCELLANEOUS.
(a) This Agreement may be amended only by written Agreement between
the Company and Purchaser.
(b) Any notice, demand or request required or permitted to be given
under this Agreement shall be in writing and shall be deemed sufficient when
delivered personally or sent by telegram or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed, if to the Company, at its principal place of business,
attention the President, and if to Purchaser, at his or her address as shown on
the stock records of the Company.
(c) The rights and benefits of this Agreement shall inure to the
benefit of, and be enforceable by the Company's successors and assigns. The
rights and obligations of Purchaser under this Agreement may be assigned only
with the prior written consent of the Company.
(d) Both parties agree to execute any additional documents necessary
to carry out the purposes of this Agreement.
[SIGNATURE PAGE FOLLOWS]
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
RETIX
By:
-----------------------------
Title:
--------------------------
PURCHASER
--------------------------------
(Print Name)
--------------------------------
(Signature)
Address:
-------------------------
-------------------------
-5-
<PAGE>
ATTACHMENT A
CONSENT OF SPOUSE
I, _______________________, spouse of M.Y. Stephan, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated:
------------------ -----------------------------
Spouse of Purchaser
<PAGE>
ATTACHMENT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated March
18, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. ____ herewith and does hereby irrevocably constitute and appoint
_____________________________ to transfer said stock on the books of the within-
named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: Signature:
-----------------------
--------------------------
--------------------------
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
CONSENT OF SPOUSE
I, _______________________, spouse of M.Y. Stephan, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated:
-----------------------
-------------------------------
Spouse of Purchaser
<PAGE>
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated March
18, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. _____ herewith and does hereby irrevocably constitute and appoint
__________________________________ to transfer said stock on the books of the
within-named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: Signature:
-----------------------
----------------------------
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
RECEIPT
Retix hereby acknowledges receipt of a check or promissory note for
$995,000.00 given by M.Y. Stephan as consideration for certificate number _____
for 250,000 shares.
Dated:
-------------------------
RETIX
By:
---------------------------
Title:
------------------------
<PAGE>
RECEIPT AND CONSENT
The undersigned hereby acknowledges receipt of a photocopy of certificate
number _____ for 250,000 shares of Common Stock of Retix (the "COMPANY").
The undersigned further acknowledges that the Company is acting as escrow
holder pursuant to the Purchaser's Exercise Notice and Stock Purchase Agreement
he/she has previously entered into with the Company. As escrow holder, the
Company holds the original of the aforementioned certificate issued in the
undersigned's name.
Dated:
---------------------- --------------------------------
(Printed Name)
--------------------------------
(Signature)
<PAGE>
PROMISSORY NOTE
$995,000.00 Santa Monica, California
March 18, 1996
At the times hereinafter stated, for value received, the undersigned
promises to pay Retix, a California corporation (the "COMPANY"), or order, at
its principal office the principal sum of $995,000.00 with interest from the
date hereof at a rate of 5.45% per annum, compounded annually, on the unpaid
balance of said principal sum. This Note, which is full recourse, is secured
by a pledge of certain shares of Common Stock of the Company and is subject
to the terms of an Exercise Notice and Stock Purchase Agreement between the
undersigned and the Company of even date herewith (the "PURCHASE AGREEMENT").
This Note shall be due and payable on March 18, 2006; provided, however,
that if the undersigned's employment by the Company or service as a
consultant or director of the Company is terminated prior to payment in full
of this Note, this Note shall be due and payable on such date as the exercise
period specified in the Option Agreement between the Purchaser and the
Company dated March 18, 1996 would have expired had the options granted
thereunder not been exercised pursuant to the Purchase Agreement of which
this Note is a part.
Principal and interest are payable in lawful money of the United States
of America. AT ANY TIME, THE PRIVILEGE IS RESERVED TO PAY MORE THAN THE SUM
DUE.
Should suit be commenced to collect this Note or any portion thereof,
such sum as the Court may deem reasonable shall be added hereto as attorneys'
fees. The makers and endorsers have severally waived presentment for payment,
protest, notice of protest, and notice of non-payment of this Note.
---------------------------
M.Y. Stephan
<PAGE>
EXHIBIT 10.35
RETIX
EXERCISE NOTICE AND STOCK PURCHASE AGREEMENT
This Exercise Notice and Stock Purchase Agreement (the "AGREEMENT") is
made as of March 18, 1996 by and between Retix, a California corporation (the
"COMPANY"), and M.Y. Stephan (the "PURCHASER").
1. EXERCISE OF OPTION. Pursuant to the exercise of a stock option
(the "OPTION") granted to the Purchaser under the Company's 1988 Stock Option
Plan (the "PLAN"), and pursuant to the Stock Option Agreement dated August 1,
1995 (the "OPTION AGREEMENT") between the Company and the Purchaser, the
Purchaser has elected to purchase 25,000 of those shares which have become
vested under the vesting schedule set forth in the Option Agreement (the
"VESTED SHARES") and none of those shares which have not yet vested under
such schedule (the "UNVESTED SHARES"). (The Vested Shares and the Unvested
Shares are referred to collectively in this Agreement as the "SHARES"). The
purchase price for the Shares shall be $3.825 per Share for a total purchase
price of $95,625.00. The term "SHARES" refers to the purchased Shares and
all securities received in replacement of the Shares, or as stock dividends
or as a result of any stock splits, all securities received in replacement of
the Shares in a recapitalization, merger, reorganization, exchange or the
like, and all new, substituted or additional securities or other properties
to which Purchaser is entitled by reason of Purchaser's ownership of the
Shares. The Option Agreement shall be deemed amended hereby to permit the
early exercise of the Option and the purchase of the Shares using a
promissory note as contemplated hereby.
2. PAYMENT OF PURCHASE PRICE.
(a) The purchase price for the Shares shall be paid to the Company
at the time of execution of this agreement in cash, by check made payable to
the Company, by cancellation of indebtedness, by delivery to the Company of a
promissory note in the form attached to this Agreement (the "NOTE"), or by
some combination thereof. The form of such payment shall be at the
discretion of the Company.
(b) As security for the payment of the Note and any renewal,
extension, or modification thereof, the Purchaser hereby grants to the
Company a security interest in and pledges with and delivers to the Company
the certificate or certificates representing the Shares to be held pursuant
to the escrow described in Section 4 of this Agreement.
(c) In the event of any foreclosure of said security interest, the
Company may sell the Shares at a private sale and may itself repurchase any
or all of the Shares. The parties acknowledge that, if there is no
established public market for the Shares of the Company, the securities laws
applicable to the sale of the Shares may make a public sale of the Shares
commercially unreasonable. The parties agree that the repurchasing of said
Shares by the Company, or by any person to whom the Company may have assigned
its rights hereunder, is commercially reasonable if made at a price
determined by the Board of Directors of the Company in its discretion, fairly
exercised, representing what would be the fair market value of the Shares
diminished by such factors as the size of the block of Shares or the
restrictions of applicable securities laws.
(d) In the event of default in payment when due of any
indebtedness under the Note, the Company may elect then, or at any time
thereafter, to exercise all rights available to a secured party under the
California Commercial Code, including the right to sell the Shares at a
private sale or repurchase the Shares as provided above. The proceeds of any
sale shall be applied in the following order:
(i) To pay all reasonable expenses of the Company in
enforcing the Note and the security interest in the Shares, including without
limitation reasonable attorneys' fees and legal expenses incurred by the
Company.
(ii) In satisfaction of the remaining indebtedness under the
Note.
-2-
<PAGE>
(iii) To the Purchaser, any remaining proceeds.
(e) In the event that the Purchaser prepays all or a portion of
the Note, in accordance with the provisions thereof, the Purchaser intends
that the Shares represented by the portion of the Note so repaid, including
interest thereon, shall continue to be held in escrow, to serve as
independent collateral for a like amount of the outstanding portion of the
Note, for the purpose of commencing the holding period set forth in
Securities and Exchange Commission Rule 144(d).
3. LIMITATIONS ON TRANSFER.
In addition to any other limitation on transfer created by
applicable securities laws, Purchaser shall not assign, encumber or dispose
of any interest in the Shares while the Shares are subject to the Company's
repurchase option. After any Shares have been released from such repurchase
option, Purchaser shall not assign, encumber or dispose of any interest in
such Shares except in compliance with this Section 3 and applicable
securities laws.
(a) REPURCHASE OPTION. In the event of the voluntary or
involuntary termination of the position of Purchaser as an employee or
consultant of the Company for any reason, with or without cause (including
death or disability), the Company shall, upon the date of such termination,
have an irrevocable, exclusive option for a period of sixty (60) days from
such date to repurchase from Purchaser, at the original purchase price per
Share, up to that number of shares which would, if the option referenced in
Section 1 had not been so exercised, have been unvested as of the date of
termination. The Option Agreement is hereby incorporated by reference and
made a part of this Agreement. The option shall be exercised by the Company
by written notice to Purchaser or his or her executor and, at the Company's
option, (i) by delivery to the Purchaser or his or her executor, with such
Notice, of a check in the amount of the purchase price for the Shares being
repurchased, or (ii) in the event the Purchaser is indebted to the Company,
by cancellation by the Company of an amount of such indebtedness equal to the
purchase price for the Shares being repurchased, or (iii) by a combination of
(i) and (ii) so that the combined payment and cancellation of indebtedness
equals such purchase price. Upon delivery of such notice and payment of the
purchase price in any of the ways described above, the Company shall become
the legal and beneficial owner of the Shares being repurchased and all rights
and interest therein or related thereto, and the Company shall have the right
to transfer to its own name the number of Shares being repurchased by the
Company, without further action by Purchaser.
(b) ASSIGNMENT. The right of Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders
of the Company or other persons or organizations.
(c) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of
Shares or any interest therein will receive and hold such Shares or interest
subject to the provisions of this Agreement, including, insofar as
applicable, the Company's option to repurchase under this Section 3. Any
sale or transfer of the Company's Shares shall be void unless the provisions
of this Agreement are met.
4. ESCROW. For purposes of facilitating the enforcement of the
provisions of Section 3 above, Purchaser agrees, immediately upon receipt of
the certificate(s) for his or her Shares, to deliver such certificate(s),
together with two stock powers executed in blank by Purchaser and Purchaser's
spouse (if required for transfer) with respect to each such stock
certificate, to the Secretary of the Company, or its designee, to hold in
escrow, with the authority to take all such actions and to effectuate all
such transfers and/or releases as may be necessary or appropriate to
accomplish the objectives of this Agreement in accordance with the terms
hereof. Purchaser hereby acknowledges that the appointment of the Secretary
of the Company (or its designee) as the escrow holder hereunder with the
stated authorities is a material inducement to the Company to make this
Agreement and that such appointment is coupled with an interest and is
accordingly irrevocable. Purchaser agrees that such escrow holder shall not
be liable to any party hereto (or to any other party) for any actions or
omissions unless such escrow holder is grossly negligent relative thereto.
The escrow holder may rely upon any letter, notice or other document executed
by any signature purported to be genuine and may resign at any time.
-3-
<PAGE>
5. LEGENDS. The certificate or certificates representing the Shares
shall bear the following legend (as well as any legends required by
applicable corporate and securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
6. NO EMPLOYMENT RIGHTS. This Agreement shall not confer upon
Purchaser any right with respect to continuation of his or her position as an
employee or consultant of the Company or its subsidiaries, nor shall it
interfere in any way with the right of Purchaser or the Company, or any of
its subsidiaries, to terminate Purchaser's position as an employee or
consultant of the Company at any time.
7. SECTION 83(b) ELECTION. Purchaser hereby represents that he or she
understands (a) the contents and requirements of Section 83(b) of the
Internal Revenue Code of 1986, as amended ("SECTION 83(b)"), (b) the
application of Section 83(b) to the purchase of Shares by Purchaser pursuant
to this Agreement, and (c) the nature of the election to be made by Purchaser
under Section 83(b). Purchaser further represents that he or she intends to
file an election pursuant to Section 83(b) with the Internal Revenue Service
within 30 days following the date of this Agreement, and a copy of such
election with his or her federal tax return for the calendar year in which
the date of this Agreement falls. Purchaser acknowledges that his or her
failure to file such election in a timely manner may result in adverse tax
consequences for Purchaser.
8. MISCELLANEOUS.
(a) This Agreement may be amended only by written Agreement
between the Company and Purchaser.
(b) Any notice, demand or request required or permitted to be
given under this Agreement shall be in writing and shall be deemed sufficient
when delivered personally or sent by telegram or forty-eight (48) hours after
being deposited in the U.S. mail, as certified or registered mail, with
postage prepaid, and addressed, if to the Company, at its principal place of
business, attention the President, and if to Purchaser, at his or her address
as shown on the stock records of the Company.
(c) The rights and benefits of this Agreement shall inure to the
benefit of, and be enforceable by the Company's successors and assigns. The
rights and obligations of Purchaser under this Agreement may be assigned only
with the prior written consent of the Company.
(d) Both parties agree to execute any additional documents
necessary to carry out the purposes of this Agreement.
[SIGNATURE PAGE FOLLOWS]
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first set forth above.
RETIX
By:
----------------------------------------
Title:
-------------------------------------
PURCHASER
--------------------------------------------
(Print Name)
--------------------------------------------
(Signature)
Address:
-----------------------------------
-----------------------------------
-5-
<PAGE>
ATTACHMENT A
CONSENT OF SPOUSE
I, _______________________, spouse of M.Y. Stephan, have read and
approved the foregoing Agreement. In consideration of the Company's granting
my spouse the right to purchase the Shares as set forth in the Agreement, I
hereby agree to be irrevocably bound by the Agreement and further agree that
any community property or other such interest shall be similarly bound by the
Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to
any amendment or exercise of any rights under the Agreement.
Dated: _________________ _______________________________
Spouse of Purchaser
<PAGE>
ATTACHMENT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and
Stock Purchase Agreement between the undersigned ("PURCHASER") and Retix
dated March 18, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and
transfers unto Retix _________________ shares of the Common Stock of Retix
standing in Purchaser's name on the books of said corporation represented by
Certificate No. ____ herewith and does hereby irrevocably constitute and
appoint _____________________________ to transfer said stock on the books of
the within-named corporation with full power of substitution in the premises.
THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE
EXHIBITS THERETO.
Dated: _________________ Signature:
__________________________________
__________________________________
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
CONSENT OF SPOUSE
I, _______________________, spouse of M.Y. Stephan, have read and
approved the foregoing Agreement. In consideration of the Company's granting
my spouse the right to purchase the Shares as set forth in the Agreement, I
hereby agree to be irrevocably bound by the Agreement and further agree that
any community property or other such interest shall be similarly bound by the
Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to
any amendment or exercise of any rights under the Agreement.
Dated: _________________
________________________________
Spouse of Purchaser
<PAGE>
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and
Stock Purchase Agreement between the undersigned ("PURCHASER") and Retix
dated March 18, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and
transfers unto Retix _________________ shares of the Common Stock of Retix
standing in Purchaser's name on the books of said corporation represented by
Certificate No. _____ herewith and does hereby irrevocably constitute and
appoint __________________________________ to transfer said stock on the
books of the within-named corporation with full power of substitution in the
premises. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT
AND THE EXHIBITS THERETO.
Dated: _____________________ Signature:
__________________________________
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
RECEIPT
Retix hereby acknowledges receipt of a check or promissory note for
$95,625.00 given by M.Y. Stephan as consideration for certificate number
_____ for 25,000 shares.
Dated: _________________
RETIX
By:
----------------------------------------
Title:
-------------------------------------
<PAGE>
RECEIPT AND CONSENT
The undersigned hereby acknowledges receipt of a photocopy of
certificate number _____ for 25,000 shares of Common Stock of Retix (the
"COMPANY").
The undersigned further acknowledges that the Company is acting as
escrow holder pursuant to the Purchaser's Exercise Notice and Stock Purchase
Agreement he/she has previously entered into with the Company. As escrow
holder, the Company holds the original of the aforementioned certificate
issued in the undersigned's name.
Dated: _________________ ____________________________________________
(Printed Name
____________________________________________
(Signature)
<PAGE>
PROMISSORY NOTE
$95,625.00 Santa Monica, California
March 18, 1996
At the times hereinafter stated, for value received, the undersigned
promises to pay Retix, a California corporation (the "COMPANY"), or order, at
its principal office the principal sum of $95,625.00 with interest from the
date hereof at a rate of 5.45% per annum, compounded annually, on the unpaid
balance of said principal sum. This Note, which is full recourse, is secured
by a pledge of certain shares of Common Stock of the Company and is subject
to the terms of an Exercise Notice and Stock Purchase Agreement between the
undersigned and the Company of even date herewith (the "PURCHASE AGREEMENT").
This Note shall be due and payable on August 1, 2005; provided, however,
that if the undersigned's employment by the Company or service as a
consultant or director of the Company is terminated prior to payment in full
of this Note, this Note shall be due and payable on such date as the exercise
period specified in the Option Agreement between the Purchaser and the
Company dated August 1, 1995 would have expired had the options granted
thereunder not been exercised pursuant to the Purchase Agreement of which
this Note is a part.
Principal and interest are payable in lawful money of the United States
of America. AT ANY TIME, THE PRIVILEGE IS RESERVED TO PAY MORE THAN THE SUM
DUE.
Should suit be commenced to collect this Note or any portion thereof,
such sum as the Court may deem reasonable shall be added hereto as attorneys'
fees. The makers and endorsers have severally waived presentment for payment,
protest, notice of protest, and notice of non-payment of this Note.
____________________________________________
M.Y. Stephan
<PAGE>
EXHIBIT 10.36
RETIX
EXERCISE NOTICE AND STOCK PURCHASE AGREEMENT
This Exercise Notice and Stock Purchase Agreement (the "AGREEMENT") is made
as of January 30, 1996 by and between Retix, a California corporation (the
"COMPANY"), and Philip Mantle (the "PURCHASER").
1. EXERCISE OF OPTION. Pursuant to the exercise of a stock option (the
"OPTION") granted to the Purchaser under the Company's 1988 Stock Option Plan
(the "PLAN"), and pursuant to the Stock Option Agreement dated December 29, 1995
(the "OPTION AGREEMENT") between the Company and the Purchaser, the Purchaser
has elected to purchase none of those shares which have become vested under the
vesting schedule set forth in the Option Agreement (the "VESTED SHARES") and
300,000 of those shares which have not yet vested under such schedule (the
"UNVESTED SHARES"). (The Vested Shares and the Unvested Shares are referred to
collectively in this Agreement as the "SHARES"). The purchase price for the
Shares shall be $2.14 per Share for a total purchase price of $642,000.00. The
term "SHARES" refers to the purchased Shares and all securities received in
replacement of the Shares, or as stock dividends or as a result of any stock
splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
entitled by reason of Purchaser's ownership of the Shares. The Option Agreement
shall be deemed amended hereby to permit the early exercise of the Option and
the purchase of the Shares using a promissory note as contemplated hereby.
2. PAYMENT OF PURCHASE PRICE.
(a) The purchase price for the Shares shall be paid to the Company at
the time of execution of this agreement in cash, by check made payable to the
Company, by cancellation of indebtedness, by delivery to the Company of a
promissory note in the form attached to this Agreement (the "NOTE"), or by some
combination thereof. The form of such payment shall be at the discretion of the
Company.
(b) As security for the payment of the Note and any renewal,
extension, or modification thereof, the Purchaser hereby grants to the Company a
security interest in and pledges with and delivers to the Company the
certificate or certificates representing the Shares to be held pursuant to the
escrow described in Section 4 of this Agreement.
(c) In the event of any foreclosure of said security interest, the
Company may sell the Shares at a private sale and may itself repurchase any or
all of the Shares. The parties acknowledge that, if there is no established
public market for the Shares of the Company, the securities laws applicable to
the sale of the Shares may make a public sale of the Shares commercially
unreasonable. The parties agree that the repurchasing of said Shares by the
Company, or by any person to whom the Company may have assigned its rights
hereunder, is commercially reasonable if made at a price determined by the Board
of Directors of the Company in its discretion, fairly exercised, representing
what would be the fair market value of the Shares diminished by such factors as
the size of the block of Shares or the restrictions of applicable securities
laws.
(d) In the event of default in payment when due of any indebtedness
under the Note, the Company may elect then, or at any time thereafter, to
exercise all rights available to a secured party under the California Commercial
Code, including the right to sell the Shares at a private sale or repurchase the
Shares as provided above. The proceeds of any sale shall be applied in the
following order:
(i) To pay all reasonable expenses of the Company in enforcing
the Note and the security interest in the Shares, including without limitation
reasonable attorneys' fees and legal expenses incurred by the Company.
(ii) In satisfaction of the remaining indebtedness under the
Note.
-2-
<PAGE>
(iii) To the Purchaser, any remaining proceeds.
(e) In the event that the Purchaser prepays all or a portion of the
Note, in accordance with the provisions thereof, the Purchaser intends that the
Shares represented by the portion of the Note so repaid, including interest
thereon, shall continue to be held in escrow, to serve as independent collateral
for a like amount of the outstanding portion of the Note, for the purpose of
commencing the holding period set forth in Securities and Exchange Commission
Rule 144(d).
3. LIMITATIONS ON TRANSFER.
In addition to any other limitation on transfer created by applicable
securities laws, Purchaser shall not assign, encumber or dispose of any interest
in the Shares while the Shares are subject to the Company's repurchase option.
After any Shares have been released from such repurchase option, Purchaser shall
not assign, encumber or dispose of any interest in such Shares except in
compliance with this Section 3 and applicable securities laws.
(a) REPURCHASE OPTION. In the event of the voluntary or involuntary
termination of the position of Purchaser as an employee or consultant of the
Company for any reason, with or without cause (including death or disability),
the Company shall, upon the date of such termination, have an irrevocable,
exclusive option for a period of sixty (60) days from such date to repurchase
from Purchaser, at the original purchase price per Share, up to that number of
shares which would, if the option referenced in Section 1 had not been so
exercised, have been unvested as of the date of termination. The Option
Agreement is hereby incorporated by reference and made a part of this Agreement.
The option shall be exercised by the Company by written notice to Purchaser or
his or her executor and, at the Company's option, (i) by delivery to the
Purchaser or his or her executor, with such Notice, of a check in the amount of
the purchase price for the Shares being repurchased, or (ii) in the event the
Purchaser is indebted to the Company, by cancellation by the Company of an
amount of such indebtedness equal to the purchase price for the Shares being
repurchased, or (iii) by a combination of (i) and (ii) so that the combined
payment and cancellation of indebtedness equals such purchase price. Upon
delivery of such notice and payment of the purchase price in any of the ways
described above, the Company shall become the legal and beneficial owner of the
Shares being repurchased and all rights and interest therein or related thereto,
and the Company shall have the right to transfer to its own name the number of
Shares being repurchased by the Company, without further action by Purchaser.
(b) ASSIGNMENT. The right of Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations.
(c) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares
or any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Company's option to repurchase under this Section 3. Any sale or transfer of
the Company's Shares shall be void unless the provisions of this Agreement are
met.
4. ESCROW. For purposes of facilitating the enforcement of the
provisions of Section 3 above, Purchaser agrees, immediately upon receipt of the
certificate(s) for his or her Shares, to deliver such certificate(s), together
with two stock powers executed in blank by Purchaser and Purchaser's spouse (if
required for transfer) with respect to each such stock certificate, to the
Secretary of the Company, or its designee, to hold in escrow, with the authority
to take all such actions and to effectuate all such transfers and/or releases as
may be necessary or appropriate to accomplish the objectives of this Agreement
in accordance with the terms hereof. Purchaser hereby acknowledges that the
appointment of the Secretary of the Company (or its designee) as the escrow
holder hereunder with the stated authorities is a material inducement to the
Company to make this Agreement and that such appointment is coupled with an
interest and is accordingly irrevocable. Purchaser agrees that such escrow
holder shall not be liable to any party hereto (or to any other party) for any
actions or omissions unless such escrow holder is grossly negligent relative
thereto. The escrow holder may rely upon any letter, notice or other document
executed by any signature purported to be genuine and may resign at any time.
-3-
<PAGE>
5. LEGENDS. The certificate or certificates representing the Shares
shall bear the following legend (as well as any legends required by applicable
corporate and securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
6. NO EMPLOYMENT RIGHTS. This Agreement shall not confer upon Purchaser
any right with respect to continuation of his or her position as an employee or
consultant of the Company or its subsidiaries, nor shall it interfere in any way
with the right of Purchaser or the Company, or any of its subsidiaries, to
terminate Purchaser's position as an employee or consultant of the Company at
any time.
7. SECTION 83(b) ELECTION. Purchaser hereby represents that he or she
understands (a) the contents and requirements of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("SECTION 83(b)"), (b) the application of
Section 83(b) to the purchase of Shares by Purchaser pursuant to this Agreement,
and (c) the nature of the election to be made by Purchaser under Section 83(b).
Purchaser further represents that he or she intends to file an election pursuant
to Section 83(b) with the Internal Revenue Service within 30 days following the
date of this Agreement, and a copy of such election with his or her federal tax
return for the calendar year in which the date of this Agreement falls.
Purchaser acknowledges that his or her failure to file such election in a timely
manner may result in adverse tax consequences for Purchaser.
8. MISCELLANEOUS.
(a) This Agreement may be amended only by written Agreement between
the Company and Purchaser.
(b) Any notice, demand or request required or permitted to be given
under this Agreement shall be in writing and shall be deemed sufficient when
delivered personally or sent by telegram or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed, if to the Company, at its principal place of business,
attention the President, and if to Purchaser, at his or her address as shown on
the stock records of the Company.
(c) The rights and benefits of this Agreement shall inure to the
benefit of, and be enforceable by the Company's successors and assigns. The
rights and obligations of Purchaser under this Agreement may be assigned only
with the prior written consent of the Company.
(d) Both parties agree to execute any additional documents necessary
to carry out the purposes of this Agreement.
[SIGNATURE PAGE FOLLOWS]
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
RETIX
By:
---------------------------
Title:
------------------------
PURCHASER
------------------------------
(Print Name)
------------------------------
(Signature)
Address:
-----------------
-----------------
-5-
<PAGE>
ATTACHMENT A
CONSENT OF SPOUSE
I, _______________________, spouse of Philip Mantle, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated: _________________ _______________________________
Spouse of Purchaser
<PAGE>
ATTACHMENT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated January
30, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. ____ herewith and does hereby irrevocably constitute and appoint
_____________________________ to transfer said stock on the books of the within-
named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: _________________ Signature:
---------------------------------
---------------------------------
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
CONSENT OF SPOUSE
I, _______________________, spouse of Philip Mantle, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated: _________________
________________________________
Spouse of Purchaser
<PAGE>
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated January
30, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. _____ herewith and does hereby irrevocably constitute and appoint
__________________________________ to transfer said stock on the books of the
within-named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: _____________________ Signature:
---------------------------
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
-10-
<PAGE>
RECEIPT
Retix hereby acknowledges receipt of a check or promissory note for
$642,000.00 given by Philip Mantle as consideration for certificate number _____
for 300,000 shares.
Dated: _________________
RETIX
By:
---------------------------
Title:
------------------------
<PAGE>
RECEIPT AND CONSENT
The undersigned hereby acknowledges receipt of a photocopy of certificate
number _____ for 300,000 shares of Common Stock of Retix (the "COMPANY").
The undersigned further acknowledges that the Company is acting as escrow
holder pursuant to the Purchaser's Exercise Notice and Stock Purchase Agreement
he/she has previously entered into with the Company. As escrow holder, the
Company holds the original of the aforementioned certificate issued in the
undersigned's name.
Dated: _________________ --------------------------------------
(Printed Name
--------------------------------------
(Signature)
<PAGE>
PROMISSORY NOTE
$642,000.00 Santa Monica, California
January 30, 1996
At the times hereinafter stated, for value received, the undersigned
promises to pay Retix, a California corporation (the "COMPANY"), or order, at
its principal office the principal sum of $642,000.00 with interest from the
date hereof at a rate of 5.73% per annum, compounded annually, on the unpaid
balance of said principal sum. This Note, which is full recourse, is secured by
a pledge of certain shares of Common Stock of the Company and is subject to the
terms of an Exercise Notice and Stock Purchase Agreement between the undersigned
and the Company of even date herewith (the "PURCHASE AGREEMENT").
This Note shall be due and payable on December 29, 2005; provided,
however, that if the undersigned's employment by the Company or service as a
consultant or director of the Company is terminated prior to payment in full of
this Note, this Note shall be due and payable on such date as the exercise
period specified in the Option Agreement between the Purchaser and the Company
dated December 29, 1995 would have expired had the options granted thereunder
not been exercised pursuant to the Purchase Agreement of which this Note is a
part.
Principal and interest are payable in lawful money of the United States of
America. AT ANY TIME, THE PRIVILEGE IS RESERVED TO PAY MORE THAN THE SUM DUE.
Should suit be commenced to collect this Note or any portion thereof, such
sum as the Court may deem reasonable shall be added hereto as attorneys' fees.
The makers and endorsers have severally waived presentment for payment, protest,
notice of protest, and notice of non-payment of this Note.
--------------------------------------------
Philip Mantle
<PAGE>
EXHIBIT 10.37
RETIX
EXERCISE NOTICE AND STOCK PURCHASE AGREEMENT
This Exercise Notice and Stock Purchase Agreement (the "AGREEMENT") is
made as of March 18, 1996 by and between Retix, a California corporation (the
"COMPANY"), and Philip Mantle (the "PURCHASER").
1. EXERCISE OF OPTION. Pursuant to the exercise of a stock option
(the "OPTION") granted to the Purchaser under the Company's 1988 Stock Option
Plan (the "PLAN"), and pursuant to the Stock Option Agreement dated March 18,
1996 (the "OPTION AGREEMENT") between the Company and the Purchaser, the
Purchaser has elected to purchase none of those shares which have become
vested under the vesting schedule set forth in the Option Agreement (the
"VESTED SHARES") and 100,000 of those shares which have not yet vested under
such schedule (the "UNVESTED SHARES"). (The Vested Shares and the Unvested
Shares are referred to collectively in this Agreement as the "SHARES"). The
purchase price for the Shares shall be $3.98 per Share for a total purchase
price of $398,000.00. The term "SHARES" refers to the purchased Shares and
all securities received in replacement of the Shares, or as stock dividends
or as a result of any stock splits, all securities received in replacement of
the Shares in a recapitalization, merger, reorganization, exchange or the
like, and all new, substituted or additional securities or other properties
to which Purchaser is entitled by reason of Purchaser's ownership of the
Shares. The Option Agreement shall be deemed amended hereby to permit the
early exercise of the Option and the purchase of the Shares using a
promissory note as contemplated hereby.
2. PAYMENT OF PURCHASE PRICE.
(a) The purchase price for the Shares shall be paid to the Company
at the time of execution of this agreement in cash, by check made payable to
the Company, by cancellation of indebtedness, by delivery to the Company of a
promissory note in the form attached to this Agreement (the "NOTE"), or by
some combination thereof. The form of such payment shall be at the
discretion of the Company.
(b) As security for the payment of the Note and any renewal,
extension, or modification thereof, the Purchaser hereby grants to the
Company a security interest in and pledges with and delivers to the Company
the certificate or certificates representing the Shares to be held pursuant
to the escrow described in Section 4 of this Agreement.
(c) In the event of any foreclosure of said security interest, the
Company may sell the Shares at a private sale and may itself repurchase any
or all of the Shares. The parties acknowledge that, if there is no
established public market for the Shares of the Company, the securities laws
applicable to the sale of the Shares may make a public sale of the Shares
commercially unreasonable. The parties agree that the repurchasing of said
Shares by the Company, or by any person to whom the Company may have assigned
its rights hereunder, is commercially reasonable if made at a price
determined by the Board of Directors of the Company in its discretion, fairly
exercised, representing what would be the fair market value of the Shares
diminished by such factors as the size of the block of Shares or the
restrictions of applicable securities laws.
(d) In the event of default in payment when due of any
indebtedness under the Note, the Company may elect then, or at any time
thereafter, to exercise all rights available to a secured party under the
California Commercial Code, including the right to sell the Shares at a
private sale or repurchase the Shares as provided above. The proceeds of any
sale shall be applied in the following order:
(i) To pay all reasonable expenses of the Company in
enforcing the Note and the security interest in the Shares, including without
limitation reasonable attorneys' fees and legal expenses incurred by the
Company.
(ii) In satisfaction of the remaining indebtedness under the
Note.
<PAGE>
(iii) To the Purchaser, any remaining proceeds.
(e) In the event that the Purchaser prepays all or a portion of
the Note, in accordance with the provisions thereof, the Purchaser intends
that the Shares represented by the portion of the Note so repaid, including
interest thereon, shall continue to be held in escrow, to serve as
independent collateral for a like amount of the outstanding portion of the
Note, for the purpose of commencing the holding period set forth in
Securities and Exchange Commission Rule 144(d).
3. LIMITATIONS ON TRANSFER.
In addition to any other limitation on transfer created by
applicable securities laws, Purchaser shall not assign, encumber or dispose
of any interest in the Shares while the Shares are subject to the Company's
repurchase option. After any Shares have been released from such repurchase
option, Purchaser shall not assign, encumber or dispose of any interest in
such Shares except in compliance with this Section 3 and applicable
securities laws.
(a) REPURCHASE OPTION. In the event of the voluntary or
involuntary termination of the position of Purchaser as an employee or
consultant of the Company for any reason, with or without cause (including
death or disability), the Company shall, upon the date of such termination,
have an irrevocable, exclusive option for a period of sixty (60) days from
such date to repurchase from Purchaser, at the original purchase price per
Share, up to that number of shares which would, if the option referenced in
Section 1 had not been so exercised, have been unvested as of the date of
termination. The Option Agreement is hereby incorporated by reference and
made a part of this Agreement. The option shall be exercised by the Company
by written notice to Purchaser or his or her executor and, at the Company's
option, (i) by delivery to the Purchaser or his or her executor, with such
Notice, of a check in the amount of the purchase price for the Shares being
repurchased, or (ii) in the event the Purchaser is indebted to the Company,
by cancellation by the Company of an amount of such indebtedness equal to the
purchase price for the Shares being repurchased, or (iii) by a combination of
(i) and (ii) so that the combined payment and cancellation of indebtedness
equals such purchase price. Upon delivery of such notice and payment of the
purchase price in any of the ways described above, the Company shall become
the legal and beneficial owner of the Shares being repurchased and all rights
and interest therein or related thereto, and the Company shall have the right
to transfer to its own name the number of Shares being repurchased by the
Company, without further action by Purchaser.
(b) ASSIGNMENT. The right of Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders
of the Company or other persons or organizations.
(c) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of
Shares or any interest therein will receive and hold such Shares or interest
subject to the provisions of this Agreement, including, insofar as
applicable, the Company's option to repurchase under this Section 3. Any
sale or transfer of the Company's Shares shall be void unless the provisions
of this Agreement are met.
4. ESCROW. For purposes of facilitating the enforcement of the
provisions of Section 3 above, Purchaser agrees, immediately upon receipt of
the certificate(s) for his or her Shares, to deliver such certificate(s),
together with two stock powers executed in blank by Purchaser and Purchaser's
spouse (if required for transfer) with respect to each such stock
certificate, to the Secretary of the Company, or its designee, to hold in
escrow, with the authority to take all such actions and to effectuate all
such transfers and/or releases as may be necessary or appropriate to
accomplish the objectives of this Agreement in accordance with the terms
hereof. Purchaser hereby acknowledges that the appointment of the Secretary
of the Company (or its designee) as the escrow holder hereunder with the
stated authorities is a material inducement to the Company to make this
Agreement and that such appointment is coupled with an interest and is
accordingly irrevocable. Purchaser agrees that such escrow holder shall not
be liable to any party hereto (or to any other party) for any actions or
omissions unless such escrow holder is grossly negligent relative thereto.
The escrow holder may rely upon any letter, notice or other document executed
by any signature purported to be genuine and may resign at any time.
-2-
<PAGE>
5. LEGENDS. The certificate or certificates representing the Shares
shall bear the following legend (as well as any legends required by
applicable corporate and securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
6. NO EMPLOYMENT RIGHTS. This Agreement shall not confer upon
Purchaser any right with respect to continuation of his or her position as an
employee or consultant of the Company or its subsidiaries, nor shall it
interfere in any way with the right of Purchaser or the Company, or any of
its subsidiaries, to terminate Purchaser's position as an employee or
consultant of the Company at any time.
7. SECTION 83(b) ELECTION. Purchaser hereby represents that he or she
understands (a) the contents and requirements of Section 83(b) of the
Internal Revenue Code of 1986, as amended ("SECTION 83(b)"), (b) the
application of Section 83(b) to the purchase of Shares by Purchaser pursuant
to this Agreement, and (c) the nature of the election to be made by Purchaser
under Section 83(b). Purchaser further represents that he or she intends to
file an election pursuant to Section 83(b) with the Internal Revenue Service
within 30 days following the date of this Agreement, and a copy of such
election with his or her federal tax return for the calendar year in which
the date of this Agreement falls. Purchaser acknowledges that his or her
failure to file such election in a timely manner may result in adverse tax
consequences for Purchaser.
8. MISCELLANEOUS.
(a) This Agreement may be amended only by written Agreement
between the Company and Purchaser.
(b) Any notice, demand or request required or permitted to be
given under this Agreement shall be in writing and shall be deemed sufficient
when delivered personally or sent by telegram or forty-eight (48) hours after
being deposited in the U.S. mail, as certified or registered mail, with
postage prepaid, and addressed, if to the Company, at its principal place of
business, attention the President, and if to Purchaser, at his or her address
as shown on the stock records of the Company.
(c) The rights and benefits of this Agreement shall inure to the
benefit of, and be enforceable by the Company's successors and assigns. The
rights and obligations of Purchaser under this Agreement may be assigned only
with the prior written consent of the Company.
(d) Both parties agree to execute any additional documents
necessary to carry out the purposes of this Agreement.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first set forth above.
RETIX
By:
-----------------------------------------
Title:
--------------------------------------
PURCHASER
--------------------------------------------
(Print Name)
--------------------------------------------
(Signature)
Address:
-----------------------------------
-----------------------------------
<PAGE>
ATTACHMENT A
CONSENT OF SPOUSE
I, _______________________, spouse of Philip Mantle, have read and
approved the foregoing Agreement. In consideration of the Company's granting
my spouse the right to purchase the Shares as set forth in the Agreement, I
hereby agree to be irrevocably bound by the Agreement and further agree that
any community property or other such interest shall be similarly bound by the
Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to
any amendment or exercise of any rights under the Agreement.
Dated: _________________ _______________________________
Spouse of Purchaser
<PAGE>
ATTACHMENT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and
Stock Purchase Agreement between the undersigned ("PURCHASER") and Retix
dated March 18, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and
transfers unto Retix _________________ shares of the Common Stock of Retix
standing in Purchaser's name on the books of said corporation represented by
Certificate No. ____ herewith and does hereby irrevocably constitute and
appoint _____________________________ to transfer said stock on the books of
the within-named corporation with full power of substitution in the premises.
THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE
EXHIBITS THERETO.
Dated: _________________ Signature:
__________________________________
__________________________________
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
CONSENT OF SPOUSE
I, _______________________, spouse of Philip Mantle, have read and
approved the foregoing Agreement. In consideration of the Company's granting
my spouse the right to purchase the Shares as set forth in the Agreement, I
hereby agree to be irrevocably bound by the Agreement and further agree that
any community property or other such interest shall be similarly bound by the
Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to
any amendment or exercise of any rights under the Agreement.
Dated: _________________
________________________________
Spouse of Purchaser
<PAGE>
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and
Stock Purchase Agreement between the undersigned ("PURCHASER") and Retix
dated March 18, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and
transfers unto Retix _________________ shares of the Common Stock of Retix
standing in Purchaser's name on the books of said corporation represented by
Certificate No. _____ herewith and does hereby irrevocably constitute and
appoint __________________________________ to transfer said stock on the
books of the within-named corporation with full power of substitution in the
premises. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT
AND THE EXHIBITS THERETO.
Dated: _____________________ Signature:
____________________________________
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
RECEIPT
Retix hereby acknowledges receipt of a check or promissory note for
$398,000.00 given by Philip Mantle as consideration for certificate number
_____ for 100,000 shares.
Dated: _________________
RETIX
By:
-----------------------------------------
Title:
--------------------------------------
<PAGE>
RECEIPT AND CONSENT
The undersigned hereby acknowledges receipt of a photocopy of
certificate number _____ for 100,000 shares of Common Stock of Retix (the
"COMPANY").
The undersigned further acknowledges that the Company is acting as
escrow holder pursuant to the Purchaser's Exercise Notice and Stock Purchase
Agreement he/she has previously entered into with the Company. As escrow
holder, the Company holds the original of the aforementioned certificate
issued in the undersigned's name.
Dated: _________________ __________________________________________
(Printed Name
__________________________________________
(Signature)
<PAGE>
PROMISSORY NOTE
$398,000.00 Santa Monica, California
March 18, 1996
At the times hereinafter stated, for value received, the undersigned
promises to pay Retix, a California corporation (the "COMPANY"), or order, at
its principal office the principal sum of $398,000.00 with interest from the
date hereof at a rate of 5.45% per annum, compounded annually, on the unpaid
balance of said principal sum. This Note, which is full recourse, is secured
by a pledge of certain shares of Common Stock of the Company and is subject
to the terms of an Exercise Notice and Stock Purchase Agreement between the
undersigned and the Company of even date herewith (the "PURCHASE AGREEMENT").
This Note shall be due and payable on March 18, 2006; provided, however,
that if the undersigned's employment by the Company or service as a
consultant or director of the Company is terminated prior to payment in full
of this Note, this Note shall be due and payable on such date as the exercise
period specified in the Option Agreement between the Purchaser and the
Company dated March 18, 1996 would have expired had the options granted
thereunder not been exercised pursuant to the Purchase Agreement of which
this Note is a part.
Principal and interest are payable in lawful money of the United States
of America. AT ANY TIME, THE PRIVILEGE IS RESERVED TO PAY MORE THAN THE SUM
DUE.
Should suit be commenced to collect this Note or any portion thereof,
such sum as the Court may deem reasonable shall be added hereto as attorneys'
fees. The makers and endorsers have severally waived presentment for payment,
protest, notice of protest, and notice of non-payment of this Note.
______________________________________
Philip Mantle
<PAGE>
EXHIBIT 10.38
RETIX
EXERCISE NOTICE AND STOCK PURCHASE AGREEMENT
This Exercise Notice and Stock Purchase Agreement (the "AGREEMENT") is made
as of March 18, 1996 by and between Retix, a California corporation (the
"COMPANY"), and Steven Waszak (the "PURCHASER").
1. EXERCISE OF OPTION. Pursuant to the exercise of a stock option (the
"OPTION") granted to the Purchaser under the Company's 1988 Stock Option Plan
(the "PLAN"), and pursuant to the Stock Option Agreement dated March 18, 1996
(the "OPTION AGREEMENT") between the Company and the Purchaser, the Purchaser
has elected to purchase none of those shares which have become vested under the
vesting schedule set forth in the Option Agreement (the "VESTED SHARES") and
50,000 of those shares which have not yet vested under such schedule (the
"UNVESTED SHARES"). (The Vested Shares and the Unvested Shares are referred to
collectively in this Agreement as the "SHARES"). The purchase price for the
Shares shall be $3.98 per Share for a total purchase price of $199,000.00. The
term "SHARES" refers to the purchased Shares and all securities received in
replacement of the Shares, or as stock dividends or as a result of any stock
splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
entitled by reason of Purchaser's ownership of the Shares. The Option Agreement
shall be deemed amended hereby to permit the early exercise of the Option and
the purchase of the Shares using a promissory note as contemplated hereby.
2. PAYMENT OF PURCHASE PRICE.
(a) The purchase price for the Shares shall be paid to the Company at
the time of execution of this agreement in cash, by check made payable to the
Company, by cancellation of indebtedness, by delivery to the Company of a
promissory note in the form attached to this Agreement (the "NOTE"), or by some
combination thereof. The form of such payment shall be at the discretion of the
Company.
(b) As security for the payment of the Note and any renewal,
extension, or modification thereof, the Purchaser hereby grants to the Company a
security interest in and pledges with and delivers to the Company the
certificate or certificates representing the Shares to be held pursuant to the
escrow described in Section 4 of this Agreement.
(c) In the event of any foreclosure of said security interest, the
Company may sell the Shares at a private sale and may itself repurchase any or
all of the Shares. The parties acknowledge that, if there is no established
public market for the Shares of the Company, the securities laws applicable to
the sale of the Shares may make a public sale of the Shares commercially
unreasonable. The parties agree that the repurchasing of said Shares by the
Company, or by any person to whom the Company may have assigned its rights
hereunder, is commercially reasonable if made at a price determined by the Board
of Directors of the Company in its discretion, fairly exercised, representing
what would be the fair market value of the Shares diminished by such factors as
the size of the block of Shares or the restrictions of applicable securities
laws.
(d) In the event of default in payment when due of any indebtedness
under the Note, the Company may elect then, or at any time thereafter, to
exercise all rights available to a secured party under the California Commercial
Code, including the right to sell the Shares at a private sale or repurchase the
Shares as provided above. The proceeds of any sale shall be applied in the
following order:
(i) To pay all reasonable expenses of the Company in enforcing
the Note and the security interest in the Shares, including without limitation
reasonable attorneys' fees and legal expenses incurred by the Company.
(ii) In satisfaction of the remaining indebtedness under the
Note.
-2-
<PAGE>
(iii) To the Purchaser, any remaining proceeds.
(e) In the event that the Purchaser prepays all or a portion of the
Note, in accordance with the provisions thereof, the Purchaser intends that the
Shares represented by the portion of the Note so repaid, including interest
thereon, shall continue to be held in escrow, to serve as independent collateral
for a like amount of the outstanding portion of the Note, for the purpose of
commencing the holding period set forth in Securities and Exchange Commission
Rule 144(d).
3. LIMITATIONS ON TRANSFER.
In addition to any other limitation on transfer created by applicable
securities laws, Purchaser shall not assign, encumber or dispose of any interest
in the Shares while the Shares are subject to the Company's repurchase option.
After any Shares have been released from such repurchase option, Purchaser shall
not assign, encumber or dispose of any interest in such Shares except in
compliance with this Section 3 and applicable securities laws.
(a) REPURCHASE OPTION. In the event of the voluntary or involuntary
termination of the position of Purchaser as an employee or consultant of the
Company for any reason, with or without cause (including death or disability),
the Company shall, upon the date of such termination, have an irrevocable,
exclusive option for a period of sixty (60) days from such date to repurchase
from Purchaser, at the original purchase price per Share, up to that number of
shares which would, if the option referenced in Section 1 had not been so
exercised, have been unvested as of the date of termination. The Option
Agreement is hereby incorporated by reference and made a part of this Agreement.
The option shall be exercised by the Company by written notice to Purchaser or
his or her executor and, at the Company's option, (i) by delivery to the
Purchaser or his or her executor, with such Notice, of a check in the amount of
the purchase price for the Shares being repurchased, or (ii) in the event the
Purchaser is indebted to the Company, by cancellation by the Company of an
amount of such indebtedness equal to the purchase price for the Shares being
repurchased, or (iii) by a combination of (i) and (ii) so that the combined
payment and cancellation of indebtedness equals such purchase price. Upon
delivery of such notice and payment of the purchase price in any of the ways
described above, the Company shall become the legal and beneficial owner of the
Shares being repurchased and all rights and interest therein or related thereto,
and the Company shall have the right to transfer to its own name the number of
Shares being repurchased by the Company, without further action by Purchaser.
(b) ASSIGNMENT. The right of Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations.
(c) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares
or any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Company's option to repurchase under this Section 3. Any sale or transfer of
the Company's Shares shall be void unless the provisions of this Agreement are
met.
4. ESCROW. For purposes of facilitating the enforcement of the
provisions of Section 3 above, Purchaser agrees, immediately upon receipt of the
certificate(s) for his or her Shares, to deliver such certificate(s), together
with two stock powers executed in blank by Purchaser and Purchaser's spouse (if
required for transfer) with respect to each such stock certificate, to the
Secretary of the Company, or its designee, to hold in escrow, with the authority
to take all such actions and to effectuate all such transfers and/or releases as
may be necessary or appropriate to accomplish the objectives of this Agreement
in accordance with the terms hereof. Purchaser hereby acknowledges that the
appointment of the Secretary of the Company (or its designee) as the escrow
holder hereunder with the stated authorities is a material inducement to the
Company to make this Agreement and that such appointment is coupled with an
interest and is accordingly irrevocable. Purchaser agrees that such escrow
holder shall not be liable to any party hereto (or to any other party) for any
actions or omissions unless such escrow holder is grossly negligent relative
thereto. The escrow holder may rely upon any letter, notice or other document
executed by any signature purported to be genuine and may resign at any time.
-3-
<PAGE>
5. LEGENDS. The certificate or certificates representing the Shares
shall bear the following legend (as well as any legends required by applicable
corporate and securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
6. NO EMPLOYMENT RIGHTS. This Agreement shall not confer upon Purchaser
any right with respect to continuation of his or her position as an employee or
consultant of the Company or its subsidiaries, nor shall it interfere in any way
with the right of Purchaser or the Company, or any of its subsidiaries, to
terminate Purchaser's position as an employee or consultant of the Company at
any time.
7. SECTION 83(b) ELECTION. Purchaser hereby represents that he or she
understands (a) the contents and requirements of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("SECTION 83(b)"), (b) the application of
Section 83(b) to the purchase of Shares by Purchaser pursuant to this Agreement,
and (c) the nature of the election to be made by Purchaser under Section 83(b).
Purchaser further represents that he or she intends to file an election pursuant
to Section 83(b) with the Internal Revenue Service within 30 days following the
date of this Agreement, and a copy of such election with his or her federal tax
return for the calendar year in which the date of this Agreement falls.
Purchaser acknowledges that his or her failure to file such election in a timely
manner may result in adverse tax consequences for Purchaser.
8. MISCELLANEOUS.
(a) This Agreement may be amended only by written Agreement between
the Company and Purchaser.
(b) Any notice, demand or request required or permitted to be given
under this Agreement shall be in writing and shall be deemed sufficient when
delivered personally or sent by telegram or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed, if to the Company, at its principal place of business,
attention the President, and if to Purchaser, at his or her address as shown on
the stock records of the Company.
(c) The rights and benefits of this Agreement shall inure to the
benefit of, and be enforceable by the Company's successors and assigns. The
rights and obligations of Purchaser under this Agreement may be assigned only
with the prior written consent of the Company.
(d) Both parties agree to execute any additional documents necessary
to carry out the purposes of this Agreement.
[SIGNATURE PAGE FOLLOWS]
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
RETIX
By:
---------------------------
Title:
------------------------
PURCHASER
-------------------------------
(Print Name)
-------------------------------
(Signature)
Address:
------------------------
------------------------
-5-
<PAGE>
ATTACHMENT A
CONSENT OF SPOUSE
I, _______________________, spouse of Steven Waszak, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated: _________________ _______________________________
Spouse of Purchaser
<PAGE>
ATTACHMENT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated March
18, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. ____ herewith and does hereby irrevocably constitute and appoint
_____________________________ to transfer said stock on the books of the within-
named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: _________________ Signature:
--------------------------------
--------------------------------
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
CONSENT OF SPOUSE
I, _______________________, spouse of Steven Waszak, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated: _________________
________________________________
Spouse of Purchaser
<PAGE>
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated March
18, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. _____ herewith and does hereby irrevocably constitute and appoint
__________________________________ to transfer said stock on the books of the
within-named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: _____________________ Signature:
-------------------------------------
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
RECEIPT
Retix hereby acknowledges receipt of a check or promissory note for
$199,000.00 given by Steven Waszak as consideration for certificate number _____
for 50,000 shares.
Dated: _________________
RETIX
By:
---------------------------
Title:
------------------------
<PAGE>
RECEIPT AND CONSENT
The undersigned hereby acknowledges receipt of a photocopy of certificate
number _____ for 50,000 shares of Common Stock of Retix (the "COMPANY").
The undersigned further acknowledges that the Company is acting as escrow
holder pursuant to the Purchaser's Exercise Notice and Stock Purchase Agreement
he/she has previously entered into with the Company. As escrow holder, the
Company holds the original of the aforementioned certificate issued in the
undersigned's name.
Dated: _________________ ------------------------------
(Printed Name
------------------------------
(Signature)
<PAGE>
PROMISSORY NOTE
$199,000.00 Santa Monica, California
March 18, 1996
At the times hereinafter stated, for value received, the undersigned
promises to pay Retix, a California corporation (the "COMPANY"), or order, at
its principal office the principal sum of $199,000.00 with interest from the
date hereof at a rate of 5.45% per annum, compounded annually, on the unpaid
balance of said principal sum. This Note, which is full recourse, is secured by
a pledge of certain shares of Common Stock of the Company and is subject to the
terms of an Exercise Notice and Stock Purchase Agreement between the undersigned
and the Company of even date herewith (the "PURCHASE AGREEMENT").
This Note shall be due and payable on March 18, 2006; provided, however,
that if the undersigned's employment by the Company or service as a consultant
or director of the Company is terminated prior to payment in full of this Note,
this Note shall be due and payable on such date as the exercise period specified
in the Option Agreement between the Purchaser and the Company dated March 18,
1996 would have expired had the options granted thereunder not been exercised
pursuant to the Purchase Agreement of which this Note is a part.
Principal and interest are payable in lawful money of the United States of
America. AT ANY TIME, THE PRIVILEGE IS RESERVED TO PAY MORE THAN THE SUM DUE.
Should suit be commenced to collect this Note or any portion thereof, such
sum as the Court may deem reasonable shall be added hereto as attorneys' fees.
The makers and endorsers have severally waived presentment for payment, protest,
notice of protest, and notice of non-payment of this Note.
------------------------------
Steven Waszak
<PAGE>
EXHIBIT 10.39
RETIX
EXERCISE NOTICE AND STOCK PURCHASE AGREEMENT
This Exercise Notice and Stock Purchase Agreement (the "AGREEMENT") is made
as of January 30, 1996 by and between Retix, a California corporation (the
"COMPANY"), and Steven Waszak (the "PURCHASER").
1. EXERCISE OF OPTION. Pursuant to the exercise of a stock option (the
"OPTION") granted to the Purchaser under the Company's 1988 Stock Option Plan
(the "PLAN"), and pursuant to the Stock Option Agreement dated December 29, 1995
(the "OPTION AGREEMENT") between the Company and the Purchaser, the Purchaser
has elected to purchase none of those shares which have become vested under the
vesting schedule set forth in the Option Agreement (the "VESTED SHARES") and
100,000 of those shares which have not yet vested under such schedule (the
"UNVESTED SHARES"). (The Vested Shares and the Unvested Shares are referred to
collectively in this Agreement as the "SHARES"). The purchase price for the
Shares shall be $2.14 per Share for a total purchase price of $214,000.00. The
term "SHARES" refers to the purchased Shares and all securities received in
replacement of the Shares, or as stock dividends or as a result of any stock
splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
entitled by reason of Purchaser's ownership of the Shares. The Option Agreement
shall be deemed amended hereby to permit the early exercise of the Option and
the purchase of the Shares using a promissory note as contemplated hereby.
2. PAYMENT OF PURCHASE PRICE.
(a) The purchase price for the Shares shall be paid to the Company at
the time of execution of this agreement in cash, by check made payable to the
Company, by cancellation of indebtedness, by delivery to the Company of a
promissory note in the form attached to this Agreement (the "NOTE"), or by some
combination thereof. The form of such payment shall be at the discretion of the
Company.
(b) As security for the payment of the Note and any renewal,
extension, or modification thereof, the Purchaser hereby grants to the Company a
security interest in and pledges with and delivers to the Company the
certificate or certificates representing the Shares to be held pursuant to the
escrow described in Section 4 of this Agreement.
(c) In the event of any foreclosure of said security interest, the
Company may sell the Shares at a private sale and may itself repurchase any or
all of the Shares. The parties acknowledge that, if there is no established
public market for the Shares of the Company, the securities laws applicable to
the sale of the Shares may make a public sale of the Shares commercially
unreasonable. The parties agree that the repurchasing of said Shares by the
Company, or by any person to whom the Company may have assigned its rights
hereunder, is commercially reasonable if made at a price determined by the Board
of Directors of the Company in its discretion, fairly exercised, representing
what would be the fair market value of the Shares diminished by such factors as
the size of the block of Shares or the restrictions of applicable securities
laws.
(d) In the event of default in payment when due of any indebtedness
under the Note, the Company may elect then, or at any time thereafter, to
exercise all rights available to a secured party under the California Commercial
Code, including the right to sell the Shares at a private sale or repurchase the
Shares as provided above. The proceeds of any sale shall be applied in the
following order:
(i) To pay all reasonable expenses of the Company in enforcing
the Note and the security interest in the Shares, including without limitation
reasonable attorneys' fees and legal expenses incurred by the Company.
(ii) In satisfaction of the remaining indebtedness under the
Note.
<PAGE>
(iii) To the Purchaser, any remaining proceeds.
(e) In the event that the Purchaser prepays all or a portion of the
Note, in accordance with the provisions thereof, the Purchaser intends that the
Shares represented by the portion of the Note so repaid, including interest
thereon, shall continue to be held in escrow, to serve as independent collateral
for a like amount of the outstanding portion of the Note, for the purpose of
commencing the holding period set forth in Securities and Exchange Commission
Rule 144(d).
3. LIMITATIONS ON TRANSFER.
In addition to any other limitation on transfer created by applicable
securities laws, Purchaser shall not assign, encumber or dispose of any interest
in the Shares while the Shares are subject to the Company's repurchase option.
After any Shares have been released from such repurchase option, Purchaser shall
not assign, encumber or dispose of any interest in such Shares except in
compliance with this Section 3 and applicable securities laws.
(a) REPURCHASE OPTION. In the event of the voluntary or involuntary
termination of the position of Purchaser as an employee or consultant of the
Company for any reason, with or without cause (including death or disability),
the Company shall, upon the date of such termination, have an irrevocable,
exclusive option for a period of sixty (60) days from such date to repurchase
from Purchaser, at the original purchase price per Share, up to that number of
shares which would, if the option referenced in Section 1 had not been so
exercised, have been unvested as of the date of termination. The Option
Agreement is hereby incorporated by reference and made a part of this Agreement.
The option shall be exercised by the Company by written notice to Purchaser or
his or her executor and, at the Company's option, (i) by delivery to the
Purchaser or his or her executor, with such Notice, of a check in the amount of
the purchase price for the Shares being repurchased, or (ii) in the event the
Purchaser is indebted to the Company, by cancellation by the Company of an
amount of such indebtedness equal to the purchase price for the Shares being
repurchased, or (iii) by a combination of (i) and (ii) so that the combined
payment and cancellation of indebtedness equals such purchase price. Upon
delivery of such notice and payment of the purchase price in any of the ways
described above, the Company shall become the legal and beneficial owner of the
Shares being repurchased and all rights and interest therein or related thereto,
and the Company shall have the right to transfer to its own name the number of
Shares being repurchased by the Company, without further action by Purchaser.
(b) ASSIGNMENT. The right of Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations.
(c) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares
or any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Company's option to repurchase under this Section 3. Any sale or transfer of
the Company's Shares shall be void unless the provisions of this Agreement are
met.
4. ESCROW. For purposes of facilitating the enforcement of the
provisions of Section 3 above, Purchaser agrees, immediately upon receipt of the
certificate(s) for his or her Shares, to deliver such certificate(s), together
with two stock powers executed in blank by Purchaser and Purchaser's spouse (if
required for transfer) with respect to each such stock certificate, to the
Secretary of the Company, or its designee, to hold in escrow, with the authority
to take all such actions and to effectuate all such transfers and/or releases as
may be necessary or appropriate to accomplish the objectives of this Agreement
in accordance with the terms hereof. Purchaser hereby acknowledges that the
appointment of the Secretary of the Company (or its designee) as the escrow
holder hereunder with the stated authorities is a material inducement to the
Company to make this Agreement and that such appointment is coupled with an
interest and is accordingly irrevocable. Purchaser agrees that such escrow
holder shall not be liable to any party hereto (or to any other party) for any
actions or omissions unless such escrow holder is grossly negligent relative
thereto. The escrow holder may rely upon any letter, notice or other document
executed by any signature purported to be genuine and may resign at any time.
-2-
<PAGE>
5. LEGENDS. The certificate or certificates representing the Shares
shall bear the following legend (as well as any legends required by applicable
corporate and securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
6. NO EMPLOYMENT RIGHTS. This Agreement shall not confer upon Purchaser
any right with respect to continuation of his or her position as an employee or
consultant of the Company or its subsidiaries, nor shall it interfere in any way
with the right of Purchaser or the Company, or any of its subsidiaries, to
terminate Purchaser's position as an employee or consultant of the Company at
any time.
7. SECTION 83(b) ELECTION. Purchaser hereby represents that he or she
understands (a) the contents and requirements of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("SECTION 83(b)"), (b) the application of
Section 83(b) to the purchase of Shares by Purchaser pursuant to this Agreement,
and (c) the nature of the election to be made by Purchaser under Section 83(b).
Purchaser further represents that he or she intends to file an election pursuant
to Section 83(b) with the Internal Revenue Service within 30 days following the
date of this Agreement, and a copy of such election with his or her federal tax
return for the calendar year in which the date of this Agreement falls.
Purchaser acknowledges that his or her failure to file such election in a timely
manner may result in adverse tax consequences for Purchaser.
8. MISCELLANEOUS.
(a) This Agreement may be amended only by written Agreement between
the Company and Purchaser.
(b) Any notice, demand or request required or permitted to be given
under this Agreement shall be in writing and shall be deemed sufficient when
delivered personally or sent by telegram or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed, if to the Company, at its principal place of business,
attention the President, and if to Purchaser, at his or her address as shown on
the stock records of the Company.
(c) The rights and benefits of this Agreement shall inure to the
benefit of, and be enforceable by the Company's successors and assigns. The
rights and obligations of Purchaser under this Agreement may be assigned only
with the prior written consent of the Company.
(d) Both parties agree to execute any additional documents necessary
to carry out the purposes of this Agreement.
[SIGNATURE PAGE FOLLOWS]
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
RETIX
By: ______________________________________
Title: ___________________________________
PURCHASER
__________________________________________
(Print Name)
__________________________________________
(Signature)
Address: _________________________________
_________________________________
-4-
<PAGE>
ATTACHMENT A
CONSENT OF SPOUSE
I, _______________________, spouse of Steven Waszak, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated: _________________ _______________________________
Spouse of Purchaser
<PAGE>
ATTACHMENT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated January
30, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. ____ herewith and does hereby irrevocably constitute and appoint
_____________________________ to transfer said stock on the books of the within-
named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: _________________ Signature:
_________________________________
_________________________________
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
CONSENT OF SPOUSE
I, _______________________, spouse of Steven Waszak, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated: _________________
________________________________
Spouse of Purchaser
<PAGE>
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated January
30, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. _____ herewith and does hereby irrevocably constitute and appoint
__________________________________ to transfer said stock on the books of the
within-named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: _____________________ Signature:
_____________________________
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
RECEIPT
Retix hereby acknowledges receipt of a check or promissory note for
$214,000.00 given by Steven Waszak as consideration for certificate number
_____ for 100,000 shares.
Dated: _________________
RETIX
By: _______________________________________
Title: ____________________________________
<PAGE>
RECEIPT AND CONSENT
The undersigned hereby acknowledges receipt of a photocopy of certificate
number _____ for 100,000 shares of Common Stock of Retix (the "COMPANY").
The undersigned further acknowledges that the Company is acting as escrow
holder pursuant to the Purchaser's Exercise Notice and Stock Purchase Agreement
he/she has previously entered into with the Company. As escrow holder, the
Company holds the original of the aforementioned certificate issued in the
undersigned's name.
Dated: _________________ ___________________________________________
(Printed Name
___________________________________________
(Signature)
<PAGE>
PROMISSORY NOTE
$214,000.00 Santa Monica, California
January 30, 1996
At the times hereinafter stated, for value received, the undersigned
promises to pay Retix, a California corporation (the "COMPANY"), or order, at
its principal office the principal sum of $214,000.00 with interest from the
date hereof at a rate of 5.73% per annum, compounded annually, on the unpaid
balance of said principal sum. This Note, which is full recourse, is secured by
a pledge of certain shares of Common Stock of the Company and is subject to the
terms of an Exercise Notice and Stock Purchase Agreement between the undersigned
and the Company of even date herewith (the "PURCHASE AGREEMENT").
This Note shall be due and payable on December 29, 2005; provided,
however, that if the undersigned's employment by the Company or service as a
consultant or director of the Company is terminated prior to payment in full of
this Note, this Note shall be due and payable on such date as the exercise
period specified in the Option Agreement between the Purchaser and the Company
dated December 29, 1995 would have expired had the options granted thereunder
not been exercised pursuant to the Purchase Agreement of which this Note is a
part.
Principal and interest are payable in lawful money of the United States of
America. AT ANY TIME, THE PRIVILEGE IS RESERVED TO PAY MORE THAN THE SUM DUE.
Should suit be commenced to collect this Note or any portion thereof, such
sum as the Court may deem reasonable shall be added hereto as attorneys' fees.
The makers and endorsers have severally waived presentment for payment, protest,
notice of protest, and notice of non-payment of this Note.
___________________________________________
Steven Waszak
<PAGE>
EXHIBIT 10.40
RETIX
EXERCISE NOTICE AND STOCK PURCHASE AGREEMENT
This Exercise Notice and Stock Purchase Agreement (the "AGREEMENT") is made
as of February 21, 1996 by and between Retix, a California corporation (the
"COMPANY"), and Steven Waszak (the "PURCHASER").
1. EXERCISE OF OPTION. Pursuant to the exercise of a stock option (the
"OPTION") granted to the Purchaser under the Company's 1988 Stock Option Plan
(the "PLAN"), and pursuant to the Stock Option Agreement dated December 15, 1994
(the "OPTION AGREEMENT") between the Company and the Purchaser, the Purchaser
has elected to purchase none of those shares which have become vested under the
vesting schedule set forth in the Option Agreement (the "VESTED SHARES") and
20,000 of those shares which have not yet vested under such schedule (the
"UNVESTED SHARES"). (The Vested Shares and the Unvested Shares are referred to
collectively in this Agreement as the "SHARES"). The purchase price for the
Shares shall be $4.35 per Share for a total purchase price of $87,000.00. The
term "SHARES" refers to the purchased Shares and all securities received in
replacement of the Shares, or as stock dividends or as a result of any stock
splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
entitled by reason of Purchaser's ownership of the Shares. The Option Agreement
shall be deemed amended hereby to permit the early exercise of the Option and
the purchase of the Shares using a promissory note as contemplated hereby.
2. PAYMENT OF PURCHASE PRICE.
(a) The purchase price for the Shares shall be paid to the Company at
the time of execution of this agreement in cash, by check made payable to the
Company, by cancellation of indebtedness, by delivery to the Company of a
promissory note in the form attached to this Agreement (the "NOTE"), or by some
combination thereof. The form of such payment shall be at the discretion of the
Company.
(b) As security for the payment of the Note and any renewal,
extension, or modification thereof, the Purchaser hereby grants to the Company a
security interest in and pledges with and delivers to the Company the
certificate or certificates representing the Shares to be held pursuant to the
escrow described in Section 4 of this Agreement.
(c) In the event of any foreclosure of said security interest, the
Company may sell the Shares at a private sale and may itself repurchase any or
all of the Shares. The parties acknowledge that, if there is no established
public market for the Shares of the Company, the securities laws applicable to
the sale of the Shares may make a public sale of the Shares commercially
unreasonable. The parties agree that the repurchasing of said Shares by the
Company, or by any person to whom the Company may have assigned its rights
hereunder, is commercially reasonable if made at a price determined by the Board
of Directors of the Company in its discretion, fairly exercised, representing
what would be the fair market value of the Shares diminished by such factors as
the size of the block of Shares or the restrictions of applicable securities
laws.
(d) In the event of default in payment when due of any indebtedness
under the Note, the Company may elect then, or at any time thereafter, to
exercise all rights available to a secured party under the California Commercial
Code, including the right to sell the Shares at a private sale or repurchase the
Shares as provided above. The proceeds of any sale shall be applied in the
following order:
(i) To pay all reasonable expenses of the Company in enforcing
the Note and the security interest in the Shares, including without limitation
reasonable attorneys' fees and legal expenses incurred by the Company.
(ii) In satisfaction of the remaining indebtedness under the
Note.
<PAGE>
(iii) To the Purchaser, any remaining proceeds.
(e) In the event that the Purchaser prepays all or a portion of the
Note, in accordance with the provisions thereof, the Purchaser intends that the
Shares represented by the portion of the Note so repaid, including interest
thereon, shall continue to be held in escrow, to serve as independent collateral
for a like amount of the outstanding portion of the Note, for the purpose of
commencing the holding period set forth in Securities and Exchange Commission
Rule 144(d).
3. LIMITATIONS ON TRANSFER.
In addition to any other limitation on transfer created by applicable
securities laws, Purchaser shall not assign, encumber or dispose of any interest
in the Shares while the Shares are subject to the Company's repurchase option.
After any Shares have been released from such repurchase option, Purchaser shall
not assign, encumber or dispose of any interest in such Shares except in
compliance with this Section 3 and applicable securities laws.
(a) REPURCHASE OPTION. In the event of the voluntary or involuntary
termination of the position of Purchaser as an employee or consultant of the
Company for any reason, with or without cause (including death or disability),
the Company shall, upon the date of such termination, have an irrevocable,
exclusive option for a period of sixty (60) days from such date to repurchase
from Purchaser, at the original purchase price per Share, up to that number of
shares which would, if the option referenced in Section 1 had not been so
exercised, have been unvested as of the date of termination. The Option
Agreement is hereby incorporated by reference and made a part of this Agreement.
The option shall be exercised by the Company by written notice to Purchaser or
his or her executor and, at the Company's option, (i) by delivery to the
Purchaser or his or her executor, with such Notice, of a check in the amount of
the purchase price for the Shares being repurchased, or (ii) in the event the
Purchaser is indebted to the Company, by cancellation by the Company of an
amount of such indebtedness equal to the purchase price for the Shares being
repurchased, or (iii) by a combination of (i) and (ii) so that the combined
payment and cancellation of indebtedness equals such purchase price. Upon
delivery of such notice and payment of the purchase price in any of the ways
described above, the Company shall become the legal and beneficial owner of the
Shares being repurchased and all rights and interest therein or related thereto,
and the Company shall have the right to transfer to its own name the number of
Shares being repurchased by the Company, without further action by Purchaser.
(b) ASSIGNMENT. The right of Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations.
(c) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares
or any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Company's option to repurchase under this Section 3. Any sale or transfer of
the Company's Shares shall be void unless the provisions of this Agreement are
met.
4. ESCROW. For purposes of facilitating the enforcement of the
provisions of Section 3 above, Purchaser agrees, immediately upon receipt of the
certificate(s) for his or her Shares, to deliver such certificate(s), together
with two stock powers executed in blank by Purchaser and Purchaser's spouse (if
required for transfer) with respect to each such stock certificate, to the
Secretary of the Company, or its designee, to hold in escrow, with the authority
to take all such actions and to effectuate all such transfers and/or releases as
may be necessary or appropriate to accomplish the objectives of this Agreement
in accordance with the terms hereof. Purchaser hereby acknowledges that the
appointment of the Secretary of the Company (or its designee) as the escrow
holder hereunder with the stated authorities is a material inducement to the
Company to make this Agreement and that such appointment is coupled with an
interest and is accordingly irrevocable. Purchaser agrees that such escrow
holder shall not be liable to any party hereto (or to any other party) for any
actions or omissions unless such escrow holder is grossly negligent relative
thereto. The escrow holder may rely upon any letter, notice or other document
executed by any signature purported to be genuine and may resign at any time.
-2-
<PAGE>
5. LEGENDS. The certificate or certificates representing the Shares
shall bear the following legend (as well as any legends required by applicable
corporate and securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
6. NO EMPLOYMENT RIGHTS. This Agreement shall not confer upon Purchaser
any right with respect to continuation of his or her position as an employee or
consultant of the Company or its subsidiaries, nor shall it interfere in any way
with the right of Purchaser or the Company, or any of its subsidiaries, to
terminate Purchaser's position as an employee or consultant of the Company at
any time.
7. SECTION 83(b) ELECTION. Purchaser hereby represents that he or she
understands (a) the contents and requirements of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("SECTION 83(b)"), (b) the application of
Section 83(b) to the purchase of Shares by Purchaser pursuant to this Agreement,
and (c) the nature of the election to be made by Purchaser under Section 83(b).
Purchaser further represents that he or she intends to file an election pursuant
to Section 83(b) with the Internal Revenue Service within 30 days following the
date of this Agreement, and a copy of such election with his or her federal tax
return for the calendar year in which the date of this Agreement falls.
Purchaser acknowledges that his or her failure to file such election in a timely
manner may result in adverse tax consequences for Purchaser.
8. MISCELLANEOUS.
(a) This Agreement may be amended only by written Agreement between
the Company and Purchaser.
(b) Any notice, demand or request required or permitted to be given
under this Agreement shall be in writing and shall be deemed sufficient when
delivered personally or sent by telegram or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed, if to the Company, at its principal place of business,
attention the President, and if to Purchaser, at his or her address as shown on
the stock records of the Company.
(c) The rights and benefits of this Agreement shall inure to the
benefit of, and be enforceable by the Company's successors and assigns. The
rights and obligations of Purchaser under this Agreement may be assigned only
with the prior written consent of the Company.
(d) Both parties agree to execute any additional documents necessary
to carry out the purposes of this Agreement.
[SIGNATURE PAGE FOLLOWS]
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
RETIX
By:
---------------------------
Title:
------------------------
PURCHASER
------------------------------
(Print Name)
------------------------------
(Signature)
Address:
----------------------
----------------------
-4-
<PAGE>
ATTACHMENT A
CONSENT OF SPOUSE
I, _______________________, spouse of Steven Waszak, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated:
------------------- --------------------------------
Spouse of Purchaser
<PAGE>
ATTACHMENT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated
February 21, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and
transfers unto Retix _________________ shares of the Common Stock of Retix
standing in Purchaser's name on the books of said corporation represented by
Certificate No. ____ herewith and does hereby irrevocably constitute and appoint
_____________________________ to transfer said stock on the books of the within-
named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: Signature:
--------------------
-----------------------------
-----------------------------
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
CONSENT OF SPOUSE
I, _______________________, spouse of Steven Waszak, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated:
-------------------
-------------------------------
Spouse of Purchaser
<PAGE>
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated
February 21, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and
transfers unto Retix _________________ shares of the Common Stock of Retix
standing in Purchaser's name on the books of said corporation represented by
Certificate No. _____ herewith and does hereby irrevocably constitute and
appoint __________________________________ to transfer said stock on the books
of the within-named corporation with full power of substitution in the premises.
THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: Signature:
--------------------
-------------------------------
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
RECEIPT
Retix hereby acknowledges receipt of a check or promissory note for
$87,000.00 given by Steven Waszak as consideration for certificate number _____
for 20,000 shares.
Dated:
-------------------
RETIX
By:
---------------------------
Title:
------------------------
<PAGE>
RECEIPT AND CONSENT
The undersigned hereby acknowledges receipt of a photocopy of certificate
number _____ for 20,000 shares of Common Stock of Retix (the "COMPANY").
The undersigned further acknowledges that the Company is acting as escrow
holder pursuant to the Purchaser's Exercise Notice and Stock Purchase Agreement
he/she has previously entered into with the Company. As escrow holder, the
Company holds the original of the aforementioned certificate issued in the
undersigned's name.
Dated:
------------------- ------------------------------------
(Printed Name)
------------------------------------
(Signature)
<PAGE>
PROMISSORY NOTE
$87,000.00 Santa Monica, California
February 21, 1996
At the times hereinafter stated, for value received, the undersigned
promises to pay Retix, a California corporation (the "COMPANY"), or order, at
its principal office the principal sum of $87,000.00 with interest from the date
hereof at a rate of 5.61% per annum, compounded annually, on the unpaid balance
of said principal sum. This Note, which is full recourse, is secured by a pledge
of certain shares of Common Stock of the Company and is subject to the terms of
an Exercise Notice and Stock Purchase Agreement between the undersigned and the
Company of even date herewith (the "PURCHASE AGREEMENT").
This Note shall be due and payable on December 15, 2004; provided,
however, that if the undersigned's employment by the Company or service as a
consultant or director of the Company is terminated prior to payment in full of
this Note, this Note shall be due and payable on such date as the exercise
period specified in the Option Agreement between the Purchaser and the Company
dated December 15, 1994 would have expired had the options granted thereunder
not been exercised pursuant to the Purchase Agreement of which this Note is a
part.
Principal and interest are payable in lawful money of the United States of
America. AT ANY TIME, THE PRIVILEGE IS RESERVED TO PAY MORE THAN THE SUM DUE.
Should suit be commenced to collect this Note or any portion thereof, such
sum as the Court may deem reasonable shall be added hereto as attorneys' fees.
The makers and endorsers have severally waived presentment for payment, protest,
notice of protest, and notice of non-payment of this Note.
------------------------------------
Steven Waszak
<PAGE>
EXHIBIT 10.41
RETIX
EXERCISE NOTICE AND STOCK PURCHASE AGREEMENT
This Exercise Notice and Stock Purchase Agreement (the "AGREEMENT") is made
as of March 26, 1996 by and between Retix, a California corporation (the
"COMPANY"), and Steven Waszak (the "PURCHASER").
1. EXERCISE OF OPTION. Pursuant to the exercise of a stock option (the
"OPTION") granted to the Purchaser under the Company's 1988 Stock Option Plan
(the "PLAN"), and pursuant to the Stock Option Agreement dated October 7, 1994
(the "OPTION AGREEMENT") between the Company and the Purchaser, the Purchaser
has elected to purchase 20,000 of those shares which have become vested under
the vesting schedule set forth in the Option Agreement (the "VESTED SHARES") and
none of those shares which have not yet vested under such schedule (the
"UNVESTED SHARES"). (The Vested Shares and the Unvested Shares are referred to
collectively in this Agreement as the "SHARES"). The purchase price for the
Shares shall be $5.25 per Share for a total purchase price of $105,000.00. The
term "SHARES" refers to the purchased Shares and all securities received in
replacement of the Shares, or as stock dividends or as a result of any stock
splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
entitled by reason of Purchaser's ownership of the Shares. The Option Agreement
shall be deemed amended hereby to permit the early exercise of the Option and
the purchase of the Shares using a promissory note as contemplated hereby.
2. PAYMENT OF PURCHASE PRICE.
(a) The purchase price for the Shares shall be paid to the Company at
the time of execution of this agreement in cash, by check made payable to the
Company, by cancellation of indebtedness, by delivery to the Company of a
promissory note in the form attached to this Agreement (the "NOTE"), or by some
combination thereof. The form of such payment shall be at the discretion of the
Company.
(b) As security for the payment of the Note and any renewal,
extension, or modification thereof, the Purchaser hereby grants to the Company a
security interest in and pledges with and delivers to the Company the
certificate or certificates representing the Shares to be held pursuant to the
escrow described in Section 4 of this Agreement.
(c) In the event of any foreclosure of said security interest, the
Company may sell the Shares at a private sale and may itself repurchase any or
all of the Shares. The parties acknowledge that, if there is no established
public market for the Shares of the Company, the securities laws applicable to
the sale of the Shares may make a public sale of the Shares commercially
unreasonable. The parties agree that the repurchasing of said Shares by the
Company, or by any person to whom the Company may have assigned its rights
hereunder, is commercially reasonable if made at a price determined by the Board
of Directors of the Company in its discretion, fairly exercised, representing
what would be the fair market value of the Shares diminished by such factors as
the size of the block of Shares or the restrictions of applicable securities
laws.
(d) In the event of default in payment when due of any indebtedness
under the Note, the Company may elect then, or at any time thereafter, to
exercise all rights available to a secured party under the California Commercial
Code, including the right to sell the Shares at a private sale or repurchase the
Shares as provided above. The proceeds of any sale shall be applied in the
following order:
(i) To pay all reasonable expenses of the Company in enforcing
the Note and the security interest in the Shares, including without limitation
reasonable attorneys' fees and legal expenses incurred by the Company.
(ii) In satisfaction of the remaining indebtedness under the
Note.
<PAGE>
(iii) To the Purchaser, any remaining proceeds.
(e) In the event that the Purchaser prepays all or a portion of the
Note, in accordance with the provisions thereof, the Purchaser intends that the
Shares represented by the portion of the Note so repaid, including interest
thereon, shall continue to be held in escrow, to serve as independent collateral
for a like amount of the outstanding portion of the Note, for the purpose of
commencing the holding period set forth in Securities and Exchange Commission
Rule 144(d).
3. LIMITATIONS ON TRANSFER.
In addition to any other limitation on transfer created by applicable
securities laws, Purchaser shall not assign, encumber or dispose of any interest
in the Shares while the Shares are subject to the Company's repurchase option.
After any Shares have been released from such repurchase option, Purchaser shall
not assign, encumber or dispose of any interest in such Shares except in
compliance with this Section 3 and applicable securities laws.
(a) REPURCHASE OPTION. In the event of the voluntary or involuntary
termination of the position of Purchaser as an employee or consultant of the
Company for any reason, with or without cause (including death or disability),
the Company shall, upon the date of such termination, have an irrevocable,
exclusive option for a period of sixty (60) days from such date to repurchase
from Purchaser, at the original purchase price per Share, up to that number of
shares which would, if the option referenced in Section 1 had not been so
exercised, have been unvested as of the date of termination. The Option
Agreement is hereby incorporated by reference and made a part of this Agreement.
The option shall be exercised by the Company by written notice to Purchaser or
his or her executor and, at the Company's option, (i) by delivery to the
Purchaser or his or her executor, with such Notice, of a check in the amount of
the purchase price for the Shares being repurchased, or (ii) in the event the
Purchaser is indebted to the Company, by cancellation by the Company of an
amount of such indebtedness equal to the purchase price for the Shares being
repurchased, or (iii) by a combination of (i) and (ii) so that the combined
payment and cancellation of indebtedness equals such purchase price. Upon
delivery of such notice and payment of the purchase price in any of the ways
described above, the Company shall become the legal and beneficial owner of the
Shares being repurchased and all rights and interest therein or related thereto,
and the Company shall have the right to transfer to its own name the number of
Shares being repurchased by the Company, without further action by Purchaser.
(b) ASSIGNMENT. The right of Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations.
(c) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares
or any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Company's option to repurchase under this Section 3. Any sale or transfer of
the Company's Shares shall be void unless the provisions of this Agreement are
met.
4. ESCROW. For purposes of facilitating the enforcement of the
provisions of Section 3 above, Purchaser agrees, immediately upon receipt of the
certificate(s) for his or her Shares, to deliver such certificate(s), together
with two stock powers executed in blank by Purchaser and Purchaser's spouse (if
required for transfer) with respect to each such stock certificate, to the
Secretary of the Company, or its designee, to hold in escrow, with the authority
to take all such actions and to effectuate all such transfers and/or releases as
may be necessary or appropriate to accomplish the objectives of this Agreement
in accordance with the terms hereof. Purchaser hereby acknowledges that the
appointment of the Secretary of the Company (or its designee) as the escrow
holder hereunder with the stated authorities is a material inducement to the
Company to make this Agreement and that such appointment is coupled with an
interest and is accordingly irrevocable. Purchaser agrees that such escrow
holder shall not be liable to any party hereto (or to any other party) for any
actions or omissions unless such escrow holder is grossly negligent relative
thereto. The escrow holder may rely upon any letter, notice or other document
executed by any signature purported to be genuine and may resign at any time.
-2-
<PAGE>
5. LEGENDS. The certificate or certificates representing the Shares
shall bear the following legend (as well as any legends required by applicable
corporate and securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
6. NO EMPLOYMENT RIGHTS. This Agreement shall not confer upon Purchaser
any right with respect to continuation of his or her position as an employee or
consultant of the Company or its subsidiaries, nor shall it interfere in any way
with the right of Purchaser or the Company, or any of its subsidiaries, to
terminate Purchaser's position as an employee or consultant of the Company at
any time.
7. SECTION 83(b) ELECTION. Purchaser hereby represents that he or she
understands (a) the contents and requirements of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("SECTION 83(b)"), (b) the application of
Section 83(b) to the purchase of Shares by Purchaser pursuant to this Agreement,
and (c) the nature of the election to be made by Purchaser under Section 83(b).
Purchaser further represents that he or she intends to file an election pursuant
to Section 83(b) with the Internal Revenue Service within 30 days following the
date of this Agreement, and a copy of such election with his or her federal tax
return for the calendar year in which the date of this Agreement falls.
Purchaser acknowledges that his or her failure to file such election in a timely
manner may result in adverse tax consequences for Purchaser.
8. MISCELLANEOUS.
(a) This Agreement may be amended only by written Agreement between
the Company and Purchaser.
(b) Any notice, demand or request required or permitted to be given
under this Agreement shall be in writing and shall be deemed sufficient when
delivered personally or sent by telegram or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed, if to the Company, at its principal place of business,
attention the President, and if to Purchaser, at his or her address as shown on
the stock records of the Company.
(c) The rights and benefits of this Agreement shall inure to the
benefit of, and be enforceable by the Company's successors and assigns. The
rights and obligations of Purchaser under this Agreement may be assigned only
with the prior written consent of the Company.
(d) Both parties agree to execute any additional documents necessary
to carry out the purposes of this Agreement.
[SIGNATURE PAGE FOLLOWS]
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
RETIX
By:
---------------------------
Title:
------------------------
PURCHASER
------------------------------
(Print Name)
------------------------------
(Signature)
Address:
---------------------
---------------------
-4-
<PAGE>
ATTACHMENT A
CONSENT OF SPOUSE
I, _______________________, spouse of Steven Waszak, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated: _________________ _______________________________
Spouse of Purchaser
<PAGE>
ATTACHMENT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated March
26, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. ____ herewith and does hereby irrevocably constitute and appoint
_____________________________ to transfer said stock on the books of the within-
named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: _________________ Signature:
-----------------------------
-----------------------------
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
CONSENT OF SPOUSE
I, _______________________, spouse of Steven Waszak, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated: _________________
________________________________
Spouse of Purchaser
<PAGE>
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated March
26, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. _____ herewith and does hereby irrevocably constitute and appoint
__________________________________ to transfer said stock on the books of the
within-named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: _____________________ Signature:
-----------------------------
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
RECEIPT
Retix hereby acknowledges receipt of a check or promissory note for
$105,000.00 given by Steven Waszak as consideration for certificate number _____
for 20,000 shares.
Dated: _________________
RETIX
By:
---------------------------
Title:
------------------------
<PAGE>
RECEIPT AND CONSENT
The undersigned hereby acknowledges receipt of a photocopy of certificate
number _____ for 20,000 shares of Common Stock of Retix (the "COMPANY").
The undersigned further acknowledges that the Company is acting as escrow
holder pursuant to the Purchaser's Exercise Notice and Stock Purchase Agreement
he/she has previously entered into with the Company. As escrow holder, the
Company holds the original of the aforementioned certificate issued in the
undersigned's name.
Dated: _________________
------------------------------
(Printed Name
------------------------------
(Signature)
<PAGE>
PROMISSORY NOTE
$105,000.00 Santa Monica, California
March 26, 1996
At the times hereinafter stated, for value received, the undersigned
promises to pay Retix, a California corporation (the "COMPANY"), or order, at
its principal office the principal sum of $105,000.00 with interest from the
date hereof at a rate of 5.45% per annum, compounded annually, on the unpaid
balance of said principal sum. This Note, which is full recourse, is secured by
a pledge of certain shares of Common Stock of the Company and is subject to the
terms of an Exercise Notice and Stock Purchase Agreement between the undersigned
and the Company of even date herewith (the "PURCHASE AGREEMENT").
This Note shall be due and payable on October 7, 2004; provided, however,
that if the undersigned's employment by the Company or service as a consultant
or director of the Company is terminated prior to payment in full of this Note,
this Note shall be due and payable on such date as the exercise period specified
in the Option Agreement between the Purchaser and the Company dated October 7,
1994 would have expired had the options granted thereunder not been exercised
pursuant to the Purchase Agreement of which this Note is a part.
Principal and interest are payable in lawful money of the United States of
America. AT ANY TIME, THE PRIVILEGE IS RESERVED TO PAY MORE THAN THE SUM DUE.
Should suit be commenced to collect this Note or any portion thereof, such
sum as the Court may deem reasonable shall be added hereto as attorneys' fees.
The makers and endorsers have severally waived presentment for payment, protest,
notice of protest, and notice of non-payment of this Note.
-----------------------------------
Steven Waszak
<PAGE>
EXHIBIT 10.42
RETIX
EXERCISE NOTICE AND STOCK PURCHASE AGREEMENT
This Exercise Notice and Stock Purchase Agreement (the "AGREEMENT") is made
as of March 26, 1996 by and between Retix, a California corporation (the
"COMPANY"), and Steven Waszak (the "PURCHASER").
1. EXERCISE OF OPTION. Pursuant to the exercise of a stock option (the
"OPTION") granted to the Purchaser under the Company's 1988 Stock Option Plan
(the "PLAN"), and pursuant to the Stock Option Agreement dated June 22, 1994
(the "OPTION AGREEMENT") between the Company and the Purchaser, the Purchaser
has elected to purchase 3,125 of those shares which have become vested under the
vesting schedule set forth in the Option Agreement (the "VESTED SHARES") and
4,375 of those shares which have not yet vested under such schedule (the
"UNVESTED SHARES"). (The Vested Shares and the Unvested Shares are referred to
collectively in this Agreement as the "SHARES"). The purchase price for the
Shares shall be $5.00 per Share for a total purchase price of $37,500.00. The
term "SHARES" refers to the purchased Shares and all securities received in
replacement of the Shares, or as stock dividends or as a result of any stock
splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
entitled by reason of Purchaser's ownership of the Shares. The Option Agreement
shall be deemed amended hereby to permit the early exercise of the Option and
the purchase of the Shares using a promissory note as contemplated hereby.
2. PAYMENT OF PURCHASE PRICE.
(a) The purchase price for the Shares shall be paid to the Company at
the time of execution of this agreement in cash, by check made payable to the
Company, by cancellation of indebtedness, by delivery to the Company of a
promissory note in the form attached to this Agreement (the "NOTE"), or by some
combination thereof. The form of such payment shall be at the discretion of the
Company.
(b) As security for the payment of the Note and any renewal,
extension, or modification thereof, the Purchaser hereby grants to the Company a
security interest in and pledges with and delivers to the Company the
certificate or certificates representing the Shares to be held pursuant to the
escrow described in Section 4 of this Agreement.
(c) In the event of any foreclosure of said security interest, the
Company may sell the Shares at a private sale and may itself repurchase any or
all of the Shares. The parties acknowledge that, if there is no established
public market for the Shares of the Company, the securities laws applicable to
the sale of the Shares may make a public sale of the Shares commercially
unreasonable. The parties agree that the repurchasing of said Shares by the
Company, or by any person to whom the Company may have assigned its rights
hereunder, is commercially reasonable if made at a price determined by the Board
of Directors of the Company in its discretion, fairly exercised, representing
what would be the fair market value of the Shares diminished by such factors as
the size of the block of Shares or the restrictions of applicable securities
laws.
(d) In the event of default in payment when due of any indebtedness
under the Note, the Company may elect then, or at any time thereafter, to
exercise all rights available to a secured party under the California Commercial
Code, including the right to sell the Shares at a private sale or repurchase the
Shares as provided above. The proceeds of any sale shall be applied in the
following order:
(i) To pay all reasonable expenses of the Company in enforcing
the Note and the security interest in the Shares, including without limitation
reasonable attorneys' fees and legal expenses incurred by the Company.
(ii) In satisfaction of the remaining indebtedness under the
Note.
<PAGE>
(iii) To the Purchaser, any remaining proceeds.
(e) In the event that the Purchaser prepays all or a portion of the
Note, in accordance with the provisions thereof, the Purchaser intends that the
Shares represented by the portion of the Note so repaid, including interest
thereon, shall continue to be held in escrow, to serve as independent collateral
for a like amount of the outstanding portion of the Note, for the purpose of
commencing the holding period set forth in Securities and Exchange Commission
Rule 144(d).
3. LIMITATIONS ON TRANSFER.
In addition to any other limitation on transfer created by applicable
securities laws, Purchaser shall not assign, encumber or dispose of any interest
in the Shares while the Shares are subject to the Company's repurchase option.
After any Shares have been released from such repurchase option, Purchaser shall
not assign, encumber or dispose of any interest in such Shares except in
compliance with this Section 3 and applicable securities laws.
(a) REPURCHASE OPTION. In the event of the voluntary or involuntary
termination of the position of Purchaser as an employee or consultant of the
Company for any reason, with or without cause (including death or disability),
the Company shall, upon the date of such termination, have an irrevocable,
exclusive option for a period of sixty (60) days from such date to repurchase
from Purchaser, at the original purchase price per Share, up to that number of
shares which would, if the option referenced in Section 1 had not been so
exercised, have been unvested as of the date of termination. The Option
Agreement is hereby incorporated by reference and made a part of this Agreement.
The option shall be exercised by the Company by written notice to Purchaser or
his or her executor and, at the Company's option, (i) by delivery to the
Purchaser or his or her executor, with such Notice, of a check in the amount of
the purchase price for the Shares being repurchased, or (ii) in the event the
Purchaser is indebted to the Company, by cancellation by the Company of an
amount of such indebtedness equal to the purchase price for the Shares being
repurchased, or (iii) by a combination of (i) and (ii) so that the combined
payment and cancellation of indebtedness equals such purchase price. Upon
delivery of such notice and payment of the purchase price in any of the ways
described above, the Company shall become the legal and beneficial owner of the
Shares being repurchased and all rights and interest therein or related thereto,
and the Company shall have the right to transfer to its own name the number of
Shares being repurchased by the Company, without further action by Purchaser.
(b) ASSIGNMENT. The right of Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations.
(c) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares
or any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Company's option to repurchase under this Section 3. Any sale or transfer of
the Company's Shares shall be void unless the provisions of this Agreement are
met.
4. ESCROW. For purposes of facilitating the enforcement of the
provisions of Section 3 above, Purchaser agrees, immediately upon receipt of the
certificate(s) for his or her Shares, to deliver such certificate(s), together
with two stock powers executed in blank by Purchaser and Purchaser's spouse (if
required for transfer) with respect to each such stock certificate, to the
Secretary of the Company, or its designee, to hold in escrow, with the authority
to take all such actions and to effectuate all such transfers and/or releases as
may be necessary or appropriate to accomplish the objectives of this Agreement
in accordance with the terms hereof. Purchaser hereby acknowledges that the
appointment of the Secretary of the Company (or its designee) as the escrow
holder hereunder with the stated authorities is a material inducement to the
Company to make this Agreement and that such appointment is coupled with an
interest and is accordingly irrevocable. Purchaser agrees that such escrow
holder shall not be liable to any party hereto (or to any other party) for any
actions or omissions unless such escrow holder is grossly negligent relative
thereto. The escrow holder may rely upon any letter, notice or other document
executed by any signature purported to be genuine and may resign at any time.
-2-
<PAGE>
5. LEGENDS. The certificate or certificates representing the Shares
shall bear the following legend (as well as any legends required by applicable
corporate and securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
6. NO EMPLOYMENT RIGHTS. This Agreement shall not confer upon Purchaser
any right with respect to continuation of his or her position as an employee or
consultant of the Company or its subsidiaries, nor shall it interfere in any way
with the right of Purchaser or the Company, or any of its subsidiaries, to
terminate Purchaser's position as an employee or consultant of the Company at
any time.
7. SECTION 83(b) ELECTION. Purchaser hereby represents that he or she
understands (a) the contents and requirements of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("SECTION 83(b)"), (b) the application of
Section 83(b) to the purchase of Shares by Purchaser pursuant to this Agreement,
and (c) the nature of the election to be made by Purchaser under Section 83(b).
Purchaser further represents that he or she intends to file an election pursuant
to Section 83(b) with the Internal Revenue Service within 30 days following the
date of this Agreement, and a copy of such election with his or her federal tax
return for the calendar year in which the date of this Agreement falls.
Purchaser acknowledges that his or her failure to file such election in a timely
manner may result in adverse tax consequences for Purchaser.
8. MISCELLANEOUS.
(a) This Agreement may be amended only by written Agreement between
the Company and Purchaser.
(b) Any notice, demand or request required or permitted to be given
under this Agreement shall be in writing and shall be deemed sufficient when
delivered personally or sent by telegram or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed, if to the Company, at its principal place of business,
attention the President, and if to Purchaser, at his or her address as shown on
the stock records of the Company.
(c) The rights and benefits of this Agreement shall inure to the
benefit of, and be enforceable by the Company's successors and assigns. The
rights and obligations of Purchaser under this Agreement may be assigned only
with the prior written consent of the Company.
(d) Both parties agree to execute any additional documents necessary
to carry out the purposes of this Agreement.
[SIGNATURE PAGE FOLLOWS]
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
RETIX
By: _______________________________________
Title: ____________________________________
PURCHASER
___________________________________________
(Print Name)
___________________________________________
(Signature)
Address: __________________________________
__________________________________
-4-
<PAGE>
ATTACHMENT A
CONSENT OF SPOUSE
I, _______________________, spouse of Steven Waszak, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated: _________________ _________________________________________
Spouse of Purchaser
<PAGE>
ATTACHMENT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated March
26, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. ____ herewith and does hereby irrevocably constitute and appoint
_____________________________ to transfer said stock on the books of the within-
named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: _________________ Signature:
_________________________________
_________________________________
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
CONSENT OF SPOUSE
I, _______________________, spouse of Steven Waszak, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated: _________________
________________________________________
Spouse of Purchaser
<PAGE>
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated March
26, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. _____ herewith and does hereby irrevocably constitute and appoint
__________________________________ to transfer said stock on the books of the
within-named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: _____________________ Signature:
_________________________________
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
RECEIPT
Retix hereby acknowledges receipt of a check or promissory note for
$37,500.00 given by Steven Waszak as consideration for certificate number _____
for 7,500 shares.
Dated: _________________
RETIX
By: _______________________________________
Title: ____________________________________
<PAGE>
RECEIPT AND CONSENT
The undersigned hereby acknowledges receipt of a photocopy of certificate
number _____ for 7,500 shares of Common Stock of Retix (the "COMPANY").
The undersigned further acknowledges that the Company is acting as escrow
holder pursuant to the Purchaser's Exercise Notice and Stock Purchase Agreement
he/she has previously entered into with the Company. As escrow holder, the
Company holds the original of the aforementioned certificate issued in the
undersigned's name.
Dated: _________________ __________________________________________
(Printed Name
__________________________________________
(Signature)
<PAGE>
PROMISSORY NOTE
$37,500.00 Santa Monica, California
March 26, 1996
At the times hereinafter stated, for value received, the undersigned
promises to pay Retix, a California corporation (the "COMPANY"), or order, at
its principal office the principal sum of $37,500.00 with interest from the date
hereof at a rate of 5.45% per annum, compounded annually, on the unpaid balance
of said principal sum. This Note, which is full recourse, is secured by a pledge
of certain shares of Common Stock of the Company and is subject to the terms of
an Exercise Notice and Stock Purchase Agreement between the undersigned and the
Company of even date herewith (the "PURCHASE AGREEMENT").
This Note shall be due and payable on June 22, 2004; provided, however,
that if the undersigned's employment by the Company or service as a consultant
or director of the Company is terminated prior to payment in full of this Note,
this Note shall be due and payable on such date as the exercise period specified
in the Option Agreement between the Purchaser and the Company dated June 22,
1994 would have expired had the options granted thereunder not been exercised
pursuant to the Purchase Agreement of which this Note is a part.
Principal and interest are payable in lawful money of the United States of
America. AT ANY TIME, THE PRIVILEGE IS RESERVED TO PAY MORE THAN THE SUM DUE.
Should suit be commenced to collect this Note or any portion thereof, such
sum as the Court may deem reasonable shall be added hereto as attorneys' fees.
The makers and endorsers have severally waived presentment for payment, protest,
notice of protest, and notice of non-payment of this Note.
_________________________________________
Steven Waszak
<PAGE>
EXHIBIT 10.43
RETIX
EXERCISE NOTICE AND STOCK PURCHASE AGREEMENT
This Exercise Notice and Stock Purchase Agreement (the "AGREEMENT") is made
as of March 26, 1996 by and between Retix, a California corporation (the
"COMPANY"), and Steven Waszak (the "PURCHASER").
1. EXERCISE OF OPTION. Pursuant to the exercise of a stock option (the
"OPTION") granted to the Purchaser under the Company's 1988 Stock Option Plan
(the "PLAN"), and pursuant to the Stock Option Agreement dated April 28, 1993
(the "OPTION AGREEMENT") between the Company and the Purchaser, the Purchaser
has elected to purchase 885 of those shares which have become vested under the
vesting schedule set forth in the Option Agreement (the "VESTED SHARES") and 365
of those shares which have not yet vested under such schedule (the "UNVESTED
SHARES"). (The Vested Shares and the Unvested Shares are referred to
collectively in this Agreement as the "SHARES"). The purchase price for the
Shares shall be $5.00 per Share for a total purchase price of $6,250.00. The
term "SHARES" refers to the purchased Shares and all securities received in
replacement of the Shares, or as stock dividends or as a result of any stock
splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
entitled by reason of Purchaser's ownership of the Shares. The Option Agreement
shall be deemed amended hereby to permit the early exercise of the Option and
the purchase of the Shares using a promissory note as contemplated hereby.
2. PAYMENT OF PURCHASE PRICE.
(a) The purchase price for the Shares shall be paid to the Company at
the time of execution of this agreement in cash, by check made payable to the
Company, by cancellation of indebtedness, by delivery to the Company of a
promissory note in the form attached to this Agreement (the "NOTE"), or by some
combination thereof. The form of such payment shall be at the discretion of the
Company.
(b) As security for the payment of the Note and any renewal,
extension, or modification thereof, the Purchaser hereby grants to the Company a
security interest in and pledges with and delivers to the Company the
certificate or certificates representing the Shares to be held pursuant to the
escrow described in Section 4 of this Agreement.
(c) In the event of any foreclosure of said security interest, the
Company may sell the Shares at a private sale and may itself repurchase any or
all of the Shares. The parties acknowledge that, if there is no established
public market for the Shares of the Company, the securities laws applicable to
the sale of the Shares may make a public sale of the Shares commercially
unreasonable. The parties agree that the repurchasing of said Shares by the
Company, or by any person to whom the Company may have assigned its rights
hereunder, is commercially reasonable if made at a price determined by the Board
of Directors of the Company in its discretion, fairly exercised, representing
what would be the fair market value of the Shares diminished by such factors as
the size of the block of Shares or the restrictions of applicable securities
laws.
(d) In the event of default in payment when due of any indebtedness
under the Note, the Company may elect then, or at any time thereafter, to
exercise all rights available to a secured party under the California Commercial
Code, including the right to sell the Shares at a private sale or repurchase the
Shares as provided above. The proceeds of any sale shall be applied in the
following order:
(i) To pay all reasonable expenses of the Company in enforcing
the Note and the security interest in the Shares, including without limitation
reasonable attorneys' fees and legal expenses incurred by the Company.
(ii) In satisfaction of the remaining indebtedness under the
Note.
<PAGE>
(iii) To the Purchaser, any remaining proceeds.
(e) In the event that the Purchaser prepays all or a portion of the
Note, in accordance with the provisions thereof, the Purchaser intends that the
Shares represented by the portion of the Note so repaid, including interest
thereon, shall continue to be held in escrow, to serve as independent collateral
for a like amount of the outstanding portion of the Note, for the purpose of
commencing the holding period set forth in Securities and Exchange Commission
Rule 144(d).
3. LIMITATIONS ON TRANSFER.
In addition to any other limitation on transfer created by applicable
securities laws, Purchaser shall not assign, encumber or dispose of any interest
in the Shares while the Shares are subject to the Company's repurchase option.
After any Shares have been released from such repurchase option, Purchaser shall
not assign, encumber or dispose of any interest in such Shares except in
compliance with this Section 3 and applicable securities laws.
(a) REPURCHASE OPTION. In the event of the voluntary or involuntary
termination of the position of Purchaser as an employee or consultant of the
Company for any reason, with or without cause (including death or disability),
the Company shall, upon the date of such termination, have an irrevocable,
exclusive option for a period of sixty (60) days from such date to repurchase
from Purchaser, at the original purchase price per Share, up to that number of
shares which would, if the option referenced in Section 1 had not been so
exercised, have been unvested as of the date of termination. The Option
Agreement is hereby incorporated by reference and made a part of this Agreement.
The option shall be exercised by the Company by written notice to Purchaser or
his or her executor and, at the Company's option, (i) by delivery to the
Purchaser or his or her executor, with such Notice, of a check in the amount of
the purchase price for the Shares being repurchased, or (ii) in the event the
Purchaser is indebted to the Company, by cancellation by the Company of an
amount of such indebtedness equal to the purchase price for the Shares being
repurchased, or (iii) by a combination of (i) and (ii) so that the combined
payment and cancellation of indebtedness equals such purchase price. Upon
delivery of such notice and payment of the purchase price in any of the ways
described above, the Company shall become the legal and beneficial owner of the
Shares being repurchased and all rights and interest therein or related thereto,
and the Company shall have the right to transfer to its own name the number of
Shares being repurchased by the Company, without further action by Purchaser.
(b) ASSIGNMENT. The right of Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations.
(c) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares
or any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Company's option to repurchase under this Section 3. Any sale or transfer of
the Company's Shares shall be void unless the provisions of this Agreement are
met.
4. ESCROW. For purposes of facilitating the enforcement of the
provisions of Section 3 above, Purchaser agrees, immediately upon receipt of the
certificate(s) for his or her Shares, to deliver such certificate(s), together
with two stock powers executed in blank by Purchaser and Purchaser's spouse (if
required for transfer) with respect to each such stock certificate, to the
Secretary of the Company, or its designee, to hold in escrow, with the authority
to take all such actions and to effectuate all such transfers and/or releases as
may be necessary or appropriate to accomplish the objectives of this Agreement
in accordance with the terms hereof. Purchaser hereby acknowledges that the
appointment of the Secretary of the Company (or its designee) as the escrow
holder hereunder with the stated authorities is a material inducement to the
Company to make this Agreement and that such appointment is coupled with an
interest and is accordingly irrevocable. Purchaser agrees that such escrow
holder shall not be liable to any party hereto (or to any other party) for any
actions or omissions unless such escrow holder is grossly negligent relative
thereto. The escrow holder may rely upon any letter, notice or other document
executed by any signature purported to be genuine and may resign at any time.
-2-
<PAGE>
5. LEGENDS. The certificate or certificates representing the Shares
shall bear the following legend (as well as any legends required by applicable
corporate and securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
6. NO EMPLOYMENT RIGHTS. This Agreement shall not confer upon Purchaser
any right with respect to continuation of his or her position as an employee or
consultant of the Company or its subsidiaries, nor shall it interfere in any way
with the right of Purchaser or the Company, or any of its subsidiaries, to
terminate Purchaser's position as an employee or consultant of the Company at
any time.
7. SECTION 83(b) ELECTION. Purchaser hereby represents that he or she
understands (a) the contents and requirements of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("SECTION 83(b)"), (b) the application of
Section 83(b) to the purchase of Shares by Purchaser pursuant to this Agreement,
and (c) the nature of the election to be made by Purchaser under Section 83(b).
Purchaser further represents that he or she intends to file an election pursuant
to Section 83(b) with the Internal Revenue Service within 30 days following the
date of this Agreement, and a copy of such election with his or her federal tax
return for the calendar year in which the date of this Agreement falls.
Purchaser acknowledges that his or her failure to file such election in a timely
manner may result in adverse tax consequences for Purchaser.
8. MISCELLANEOUS.
(a) This Agreement may be amended only by written Agreement between
the Company and Purchaser.
(b) Any notice, demand or request required or permitted to be given
under this Agreement shall be in writing and shall be deemed sufficient when
delivered personally or sent by telegram or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed, if to the Company, at its principal place of business,
attention the President, and if to Purchaser, at his or her address as shown on
the stock records of the Company.
(c) The rights and benefits of this Agreement shall inure to the
benefit of, and be enforceable by the Company's successors and assigns. The
rights and obligations of Purchaser under this Agreement may be assigned only
with the prior written consent of the Company.
(d) Both parties agree to execute any additional documents necessary
to carry out the purposes of this Agreement.
[SIGNATURE PAGE FOLLOWS]
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
RETIX
By:
---------------------------
Title:
------------------------
PURCHASER
------------------------------
(Print Name)
------------------------------
(Signature)
Address:
---------------------
---------------------
-4-
<PAGE>
ATTACHMENT A
CONSENT OF SPOUSE
I, _______________________, spouse of Steven Waszak, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated: _________________ _______________________________
Spouse of Purchaser
<PAGE>
ATTACHMENT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated March
26, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. ____ herewith and does hereby irrevocably constitute and appoint
_____________________________ to transfer said stock on the books of the within-
named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: _________________ Signature:
-----------------------------
-----------------------------
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
CONSENT OF SPOUSE
I, _______________________, spouse of Steven Waszak, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated: _________________
________________________________
Spouse of Purchaser
<PAGE>
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated March
26, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. _____ herewith and does hereby irrevocably constitute and appoint
__________________________________ to transfer said stock on the books of the
within-named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: _____________________ Signature:
-----------------------------
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
RECEIPT
Retix hereby acknowledges receipt of a check or promissory note for
$105,000.00 given by Steven Waszak as consideration for certificate number _____
for 20,000 shares.
Dated: _________________
RETIX
By:
---------------------------
Title:
------------------------
<PAGE>
RECEIPT AND CONSENT
The undersigned hereby acknowledges receipt of a photocopy of certificate
number _____ for 20,000 shares of Common Stock of Retix (the "COMPANY").
The undersigned further acknowledges that the Company is acting as escrow
holder pursuant to the Purchaser's Exercise Notice and Stock Purchase Agreement
he/she has previously entered into with the Company. As escrow holder, the
Company holds the original of the aforementioned certificate issued in the
undersigned's name.
Dated: _________________
------------------------------
(Printed Name
------------------------------
(Signature)
<PAGE>
PROMISSORY NOTE
$6,250.00 Santa Monica, California
March 26, 1996
At the times hereinafter stated, for value received, the undersigned
promises to pay Retix, a California corporation (the "COMPANY"), or order, at
its principal office the principal sum of $6,250.00 with interest from the date
hereof at a rate of 5.45% per annum, compounded annually, on the unpaid balance
of said principal sum. This Note, which is full recourse, is secured by a pledge
of certain shares of Common Stock of the Company and is subject to the terms of
an Exercise Notice and Stock Purchase Agreement between the undersigned and the
Company of even date herewith (the "PURCHASE AGREEMENT").
This Note shall be due and payable on April 28, 2003; provided, however,
that if the undersigned's employment by the Company or service as a consultant
or director of the Company is terminated prior to payment in full of this Note,
this Note shall be due and payable on such date as the exercise period specified
in the Option Agreement between the Purchaser and the Company dated April 28,
1993 would have expired had the options granted thereunder not been exercised
pursuant to the Purchase Agreement of which this Note is a part.
Principal and interest are payable in lawful money of the United States of
America. AT ANY TIME, THE PRIVILEGE IS RESERVED TO PAY MORE THAN THE SUM DUE.
Should suit be commenced to collect this Note or any portion thereof, such
sum as the Court may deem reasonable shall be added hereto as attorneys' fees.
The makers and endorsers have severally waived presentment for payment, protest,
notice of protest, and notice of non-payment of this Note.
---------------------------------
Steven Waszak
<PAGE>
EXHIBIT 10.44
RETIX
EXERCISE NOTICE AND STOCK PURCHASE AGREEMENT
This Exercise Notice and Stock Purchase Agreement (the "AGREEMENT") is made
as of March 26, 1996 by and between Retix, a California corporation (the
"COMPANY"), and Steven Waszak (the "PURCHASER").
1. EXERCISE OF OPTION. Pursuant to the exercise of a stock option (the
"OPTION") granted to the Purchaser under the Company's 1988 Stock Option Plan
(the "PLAN"), and pursuant to the Stock Option Agreement dated June 16, 1992
(the "OPTION AGREEMENT") between the Company and the Purchaser, the Purchaser
has elected to purchase 4,687 of those shares which have become vested under the
vesting schedule set forth in the Option Agreement (the "VESTED SHARES") and 313
of those shares which have not yet vested under such schedule (the "UNVESTED
SHARES"). (The Vested Shares and the Unvested Shares are referred to
collectively in this Agreement as the "SHARES"). The purchase price for the
Shares shall be $5.00 per Share for a total purchase price of $25,000.00. The
term "SHARES" refers to the purchased Shares and all securities received in
replacement of the Shares, or as stock dividends or as a result of any stock
splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
entitled by reason of Purchaser's ownership of the Shares. The Option Agreement
shall be deemed amended hereby to permit the early exercise of the Option and
the purchase of the Shares using a promissory note as contemplated hereby.
2. PAYMENT OF PURCHASE PRICE.
(a) The purchase price for the Shares shall be paid to the Company at
the time of execution of this agreement in cash, by check made payable to the
Company, by cancellation of indebtedness, by delivery to the Company of a
promissory note in the form attached to this Agreement (the "NOTE"), or by some
combination thereof. The form of such payment shall be at the discretion of the
Company.
(b) As security for the payment of the Note and any renewal,
extension, or modification thereof, the Purchaser hereby grants to the Company a
security interest in and pledges with and delivers to the Company the
certificate or certificates representing the Shares to be held pursuant to the
escrow described in Section 4 of this Agreement.
(c) In the event of any foreclosure of said security interest, the
Company may sell the Shares at a private sale and may itself repurchase any or
all of the Shares. The parties acknowledge that, if there is no established
public market for the Shares of the Company, the securities laws applicable to
the sale of the Shares may make a public sale of the Shares commercially
unreasonable. The parties agree that the repurchasing of said Shares by the
Company, or by any person to whom the Company may have assigned its rights
hereunder, is commercially reasonable if made at a price determined by the Board
of Directors of the Company in its discretion, fairly exercised, representing
what would be the fair market value of the Shares diminished by such factors as
the size of the block of Shares or the restrictions of applicable securities
laws.
(d) In the event of default in payment when due of any indebtedness
under the Note, the Company may elect then, or at any time thereafter, to
exercise all rights available to a secured party under the California Commercial
Code, including the right to sell the Shares at a private sale or repurchase the
Shares as provided above. The proceeds of any sale shall be applied in the
following order:
(i) To pay all reasonable expenses of the Company in enforcing
the Note and the security interest in the Shares, including without limitation
reasonable attorneys' fees and legal expenses incurred by the Company.
(ii) In satisfaction of the remaining indebtedness under the
Note.
<PAGE>
(iii) To the Purchaser, any remaining proceeds.
(e) In the event that the Purchaser prepays all or a portion of the
Note, in accordance with the provisions thereof, the Purchaser intends that the
Shares represented by the portion of the Note so repaid, including interest
thereon, shall continue to be held in escrow, to serve as independent collateral
for a like amount of the outstanding portion of the Note, for the purpose of
commencing the holding period set forth in Securities and Exchange Commission
Rule 144(d).
3. LIMITATIONS ON TRANSFER.
In addition to any other limitation on transfer created by applicable
securities laws, Purchaser shall not assign, encumber or dispose of any interest
in the Shares while the Shares are subject to the Company's repurchase option.
After any Shares have been released from such repurchase option, Purchaser shall
not assign, encumber or dispose of any interest in such Shares except in
compliance with this Section 3 and applicable securities laws.
(a) REPURCHASE OPTION. In the event of the voluntary or involuntary
termination of the position of Purchaser as an employee or consultant of the
Company for any reason, with or without cause (including death or disability),
the Company shall, upon the date of such termination, have an irrevocable,
exclusive option for a period of sixty (60) days from such date to repurchase
from Purchaser, at the original purchase price per Share, up to that number of
shares which would, if the option referenced in Section 1 had not been so
exercised, have been unvested as of the date of termination. The Option
Agreement is hereby incorporated by reference and made a part of this Agreement.
The option shall be exercised by the Company by written notice to Purchaser or
his or her executor and, at the Company's option, (i) by delivery to the
Purchaser or his or her executor, with such Notice, of a check in the amount of
the purchase price for the Shares being repurchased, or (ii) in the event the
Purchaser is indebted to the Company, by cancellation by the Company of an
amount of such indebtedness equal to the purchase price for the Shares being
repurchased, or (iii) by a combination of (i) and (ii) so that the combined
payment and cancellation of indebtedness equals such purchase price. Upon
delivery of such notice and payment of the purchase price in any of the ways
described above, the Company shall become the legal and beneficial owner of the
Shares being repurchased and all rights and interest therein or related thereto,
and the Company shall have the right to transfer to its own name the number of
Shares being repurchased by the Company, without further action by Purchaser.
(b) ASSIGNMENT. The right of Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations.
(c) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares
or any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Company's option to repurchase under this Section 3. Any sale or transfer of
the Company's Shares shall be void unless the provisions of this Agreement are
met.
4. ESCROW. For purposes of facilitating the enforcement of the
provisions of Section 3 above, Purchaser agrees, immediately upon receipt of the
certificate(s) for his or her Shares, to deliver such certificate(s), together
with two stock powers executed in blank by Purchaser and Purchaser's spouse (if
required for transfer) with respect to each such stock certificate, to the
Secretary of the Company, or its designee, to hold in escrow, with the authority
to take all such actions and to effectuate all such transfers and/or releases as
may be necessary or appropriate to accomplish the objectives of this Agreement
in accordance with the terms hereof. Purchaser hereby acknowledges that the
appointment of the Secretary of the Company (or its designee) as the escrow
holder hereunder with the stated authorities is a material inducement to the
Company to make this Agreement and that such appointment is coupled with an
interest and is accordingly irrevocable. Purchaser agrees that such escrow
holder shall not be liable to any party hereto (or to any other party) for any
actions or omissions unless such escrow holder is grossly negligent relative
thereto. The escrow holder may rely upon any letter, notice or other document
executed by any signature purported to be genuine and may resign at any time.
-2-
<PAGE>
5. LEGENDS. The certificate or certificates representing the Shares
shall bear the following legend (as well as any legends required by applicable
corporate and securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
6. NO EMPLOYMENT RIGHTS. This Agreement shall not confer upon Purchaser
any right with respect to continuation of his or her position as an employee or
consultant of the Company or its subsidiaries, nor shall it interfere in any way
with the right of Purchaser or the Company, or any of its subsidiaries, to
terminate Purchaser's position as an employee or consultant of the Company at
any time.
7. SECTION 83(b) ELECTION. Purchaser hereby represents that he or she
understands (a) the contents and requirements of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("SECTION 83(b)"), (b) the application of
Section 83(b) to the purchase of Shares by Purchaser pursuant to this Agreement,
and (c) the nature of the election to be made by Purchaser under Section 83(b).
Purchaser further represents that he or she intends to file an election pursuant
to Section 83(b) with the Internal Revenue Service within 30 days following the
date of this Agreement, and a copy of such election with his or her federal tax
return for the calendar year in which the date of this Agreement falls.
Purchaser acknowledges that his or her failure to file such election in a timely
manner may result in adverse tax consequences for Purchaser.
8. MISCELLANEOUS.
(a) This Agreement may be amended only by written Agreement between
the Company and Purchaser.
(b) Any notice, demand or request required or permitted to be given
under this Agreement shall be in writing and shall be deemed sufficient when
delivered personally or sent by telegram or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed, if to the Company, at its principal place of business,
attention the President, and if to Purchaser, at his or her address as shown on
the stock records of the Company.
(c) The rights and benefits of this Agreement shall inure to the
benefit of, and be enforceable by the Company's successors and assigns. The
rights and obligations of Purchaser under this Agreement may be assigned only
with the prior written consent of the Company.
(d) Both parties agree to execute any additional documents necessary
to carry out the purposes of this Agreement.
[SIGNATURE PAGE FOLLOWS]
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
RETIX
By: _______________________________________
Title: ____________________________________
PURCHASER
___________________________________________
(Print Name)
___________________________________________
(Signature)
Address: __________________________________
__________________________________
-4-
<PAGE>
ATTACHMENT A
CONSENT OF SPOUSE
I, _______________________, spouse of Steven Waszak, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated: _________________ _______________________________
Spouse of Purchaser
<PAGE>
ATTACHMENT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated March
26, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. ____ herewith and does hereby irrevocably constitute and appoint
_____________________________ to transfer said stock on the books of the within-
named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: _________________ Signature:
_________________________________
_________________________________
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
CONSENT OF SPOUSE
I, _______________________, spouse of Steven Waszak, have read and approved
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Dated: _________________
________________________________
Spouse of Purchaser
<PAGE>
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to that certain Exercise Notice and Stock
Purchase Agreement between the undersigned ("PURCHASER") and Retix dated March
26, 1996 (the "AGREEMENT"), Purchaser hereby sells, assigns and transfers unto
Retix _________________ shares of the Common Stock of Retix standing in
Purchaser's name on the books of said corporation represented by Certificate
No. _____ herewith and does hereby irrevocably constitute and appoint
__________________________________ to transfer said stock on the books of the
within-named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: _____________________ Signature:
__________________________________
Instruction: 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 set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
RECEIPT
Retix hereby acknowledges receipt of a check or promissory note for
$25,000.00 given by Steven Waszak as consideration for certificate number _____
for 5,000 shares.
Dated: _________________
RETIX
By: _______________________________________
Title: ____________________________________
<PAGE>
RECEIPT AND CONSENT
The undersigned hereby acknowledges receipt of a photocopy of certificate
number _____ for 5,000 shares of Common Stock of Retix (the "COMPANY").
The undersigned further acknowledges that the Company is acting as escrow
holder pursuant to the Purchaser's Exercise Notice and Stock Purchase Agreement
he/she has previously entered into with the Company. As escrow holder, the
Company holds the original of the aforementioned certificate issued in the
undersigned's name.
Dated: _________________ ___________________________________________
(Printed Name
___________________________________________
(Signature)
<PAGE>
PROMISSORY NOTE
$25,000.00 Santa Monica, California
March 26, 1996
At the times hereinafter stated, for value received, the undersigned
promises to pay Retix, a California corporation (the "COMPANY"), or order, at
its principal office the principal sum of $25,000.00 with interest from the date
hereof at a rate of 5.45% per annum, compounded annually, on the unpaid balance
of said principal sum. This Note, which is full recourse, is secured by a pledge
of certain shares of Common Stock of the Company and is subject to the terms of
an Exercise Notice and Stock Purchase Agreement between the undersigned and the
Company of even date herewith (the "PURCHASE AGREEMENT").
This Note shall be due and payable on June 16, 2002; provided, however,
that if the undersigned's employment by the Company or service as a consultant
or director of the Company is terminated prior to payment in full of this Note,
this Note shall be due and payable on such date as the exercise period specified
in the Option Agreement between the Purchaser and the Company dated June 16,
1992 would have expired had the options granted thereunder not been exercised
pursuant to the Purchase Agreement of which this Note is a part.
Principal and interest are payable in lawful money of the United States of
America. AT ANY TIME, THE PRIVILEGE IS RESERVED TO PAY MORE THAN THE SUM DUE.
Should suit be commenced to collect this Note or any portion thereof, such
sum as the Court may deem reasonable shall be added hereto as attorneys' fees.
The makers and endorsers have severally waived presentment for payment, protest,
notice of protest, and notice of non-payment of this Note.
____________________________________________
Steven Waszak
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Form 10-Q
dated March 30, 1996 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> MAR-30-1996
<CASH> 7,544
<SECURITIES> 9,506
<RECEIVABLES> 5,269<F1>
<ALLOWANCES> 0
<INVENTORY> 3,350
<CURRENT-ASSETS> 27,358
<PP&E> 2,871<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 31,578
<CURRENT-LIABILITIES> 10,338
<BONDS> 0
0
0
<COMMON> 220
<OTHER-SE> 17,021
<TOTAL-LIABILITY-AND-EQUITY> 31,578<F3>
<SALES> 7,581
<TOTAL-REVENUES> 7,581
<CGS> 2,778
<TOTAL-COSTS> 9,091<F4>
<OTHER-EXPENSES> (101)<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,409)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,409)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,409)
<EPS-PRIMARY> (0.07)
<EPS-DILUTED> (0.07)
<FN>
<F1>IS NET OF ALLOWANCES
<F2>IS NET OF ACCUMULATED DEPRECIATION
<F3>INCLUDES $3,999 IN LONG TERM OBLIGATIONS
<F4>INCLUDES $6,313 IN OPERATING EXPENSES
<F5>INCLUDES INTEREST INCOME, NET.
</FN>
</TABLE>
