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EXHIBIT 10.3
EVEREST DESIGN AUTOMATION INC.
FOUNDER'S RESTRICTED STOCK PURCHASE AGREEMENT
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TABLE OF CONTENTS
PAGE
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I. PURCHASE OF SHARES.......................................................................1
1.1 Purchase and Payment..............................................................1
1.2 Delivery of Certificates..........................................................1
1.3 Shareholder Rights................................................................1
II. SECURITIES LAW COMPLIANCE................................................................1
2.1 Exemption from Registration.......................................................1
2.2 Purchaser's Representations and Warranties........................................1
2.3 Disposition of Shares.............................................................3
2.4 Restrictive Legends...............................................................4
2.5 CALIFORNIA SECURITIES LAWS........................................................4
III. SPECIAL TAX ELECTION.....................................................................4
3.1 Section 83(b) Election............................................................4
3.2 Section 83(b) Election Acknowledgement............................................5
3.3 Valuation of Common Stock.........................................................5
IV. TRANSFER RESTRICTIONS....................................................................5
4.1 Definition of Owner...............................................................5
4.2 Restriction on Transfer...........................................................6
4.3 Transferee Obligations............................................................6
4.4 Market Stand-Off Provisions.......................................................6
V. REPURCHASE RIGHT.........................................................................7
5.1 Grant.............................................................................7
5.2 Exercise of the Repurchase Right..................................................7
5.3 Termination of the Repurchase Right/Vesting.......................................7
5.4 Fractional Shares.................................................................7
5.5 Additional Shares or Substituted Securities.......................................8
5.6 Corporate Transaction.............................................................8
5.7 Death/Disability..................................................................9
5.8 Assignment........................................................................9
VI. RIGHT OF FIRST REFUSAL..................................................................10
6.1 Grant............................................................................10
6.2 Notice of Intended Disposition...................................................10
6.3 Exercise of Right................................................................10
6.4 Non-Exercise of Right............................................................10
6.5 Partial Exercise of Right........................................................11
6.6 Recapitalization/Corporate Transaction...........................................11
6.7 Lapse............................................................................11
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TABLE OF CONTENTS
(CONTINUED)
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VII. ESCROW FOR UNVESTED SHARES..............................................................12
7.1 Deposit..........................................................................12
7.2 Recapitalization.................................................................12
7.3 Release/Surrender................................................................12
VIII. MARITAL DISSOLUTION OR LEGAL SEPARATION.................................................13
8.1 Grant............................................................................13
8.2 Notice of Decree or Agreement....................................................13
8.3 Exercise of Special Purchase Right...............................................13
8.4 Lapse............................................................................14
IX. GENERAL PROVISIONS......................................................................14
9.1 Assignment.......................................................................14
9.2 Definitions......................................................................14
9.3 No Waiver........................................................................15
9.4 Notices..........................................................................15
9.5 Cancellation of Shares...........................................................15
X. MISCELLANEOUS PROVISIONS................................................................16
10.1 Purchaser Undertaking............................................................16
10.2 Agreement is Entire Contract.....................................................16
10.3 Governing Law....................................................................16
10.4 Counterparts.....................................................................16
10.5 Successors and Assigns...........................................................16
10.6 Power of Attorney................................................................16
10.7 Severability.....................................................................17
10.8 No Construction as Employment Agreement..........................................17
10.9 Conflict Waiver..................................................................17
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EVEREST DESIGN AUTOMATION INC.
FOUNDER'S RESTRICTED STOCK PURCHASE AGREEMENT
THIS FOUNDER'S RESTRICTED STOCK PURCHASE AGREEMENT is made as of this
____ day of _____, _____, by and between Everest Design Automation Inc., a
California corporation (the "Company") and _____________ (the "Purchaser").
I. PURCHASE OF SHARES
1.1 PURCHASE AND PAYMENT. Subject to the terms hereof, Purchaser hereby
purchases, and the Company hereby sells to Purchaser, _____________________
shares of the Company's Common Stock (the "Shares") at the purchase price of
___________ per share (the "Purchase Price"). Concurrently with the delivery of
this Agreement to the Company, Purchaser shall pay the aggregate Purchase Price
for the Shares and shall deliver a duly-executed blank Assignment Separate from
Certificate (in the form attached hereto as Exhibit C) with respect to the
Shares.
1.2 DELIVERY OF CERTIFICATES. A copy of a certificate representing the
Shares purchased hereunder shall be delivered to Purchaser upon the execution of
this Agreement, provided, however, that all Unvested Shares (as such term is
defined herein) shall be represented by the original certificate held in escrow
by the Secretary of the Company as provided in Article VII of this Agreement.
1.3 SHAREHOLDER RIGHTS. Until such time as the Company actually
exercises its Repurchase Right, First Refusal Right or Special Purchase Right
under this Agreement, Purchaser or any successor in interest shall have all the
rights of a shareholder (including voting and dividend rights) with respect to
the Shares including the Shares held in escrow under Article VII subject,
however, to the transfer restrictions of Article ______.
II. SECURITIES LAW COMPLIANCE
2.1 EXEMPTION FROM REGISTRATION. The Shares have not been registered
under the Securities Act of 1933, as amended (the "1933 Act"), and are
accordingly being issued to Purchaser in reliance upon the exemption from such
registration provided by Rule 701 of the Securities and Exchange Commission
("SEC") for stock issuances under compensatory benefit plans such as the
compensation agreement of even date herewith.
2.2 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser hereby
confirms:
(a) Purchase for Own Account for Investment. Purchaser is
purchasing the Shares for Purchaser's own account for investment
purposes only and not with a view to, or for sale in connection with, a
distribution of the Shares within the meaning of the 1933 Act. Purchaser
has no present intention of selling or otherwise disposing of all or any
portion of the Shares.
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(b) Access to Information. Purchaser has had access to all
information regarding the Company and its present and prospective
business, assets, liabilities and financial condition that Purchaser
reasonably considers important in making the decision to purchase the
Shares.
(c) Understanding of Risks. Purchaser is fully aware of: (i) the
highly speculative nature of the investment in the Shares; (ii) the
financial hazards involved; (iii) the lack of liquidity of the Shares
and the restrictions on transferability of the Shares (e.g., that
Purchaser may not be able to sell or dispose of the Shares or use them
as collateral for loans); (iv) the qualifications and backgrounds of the
management of the Company; and (v) the tax consequences of investment in
the Shares.
(d) Purchaser's Qualifications. Purchaser has a preexisting
personal or business relationship with the Company and/or certain of its
officers and/or directors of a nature and duration sufficient to make
Purchaser aware of the character, business acumen and general business
and financial circumstances of the Company and/or such officers and
directors. By reason of Purchaser's business or financial experience,
Purchaser is capable of evaluating the merits and risks of this
investment, has the ability to protect Purchaser's own interests in this
transaction and is financially capable of bearing a total loss of this
investment.
(e) No General Solicitation. At no time was Purchaser presented
with or solicited by any publicly issued or circulated newspaper, mail,
radio, television or other form of general advertising or solicitation
in connection with the offer, sale and purchase of the Shares.
(f) Compliance with Securities Laws. Purchaser understands and
acknowledges that, in reliance upon the representations and warranties
made by Purchaser herein, the Shares are not being registered with the
SEC under the 1933 Act or being qualified under the California Corporate
Securities Law of 1968, as amended (the "Law"), but instead are being
issued under an exemption or exemptions from the registration and
qualification requirements of the 1933 Act and the Law which impose
certain restrictions on Purchaser's ability to transfer the Shares.
(g) Restrictions on Transfer. Purchaser understands that
Purchaser may not transfer any Shares unless such Shares are registered
under the 1933 Act or qualified under the Law or unless, in the opinion
of counsel to the Company, exemptions from such registration and
qualification requirements are available. Purchaser understands that
only the Company may file a registration or qualification statement with
the SEC or the California Commissioner of Corporations and that the
Company is under no obligation to do so with respect to the Shares.
Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit Purchaser to
transfer all or any of the Shares in the amounts or at the times
proposed by Purchaser.
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(h) Rule 144. In addition, Purchaser has been advised that SEC
Rule 144 promulgated under the 1933 Act, which permits certain limited
sales of unregistered securities, is not presently available with
respect to the Shares and, in any event, requires that the Shares be
held for a minimum of one year, and in certain cases two years, after
they have been purchased and paid for (within the meaning of Rule 144),
before they may be resold under Rule 144. Purchaser understands that
Rule 144 may indefinitely restrict transfer of the Shares so long as
Purchaser remains an "affiliate" of the Company and "current public
information" about the Company (as defined in Rule 144) is not publicly
available.
(i) Rule 701. The Shares will become freely tradeable by
non-affiliates under SEC Rule 701 promulgated under the 1933 Act,
subject to limited conditions regarding the method of sale, 90 days
after the first sale of common stock of the Company to the general
public pursuant to a registration statement filed with and declared
effective by the SEC, subject to the lengthier market standoff agreement
contained in this Agreement or any other agreement entered into by
Purchaser, provided, however, that affiliates must comply with the
provisions (other than the holding period requirements) of Rule 144.
2.3 DISPOSITION OF SHARES. Purchaser hereby agrees that Purchaser shall
make no disposition of the Shares unless and until there is compliance with all
of the following requirements:
(a) Purchaser shall have notified the Company of the proposed
disposition and provided a written summary of the terms and conditions
of the proposed disposition.
(b) Purchaser shall have complied with all requirements of this
Agreement applicable to the disposition of the Shares.
(c) Purchaser shall have provided the Company with written
assurances, in form and substance satisfactory to the Company, that (i)
the proposed disposition does not require registration of the Shares
under the 1933 Act or (ii) all appropriate action necessary for
compliance with the registration requirements of the 1933 Act or for
compliance with an exemption from registration available under the 1933
Act (including Rule 144) has been taken.
(d) Purchaser shall have provided the Company with written
assurances, in form and substance satisfactory to the Company, that the
proposed disposition will not result in the contravention of any
transfer restrictions applicable to the Shares pursuant to the
provisions of Article IV.
The Company shall not be required (i) to transfer on its books
any Shares which have been sold or transferred in violation of the provisions of
this Article _____ or (ii) to treat as the owner of the Shares, or otherwise to
accord voting or dividend rights to, any transferee to whom the Shares have been
transferred in contravention of this Agreement.
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2.4 RESTRICTIVE LEGENDS. In order to reflect the restrictions on
disposition of the Shares, the stock certificates for the Shares may be endorsed
with restrictive legends, including one or more of the following legends:
(a) "The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The shares may
not be sold or offered for sale in the absence of (1) an effective
registration statement for the shares under such Act, (2) a `no action'
letter of the Securities and Exchange Commission with respect to such
sale or offer, or (3) satisfactory assurances to the Company that
registration under such Act is not required with respect to such sale or
offer."
(b) "The shares represented by this certificate may not be sold,
assigned, transferred, encumbered, or in any manner disposed of except
in conformity with the terms of a written agreement between the Company
and the registered holder of the shares and spouse, if applicable (or
the predecessor in interest to the shares). Such agreement grants
certain repurchase rights, rights of first refusal and/or special
purchase rights to the Company (or its assignees) upon the sale,
assignment, transfer, encumbrance or other disposition of the Company's
shares or upon termination of service with the Company. The Company will
upon written request furnish a copy of such agreement to the holder
hereof without charge."
(c) If required by the authorities of any state in connection
with the issuance of the Shares, the legend or legends required by such
state authorities shall also be endorsed on all such certificates.
(d) Any other legend or legends required under any agreement
entered into by the Company, the Purchaser and third parties relating to
the issuance and sale of Preferred Stock of the Company.
2.5 CALIFORNIA SECURITIES LAWS. "THE SALE OF THE SHARES HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, AND
THE ISSUANCE OF SUCH SHARES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS THE SALE
OF SUCH SHARES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF
THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UNLESS THE SALE IS SO EXEMPT.
III. SPECIAL TAX ELECTION
3.1 SECTION 83(b) ELECTION. Purchaser understands that under Section 83
of the Internal Revenue Code of 1986, as amended (the "Code"), the excess of the
fair market value of the Shares on the date any forfeiture restrictions
applicable to the Shares lapse over the Purchase Price paid for the Shares will
be reportable as ordinary income at that time. For this purpose, the term
"forfeiture restrictions" includes the right of the Company to repurchase a
portion of the Shares pursuant to the
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Repurchase Right provided under Article ______ of this Agreement. Purchaser
understands, however, that Purchaser may elect to be taxed at the time such
Shares are acquired hereunder, rather than when and as such Shares cease to be
subject to such forfeiture restrictions, by filing an election under Section
83(b) of the Code with the Internal Revenue Service WITHIN THIRTY (30) DAYS
AFTER THE DATE OF THIS AGREEMENT. Even if the fair market value of the Shares at
the date of this Agreement equals the Purchase Price paid (and thus no tax is
payable), the election must be made to avoid adverse tax consequences in the
future. The form for making this election is attached as Exhibit A hereto.
Purchaser understands that failure to make this filing within the thirty (30)
day period will result in the recognition of ordinary income by Purchaser as the
forfeiture restrictions lapse.
3.2 SECTION 83(b) ELECTION ACKNOWLEDGEMENT. PURCHASER ACKNOWLEDGES THAT
IT IS PURCHASER'S SOLE RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE A TIMELY
ELECTION UNDER SECTION 83(B), EVEN IF PURCHASER REQUESTS THE COMPANY OR ITS
REPRESENTATIVES TO MAKE THIS FILING ON HIS BEHALF.
3.3 VALUATION OF COMMON STOCK. Purchaser understands that the Shares
have been valued by the Board of Directors and that the Company believes this
valuation represents a fair attempt at reaching an accurate appraisal of their
worth; Purchaser understands, however, that the Company can give no assurances
that such price is in fact the fair market value of the Shares and that it is
possible that, with the benefit of hindsight, the Internal Revenue Service would
successfully assert that the value of the Shares on the date of purchase is
substantially greater than so determined.
If the Internal Revenue Service were to succeed in a tax
determination that the Shares received had value greater than that upon which
the transaction was based, the additional value would constitute ordinary income
as of the date of its receipt. The additional taxes (and interest) due would be
payable by Purchaser, and there is no provision for the Company to reimburse
Purchaser for that tax liability, and Purchaser assumes all responsibility for
such potential tax liability. In the event that such additional value would
represent more than twenty-five (25) percent of Purchaser's gross income for the
year in which the value of the Shares was taxable, the Internal Revenue Service
would have six years from the due date for filing the return (or the actual
filing date of the return if filed thereafter) within which to assess Purchaser
the additional tax and interest which would then be due.
The Company would have the benefit, in any such transaction, if a
determination was made prior to the three year statute of limitations period
affecting the Company, of an increase in its deduction for compensation paid,
which would offset its operating profits, or, if not profitable, would create
net operating loss carry forward arising from operations in that year.
IV. TRANSFER RESTRICTIONS
4.1 DEFINITION OF OWNER. For purposes of Articles ______, VI, VIII, IX and X,
the term "Owner" shall include Purchaser and all subsequent holders of the
Shares.
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4.2 RESTRICTION ON TRANSFER. Owner shall not transfer, assign, encumber
or otherwise dispose of any of the Shares which are subject to the Company's
Repurchase Right under Article ______ below. In addition, shares which are
released from the Repurchase Right shall not be transferred, assigned,
encumbered or otherwise made the subject of disposition in contravention of the
Company's First Refusal Right under Article VI. Such restrictions on transfer,
however, shall not be applicable to: (i) any gratuitous transfer of the Shares
to any spouse or member of Founder's immediate family (including adopted
children), or to a custodian, trustee (including a trustee of a voting trust),
executor or other fiduciary for the account of his spouse or members of his
immediate family, or to a trust for himself, or a charitable remainder trust,
provided and only if Owner obtains the Company's prior written consent to such
transfer; (ii) a transfer of title to the Shares effected pursuant to Owner's
will or the laws of intestate succession; (iii) a transfer to the Company in
pledge as security for any purchase-money indebtedness incurred by Owner in
connection with the acquisition of the Shares; or (iv) up to fifteen percent
(15%) of the Shares, provided that, in each case, each such transferee or
assignee, prior to the completion of the sale, transfer or assignment shall have
executed documents assuming the obligations of the Founder under this Agreement
with respect to the transferred securities.
4.3 TRANSFEREE OBLIGATIONS. Each person (other than the Company) to whom
the Shares are transferred by means of one of the permitted transfers specified
in paragraph 4.2 must, as a condition precedent to the validity of such
transfer, acknowledge in writing to the Company that such person is bound by the
provisions of this Agreement and that the transferred shares are subject to (i)
the Company's Repurchase Right, the Company's First Refusal Right and the
Company's Special Purchase Right granted under this Agreement and (ii) the
market stand-off provisions of paragraph ______, to the same extent such Shares
would be so subject if retained by Owner.
4.4 MARKET STAND-OFF PROVISIONS.
(a) In connection with the first underwritten public offering by
the Company of its equity securities pursuant to an effective
registration statement filed under the 1933 Act, Owner shall not sell,
make any short sale of, loan, hypothecate, pledge, grant any option for
the purchase of, or otherwise dispose or transfer for value or otherwise
agree to engage in any of the foregoing transactions with respect to,
any Shares without the prior written consent of the Company and its
underwriters. Such limitations shall be in effect for such period of
time from and after the effective date of such registration statement as
may be requested by the Company or its underwriters; provided, however,
that in no event shall such period exceed one hundred-eighty (180) days.
(b) In the event of any stock dividend, stock split,
recapitalization or other change affecting the Company's outstanding
Common Stock effected without receipt of consideration, then any new,
substituted or additional securities distributed with respect to the
Shares shall be immediately subject to the provisions of this paragraph
______, to the same extent the Shares are at such time covered by such
provisions.
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(c) In order to enforce the limitations of this paragraph
______, the Company may impose stop-transfer instructions with respect
to the Shares until the end of the applicable stand-off period.
V. REPURCHASE RIGHT
5.1 GRANT. The Company is hereby granted the right (the "Repurchase
Right"), exercisable at any time during the sixty (60)-day period following the
date Purchaser for any reason ceases to be a Service Provider (as such term is
defined below) to the Company, to repurchase at the Purchase Price all or (at
the discretion of the Company) any portion of the Shares in which Purchaser has
not acquired a vested interest in accordance with the vesting provisions of
paragraph ______ hereof and Exhibit B hereto (such shares to be hereinafter
called the "Unvested Shares"). For purposes of this Agreement, Purchaser shall
be deemed to be a "Service Provider" to the Company for so long as Purchaser
performs services on at least a periodic basis for the Company in the capacity
as an employee of, or an independent consultant or advisor to, the Company or
any parent, subsidiary or affiliate of the Company pursuant to an agreement.
5.2 EXERCISE OF THE REPURCHASE RIGHT. The Repurchase Right shall be
exercisable by written notice delivered to Purchaser prior to the expiration of
the applicable sixty (60)-day period specified in paragraph ______ hereof. The
notice shall indicate the number of Unvested Shares to be repurchased and the
date on which the repurchase is to be effected, such date to be not more than
thirty (30) days after the date of notice. The Company shall, concurrently with
the receipt of the stock certificates from escrow in accordance with paragraph
______ hereof, pay to Purchaser in cash or cash equivalents an amount equal to
the purchase price originally paid by Purchaser for the Unvested Shares which
are to be repurchased by the Company.
5.3 TERMINATION OF THE REPURCHASE RIGHT/VESTING. The Repurchase Right
shall terminate and Purchaser's interest shall vest with respect to any Unvested
Shares for which the Company has not timely exercised its Repurchase Right
pursuant to paragraph ______ of this Agreement. The Repurchase Right shall lapse
and cease to be exercisable, and Purchaser's interest shall vest, with respect
to any and all Shares in accordance with the schedule set forth on Exhibit B
attached hereto, or as otherwise set forth in Sections 5.6 and 5.7 below.
Accordingly, subject to the terms of this Agreement, as, and provided that the
Purchaser continues as a Service Provider, the Purchaser shall acquire a vested
interest in, and the Repurchase Right shall lapse with respect to, the Shares in
accordance with the schedule as set forth in Exhibit B or as otherwise set forth
in Sections 5.6 and 5.7 below. All Shares as to which the Repurchase Right
lapses shall, however, continue to be subject to: (1) the First Refusal Right of
Article VI, (2) the market stand-off provisions of paragraph 4.4. and (3) the
Special Purchase Right of Article VIII. The vesting provisions of this paragraph
5.3 (together with Exhibit B) shall be subject to the provisions of paragraph
5.6 of this Agreement.
5.4 FRACTIONAL SHARES. No fractional shares shall be repurchased by the
Company. Accordingly, should the Repurchase Right extend to a fractional share
(in accordance with the vesting computation provisions of paragraph ______
hereof) at the time Purchaser ceases to be a
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Service Provider, then such fractional share shall be added to any fractional
share in which Purchaser is at such time vested in order to make one whole
vested share no longer subject to the Repurchase Right.
5.5 ADDITIONAL SHARES OR SUBSTITUTED SECURITIES. In the event of any
stock dividend, stock split, recapitalization, or other change affecting the
Company's outstanding Common Stock as a class effected without receipt of
consideration, then any new, substituted, or additional securities or other
property which is by reason of any such transaction distributed with respect to
the Shares shall be immediately subject to the Repurchase Right, but only to the
extent the Shares are at the time covered by such right. Appropriate adjustments
to reflect the distribution of such securities or property shall be made to the
number of Shares hereunder and to the price per share to be paid upon the
exercise of the Repurchase Right in order to reflect the effect of any such
transaction upon the Company's capital structure; provided, however, that the
aggregate repurchase price shall remain the same.
5.6 CORPORATE TRANSACTION. In the event of any of the following
transactions (a "Corporate Transaction"):
(a) a merger or acquisition in which the Company is not the
surviving entity, except for a transaction the principal purpose of
which is to change the State in which the Company is incorporated; or
(b) the sale, transfer or other disposition of all or
substantially all of the assets of the Company; or
(c) any merger in which the Company is the surviving entity but
in which fifty percent (50%) or more of the Company's outstanding voting
stock is transferred in a single transaction or a series of related
transactions to holders different from those who held the stock of the
Company immediately prior to such merger,
and Purchaser either (i) is not offered full-time employment with the Company or
its successor immediately following the Corporate Transaction or (ii) is offered
full-time employment with the Company or its successor at the Corporate
Transaction date, but is subsequently Terminated Without Cause (as defined
below) by the Company or its successor after the consummation date of the
Corporate Transaction, then the Company's Repurchase Right shall automatically
lapse as to the lesser of the remaining Unvested Shares as of Purchaser's
termination date or 25% of the Shares (i.e., 375,000 additional Shares or such
lesser number as remains Unvested, in either case together with the Shares that
have already vested), and Purchaser shall also acquire a vested interest in such
375,000 additional Shares (or such lesser number as remains Unvested). Under no
circumstances shall Purchaser acquire a vested interest in shares of the
Company's Common Stock in excess of the Shares (as adjusted for stock splits,
stock dividends and the like). "Termination Without Cause" shall mean, without
Purchaser's express written consent: (i) the hiring or any executive officer in
replacement of Purchaser; (ii) a reassignment that materially adversely affects
Purchaser's position with the Company (or any successor), responsibilities,
duties or status as in effect immediately prior
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to such reassignment; (iii) a reduction by the Company (or its successor) in the
compensation and benefits of the Purchaser as in effect immediately prior to
such reduction unless such reduction is authorized by the Board of Directors and
is proportionate to the reduction made to the compensation and benefits of all
employees of the Company (or its successor) with positions, responsibilities,
duties and status comparable to Purchaser's; or (iv) the relocation of Purchaser
to a facility or a location more than 40 miles from Purchaser's then principal
place of employment.
5.7 DEATH/DISABILITY.
(a) Should Purchaser die during the term that any of the Shares
remain subject to the Company's Repurchase Right, then at the time of
death, the Company's Repurchase Right shall lapse with respect to, and
Purchaser shall acquire a vested interest in, the lesser of the
remaining Unvested Shares as of the date of death or an additional
375,000 shares, over and above any portion of the Shares which have
already vested. Under no circumstances shall Purchaser acquire a vested
interest in shares of the Company's Common Stock in excess of the Shares
(as adjusted for stock splits, stock dividends and the like). The
personal representative of Purchaser's estate or the person or persons
to whom such vested Shares shall be transferred pursuant to Purchaser's
will or in accordance with the law of descent and distribution shall
have the right to receive all such vested Shares, including those vested
on the basis of Purchaser's service to the Company and those vested on
the basis of acceleration.
(b) Should Purchaser become permanently disabled and cease by
reason thereof to be a Service Provider at any time during the term that
any of the Shares remain subject to the Company's Repurchase Right, then
at the time of disability, the Company's Repurchase Right shall lapse
with respect to, and Purchaser shall acquire a vested interest in, the
lesser or the remaining Unvested Shares as of the date of disability or
an additional 375,000 Shares, over and above any portion of the Shares
which have already vested. Under no circumstances shall Purchaser
acquire a vested interest in shares of the Company's Common Stock in
excess of the Shares (as adjusted for stock splits, stock dividends and
the like). Purchaser shall be deemed to be permanently disabled if
Purchaser is, by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration
of not fewer than twelve (12) consecutive months, unable to perform his
usual duties for the Company or the parent or subsidiary corporation
retaining his services.
5.8 ASSIGNMENT. The Company may assign its Repurchase Right under this
Article ______ to any person or entity selected by the Company's Board of
Directors, including (without limitation) one or more shareholders of the
Company, provided that the Repurchase Right shall not extend beyond the sixty
(60)-day period described in paragraph ______ hereof. In the event that the
Company and such assignees do not elect to exercise the Repurchase Right as to
all of the Unvested Shares subject thereto, the Repurchase Right shall expire as
to all shares which the Company and such assignees have not elected to purchase.
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VI. RIGHT OF FIRST REFUSAL
6.1 GRANT. The Company is hereby granted the right of first refusal (the
"First Refusal Right"), exercisable in connection with any proposed transfer of
the Shares. For purposes of this Article VI, the term "transfer" shall include
any sale, assignment, pledge, encumbrance or other disposition for value of the
Shares intended to be made by the Owner, but shall not include any of the
permitted transfers under paragraph 4.2.
6.2 NOTICE OF INTENDED DISPOSITION. In the event the Owner desires to
accept a bona fide third-party offer for any or all of the Shares (the shares
subject to such offer to be hereinafter called the "Target Shares"), Owner shall
promptly (i) deliver to the Corporate Secretary of the Company written notice
(the "Disposition Notice") of the terms and conditions of the offer, including
the purchase price and the identity of the third-party offeror and (ii) provide
satisfactory proof that the disposition of the Target Shares to such third-party
offeror would not be in contravention of the provisions set forth in Articles II
and IV of this Agreement.
6.3 EXERCISE OF RIGHT. The Company (or its assignees) shall, for a
period of twenty-five (25) days following receipt of the Disposition Notice,
have the right to repurchase any or all of the Target Shares specified in the
Disposition Notice upon substantially the same terms and conditions specified
therein. Such right shall be exercisable by delivery of written notice (the
"Exercise Notice") to Owner prior to the expiration of the twenty-five (25) day
exercise period. If such right is exercised with respect to all the Target
Shares specified in the Disposition Notice, then the Company (or its assignees)
shall effect the repurchase of the Target Shares, including payment of the
purchase price, not more than five (5) business days after delivery of the
Exercise Notice; and at such time Owner shall deliver to the Company the
certificates representing the Target Shares to be repurchased, each certificate
to be properly endorsed for transfer. To the extent any of the Target Shares are
vested but are, at the time, still held in escrow under Article VII, the
certificates for such shares shall automatically be released from escrow and
delivered to the Company for purchase.
6.4 NON-EXERCISE OF RIGHT. In the event the Exercise Notice is not given
to Owner within twenty-five (25) days following the date of the Company's
receipt of the Disposition Notice, Owner shall have a period of thirty (30) days
thereafter in which to sell or otherwise dispose of the Target Shares to the
third-party offeror identified in the Disposition Notice upon terms and
conditions (including the purchase price) no more favorable to such third-party
offeror than those specified in the Disposition Notice; provided, however, that
any such sale or disposition must not be effected in contravention of the
provisions of Article II of this Agreement. To the extent any of the Target
Shares are at the time held in escrow under Article VII, the certificates for
such shares shall automatically be released from escrow and surrendered to the
Owner. The acquired shares shall remain subject to (i) the securities law
restrictions under Article II, (ii) the Company's First Refusal Right under this
Article VI, (iii) the Transfer Restrictions of Article 4, including but not
limited to the market stand-off provisions of paragraph 4.4 and (iv) the
Company's Special Purchase Right under Article VIII. In the event Owner does not
effect such sale or disposition of the Target Shares within the specified thirty
(30) day period, the Company's First Refusal Right shall continue to be
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applicable to any subsequent disposition of the Target Shares by Owner until
such right lapses in accordance with paragraph ______.
6.5 PARTIAL EXERCISE OF RIGHT. In the event the Company (or its
assignees) makes a timely exercise of the First Refusal Right with respect to a
portion, but not all, of the Target Shares specified in the Disposition Notice,
Owner shall have the option, exercisable by written notice to the Company
delivered within thirty (30) days after the date of the Disposition Notice, to
effect the sale of the Target Shares pursuant to one of the following
alternatives:
(a) sale or other disposition of all the Target Shares to the
third-party offeror identified in the Disposition Notice, but in full
compliance with the requirements of paragraph 6.4, as if the Company did
not exercise the First Refusal Right hereunder; or
(b) sale to the Company (or its assignees) of the portion of the
Target Shares which the Company (or its assignees) has elected to
purchase, such sale to be effected in substantial conformity with the
provisions of this Agreement.
Failure of Owner to deliver timely notification to the Company
under this paragraph 6.5 shall be deemed to be an election by Owner to sell the
Target Shares pursuant to alternative (a) above.
6.6 RECAPITALIZATION/CORPORATE TRANSACTION.
(a) In the event of any stock dividend, stock split,
recapitalization or other transaction affecting the Company's
outstanding Common Stock as a class effected without receipt of
consideration, then any new, substituted or additional securities or
other property which is by reason of such transaction distributed with
respect to the Shares shall be immediately subject to the Company's
First Refusal Right hereunder.
(b) In the event of a Corporate Transaction, the Company's First
Refusal Right shall remain in full force and effect and shall apply to
the new capital stock or other property received in exchange for the
Shares in consummation of the Corporate Transaction.
6.7 LAPSE. The First Refusal Right under this Article VI shall lapse and
cease to have effect upon the earliest to occur of (i) the first date on which
shares of the Company's Common Stock are held of record by more than five
hundred (500) persons, (ii) a determination is made by the Company's Board of
Directors that a public market exists for the outstanding shares of the
Company's Common Stock, or (iii) a firm commitment underwritten public offering
pursuant to an effective registration statement under the 1933 Act, covering the
offer and sale of the Company's Common Stock sufficient to cause an automatic
conversion of the preferred stock into Common Stock pursuant to the Company's
then existing Articles of Incorporation. However, the market stand-off
provisions of paragraph 4.4 shall continue to remain in full force and effect
following the lapse of the First Refusal Right hereunder.
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VII. ESCROW FOR UNVESTED SHARES
7.1 DEPOSIT. Upon issuance, the certificate for the Unvested Shares
shall be deposited in escrow with the Secretary of the Company to be held in
accordance with the provisions of this Article VII. Such deposited certificate
shall be accompanied by a duly executed Assignment Separate from Certificate in
the form of Exhibit C attached hereto. The deposited certificate, together with
any other assets or securities from time to time deposited with the Company
pursuant to the requirements of this Agreement, shall remain in escrow until
such time or times as the certificate (or other assets and securities) shall be
released or otherwise surrendered for cancellation in accordance with paragraph
7.3 of this Agreement.
7.2 RECAPITALIZATION. Any cash dividends on the Shares (or other
securities at the time held in escrow) shall be paid directly to Purchaser and
shall not be held in escrow. However, in the event of any stock dividend, stock
split, recapitalization, or other change affecting the Company's outstanding
Common Stock as a class effected without receipt of consideration or in the
event of a Corporate Transaction any new, substituted, or additional securities
or other property which is by reason of such event distributed with respect to
the Shares shall be immediately delivered to the Company to be held in escrow
under this Article VII, but only to the extent the Shares are at the time
subject to the escrow requirements of paragraph 7.1.
7.3 RELEASE/SURRENDER. The Unvested Shares, together with any other
assets or securities held in escrow hereunder, shall be subject to the following
terms and conditions relating to their release from escrow or their surrender to
the Company for repurchase and cancellation:
(a) Should the Company (or its assignees) elect to exercise the
Repurchase Right under Article ______ with respect to any Unvested
Shares, then the escrowed certificates for such Unvested Shares
(together with any other assets or securities issued with respect
thereto) shall be delivered to the Company for cancellation,
concurrently with the payment to Purchaser, in cash or cash equivalent,
of an amount equal to the aggregate Purchase Price for such Unvested
Shares, and Purchaser shall cease to have any further rights or claims
with respect to such Unvested Shares (or other assets or securities).
(b) Should the Company (or its assignees) elect to exercise its
First Refusal Right under Article VI with respect to any vested Target
Shares held at the time in escrow hereunder, then the escrowed
certificates for such Target Shares (together with any other assets or
securities attributable thereto) shall, concurrently with the payment of
the paragraph 6.3 purchase price for such Target Shares to the
Purchaser, be surrendered to the Company, and the Purchaser shall cease
to have any further rights or claims with respect to such Target Shares
(or other assets or securities).
(c) Should the Company (or its assignees) elect not to exercise
its First Refusal Right under Article VI with respect to any vested
Target Shares held at the time in escrow hereunder, then the escrowed
certificates for such Target Shares (together with any other
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assets or securities attributable thereto) shall be surrendered to the
Purchaser for disposition in accordance with the provisions of paragraph
6.4.
(d) As the interest of Purchaser in the Shares (or any other
assets or securities issued with respect thereto) vests in accordance
with the provisions of Article ______, the certificates for such vested
shares (as well as all other vested assets and securities) shall be
released from escrow and delivered to Purchaser upon the request of
Purchaser, but no more frequently than every six (6) months.
(e) Upon any earlier termination of the Company's Repurchase
Right in accordance with the applicable provisions of Article V, the
Shares (or other assets or securities) at the time held in escrow
hereunder shall promptly be released to the Purchaser as fully-vested
shares or other property.
(f) All Shares (or other assets or securities) released from
escrow in accordance with the provisions of subparagraphs (c), (d) and
(e) above shall nevertheless remain subject to all other restrictions
applicable thereto, including without limitation (i) the securities law
restrictions under Article II, (ii) the Company's First Refusal Right
under Article VI, (iii) the Transfer Restrictions of Article IV,
including but not limited to the market stand-off provisions of
paragraph 4.4 and (iv) the Company's Special Purchase Right under
Article VIII.
VIII. MARITAL DISSOLUTION OR LEGAL SEPARATION
8.1 GRANT. In connection with the dissolution of the Owner's marriage or
the legal separation of the Owner and the Owner's spouse, the Company shall have
the right (the "Special Purchase Right"), exercisable at any time during the
thirty (30)-day period following the Company's receipt of the required
Dissolution Notice under paragraph 8.2, to purchase from the Owner's spouse, in
accordance with the provisions of paragraph 8.3, all or any portion of the
Shares which would otherwise be awarded to such spouse in settlement of any
community property or other marital property rights such spouse may have in such
shares.
8.2 NOTICE OF DECREE OR AGREEMENT. The Owner shall promptly provide the
Secretary of the Company with written notice (the "Dissolution Notice") of (i)
the entry of any judicial decree or order resolving the property rights of the
Owner and the Owner's spouse in connection with their marital dissolution or
legal separation or (ii) the execution of any contract or agreement relating to
the distribution or division of such property rights. The Dissolution Notice
shall be accompanied by a copy of the actual decree of dissolution or settlement
agreement between the Owner and the Owner's spouse which provides for the award
to the spouse of one or more of the Shares in settlement of any community
property or other marital property rights such spouse may have in such shares.
8.3 EXERCISE OF SPECIAL PURCHASE RIGHT. The Special Purchase Right shall
be exercisable by delivery of a Purchase Notice to the Owner and the Owner's
spouse within thirty (30)
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days after the Company's receipt of the Dissolution Notice. The Purchase Notice
shall indicate the number of shares to be purchased by the Company, the date
such purchase is to be effected (such date to be not less than five (5) business
days, nor more than fifteen (15) business days, after the date of the Purchase
Notice), and the fair market value to be paid for such Shares. The Owner (or the
Owner's spouse, to the extent such spouse has physical possession of the Shares)
shall, prior to the close of business on the date specified for the purchase,
deliver to the Corporate Secretary of the Company the certificates representing
the shares to be purchased, and each certificate shall be properly endorsed for
transfer. To the extent any of the shares to be purchased by the Company are at
the time held in escrow under Article VII, the certificates for such shares
shall be promptly delivered out of escrow to the Company. The Company shall,
concurrently with the receipt of the stock certificates, pay to the Owner's
spouse (in cash or cash equivalents) an amount equal to the fair market value
specified for such shares in the Purchase Notice.
If the Owner's spouse does not agree with the fair market value
specified for the shares in the Purchase Notice, then the spouse shall promptly
notify the Company in writing of such disagreement and the fair market value of
such shares shall thereupon be determined by an appraiser of recognized standing
selected by the Company and the spouse. If they cannot agree on an appraiser
within twenty (20) days after the date of the Purchase Notice, each shall select
an appraiser of recognized standing, and the two appraisers shall designate a
third appraiser of recognized standing whose appraisal shall be determinative of
such value. The cost of the appraisal shall be shared equally by the Company and
the Owner's spouse. The closing shall then be held on the fifth business day
following the completion of such appraisal; provided, however, that if the
appraised value is more than twenty-five percent (25%) greater than the fair
market value specified for the shares in the Purchase Notice, the Company shall
have the right, exercisable prior to the expiration of such fifteen (15)
business-day period, to rescind the exercise of the Special Purchase Right and
thereby revoke its election to purchase the shares awarded to the spouse.
8.4 LAPSE. The Special Purchase Right under this Article VIII shall
lapse and cease to have effect upon the earlier to occur of (i) the first date
on which the First Refusal Right under Article VI lapses or (ii) the expiration
of the thirty (30)-day exercise period specified in paragraph 8.3, to the extent
the Special Purchase Right is not timely exercised in accordance with such
paragraph.
IX. GENERAL PROVISIONS
9.1 ASSIGNMENT. The Company may assign its Repurchase Right under
Article V, its First Refusal Right under Article VI and/or its Special Purchase
Right under Article VIII to any person or entity selected by the Company's Board
of Directors, including (without limitation) one or more shareholders of the
Company.
9.2 DEFINITIONS. For purposes of this Agreement, the following
provisions shall be applicable in determining the parent and subsidiary
corporations of the Company:
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(a) Any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company shall be considered to be
a parent corporation of the Company, provided each such corporation in
the unbroken chain (other than the Company) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
(b) Each corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company shall be considered to
be a subsidiary of the Company, provided each such corporation (other
than the last corporation) in the unbroken chain owns, at the time of
the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
9.3 NO WAIVER. The failure of the Company (or its assignees) in any
instance to exercise the Repurchase Right granted under Article ______, or the
failure of the Company (or its assignees) in any instance to exercise the First
Refusal Right granted under Article VI, or the failure of the Company (or its
assignees) in any instance to exercise the Special Purchase Right granted under
Article VIII, shall not constitute a waiver of any other repurchase rights,
rights of first refusal and/or special purchase rights that may subsequently
arise under the provisions of this Agreement or any other agreement between the
Company and the Owner or the Owner's spouse. No waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different nature.
9.4 NOTICES. Any notice required in connection with (i) the Repurchase
Right, Special Purchase Right or the First Refusal Right or (ii) the disposition
of any Shares covered thereby shall be given in writing and shall be deemed
effective upon personal delivery or upon deposit in the United States mail,
registered or certified, postage prepaid and addressed to the party entitled to
such notice at the address indicated below such party's signature line on this
Agreement or at such other address as such party may designate by ten (10) days
advance written notice under this paragraph 9.4 to all other parties to this
Agreement.
9.5 CANCELLATION OF SHARES. If the Company (or its assignees) shall make
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Shares to be repurchased in accordance with
the provisions of this Agreement, then from and after such time, the person from
whom such shares are to be repurchased shall no longer have any rights as a
holder of such shares (other than the right to receive payment of such
consideration in accordance with this Agreement), and such shares shall be
deemed purchased in accordance with the applicable provisions hereof and the
Company (or its assignees) shall be deemed the owner and holder of such shares,
whether or not the certificates therefor have been delivered as required by this
Agreement.
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X. MISCELLANEOUS PROVISIONS
10.1 PURCHASER UNDERTAKING. Purchaser hereby agrees to take whatever
additional action and execute whatever additional documents the Company may in
its judgment deem necessary or advisable in order to carry out or effect one or
more of the obligations or restrictions imposed on either Purchaser or the
Shares pursuant to the express provisions of this Agreement.
In particular, but without limitation, the Purchaser hereby agrees,
concurrently with the execution of this Agreement, to deliver two (2) duly
executed blank Assignment Separate from Certificate forms (in substantially the
form attached hereto as Exhibit C).
10.2 AGREEMENT IS ENTIRE CONTRACT. This Agreement (and consulting
agreement attached hereto) constitutes the entire contract between the parties
hereto with regard to the subject matter hereof. Purchaser acknowledges that
this Agreement supersedes all previous understandings, written or oral, with
respect to the subject matter hereof.
10.3 GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California, as such laws are
applied to contracts entered into and performed in such State without resort to
that State's conflict-of-laws rules.
10.4 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
10.5 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Company and its successors and
assigns and Owner and Owner's legal representatives, heirs, legatees,
distributees, assigns and transferees by operation of law or otherwise, whether
or not any such person shall have become a party to this Agreement and have
agreed in writing to join herein and be bound by the terms and conditions
hereof.
10.6 POWER OF ATTORNEY. Purchaser's spouse hereby appoints Purchaser his
or her true and lawful attorney in fact, for him or her and in his or her name,
place and stead, and for his or her use and benefit, to agree to any amendment
or modification of the Agreement and to execute such further instruments and
take such further actions as may reasonably be necessary to carry out the intent
of this Agreement. Purchaser's spouse further gives and grants unto Purchaser as
his or her attorney in fact full power and authority to do and perform every act
necessary and proper to be done in the exercise of any of the foregoing powers
as fully as he or she might or could do if personally present, with full power
of substitution and revocation, hereby ratifying and confirming all that
Purchaser shall lawfully do and cause to be done by virtue of this power of
attorney.
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10.7 SEVERABILITY. In the event that any of the provisions of this
Agreement shall be held by a court or other tribunal of competent jurisdiction
to be illegal, invalid or unenforceable, such provisions shall be limited or
eliminated to the minimum extent necessary so that this Agreement shall
otherwise remain in full force and effect.
10.8 NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained in this
Agreement shall be construed as giving Purchaser any right to be retained in the
employ of the Company.
10.9 CONFLICT WAIVER. Each of the parties to this Agreement understands
that Brobeck, Phleger & Harrison LLP is serving as counsel to the Company in
connection with the purchase and sale of the Common Stock and the transactions
contemplated thereby, and that discussion of such transactions with Purchaser
and the other founders of the Company (collectively, the "Founders") could be
construed to create a conflict of interest. By executing this Agreement, the
parties hereto acknowledge the potential conflict of interest and waive the
right to claim any conflict of interest at a later date. Furthermore, by
executing this Agreement, the parties acknowledge that if a conflict of interest
exists and any litigation arises between the Founders and the Company as a
result of the purchase and sale of the Common Stock, Brobeck, Phleger & Harrison
LLP would represent the Company. The Purchaser also represents and warrants that
he has had the opportunity to seek independent counsel in his review of this and
all related Agreements.
[Remainder of Page Intentionally Blank]
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[Signature Page to Founder's Restricted Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have executed this Founder's Restricted
Stock Purchase Agreement on the day and year first indicated above.
EVEREST DESIGN AUTOMATION INC.
By:
--------------------------
Address:
------------------------------
------------------------------
Purchaser(1)
------------------------------
Address:
------------------------------
------------------------------
The undersigned spouse of Purchaser has read and hereby approves
the foregoing Founder's Restricted Stock Purchase Agreement. In consideration of
the Company's granting the Purchaser the right to acquire the Shares in
accordance with the terms of such Agreement, the undersigned hereby agrees to be
irrevocably bound by all the terms and provisions of such Agreement, including
(specifically) the right of the Company (or its assignees) to purchase any and
all interest or right the undersigned may otherwise have in such shares pursuant
to community property laws or other marital property rights.
Purchaser's Spouse
-----------------------------
- --------
(1) I have received, completed, executed and retained the I.R.C.
Section 83(b) election that was attached hereto as Exhibit A. I understand that
I, and not the Company, will be responsible for completing the form and filing
the election with the appropriate office of the federal and state tax
authorities and that if such filing is not completed within thirty (30) days
after the date of this Agreement, I will forfeit the significant tax benefits of
Section 83(b). I understand further that such filing should be made by
registered or certified mail, return receipt requested, and that I must retain
two (2) copies of the completed form for filing with my state and federal tax
returns the current tax year and an additional copy for my records.
22
EXHIBIT A
83(b) TAX ELECTION
This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
--------------------------------------
Address:
-----------------------------------
Taxpayer Ident. No.:
-----------------------
Taxable Year:
------------------------------
(2) The property with respect to which the election is being made is
___________ shares of the Common Stock of Everest Design Automation Inc.
(3) The property was issued on _____________.
(4) The property is subject to a repurchase right pursuant to which the
issuer has the right to acquire the property at the original purchase
price if taxpayer's service relationship with the issuer ceases. The
repurchase right lapses in installments, 25% upon the end of one (1)
year after ______________ and the remaining 75% in a series of equal
monthly installments over the three (3)-year period thereafter, until
taxpayer is fully vested. The Company's repurchase right shall lapse in
certain, predetermined portions upon the occurrence of other specified
events.
(5) The fair market value at the time of transfer (determined without regard
to any restriction other than a restriction which by its terms will
never lapse) is _____________ per share.
(6) The amount paid for such property is ______________ per share.
(7) A copy of this statement was furnished to Everest Design Automation Inc.
to which taxpayer rendered the services underlying the transfer of
property.
(8) This statement is executed as of: ________________.
- --------------------------------------------------------------------------------
Taxpayer Spouse (if any)
This form must be filed with the Internal Revenue Service Center with which
taxpayer files his/her Federal income tax returns. The filing must be made
within thirty (30) days after the execution date of the Restricted Stock
Purchase Agreement.
23
EXHIBIT B
EVEREST DESIGN AUTOMATION INC.
VESTING SCHEDULE
The Company's Repurchase Right shall lapse and Purchaser shall acquire a
vested interest with respect to the Shares in installments as follows: the first
25% of the Shares shall vest upon the completion of one (1) full year of
continuous service to the Company, starting from _____________, and the
remaining 75% of the Shares shall vest in a series of equal monthly installments
of ___________ shares over the three (3)-year period of continuous service to
the Company thereafter, such that all of the Shares shall be fully vested in
four full (4) years from _______________. Except as otherwise provided for in
Article V of this Agreement, in no event shall any additional Shares vest after
Purchaser ceases to be a Service Provider to the Company.
24
EXHIBIT C
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________________________________ (_______) shares of
the Common Stock of Everest Design Automation Inc. (the "Company") standing in
the undersigned's name on the books of the Company represented by Certificate
No. herewith and does hereby irrevocably constitute and appoint Attorney to
transfer such Common Stock on the books of the within named Company with full
power of substitution in the premises.
Dated:
---------------------
--------------------------------------
(Signature)
--------------------------------------
(Printed Name)
--------------------------------------
(Spouse's Signature, if applicable)
--------------------------------------
(Printed Name)
Instruction: Please do not fill in any blanks (including the date) other than
the signature line.
25
EXHIBIT C
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________ (______) shares of the
Common Stock of Everest Design Automation Inc. (the "Company") standing in the
undersigned's name on the books of the Company represented by Certificate No.
herewith and does hereby irrevocably constitute and appoint
________________________ Attorney to transfer such Common Stock on the books of
the within named Company with full power of substitution in the premises.
Dated:
-----------------------
--------------------------------------
(Signature)
--------------------------------------
(Printed Name)
--------------------------------------
(Spouse's Signature, if applicable)
--------------------------------------
(Printed Name)
Instruction: Please do not fill in any blanks (including the date) other than
the signature line.
26
COMPENSATION AGREEMENT
This Compensation Agreement dated as of the _____day of ________, ____
by and between Everest Design Automation Inc., a California corporation (the
"Company"), and ________________ (the "Employee").
WITNESSETH
Whereas, in order to induce Employee to continue in the employ of the
Company, the Company has determined and agreed to sell shares of the Company's
Common Stock pursuant to this Agreement and that certain Founders Restricted
Stock Purchase Agreement of even date herewith (the "Purchase Agreement");
NOW, THEREFORE, in consideration of the above premises, the parties
hereto agree as follows:
1. Employee shall hereby purchase ______________ shares of the
Company's Common Stock (the "Shares") upon the terms and conditions set forth in
the Purchase Agreement.
2. The Company and Employee acknowledge and agree that the Shares
were granted as compensation for services and not for any capital-raising
purposes or in connection with any capital-raising activities.
3. This agreement is intended to constitute a written compensation
contract within the meaning of Rule 701 of the Securities Act of 1933, as
amended.
4. Nothing herein or in the Purchase Agreement is intended to impair
the right of the Company or Employee to terminate Employee's service with the
Company at any time in accordance with applicable law.
27
IN WITNESS WHEREOF, the parties hereto have executed this Compensation
Agreement as of the date first above written.
EVEREST DESIGN AUTOMATION INC.
By:
--------------------------------------
Title:
-----------------------------------
Address:
----------------------------------
-----------------------------------------
EMPLOYEE
-----------------------------------------
Address:
----------------------------------
-----------------------------------------