EXHIBIT 4.2
CLAREMONT TECHNOLOGY GROUP, INC.
SHAREHOLDER AGREEMENT
This Agreement is entered into by and between Claremont Technology Group,
Inc., an Oregon corporation (the "Company"), and the undersigned Shareholder
("Shareholder").
RECITALS
A. The Shareholder owns (or may obtain through exercise of options)
shares (the "Shares") of the Company's Common Stock.
B. The Shareholder and the Company desire to enter into an Agreement
relating to the sale or other disposition of the Shares.
AGREEMENT
The parties agree as follows:
1. RESTRICTIONS ON TRANSFER. The Shareholder shall not sell, assign,
transfer, pledge or in any other manner alienate any of the Shares held by him
or her, or any right or interest therein, whether voluntarily or by operation of
law or otherwise, except to the Company by consent of the Board of Directors,
unless the transfer meets the requirements set forth in this Agreement.
2. FIRST REFUSAL. If the Shareholder desires to sell any Shares (unless the
Shareholder elects to transfer under the terms of Section 3), the Shareholder
shall first be obligated to offer to sell the Shares to the Company or its
designee in accordance with the remaining subsections of this Section.
2.1 NOTICE. The Shareholder shall give written notice to the Company of
the Shareholder's desire to sell the Shares (the "Option Notice"). The Option
Notice shall set forth the name of the proposed purchaser, the number of Shares
proposed to be sold, the purchase price per Share and the terms of payment
proposed by the purchaser (the "Purchase Terms").
2.2 COMPANY'S OPTION. The Company (or its designee whom the Company
identifies by notice to the Shareholder) shall have the option to purchase all,
but not less than all, of the Shares described in the Option Notice in
accordance with the Purchase Terms. The option shall be exercised, if at all,
by notice to the Shareholder within 30 days.
2.3 CLOSING. Closing of the purchase shall take place at the Company's
principal office on the date designated by the Company or its designee, which
date shall be before the later of 30 days following the closing date specified
in the Purchase Terms or 50 days following the effective date of the Option
Notice.
Page 1 -- Shareholder Agreement
2.4 IF COMPANY DECLINES. If the Company (or its designee) does not elect
to acquire the Shares specified in the Option Notice, the Shareholder may sell
the proposed purchaser the Shares within the 60 day period following the receipt
by the Company of the Option Notice. These conditions will apply:
2.4.1 IDENTICAL TERMS FOR PURCHASE. The purchase terms for the
Shares shall be identical with those described in the Option Notice.
2.4.2 SHAREHOLDER AGREEMENT APPLIES. The purchaser shall be bound
by the terms and conditions of this Agreement, as if an original
Shareholder. The Company may require the purchaser's written Agreement to
be bound, before the Company enters the transfer of the Shares to the
purchaser in the Company's stock records.
3. TRANSFER TO IMMEDIATE FAMILY. Shareholder may transfer any or all of the
Shareholder's Shares to his or her Immediate Family, either during his or her
lifetime or on death by will or intestacy. "Immediate Family" shall mean
spouse, lineal descendant of Shareholder or Shareholder's spouse, father,
mother, brother or sister of Shareholder, or a trust established for which one
or more Immediate Family Members are the sole beneficiaries. These conditions
apply:
3.1 SHAREHOLDER AGREEMENT APPLIES. Upon any transfer described in this
Section, the transferee shall be bound by the terms and conditions of this
Agreement as Shareholder. The Company may require the transferee's written
agreement to be bound to this Agreement before entering the transfer in the
Company's stock records.
3.2 SUBSEQUENT TRANSFERS. For purposes of determining to whom a
transferree under this Section 3 may make further transfers under the same
section, the people who qualify as "Immediate Family" shall be determined by
reference to the identity of the originating Shareholder. Thus under this
section a parent may transfer to a child, who may further transfer to any other
immediate family member of the parent. But the child may not transfer to the
child's spouse without the Company's consent, because the child's spouse is not
a member of the originating Shareholder's "immediate family".
3.3 VOTING RIGHTS. The right to vote the shares that have been
transferred under this Section shall be held by the originating Shareholder or
by a person designated by the Shareholder and approved by the Board of
Directors. On the death or incapacity of the original designee the Company
(acting by and through the Board of Directors), will designate the successor
designee.
3.3.1 STATUTORY VOTING AGREEMENT. This Section 3.3 constitutes a
"Voting Agreement" under ORS Section 60.257.
3.3.2 IRREVOCABLE PROXY, DURATION. This Section 3.3 also
constitutes an irrevocable proxy, that will last for so long as the shares
are held by a person who acquired them in a transaction under this Section
3.
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3.3.3 FIRST REFUSAL TRANSACTION RELEASES PROXY. Shares subject to
the Voting Agreement of this Section 3.3 shall be released from it if
transferred in a transaction meeting the conditions of Section 2.
4. PURCHASE UPON TERMINATION OF EMPLOYMENT. Upon termination of the
Shareholder's employment or consulting relationship with the Company for any
reason, including, without limitation, retirement, death or disability (the
"Termination"), the Company or its designee shall have the right for a period of
90 days following such Termination (or purchase of the Shares, if later) to buy
all, but not less than all, of the terminated Shareholder's Shares on the terms
and conditions set forth in subsections 4.1, 4.2, and 4.3. Such right of first
refusal shall be exercised by giving written notice of exercise to the
Shareholder or his estate, as the case may be, as provided herein.
4.1 PURCHASE PRICE. The purchase price for the Shares shall be the
greater of the Shareholder's original purchase price for the Shares or the fair
market value thereof at the time of Termination as determined in good faith by
the Company's Board of Directors; provided, however, if the Shareholder (or, if
applicable, the personal representative of the deceased Shareholder's estate),
or any member of the Shareholder's Immediate Family owning Shares on the date of
Termination disputes such valuation, the fair market value of the Shares shall
be determined by a local, independent investment banking or valuation firm
acceptable to the Company and the Shareholder (or, if applicable, the personal
representative of the deceased Shareholder's estate). All costs of such
independent valuation shall be paid by the Shareholder (or, if applicable, the
personal representative of the deceased Shareholder's estate).
4.2 HOW PAID. The purchase price shall be paid to the Shareholder at
closing (or, if applicable, the personal representative of the deceased
Shareholders's estate) and/or the members of the Shareholder's Immediate Family
owning Shares on the date of Termination, in proportion to their respective
stock interests. Each shall receive, at closing: (i) an initial payment by
Company check of at least one-third of the total purchase price and (ii) a
promissory note for the remaining balance of the purchase price, if any, payable
in two equal annual installments including principal and interest on the first
and second anniversaries of the closing. The promissory note shall bear
interest from the date of closing at a rate equal to the interest rate being
charged to the Company as of the date of closing by its then acting bank and
shall allow prepayment in whole or in part without premium or penalty.
4.3 CLOSING. Closing of the purchase shall take place at the Company's
principal office on the date designated by the Company, which shall be no later
than 30 days following the date of mailing of the written notice of exercise,
or, if later and applicable, 30 days following the appointment of the personal
representative of the deceased Shareholder's estate. At such closing, the
Shareholder's certificate for Shares shall be duly endorsed to the Company or
its designee and surrendered, and the Company or its designee shall deliver to
the Shareholder (or, if applicable, the personal representative of the deceased
Shareholder's estate) the cash payment and promissory note, if any, representing
the purchase price for the Shares, all in accordance with subsections 4.1 and
4.2 above.
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5. LEGENDS ON CERTIFICATES. The certificate(s) representing Shares held
by the Shareholder shall bear on its face the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TERMS AND
CONDITIONS OF A SHAREHOLDER AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE
COMPANY, WHICH AGREEMENT INCLUDES, AMONG OTHER PROVISIONS, RESTRICTIONS ON
THE TRANSFER OF THE SHARES AND UNDER SOME CONDITIONS AN IRREVOCABLE PROXY.
6. APPLICATION OF AGREEMENT TO AFTER-ACQUIRED STOCK. All of the provisions of
this Agreement shall apply to all of the Shares and any other shares of the
Company's capital stock which may be issued or transferred hereafter to the
Shareholder or to transferees of the Shareholder in consequence of any
additional issuance, exchange or reclassification of shares, corporate
reorganization, or any other form of recapitalization, consolidation, merger,
share split or share dividend, or shares which are acquired by the Shareholder
or transferees of the Shareholder in any other manner.
7. TERMINATION OF RESTRICTIONS. The restrictions on transfer set forth in
this Agreement shall terminate upon the first to occur of any of the following
events:
7.1 REGISTRATION. The effectiveness of a registration statement relating
to an offering of shares of Common Stock of the Company registered under the
Securities Act of 1933, as amended, and the consummation of the sale of Common
Stock pursuant thereto.
7.2 SALE OF ALL ASSETS. The sale by the Company of all or substantially
all of its assets.
7.3 MERGER. A merger or consolidation of the Company into or with another
corporation after which the holders of shares of stock of the Company shall own
less than fifty percent of the voting securities necessary to control the
affairs of the surviving corporation.
7.4 SALE OF ALL STOCK. The sale of all of the outstanding Shares of
capital stock of the Company by the holders thereof.
8. BINDING EFFECT ON TRANSFEREES. This Agreement and all of the terms,
covenants, and conditions herein contained, shall be binding upon and inure to
the benefit of all of the parties hereto and their respective transferees,
successors, heirs, executors, administrators and assigns. All transfers must be
made in accordance with this agreement, and upon the transfer of any of the
Shares to any person, the transferee shall become a party to this Agreement and
shall execute any and all instruments and take all other actions necessary to
carry out the purposes of this Agreement.
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9. OTHER MATTERS.
9.1 NOTICE. Notice to the Company shall be sent to the Company's
president at the Company's principal place of business. Notice to a Shareholder
shall be sent to the Shareholder's address as it appears on the books and
records of the Company, or to such other address as a Shareholder may from time
to time by notice provide. Notice shall be effective when actually received by
the party this Agreement designates for notice, if sent by any means that leaves
a hard-copy record in the hands of the recipient. If sent certified or
registered mail, postage prepaid, return receipt requested, notice shall be
deemed effective on the date the return receipt shows the notice was accepted,
refused, or returned undeliverable.
9.2 SEVERABILITY. Each clause of this Agreement is severable. If any
clause is ruled void or unenforceable, the balance of the Agreement shall
nonetheless remain in effect. Wherever there is any conflict between any
provision of this Agreement and any statute, law, regulation or judicial
precedent, the latter shall prevail, but in such event the provisions of this
Agreement thus affected shall be curtailed and limited only to the extent
necessary to bring it within the requirement of the law. If any part, section,
paragraph, or clause of this Agreement shall be held by a court of proper
jurisdiction to be indefinite, invalid or otherwise unenforceable, the entire
Agreement shall not fail on account thereof, but the balance of the Agreement
shall continue in full force and effect unless such construction would clearly
be contrary to the intentions of the parties or would result in an
unconscionable injustice.
9.3 NON-WAIVER. A waiver of one or more breaches of any clause of this
Agreement shall not act to waive any other breach, whether of the same or
different clauses.
9.4 ASSIGNMENT. This Agreement may not be assigned without the express
written consent of each party, which consent will not be unreasonably withheld.
9.5 GOVERNING LAW, JURISDICTION. This Agreement is made in and governed
by the laws of the state of Oregon. Any action brought between the parties may
be brought only in the state or federal courts located in Portland, Oregon, and
in no other place unless the parties expressly agree in writing to waive this
requirement. Each party consents to jurisdiction in that location. Each party
consents to service of process through the method prescribed for notice in this
Agreement.
9.6 ATTORNEYS' FEES. The prevailing party in any suit, action, or
arbitration filed or held concerning this Agreement shall be entitled to
reasonable attorneys' fees, both at trial and on any appeal.
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9.7 HEADINGS. The section headings herein have been inserted for
convenience only and are not intended to restrict, construe, or modify in any
manner any of the terms and provisions hereof.
9.8 INTEGRATION. This Agreement is the complete Agreement between the
parties dealing with transferability of Shares as of the date hereof, and
supersedes all prior agreements, written or oral. It may be modified only in
writing signed by any affected Shareholder or successor in interest of a
Shareholder.
9.9 EFFECTIVE DATE, COUNTERPARTS. This Agreement is effective as of the
date shares are first issued by the Company, and is binding on each Shareholder
as that Shareholder obtains ownership in Shares. The Agreement may be executed
in counterparts.
CLAREMONT TECHNOLOGY GROUP, INC. SHAREHOLDER
By:
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Print: Print:
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Title: Date:
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Date:
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ATTACHMENT 1 TO EXHIBIT C
CONSENT OF SPOUSE
I, _______________, spouse of ______________________, acknowledge that
I have read the Shareholder Agreement dated ____________________, 19__, to which
this Consent is attached as Attachment 1 (the "Agreement") and that I know its
contents. I am aware that by its provisions the Company or its designee has the
option to purchase certain shares of Common Stock of the Company which my spouse
is acquiring pursuant to the Agreement ("Shares"), including any interest I
might have therein, in the event my spouse desires to sell the Shares and
certain other restrictions are imposed upon the sale or other disposition of the
Shares during my spouse's lifetime. I am also aware that the Company or its
designee has the right to purchase the Shares upon my spouse's termination of
employment with the Company.
I hereby agree that my interest, if any, in the Shares subject to the
Agreement, whether now owned or hereafter acquired, shall be irrevocably bound
by the Agreement and further understand and agree that any community property
interest I may have in the Shares shall be similarly bound by the Agreement.
I AM AWARE THAT THE LEGAL, FINANCIAL AND RELATED MATTERS CONTAINED IN
THE AGREEMENT ARE COMPLEX AND THAT I AM FREE TO SEEK INDEPENDENT PROFESSIONAL
GUIDANCE OR COUNSEL WITH RESPECT TO THIS CONSENT. I HAVE EITHER SOUGHT SUCH
GUIDANCE OR COUNSEL OR DETERMINED AFTER REVIEWING THE AGREEMENT CAREFULLY THAT I
WILL WAIVE SUCH RIGHT.
DATED the day of , 19 .
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By:
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EXHIBIT A (TO SHAREHOLDER AGREEMENT)