1
EXHIBIT 10.49
ADIR TECHNOLOGIES, INC.
FORM OF FOUNDER STOCK AGREEMENT
THIS AGREEMENT is made as of September 8, 2000, between Adir
Technologies, Inc., a Delaware corporation (the "Company"), and ________________
("Founder").
The Company and Founder desire to enter into an agreement pursuant to
which Founder shall purchase, and the Company shall sell to Founder, _____
shares of the Company's common stock, par value $.01 per share, pursuant to the
Company's Stock Option and Incentive Plan, as amended from time to time. All of
such shares of common stock and all shares of common stock hereafter acquired by
Founder are referred to herein as "Founder Stock." Certain definitions are set
forth in paragraph 7 of this Agreement.
The parties hereto agree as follows:
1. PURCHASE AND SALE OF FOUNDER STOCK.
(a) Upon execution of this Agreement, Founder shall irrevocably
purchase, and the Company shall sell to Founder, _____ (the "Shares") shares of
common stock at a price of $175.00 per share. The Company shall deliver to
Founder a copy of, and a receipt for, the certificate representing the Shares,
and Founder shall deliver to the Company a promissory note in the form of Annex
A attached hereto in the principal amount of $________ (the "Founder Note"), and
a check in the amount of $_____. Founder's obligations under the Founder Note
shall be secured by a pledge to the Company of all of the shares of Founder
Stock, and in connection therewith, Founder shall enter into a pledge agreement
in the form of Annex B attached hereto (the "Pledge Agreement").
(b) The Company shall hold each certificate representing Founder Stock
until such time as the Founder Stock represented by such certificate is released
from the pledge to the Company and is fully vested hereunder.
(c) Within 30 days after Founder purchases any Founder Stock from the
Company, Founder shall make an effective election with the Internal Revenue
Service under Section 83(b) of the Internal Revenue Code and the regulations
promulgated thereunder in the form of Annex C attached hereto.
(d) In connection with the purchase and sale of the Founder Stock
hereunder, Founder represents and warrants to the Company that:
(i) The Founder Stock to be acquired by Founder pursuant to
this Agreement shall be acquired for Founder's own account and not with
a view to, or intention of, distribution thereof in violation of the
1933 Act, or any applicable state securities laws,
-1-
2
and the Founder Stock shall not be disposed of in contravention of the
1933 Act or any applicable state securities laws.
(ii) Founder is an officer of Net2Phone, Inc. ("Net2Phone") or
its Subsidiaries or their Affiliates, is sophisticated in financial
matters and is able to evaluate the risks and benefits of the
investment in the Founder Stock.
(iii) Founder is able to bear the economic risk of his
investment in the Founder Stock for an indefinite period of time
because the Founder Stock has not been registered under the 1933 Act
and, therefore, cannot be sold unless subsequently registered under the
1933 Act or an exemption from such registration is available.
(iv) Founder has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering of
Founder Stock and has had full access to such other information
concerning the Company as he has requested. Founder has reviewed, or
has had an opportunity to review, a copy of that certain Assignment and
License Agreement by and between the Company and Net2Phone.
(v) This Agreement constitutes the legal, valid and binding
obligation of Founder, enforceable in accordance with its terms, and
the execution, delivery and performance of this Agreement by Founder do
not and shall not conflict with, violate or cause a breach of any
agreement, contract or instrument to which Founder is a party or any
judgment, order or decree to which Founder is subject.
(e) As an inducement to the Company to issue the Founder Stock to
Founder, as a condition thereto, Founder acknowledges and agrees that:
(i) neither the issuance of the Founder Stock to Founder nor
any provision contained herein shall entitle Founder to remain in the
employment of Net2Phone and its Subsidiaries or their Affiliates or
affect the right of Net2Phone and its Subsidiaries or their Affiliates
to terminate Founder's employment at any time; and
(ii) the Company or Net2Phone shall have no duty or obligation
to disclose to Founder, and Founder shall have no right to be advised
of, any material information regarding Net2Phone and its Subsidiaries
or their Affiliates at any time prior to, upon or in connection with
the repurchase of Founder Stock upon the termination of Founder's
employment with the Net2Phone and its Subsidiaries or their Affiliates
or as otherwise provided hereunder.
(f) The Company, Net2Phone and Founder acknowledge and agree that this
Agreement has been executed and delivered, and the Founder Stock has been issued
hereunder, in connection with and as a part of the compensation and incentive
arrangements between Net2Phone and its Subsidiaries and their Affiliates and
Founder.
-2-
3
2. VESTING OF FOUNDER STOCK.
(a) Except as otherwise provided in paragraph 2(b) below, the Founder
Stock shall become vested in accordance with the following schedule, if and only
if Founder has been continuously employed by Net2Phone or any of its
Subsidiaries or their Affiliates from the date hereof through and including the
date set forth below:
(i) 25% on the first anniversary of the date first written
above; and
(ii) 2.08% on the last day of each month for the thirty-six
months following the first anniversary of the date first written above.
(b) In the event of a Corporate Transaction or Change in Control, all
shares of Founder Stock which have not yet become vested shall become vested at
the time of such event; provided, however, that any unvested Founder Stock shall
not automatically vest if such Founder Stock is, in connection with the
Corporate Transaction or Change in Control, exchanged for or converted into
comparable securities in the surviving or resulting corporation on terms and
conditions that substantially preserve the value, rights and benefits of the
Founder Stock then outstanding. In the event of the death or permanent
disability of Founder, the number of shares of Founder Stock which would have
become vested during the 12 months following Founder's death or the
determination of Founder's permanent disability (in addition to shares which
have already become vested) shall become vested as of the time of such death or
permanent disability. For purposes of this paragraph 2(b), the determination of
permanent disability shall be made in good faith by the Company's board of
directors (the "Board"). Shares of Founder Stock which have become vested are
referred to herein as "Vested Shares," and all other shares of Founder Stock are
referred to herein as "Unvested Shares."
3. REPURCHASE OPTION.
(a) In the event Founder ceases to be employed by Net2Phone and its
Subsidiaries or their Affiliates for any reason (the "Termination"), the
Unvested Shares (whether held by Founder or one or more of Founder's
transferees) shall be subject to repurchase by the Company and Net2Phone,
pursuant to the terms and conditions set forth in this paragraph 3 (the
"Repurchase Option").
(b) The purchase price for each Unvested Share shall be Founder's
Original Cost for such share (with shares having the lowest cost subject to
repurchase prior to shares with a higher cost).
(c) The Board may elect to purchase all or any portion of the Unvested
Shares by delivering written notice (the "Repurchase Notice") to the holder or
holders of the Founder Stock within 90 days after the Termination. The
Repurchase Notice shall set forth the number of Unvested Shares to be acquired
from each holder of Founder Stock, the aggregate consideration to be paid for
such shares and the time and place for the closing of the transaction. The
number of shares to be
-3-
4
repurchased by the Company shall first be satisfied to the extent possible from
the shares of Founder Stock held by Founder at the time of delivery of the
Repurchase Notice. If the number of shares of Founder Stock then held by Founder
is less than the total number of shares of Founder Stock the Company has elected
to purchase, the Company shall purchase the remaining shares elected to be
purchased from the other holder(s) of Founder Stock under this Agreement, pro
rata according to the number of shares of Founder Stock held by such other
holder(s) at the time of delivery of such Repurchase Notice (determined as close
as practicable to the nearest whole shares). The number of Unvested Shares to be
repurchased hereunder shall be allocated among Founder and the other holders of
Founder Stock (if any) pro rata according to the number of shares of Founder
Stock held by such persons.
(d) If for any reason the Company does not elect to purchase all of the
Founder Stock pursuant to the Repurchase Option, Net2Phone shall be entitled to
exercise the Repurchase Option for the shares of Founder Stock the Company has
not elected to purchase (the "Available Shares"). As soon as practicable after
the Company has determined that there will be Available Shares, but in any event
within 45 days after the Termination, the Company shall give written notice (the
"Option Notice") to Net2Phone setting forth the number of Available Shares and
the purchase price for the Available Shares. Net2Phone may elect to purchase any
or all of the Available Shares by giving written notice to the Company within 30
days after the Option Notice has been given by the Company. As soon as
practicable, and in any event within ten days after the expiration of the 30-day
period set forth above, the Company shall notify each holder of Founder Stock as
to the number of shares being purchased from such holder by Net2Phone (the
"Supplemental Repurchase Notice"). At the time the Company delivers the
Supplemental Repurchase Notice to the holder(s) of Founder Stock, the Company
shall also deliver written notice to Net2Phone setting forth the number of
shares Net2Phone is entitled to purchase, the aggregate purchase price and the
time and place of the closing of the transaction.
(e) The closing of the purchase of the Founder Stock pursuant to the
Repurchase Option shall take place on the date designated by the Company in the
Repurchase Notice or Supplemental Repurchase Notice, which date shall not be
more than 60 days nor less than five days after the delivery of the later of
either such notice to be delivered. The Company and/or Net2Phone shall pay for
the Founder Stock to be purchased pursuant to the Repurchase Option by delivery
of, in the case of Net2Phone, a check or wire transfer of funds and, in the case
of the Company at its option, (i) a check or wire transfer of funds, (ii) a
subordinated note or notes payable in up to three equal annual installments
beginning on the first anniversary of the closing of such purchase and bearing
interest (payable quarterly) at a rate per annum equal to the prime lending rate
charged by Money Center Banks as reported in the Wall Street Journal on the date
of issuance of such note or (iii) both (i) and (ii), in the aggregate amount of
the purchase price for such shares; provided that the Company shall use
reasonable efforts to make all such repurchases with a check or wire transfer of
funds. Any notes issued by the Company pursuant to this paragraph 3(e) shall be
subject to any restrictive covenants to which the Company is subject at the time
of such purchase. In addition, the Company may pay the purchase price for such
shares by offsetting amounts outstanding under the Founder Note issued to the
Company hereunder and under any other bona fide debts owed by Founder to the
Company. The purchasers of Founder Stock hereunder shall be entitled to receive
-4-
5
customary representations and warranties from the sellers regarding such sale of
shares (including representations and warranties regarding good title to such
shares, free and clear of any liens or encumbrances) and to require all sellers'
signatures be guaranteed by a nationally recognized bank or securities broker.
(f) Notwithstanding anything to the contrary contained in this
Agreement, all repurchases of Founder Stock by the Company shall be subject to
applicable restrictions contained in the Delaware General Corporation Law and in
the Company's and its Subsidiaries debt and equity financing agreements. If any
such restrictions prohibit the repurchase of Founder Stock hereunder which the
Company is otherwise entitled or required to make, the time periods provided in
this paragraph 3 shall be suspended, and the Company may make such repurchases
as soon as it is permitted to do so under such restrictions.
4. RESTRICTIONS ON TRANSFER. Founder shall not sell, transfer, assign,
pledge, or otherwise dispose of any interest in any shares of Founder Stock,
except pursuant to terms of that certain Right of First Offer and Co-Sale
Agreement of even date herewith, as amended and modified from time to time, a
form of which is attached hereto as Annex D. Any prospective transferee should
execute and deliver to the Company an instrument evidencing its agreement to be
bound to the provisions hereof.
5. LEGEND. The certificates representing the Founder Stock shall bear
the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON SEPTEMBER 8, 2000, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER, CERTAIN REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS SET
FORTH IN A FOUNDER STOCK AGREEMENT DATED AS OF SEPTEMBER 8, 2000, AND A
RIGHT OF FIRST OFFER AND CO-SALE AGREEMENT DATED AS OF SEPTEMBER 8,
2000, EACH AS AMENDED AND MODIFIED FROM TIME TO TIME. A COPY OF SUCH
AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY'S
PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
-5-
6
6. SALE OF THE COMPANY.
(a) If the Board and the holders of a majority of the Company's
Preferred Stock and common stock approve a Sale of the Company (the "Approved
Sale"), the holders of Founder Stock shall consent to and raise no objections
against the Approved Sale of the Company, and if the Approved Sale of the
Company is structured as a sale of stock, the holders of Founder Stock shall
agree to sell their shares of Founder Stock on the terms and conditions approved
by the Board and the holders of a majority of the Company's Preferred Stock and
common stock. The holders of Founder Stock shall take all necessary and
desirable actions in connection with the consummation of the Approved Sale of
the Company.
(b) The obligations of the holders of Founder Stock with respect to the
Approved Sale of the Company are subject to the satisfaction of the condition
that upon the consummation of the Approved Sale, all of the holders of common
stock shall receive the same form and amount of consideration per share of
common stock, or if any holders of common stock are given an option as to the
form and amount of consideration to be received, all holders shall be given the
same option.
(c) If the Company or the holders of the Company's securities enter
into any negotiation or transaction for which Rule 506 (or any similar rule then
in effect) promulgated by the Securities Exchange Commission may be available
with respect to such negotiation or transaction (including a merger,
consolidation or other reorganization), the holders of Founder Stock shall at
the request of the Company, appoint a "purchaser representative" (as such term
is defined in Rule 501) reasonably acceptable to the Company. If any holder of
Founder Stock appoints a purchaser representative designated by the Company, the
Company shall pay the fees of such purchaser representative. However, if any
holder of Founder Stock declines to appoint the purchaser representative
designated by the Company, such holder shall appoint another purchaser
representative (reasonably acceptable to the Company), and such holder shall be
responsible for the fees of the purchaser representative so appointed.
(d) Founder and the other holders of Founder Stock (if any) shall bear
their pro-rata share (based upon the number of shares sold) of the costs of any
sale of Founder Stock pursuant to an Approved Sale to the extent such costs are
incurred for the benefit of all holders of common stock and are not otherwise
paid by the Company or the acquiring party. Costs incurred by Founder and the
other holders of Founder Stock on their own behalf shall not be considered costs
of the transaction hereunder.
(e) The provisions of this paragraph 6 shall terminate upon the
completion of a Qualified Public Offering, Sale of the Company, Corporate
Transaction or Change in Control.
7. DEFINITIONS.
"Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession,
-6-
7
directly or indirectly, of the power to direct the management and policies of a
Person whether through the ownership of voting securities, contract or
otherwise.
"Corporate Transaction" shall have the same meaning as set forth in the
Company's 2000 Stock Option and Incentive Plan.
"Change in Control" shall have the same meaning as set forth in the
Company's 2000 Stock Option and Incentive Plan.
"Founder Stock" shall continue to be Founder Stock in the hands of any
holder other than Founder (except for the Company and Net2Phone and except for
transferees in a Public Sale), and except as otherwise provided herein, each
such other holder of Founder Stock shall succeed to all rights and obligations
attributable to Founder as a holder of Founder Stock hereunder. Founder Stock
shall also include shares of the Company's capital stock issued with respect to
Founder Stock by way of a stock split, stock dividend or other recapitalization.
Notwithstanding the foregoing, all Vested and Unvested Shares shall remain
Founder Stock after any Transfer thereof.
"Independent Third Party" means any person who, immediately prior to
the contemplated transaction, does not own in excess of 5% of the Company's
common stock on a fully-diluted basis, who is not controlling, controlled by or
under common control with any such 5% owner of the Company's common stock and
who is not the spouse or descendent (by birth or adoption) of any such 5% owner
of the Company's common stock.
"1933 Act" means the Securities Act of 1933, as amended from time to
time.
"Original Cost" of each share of common stock purchased hereunder shall
be equal to $175.00 (as proportionately adjusted for all subsequent stock
splits, stock dividends and other recapitalizations).
"Qualified Public Offering" means the sale, in an underwritten public
offering registered under the 1933 Act, of shares of the Company's common stock
having an aggregate offering value of at least $20 million and a per share price
of at least three times Original Cost.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Preferred Stock" means any class or series of capital stock of the
Company which is designated preferred stock.
"Public Sale" means any sale pursuant to a registered public offering
under the 1933 Act or any sale to the public pursuant to Rule 144 promulgated
under the 1933 Act effected through a broker, dealer or market maker.
-7-
8
"Sale of the Company" means the sale of the Company to an Independent
Third Party or affiliated group of Independent Third Parties pursuant to which
such party or parties acquire (i) capital stock of the Company possessing the
voting power to elect a majority of the Company's board of directors (whether by
merger, consolidation or sale or transfer of the Company's capital stock) or
(ii) all or substantially all of the Company's assets determined on a
consolidated basis.
"Subsidiary" means any corporation of which Net2Phone owns securities
having a majority of the ordinary voting power in electing the board of
directors directly or through one or more subsidiaries.
8. NOTICES. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested) or sent by reputable overnight
courier service (charges prepaid) to the recipient at the address below
indicated:
To the Company: Adir Technologies, Inc.
520 Broad Street
Newark, NJ 07102
Fax: (973) ___-_____
Attn: President
With copies to (which will
not constitute notice): Kirkland & Ellis
200 E. Randolph Dr.
Chicago, IL 60601
Fax: (312) 861-2200
Attn: Richard W. Porter, Esq.
To Founder: __________________
Net2Phone, Inc.
520 Broad Street
Newark, NJ 07102
Fax: (973) ___-____
To Net2Phone: Net2Phone, Inc.
520 Broad Street
Newark, NJ 07102
Fax: (973) 412-3800
Attn: General Counsel
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be
-8-
9
deemed to have been given when so delivered or sent or, if mailed, five days
after deposit in the U.S. mail.
9. GENERAL PROVISIONS.
(a) Transfers in Violation of Agreement. Any Transfer or attempted
Transfer of any Founder Stock in violation of any provision of this Agreement
shall be void, and the Company shall not record such Transfer on its books or
treat any purported transferee of such Founder Stock as the owner of such stock
for any purpose.
(b) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(c) Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(d) Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(e) Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by Founder,
the Company, Net2Phone and their respective successors and assigns (including
subsequent holders of Founder Stock); provided that the rights and obligations
of Founder under this Agreement shall not be assignable except in connection
with a permitted transfer of Founder Stock hereunder.
(f) Choice of Law. The corporate law of the State of Delaware shall
govern all questions concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the exhibits hereto shall
be governed by the internal law, and not the law of conflicts, of the State of
New Jersey.
(g) Remedies. Each of the parties to this Agreement (including the
Founders) shall be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including reasonable attorney's
fees) caused by any breach of any provision of this Agreement and to exercise
all other rights existing in its favor. The parties hereto agree and acknowledge
that
-9-
10
money damages would not be an adequate remedy for any breach of the provisions
of this Agreement and that any party may in its sole discretion apply to any
court of law or equity of competent jurisdiction (without posting any bond or
deposit) for specific performance and/or other injunctive relief in order to
enforce or prevent any violations of the provisions of this Agreement.
(h) Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company, Founder
and Net2Phone.
(i) Third-Party Beneficiaries. Certain provisions of this Agreement are
entered into for the benefit of and shall be enforceable by Net2Phone as
provided herein.
(j) Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or legal holiday
in the state in which the Company's chief Founder office is located, the time
period shall be automatically extended to the business day immediately following
such Saturday, Sunday or holiday.
* * * *
-10-
11
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
ADIR TECHNOLOGIES, INC.
____________________________________
By: ________________________________
Its: _______________________________
____________________________________
-11-