Exhibit 10.1
SCANSOFT, INC.
STAND-ALONE
RESTRICTED STOCK PURCHASE AGREEMENT
(A) Name of Grantee:
___________________
(B) Grant Date:
___________________
(C) Vesting Commencement Date
___________________
(D) Number of Shares:
___________________
(E) Price Per Share: $0.001
___________________
(F) Effective Date:
___________________
THIS RESTRICTED STOCK PURCHASE AGREEMENT (the "AGREEMENT"), is made and
entered into as of the date set forth in Item F above (the "EFFECTIVE DATE")
between ScanSoft, Inc., a Delaware corporation (the "COMPANY") and the person
named in Item A above ("GRANTEE").
THE PARTIES AGREE AS FOLLOWS:
1. GRANT OF STOCK. Grantee hereby purchases from the Company, and the Company
hereby issues and sells to Grantee, the number of shares of Common Stock
of the Company, par value $0.001 (the "SHARES"), listed in Item D above on
the terms and conditions set forth herein. The Company shall, promptly
after execution of this Agreement, issue a certificate representing the
Shares registered in the name of Grantee, which certificate shall be
retained by the Company at the Company's executive offices. In return, the
Grantee shall deliver to the Company (a) an executed counterpart of this
Agreement, and (b) the purchase price of the Shares in the form of a check
payable to the Company.
2. PURCHASE PRICE. The purchase price for the Shares shall be the price set
forth in Item E above.
3. DEFINITIONS.
a) "ADMINISTRATOR" means the Board or any committee of the Board that
has been designated by the Board to administer this Agreement.
b) "BOARD" means the Board of Directors of the Company.
c) "CODE" means the Internal Revenue Code of 1986, as amended.
d) "COMMON STOCK" means the Common Stock of the Company.
e) "CONSULTANT" means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.
f) "DIRECTOR" means a member of the Board or a member of the Board of
Directors of any Parent or Subsidiary of the Company.
g) "EMPLOYEE" means an employee of the Company or any Parent or
Subsidiary of the Company. A Service Provider shall not cease to be
an Employee in the case of (i) any leave of absence approved by the
Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary of the Company, or
any successor.
h) "PARENT" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
i) "SERVICE PROVIDER" means an Employee, Director or Consultant.
j) "SUBSIDIARY" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
4. COMPANY'S RIGHT OF REPURCHASE.
(a) The Shares shall be subject to a right of repurchase in favor of the
Company (the "RIGHT OF REPURCHASE") to the extent set forth on
Exhibit A attached hereto. Except with respect to a termination
without Cause as described in Exhibit A, if the Grantee shall cease
to be a Service Provider for any reason (including death,
disability, for Cause or resignation) before the Right of Repurchase
lapses in accordance with Exhibit A, the Company may purchase the
Shares subject to the Right of Repurchase for an amount equal to the
price the Grantee paid for such Shares (exclusive of any taxes paid
upon acquisition of the stock). The Grantee may not dispose of or
transfer Shares while such Shares are subject to the Right of
Repurchase and any such attempted transfer shall be null and void.
The Grantee acknowledges and agrees that until such time as the
Shares are no longer subject to the Right of Repurchase, the Shares
shall be retained by the Company at the Company's executive offices.
Any Shares released from the Right of Repurchase pursuant to the
provisions set forth in Exhibit A shall be released from the
Company's Right of Repurchase forever and shall not be subject to
repurchase in the event of Grantee's ceasing to be a Service
Provider for any reason.
(b) The Company may exercise its Right of Repurchase set forth in this
Section 4 by written notice to the Grantee within 90 days after the
date on which the Grantee ceases to be retained as a Service
Provider. If the Company (or its assignees) exercises its Right of
Repurchase, the Grantee shall, if necessary, endorse and deliver to
the Company (or its assignees) the stock certificates representing
the Shares being repurchased, and the Company (or its assignees)
shall pay the Grantee the total repurchase price in cash upon such
delivery. The Grantee shall cease to have any rights with respect to
such repurchased Shares immediately upon receipt of the repurchase
price.
5. STOCK CERTIFICATE RESTRICTIVE LEGENDS. Stock certificates evidencing Shares
will bear the following restrictive legend:
"THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS OF
AN AGREEMENT BETWEEN THE COMPANY AND THE HOLDER OF SUCH SECURITIES.
PURSUANT TO THE TERMS OF SUCH AGREEMENT, THE COMPANY HAS A RIGHT TO
REPURCHASE SUCH SECURITIES UNDER CERTAIN CIRCUMSTANCES. A COPY OF
THE AGREEMENT CAN BE OBTAINED FROM THE SECRETARY OF THE COMPANY."
6. RELATION TO THE COMPANY. Grantee is presently an officer, director, or other
employee of, or Consultant to the Company and in such capacity has become
personally familiar with the business, affairs, financial condition, and results
of the operations of the Company.
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET SALE.
a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of Shares purchased under
this Agreement, shall be proportionately adjusted for any increase
or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or
decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that a conversion
of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number of Shares subject to this
Agreement.
b) Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, the Board may provide that any
Company Repurchase Right applicable to the Shares purchased under
this Agreement shall lapse as to such Shares.
c) Merger or Asset Sale. In the event of a merger of the Company with
or into another corporation, or the sale of substantially all of the
assets of the Company, the Agreement shall be assumed by the
successor corporation or a Parent or Subsidiary of the successor
corporation. In the event that the successor corporation refuses to
assume the Agreement, the Company's Repurchase Right will lapse.
8. ADMINISTRATION OF THE AGREEMENT. The Administrator shall have the authority,
in its discretion, to construe and interpret the terms of this Agreement, to
prescribe, amend and rescind rules and regulations relating to the Agreement and
to make all other determinations and amendments deemed necessary or advisable
for administering the Agreement. The Administrator's decisions and
interpretations shall be final and binding on the Grantee and all other persons.
Notwithstanding the foregoing, no amendment or alteration of this Agreement
shall adversely affect the rights of Grantee, unless mutually agreed otherwise
between the Grantee and the Administrator.
9. TAX ADVICE. The Company has made no warranties or representations to Grantee
with respect to the income tax consequences of the transactions contemplated by
the agreement pursuant to which the Shares will be purchased and Grantee is in
no manner relying on the Company or its representatives for an assessment of
such tax consequences. The Grantee acknowledges that the Grantee has not relied
and will not rely upon the Company or the Company's counsel with respect to any
tax consequences related to the ownership, purchase, or disposition of the
Shares. The Grantee assumes full responsibility for all such consequences and
for the preparation and filing of all tax returns and elections which may or
must be filed in connection with the Shares.
10. TAXES.
a) Withholding. Notwithstanding any contrary provision of this
Agreement, no certificate representing Shares may be released from
the Company unless and until the Grantee shall have delivered to the
Company the full amount of any federal, state or local income or
other taxes which the Company may be required by law to withhold
with respect to such Shares.
b) Section 83(b) Election. The Grantee may elect to accelerate any
Federal tax payment due as a result of receiving an award of Shares
subject to the Company's Right of Repurchase by making a timely
election pursuant to Section 83(b) of the Code, and complying with
the procedures outlined therein. The election must be filed by the
Grantee within 30 days from the date of grant. The Grantee
understands that the Grantee (and not the Company) shall be
responsible for the Grantee's own tax liability that may arise as a
result of this investment or the transactions contemplated by this
Agreement. The Grantee acknowledges that it is the Grantee's sole
responsibility.
11. ASSIGNMENT; BINDING EFFECT. Subject to the limitations set forth in this
Agreement, this Agreement shall be binding upon and inure to the benefit of the
executors, administrators, heirs, legal representatives, and successors of the
parties hereto; provided, however, that Grantee may not assign any of Grantee's
rights under this Agreement.
12. DAMAGES. Grantee shall be liable to the Company for all costs and damages,
including incidental and consequential damages, resulting from a disposition of
the Shares which is not in conformity with the provisions of this Agreement.
13. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts excluding those
laws that direct the application of the laws of another jurisdiction.
14. NOTICES. All notices and other communications under this Agreement shall be
in writing. Unless and until the Grantee is notified in writing to the contrary,
all notices, communications, and documents directed to the Company and related
to the Agreement, if not delivered by hand, shall be mailed, addressed as
follows:
ScanSoft, Inc.
9 Centennial Drive
Peabody, MA 01960
Attention: Vice President, Human Resources
Unless and until the Company is notified in writing to the contrary, all
notices, communications, and documents intended for the Grantee and
related to this Agreement, if not delivered by hand, shall be mailed to
Grantee's last known address as shown on the Company's books. Notices and
communications shall be mailed by first class mail, postage prepaid;
documents shall be mailed by registered mail, return receipt requested,
postage prepaid. All mailings and deliveries related to the Agreement
shall be deemed received when actually received, if by hand delivery, and
two business days after mailing, if by mail.
15. ARBITRATION. Any and all disputes or controversies arising out of this
Agreement shall be finally settled by arbitration conducted in Essex County in
accordance with the then existing rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof; provided that nothing in this Section 15
shall prevent a party from applying to a court of competent jurisdiction to
obtain temporary relief pending resolution of the dispute through arbitration.
The parties hereby agree that service of any notices in the course of such
arbitration at their respective addresses as provided for in Section 14 shall be
valid and sufficient.
16. NO RIGHTS TO SHARES, OPTIONS OR EMPLOYMENT. Other than with respect to the
Shares, neither Grantee nor any other person shall have any claim or right to be
issued stock under this Agreement. Having received a stock award under this
Agreement shall not give the Grantee any right to receive any other stock based
award. This Agreement is not an employment contract and nothing in this
Agreement shall be deemed to create in any way whatsoever any obligation on the
part of Grantee to continue in the employ of the Company, or the Company to
continue Grantee's employment with the Company.
17. ENTIRE AGREEMENT. Company and Grantee agree that this Agreement (including
its attached Exhibits) is the complete and exclusive statement between Company
and Grantee regarding its subject matter and supersedes all prior proposals,
communications, and agreements of the parties, whether oral or written,
regarding the issuances of Shares to Grantee.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
ScanSoft, Inc.
By:__________________________________
Paul A. Ricci
The Grantee hereby accepts and agrees to be bound by all of the
terms and conditions of this Agreement and the Plan.
_________________________________
Grantee
EXHIBIT A OF THE
RESTRICTED STOCK PURCHASE AGREEMENT
RIGHT OF REPURCHASE
The Right of Repurchase shall expire as follows:
1) Subject to earlier vesting as provided in this Exhibit A, the Right of
Repurchase with respect to 100% of the Shares shall expire on the third
(3rd) anniversary of the Vesting Commencement Date as set forth in Item C
of the Agreement, subject to Grantee's continuing to be a Service Provider
on such date.
2) Subject to the Grantee's continued status as a Service Provider on
September 30, 2006 ("First Target Date"):
a) 12.5% of the Shares shall be released from the Right of Repurchase
as soon as administratively feasible following the First Target Date
if the Company business unit consisting of a worldwide transcription
workflow platform, either licensed or hosted on an ASP basis, along
with associated services and structured either as a stand-alone
business unit or integrated within the Healthcare Dictation
business, as determined by the Administrator (the "Big Mac
Business") (i) receives Board approval of an operating plan for the
Big Mac Business for fiscal year 2006 (the "First Approved Plan"),
and (ii) achieves at least 95% but less than 100% of the First
Target (defined below) between the time period beginning on the date
of the acquisition of the Big Mac Business by the Company and the
First Target Date (the "First Performance Period") (no Shares be
released pursuant to this Section 2(a) in the event Section 2(b) or
2(c) applies); or
b) 25% of the Shares shall be released from the Right of Repurchase as
soon as administratively feasible following the First Target Date if
the Big Mac Business (i) receives Board approval of the First
Approved Plan, and (ii) achieves 100% of the First Target during the
First Performance Period (no Shares will Shares be released pursuant
to this Section 2(b) in the event Section 2(c) applies); or
c) Between 25% and 50% of the Shares shall be released from the Right
of Repurchase as soon as administratively feasible following the
First Target Date if the Big Mac Business (i) receives Board
approval of the First Approved Plan, and (ii) achieves in
excess of 100% and up to 120% of the First Target in the First
Performance Period (in no event will Shares be released pursuant to
this provision in the event 100% or less of the First Target is
achieved). The additional percentage of Shares released over 25%
shall be determined by adding (a) the product of (i) the number of
percentage points of the First Target achieved in excess of 100%
(rounded to the nearest percent) and (ii) 1.25, to (b) 25%.
The "First Target" means [ ] of the revenue (Company recognizable)
forecast for the Big Mac Business in the First Performance Period.
3) Subject to the Grantee's continued status as a Service Provider on
September 30, 2007 ("Second Target Date") and in addition to any Shares
released pursuant to Section 2 of this Exhibit A:
a) 10% of the Shares shall be released from the Right of Repurchase as
soon as administratively feasible following the Second Target Date
if the Big Mac Business (i) receives Board approval of an operating
plan for the Big Mac Business for fiscal year 2007 (the "Second
Approved Plan"), and (ii) achieves at least 95% but less than 100%
of the Second Target (defined below) between the First Target Date
and the Second Target Date (the "Second Performance Period") (no
Shares will be released pursuant to this Section 3(a) in the event
Section 3(b) or 3(c) applies); or
b) 20% of the Shares shall be released from the Right of Repurchase as
soon as administratively feasible following the Second Target Date
if the Big Mac Business (i) receives Board approval of the Second
Approved Plan, and (ii) achieves 100% of the Second Target during
the Second Performance Period (no Shares will be released pursuant
to this Section 3(b) in the event Section 3(c) applies); or
c) Between 20% and 40% of the Shares shall be released from the Right
of Repurchase as soon as administratively feasible following the
Second Target Date if the Big Mac Business (i) receives Board
approval of the Second Approved Plan, and (ii) achieves in excess of
100% and up to 120% of the Second Target in the Second Performance
Period (in no event will Shares be released pursuant to this
provision in the event 100% or less of the Second Target is
achieved). The additional percentage of Shares released over 20%
shall be determined by adding (i) the number of percentage points of
the First Target achieved in excess of 100% (rounded to the nearest
percent), to (b) 20%.
The "Second Target" means [ ] of the revenue (Company recognizable)
forecast for the Big Mac Business in the Second Performance Period.
4) Except as provided in Section 5 of this Exhibit A, if Grantee ceases to be
a Service Provider as a result of the Company's termination of Grantee for
a reason other than Cause, then the 100% of the Shares shall be released
from the Right of Repurchase on the date set forth in Section 1 of this
Exhibit A or earlier as provided in Sections 2, 3 and 4 of this Exhibit A
and without a requirement that Grantee be a Service Provider on the
applicable date. For purposes of this Agreement, "Cause" means Grantee's
employment with the Company is terminated after the Administrator has
found any of the following to exist: (i) Grantee's dishonesty that
materially harms the Company, theft, or falsification of any Company
records; (ii) disclosure of the Company's confidential or proprietary
information which violates the terms of any agreement between Grantee and
the Company; (iii) Grantee's continued substantial willful nonperformance
(except by reason of Disability) of his employment duties after Grantee
has received a written demand for performance by the Board and has failed
to cure such nonperformance within 15 business days of receiving such
notice; (iv) Grantee's conviction of, or plea of nolo contendere to, a
felony which such conviction or plea materially harms the business or
reputation of the Company, or (v) Grantee's termination due to death or
Disability. For purposes of this Agreement, "Disability" means total and
permanent disability as defined in Section 22(e)(3) of the Code.
5) If Grantee ceases to be a Service Provider as a result of the Company's
termination of Grantee for a reason other than Cause within six (6) months
following a Change in Control, then the 100% of the Shares shall be
immediately released from the Right of Repurchase. For the purposes of
this Agreement, a "Change in Control" means: (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended) becomes the "beneficial owner" (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by the
Company's then outstanding voting securities; or (ii) the date of the
consummation of a merger or consolidation of the Company with any other
corporation that has been approved by the stockholders of the Company,
other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than fifty percent (50%)
of the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such merger
or consolidation; or (iii) the date of the consummation of the sale or
disposition by the Company of all or substantially all the Company's
assets.
Shares will be released from the Right of Repurchase pursuant to the
accelerated vesting provided in Sections 2 and 3 above at such time as the
Administrator determines that the performance objectives described in those
sections have been met based on the Company's standard accounting practices. In
the event any of the above performance objectives are not met by the stated
dates, the installment of the Shares that would otherwise be released from the
Right of Repurchase shall be released only on the three year anniversary of the
Vesting Commencement Date, provided Grantee is a Service Provider on such date.
Notwithstanding anything to the contrary in this Exhibit A, if Grantee's
employment responsibilities are significantly changed
prior to the three year anniversary of the Vesting Commencement Date, then the
Administrator may change the performance criteria stated above to better reflect
Grantee's new employment responsibilities, as determined by the Administrator.
EXHIBIT B
(STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE)
FOR VALUE RECEIVED, I hereby sell, assign and transfer unto
__________________ (____________________) shares of Common Stock, $.001 par
value per share, of _______________________ (the "Corporation") standing in my
name on the books of the Corporation represented by Certificate(s) Number
_______________ herewith, and do hereby irrevocably constitute and appoint
________________ attorney to transfer the said stock on the books of the
Corporation with full power of substitution in the premises.
Dated: ____________________
____________________
IN PRESENCE OF
____________________
NOTICE: The signature(s) to this assignment must correspond with the
name as written on the face of the certificate, in every particular, without
alteration, enlargement, or any change whatever and must be guaranteed by a
commercial bank, trust company or member firm of the Boston, New York or Midwest
Stock Exchange.