Exhibit 99.7
ADDENDUM
TO
STOCK ISSUANCE AGREEMENT
The following provisions are hereby incorporated into, and
are hereby made a part of, that certain Stock Issuance Agreement (the
"Issuance Agreement") by and between ENCAD, Inc. (the "Corporation") and
____________________________________ ("Participant") evidencing the stock
issuance made this day to Participant under the terms of the Corporation's
1999 Stock Option/Stock Issuance Plan, and such provisions are effective
immediately. All capitalized terms in this Addendum, to the extent not
otherwise defined herein, shall have the meanings assigned to such terms in
the Issuance Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CORPORATE TRANSACTION/CHANGE IN CONTROL
1. To the extent the Repurchase Right is assigned to the successor
corporation (or parent thereof) in connection with a Corporate Transaction,
no accelerated vesting of the Purchased Shares shall occur upon such
Corporate Transaction, and the Repurchase Right shall continue to remain in
full force and effect in accordance with the provisions of the Issuance
Agreement. The Participant shall, over Participant's period of Service
following the Corporate Transaction, continue to vest in the Purchased Shares
in one or more installments in accordance with the provisions of the Issuance
Agreement.
2. No accelerated vesting of the Purchased Shares shall occur upon a
Change in Control, and the Repurchase Right shall continue to remain in full
force and effect in accordance with the provisions of the Issuance Agreement
and shall be assigned to any successor entity in the Change in Control
transaction. The Participant shall, over Participant's period of Service
following the Change in Control, continue to vest in the Purchased Shares in
one or more installments in accordance with the provisions of the Issuance
Agreement.
3. Immediately upon an Involuntary Termination of Participant's
Service within eighteen (18) months following the Corporate Transaction or
Change in Control, the Repurchase Right shall terminate automatically, and
all the Purchased Shares shall vest in full at that time. Any unvested cash
escrow maintained on the Participant's behalf pursuant to Paragraph C.5 of
the Issuance Agreement shall also vest at the time of such Involuntary
Termination and shall be paid to the Participant promptly thereafter.
4. For purposes of this Addendum, the following definitions shall be
in effect:
An INVOLUNTARY TERMINATION shall mean the termination of
Participant's Service by reason of:
(i) Participant's involuntary dismissal or discharge
by the Corporation for reasons other than Misconduct, or
(ii) Participant's voluntary resignation following (A)
a change in Participant's position with the Corporation (or Parent
or Subsidiary employing Participant) which materially reduces
Participant's duties and responsibilities or the level of management
to which Participant reports, (B) a reduction in Participant's level
of compensation (including base salary, fringe benefits and target
bonus under any corporate performance based bonus or incentive
programs) by more than fifteen percent (15%) or (C) a relocation of
Participant's place of employment by more than fifty (50) miles,
provided and only if such change, reduction or relocation is
effected by the Corporation without Participant's consent.
A CHANGE IN CONTROL shall be deemed to occur in the event of a
change in ownership or control of the Corporation effected through either of the
following transactions:
(i) the acquisition, directly or indirectly, by any
person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or is
under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act of
1934, as amended) of securities possessing more than thirty-five
percent (35%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's stockholders, or
(ii) a change in the composition of the Board over a
period of thirty-six (36) consecutive months or less such that a
majority of the Board members ceases, by reason of one or more
contested elections for Board membership, to be comprised of
individuals who either (A) have been Board members continuously
since the beginning of such period or (B) have been elected or
nominated for election as Board members during such period by at
least a majority of the Board members described in clause (A) who
were still in office at the time the Board approved such election or
nomination.
MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Participant, any unauthorized use or
disclosure by the Participant of confidential information or trade secrets of
the Corporation (or any Parent or Subsidiary), or any other intentional
misconduct by the Participant adversely affecting the business or affairs of
the Corporation (or any Parent or Subsidiary) in a material manner. The
foregoing definition shall not be deemed to be inclusive of all the acts or
omissions which the Corporation (or any Parent or Subsidiary) may consider as
grounds for the dismissal or discharge of the Participant or other person in
the Service of the Corporation (or any Parent or Subsidiary).
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IN WITNESS WHEREOF, ENCAD, Inc. has caused this Addendum
to be executed by its duly-authorized officer, effective as of the Effective
Date specified below.
ENCAD, INC.
By:
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Title:
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EFFECTIVE DATE:
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