CORNERSTONE
ONDEMAND, INC.
1999
STOCK PLAN
STOCK
OPTION AGREEMENT
Unless
otherwise defined herein, the terms defined in the 1999 Stock Plan shall have
the same defined meanings in this Stock Option Agreement.
I. NOTICE OF STOCK OPTION
GRANT
[Optionee's Name and
Address]
The
undersigned Optionee has been granted an Option to purchase Common Stock of the
Company, subject to the terms and conditions of the Plan and this Option
Agreement, as follows:
Grant
Number
|
|
|
|
|
|
|
|
Date
of Grant
|
|
|
|
|
|
|
|
Vesting
Commencement Date
|
|
|
|
|
|
|
|
Exercise
Price per Share
|
$
|
|
|
|
|
|
|
Total
Number of Shares Granted
|
|
|
|
|
|
|
|
Total
Exercise Price
|
$
|
|
|
|
|
|
|
Type
of Option:
|
|
Incentive
Stock Option
|
|
|
|
|
|
|
|
Nonstatutory
Stock Option
|
|
|
|
|
|
Term/Expiration
Date:
|
|
|
|
Vesting
Schedule:
This
Option shall be exercisable, in whole or in part, according to the following
vesting schedule:
[INSERT
VESTING SCHEDULE]
Termination
Period:
This
Option shall be exercisable for three months after Optionee ceases to be a
Service Provider. Upon Optionee's death or Disability, this Option
may be exercised for one year after Optionee ceases to be a Service
Provider. In no event may Optionee exercise this Option after the
Term/Expiration Date as provided above.
1. Grant of
Option. The Plan Administrator of the Company hereby grants to
the Optionee named in the Notice of Grant (the "Optionee"), an option (the
"Option") to purchase the number of Shares set forth in the Notice of Grant, at
the exercise price per Share set forth in the Notice of Grant (the "Exercise
Price"), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 14(c) of the
Plan, in the event of a conflict between the terms and conditions of the Plan
and this Option Agreement, the terms and conditions of the Plan shall
prevail.
If
designated in the Notice of Grant as an Incentive Stock Option ("ISO"), this
Option is intended to qualify as an Incentive Stock Option as defined in
Section 422 of the Code. Nevertheless, to the extent that it
exceeds the $100,000 rule of Code Section 422(d), this Option shall be treated
as a Nonstatutory Stock Option ("NSO").
(a) Right to
Exercise. This Option shall be exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and with the
applicable provisions of the Plan and this Option Agreement.
(b) Method of
Exercise. This Option shall be exercisable by delivery of an
exercise notice in the form attached as Exhibit A (the
"Exercise Notice") which shall state the election to exercise the Option, the
number of Shares with respect to which the Option is being exercised, and such
other representations and agreements as may be required by the Company. The
Exercise Notice shall be accompanied by payment of the aggregate Exercise Price
as to all Exercised Shares. This Option shall be deemed to be
exercised upon receipt by the Company of such fully executed Exercise Notice
accompanied by the aggregate Exercise Price.
No Shares
shall be issued pursuant to the exercise of an Option unless such issuance and
such exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Shares shall be considered transferred
to the Optionee on the date on which the Option is exercised with respect to
such Shares.
3. Optionee's
Representations. In the event the Shares have not been
registered under the Securities Act of 1933, as amended, at the time this Option
is exercised, the Optionee shall, if required by the Company, concurrently with
the exercise of all or any portion of this Option, deliver to the Company his or
her Investment Representation Statement in the form attached hereto as Exhibit B.
4. Lock-Up
Period. Optionee hereby agrees that, if so requested by the
Company or any representative of the underwriters (the "Managing Underwriter")
in connection with any registration of the offering of any securities of the
Company under the Securities Act, Optionee shall not sell or otherwise
transfer any Shares or other securities of the Company during the 180-day period
(or such other period as may be requested in writing by the Managing Underwriter
and agreed to in writing by the Company) (the "Market Standoff Period")
following the effective date of a registration statement of the Company filed
under the Securities Act. Such restriction shall apply
only to the first registration statement of the Company to become
effective under the Securities Act that includes securities to be sold on behalf
of the Company to the public in an underwritten public offering under the
Securities Act. The Company may impose stop-transfer instructions
with respect to securities subject to the foregoing restrictions until the end
of such Market Standoff Period.
5. Method of
Payment. Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the
Optionee:
(b) consideration
received by the Company under a formal cashless exercise program adopted by the
Company in connection with the Plan; or
(c) surrender
of other Shares which, (i) in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than six (6) months on the date
of surrender, and (ii) have a Fair Market Value on the date of surrender equal
to the aggregate Exercise Price of the Exercised Shares.
6. Restrictions on
Exercise. This Option may not be exercised until such time as
the Plan has been approved by the shareholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any Applicable
Law.
7. Non-Transferability of
Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be
exercised during the lifetime of Optionee only by Optionee. The terms
of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
8. Term of
Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
9. Tax
Consequences. Set forth below is a brief summary as of the
date of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of
NSO. There may be a regular federal income tax liability upon
the exercise of an NSO. The Optionee will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price. If Optionee is an Employee or a former
Employee, the Company will be required to withhold from Optionee's compensation
or collect from Optionee and pay to the applicable taxing authorities an amount
in cash equal to a percentage of this compensation income at the time of
exercise, and may refuse to honor the exercise and refuse to deliver Shares if
such withholding amounts are not delivered at the time of exercise.
(b) Exercise of
ISO. If this Option qualifies as an ISO, there will be no
regular federal income tax liability upon the exercise of the Option, although
the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price will be treated as an adjustment to the
alternative minimum tax for federal tax purposes and may subject the Optionee to
the alternative minimum tax in the year of exercise.
(c) Disposition of
Shares. In the case of an NSO, if Shares are held for at least
one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes. In the case
of an ISO, if Shares transferred pursuant to the Option are held for at least
one year after exercise and of at least two years after the Date of Grant, any
gain realized on disposition of the Shares will also be treated as long-term
capital gain for federal income tax purposes. If Shares purchased
under an ISO are disposed of within one year after exercise or two years after
the Date of Grant, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
difference between the Exercise Price and the lesser of (1) the Fair Market
Value of the Shares on the date of exercise, or (2) the sale price of the
Shares. Any additional gain will be taxed as capital gain, short-term
or long-term depending on the period that the ISO Shares were held.
(d) Notice of Disqualifying
Disposition of ISO Shares. If the Option granted to Optionee
herein is an ISO, and if Optionee sells or otherwise disposes of any of the
Shares acquired pursuant to the ISO on or before the later of (1) the date
two years after the Date of Grant, or (2) the date one year after the date
of exercise, the Optionee shall immediately notify the Company in writing of
such disposition. Optionee agrees that Optionee may be subject to
income tax withholding by the Company on the compensation income recognized by
the Optionee.
10. Entire Agreement; Governing
Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified
adversely to the Optionee's interest except by means of a writing signed by the
Company and Optionee. This agreement is governed by the internal
substantive laws but not the choice of law rules of California.
11. No Guarantee of Continued
Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF
SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A
SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.
Optionee
acknowledges receipt of a copy of the Plan and represents that he or she is
familiar with the terms and provisions thereof, and hereby accepts this Option
subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this
Option. Optionee further agrees to notify the Company upon any change
in the residence address indicated below.
OPTIONEE
|
|
CORNERSTONE
ONDEMAND, INC.
|
|
|
|
|
|
|
Signature
|
|
By
|
|
|
|
|
|
|
Print
Name
|
|
Title
|
|
|
|
|
|
|
|
|
|
Residence
Address
|
|
|
EXHIBIT
A
1999
STOCK PLAN
EXERCISE
NOTICE
Cornerstone
OnDemand, Inc.
166
34th
Street
Suite
17L
Attention: Secretary
1. Exercise of
Option. Effective as of today, ___________, ____, the
undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase
_________ shares of the Common Stock (the "Shares") of Cornerstone OnDemand,
Inc. (the "Company") under and pursuant to the 1999 Stock Plan (the "Plan") and
the Stock Option Agreement dated ________, 19 (the "Option
Agreement").
2. Delivery of
Payment. Purchaser herewith delivers to the Company the full
purchase price of the Shares, as set forth in the Option Agreement.
3. Representations of
Optionee. Optionee acknowledges that Optionee has received,
read and understood the Plan and the Option Agreement and agrees to abide by and
be bound by their terms and conditions.
4. Rights as
Shareholder. Until the issuance of the Shares (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Shares shall be
issued to the Optionee as soon as practicable after the Option is
exercised. No adjustment shall be made for a dividend or other right
for which the record date is prior to the date of issuance except as provided in
Section 12 of the Plan.
5. Company's Right of First
Refusal. Before any Shares held by Optionee or any transferee
(either being sometimes referred to herein as the "Holder") may be sold or
otherwise transferred (including transfer by gift or operation of law), the
Company or its assignee(s) shall have a right of first refusal to purchase the
Shares on the terms and conditions set forth in this Section (the "Right of
First Refusal").
(a) Notice of Proposed
Transfer. The Holder of the Shares shall deliver to the
Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer such Shares;
(ii) the name of each proposed purchaser or other transferee ("Proposed
Transferee"); (iii) the number of Shares to be transferred to each Proposed
Transferee; and (iv) the bona fide cash price or other consideration for
which the Holder proposes to transfer the Shares (the "Offered Price"), and the
Holder shall offer the Shares at the Offered Price to the Company or its
assignee(s).
(b) Exercise of Right of First
Refusal. At any time within thirty (30) days after receipt of
the Notice, the Company and/or its assignee(s) may, by giving written notice to
the Holder, elect to purchase all, but not less than all, of the Shares proposed
to be transferred to any one or more of the Proposed Transferees, at the
purchase price determined in accordance with subsection (c)
below.
(c) Purchase
Price. The purchase price ("Purchase Price") for the Shares
purchased by the Company or its assignee(s) under this Section shall be the
Offered Price. If the Offered Price includes consideration other than
cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.
(d) Payment. Payment
of the Purchase Price shall be made, at the option of the Company or its
assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness of the Holder to the Company (or, in the case of
repurchase by an assignee, to the assignee), or by any combination thereof
within 30 days after receipt of the Notice or in the manner and at the times set
forth in the Notice.
(e) Holder's Right to
Transfer. If all of the Shares proposed in the Notice to be
transferred to a given Proposed Transferee are not purchased by the Company
and/or its assignee(s) as provided in this Section, then the Holder may sell or
otherwise transfer such Shares to that Proposed Transferee at the Offered Price
or at a higher price, provided that such sale or other transfer is consummated
within 120 days after the date of the Notice, that any such sale or other
transfer is effected in accordance with any applicable securities laws and that
the Proposed Transferee agrees in writing that the provisions of this Section
shall continue to apply to the Shares in the hands of such Proposed
Transferee. If the Shares described in the Notice are not transferred
to the Proposed Transferee within such period, a new Notice shall be given to
the Company, and the Company and/or its assignees shall again be offered the
Right of First Refusal before any Shares held by the Holder may be sold or
otherwise transferred.
(f) Exception for Certain Family
Transfers. Anything to the contrary contained in this Section
notwithstanding, the transfer of any or all of the Shares during the Optionee's
lifetime or on the Optionee's death by will or intestacy to the Optionee's
immediate family or a trust for the benefit of the Optionee's immediate family
shall be exempt from the provisions of this Section. "Immediate
Family" as used herein shall mean spouse, lineal descendant or antecedent,
father, mother, brother or sister. In such case, the transferee or
other recipient shall receive and hold the Shares so transferred subject to the
provisions of this Section, and there shall be no further transfer of such
Shares except in accordance with the terms of this Section.
(g) Termination of Right of
First Refusal. The Right of First Refusal shall terminate as
to any Shares upon 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 Securities and Exchange Commission under the Securities Act of 1933, as
amended.
6. Tax
Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any
tax consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
7. Restrictive Legends and
Stop-Transfer Orders.
(a) Legends. Optionee
understands and agrees that the Company shall cause the legends set forth below
or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Shares together with any other
legends that may be required by the Company or by state or federal securities
laws:
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE
OPINION OF COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS
SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF
THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE
BINDING ON TRANSFEREES OF THESE SHARES.
(b) Stop-Transfer
Notices. Optionee agrees that, in order to ensure compliance
with the restrictions referred to herein, the Company may issue appropriate
"stop transfer" instructions to its transfer agent, if any, and that, if the
Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Refusal to
Transfer. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Exercise Notice or (ii) to treat
as owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.
8. Successors and
Assigns. The Company may assign any of its rights under this
Exercise Notice to single or multiple assignees, and this Exercise Notice shall
inure to the benefit of the successors and assigns of the
Company. Subject to the restrictions on transfer herein set forth,
this Exercise Notice shall be binding upon Optionee and his or her heirs,
executors, administrators, successors and assigns.
9. Interpretation. Any
dispute regarding the interpretation of this Exercise Notice shall be submitted
by Optionee or by the Company forthwith to the Administrator which shall review
such dispute at its next regular meeting. The resolution of such a
dispute by the Administrator shall be final and binding on all
parties.
10. Governing Law;
Severability. This Exercise Notice is governed by the internal
substantive laws but not the choice of law rules, of California.
11. Entire
Agreement. The Plan and Option Agreement are incorporated
herein by reference. This Exercise Notice, the Plan, the Option
Agreement and the Investment Representation Statement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified
adversely to the Optionee's interest except by means of a writing signed by the
Company and Optionee.
Submitted by: |
|
Accepted by: |
|
|
|
OPTIONEE
|
|
CORNERSTONE
ONDEMAND, INC.
|
|
|
|
|
|
|
Signature
|
|
By
|
|
|
|
|
|
|
Print
Name
|
|
Title
|
|
|
|
Address: |
|
Address: |
|
|
166
34THStreet,
Suite 17L
|
|
|
|
|
|
|
|
|
|
|
|
Date
Received |
EXHIBIT
B
INVESTMENT
REPRESENTATION STATEMENT
|
|
OPTIONEE:
|
|
|
|
COMPANY:
|
CORNERSTONE
ONDEMAND, INC.
|
|
|
SECURITY:
|
COMMON
STOCK
|
|
|
AMOUNT:
|
|
|
|
DATE:
|
|
In
connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:
(a) Optionee
is aware of the Company's business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Securities. Optionee is
acquiring these Securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
(b) Optionee
acknowledges and understands that the Securities constitute "restricted
securities" under the Securities Act and have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of Optionee's investment
intent as expressed herein. In this connection, Optionee understands
that, in the view of the Securities and Exchange Commission, the statutory basis
for such exemption may be unavailable if Optionee's representation was
predicated solely upon a present intention to hold these Securities for the
minimum capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the Securities, or
for a period of one year or any other fixed period in the
future. Optionee further understands that the Securities must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to register
the Securities. Optionee understands that the certificate evidencing
the Securities will be imprinted with a legend which prohibits the transfer of
the Securities unless they are registered or such registration is not required
in the opinion of counsel satisfactory to the Company, and any other legend
required under applicable state securities laws.
(c) Optionee
is familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited public
resale of "restricted securities" acquired, directly or indirectly from the
issuer thereof, in a non-public offering subject to the satisfaction of certain
conditions. Rule 701 provides that if the issuer qualifies under
Rule 701 at the time of the grant of the Option to the Optionee, the
exercise will be exempt from registration under the Securities
Act. In the event the Company becomes subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
ninety (90) days thereafter (or such longer period as any market stand-off
agreement may require) the Securities exempt under Rule 701 may be resold,
subject to the satisfaction of certain of the conditions specified by
Rule 144, including: (1) the resale being made through a
broker in an unsolicited "broker's transaction" or in transactions directly
with a market maker (as said term is defined under the Securities Exchange
Act of 1934); and, in the case of an affiliate, (2) the availability of
certain public information about the Company, (3) the amount of Securities being
sold during any three month period not exceeding the limitations specified in
Rule 144(e), and (4) the timely filing of a Form 144, if
applicable.
In the
event that the Company does not qualify under Rule 701 at the time of grant
of the Option, then the Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which
requires the resale to occur not less than one year after the later of the
date the Securities were sold by the Company or the date the Securities were
sold by an affiliate of the Company, within the meaning of Rule 144; and,
in the case of acquisition of the Securities by an affiliate, or by a
non-affiliate who subsequently holds the Securities less than two years, the
satisfaction of the conditions set forth in sections (1), (2), (3) and (4) of
the paragraph immediately above.
(d) Optionee
further understands that in the event all of the applicable requirements of
Rule 701 or 144 are not satisfied, registration under the Securities Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rules 144 and 701 are not
exclusive, the Staff of the Securities and Exchange Commission has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rules 144 or 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their own
risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.
|
Signature
of Optionee: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date: |
|
,
19
|
|
ATTACHMENT
1
STATE OF CALIFORNIA -
CALIFORNIA ADMINISTRATIVE CODE
Title
10. Investment - Chapter 3. Commissioner of
Corporations
260.141.11: Restriction on
Transfer.
(a) The
issuer of any security upon which a restriction on transfer has been imposed
pursuant to Sections 260.102.6, 260.141.10 or 260.534 shall cause a copy of this
section to be delivered to each issuee or transferee of such security at the
time the certificate evidencing the security is delivered to the issuee or
transferee.
(b) It
is unlawful for the holder of any such security to consummate a sale or transfer
of such security, or any interest therein, without the prior written consent of
the Commissioner (until this condition is removed pursuant to Section 260.141.12
of these rules), except:
(1) to
the issuer;
(2) pursuant
to the order or process of any court;
(3) to
any person described in Subdivision (i) of Section 25102 of the Code or Section
260.105.14 of these rules;
(4) to
the transferor's ancestors, descendants or spouse, or any custodian or trustee
for the account of the transferor or the transferor's ancestors, descendants, or
spouse; or to a transferee by a trustee or custodian for the account of the
transferee or the transferee's ancestors, descendants or spouse;
(5) to
holders of securities of the same class of the same issuer;
(6) by
way of gift or donation inter vivos or on death;
(7) by
or through a broker-dealer licensed under the Code (either acting as such or as
a finder) to a resident of a foreign state, territory or country who is neither
domiciled in this state to the knowledge of the broker-dealer, nor actually
present in this state if the sale of such securities is not in violation of any
securities law of the foreign state, territory or country
concerned;
(8) to
a broker-dealer licensed under the Code in a principal transaction, or as an
underwriter or member of an underwriting syndicate or selling
group;
(9) if
the interest sold or transferred is a pledge or other lien given by the
purchaser to the seller upon a sale of the security for which the Commissioner's
written consent is obtained or under this rule not required;
(10) by
way of a sale qualified under Sections 25111, 25112, 25113 or 25121 of the Code,
of the securities to be transferred, provided that no order under Section 25140
or subdivision (a) of Section 25143 is in effect with respect to such
qualification;
(11) by
a corporation to a wholly owned subsidiary of such corporation, or by a wholly
owned subsidiary of a corporation to such corporation;
(12) by
way of an exchange qualified under Section 25111, 25112 or 25113 of the Code,
provided that no order under Section 25140 or subdivision (a) of Section 25143
is in effect with respect to such qualification;
(13) between
residents of foreign states, territories or countries who are neither domiciled
nor actually present in this state;
(14) to
the State Controller pursuant to the Unclaimed Property Law or to the
administrator of the unclaimed property law of another state; or
(15) by
the State Controller pursuant to the Unclaimed Property Law or by the
administrator of the unclaimed property law of another state if, in either such
case, such person (i) discloses to potential purchasers at the sale that
transfer of the securities is restricted under this rule, (ii) delivers to each
purchaser a copy of this rule, and (iii) advises the Commissioner of the name of
each purchaser;
(16) by
a trustee to a successor trustee when such transfer does not involve a change in
the beneficial ownership of the securities;
(17) by
way of an offer and sale of outstanding securities in an issuer transaction that
is subject to the qualification requirement of Section 25110 of the Code but
exempt from that qualification requirement by subdivision (f) of Section 25102;
provided that any such transfer is on the condition that any certificate
evidencing the security issued to such transferee shall contain the legend
required by this section.
(c) The
certificates representing all such securities subject to such a restriction on
transfer, whether upon initial issuance or upon any transfer thereof, shall bear
on their face a legend, prominently stamped or printed thereon in capital
letters of not less than 10-point size, reading as follows:
“IT IS
UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT
AS PERMITTED IN THE COMMISSIONER'S RULES.”