FORM OF STOCK OPTION GRANT AGREEMENTS
Published on August 3, 1999
Exhibit 4.02
BOSTON LIGHT SOFTWARE CORP.
INCENTIVE STOCK OPTION AGREEMENT
Boston Light Software Corp., a Massachusetts corporation (the "Company"),
hereby grants as of the ___ day of __________, 19__ (the "Grant Date"), to
__________ (the "Employee"), an option to purchase a maximum of __________
(__________) shares of the Company's Common Stock, no par value per share (the
"Common Stock"), at the price of $_____ per share, on the following terms and
conditions:
1. Grant Under 1999 Amended and Restated Stock Option/Stock Issuance Plan.
(a) This option is granted pursuant to and is governed by and subject to the
Company's 1999 Amended and Restated Stock Option/Stock Issuance Plan (the
"Plan"), the terms and conditions of which are incorporated herein by this
reference. Unless the context otherwise requires, terms used herein shall have
the same meaning as in the Plan. Determinations made pursuant to the Plan in
connection with this option shall be governed by the Plan as it exists on the
date of this option agreement ("Agreement").
(b) The granting of this option shall be subject to receipt by the Company
of the Company's current form of non-disclosure, non-competition and
developments agreement, executed and delivered by the Employee.
2. Grant as Incentive Stock Option, Other Options. This option is intended
to qualify as an incentive stock option ("ISO") within the meaning of Section
422 of the Internal Revenue Code of 1986 (the "Code"). This option is in
addition to any other options heretofore or hereafter granted to the Employee by
the Company, but a duplicate original of this instrument shall not effect the
grant of another option.
3. Exercise of Option and Provisions for Termination.
(a) Vesting Schedule. Except as otherwise provided in this
Agreement, and subject to all other terms and conditions of this Agreement, if
the Employee has continued to be employed by the Company through any applicable
date in the table below, this option may be exercised prior to the tenth
anniversary of the Grant Date (hereinafter the "Expiration Date") in
installments for not more than the number of shares set forth opposite such
applicable date:
As of the Grant Date _______ shares
As of _____________ _______ shares
As of _____________ an additional __________ shares
As of _____________ an additional __________ shares
As of _____________ an additional __________ shares
As of _____________ an additional __________ shares
As of _____________ an additional __________ shares
The right of exercise shall be cumulative so that if the option is not
exercised to the maximum extent permissible as of an applicable date, it shall
be exercisable, in whole or in part, with respect to all shares not so purchased
at any time prior to the Expiration Date or the earlier termination of this
option. Notwithstanding any other provision of this Agreement or the Plan, this
option may not be exercised at any time on or after the Expiration Date.
(b) Method of Exercise. Subject to the terms and conditions set
forth in this Agreement, this option shall be exercised by the Employee's
delivery of written notice of exercise to the Treasurer of the Company,
specifying the number of shares to be purchased and the purchase price to be
paid therefor and accompanied by payment in full in accordance with Section 4
hereof. Such exercise shall be effective upon receipt by the Treasurer of the
Company of such written notice together with the required payment. The Employee
may purchase less than the number of shares covered hereby, provided that no
partial exercise of this option may be for any fractional share.
(c) Continuous Employment Required. Except as otherwise provided in
this Section 3, this option may not be exercised unless the Employee, at the
time he or she exercises this option, is, and has been at all times since the
Grant Date, an employee of the Company. For all purposes of this Agreement, (i)
"employee" and "employment" shall be defined in accordance with the provisions
of Treasury Regulation Section 1.421-7(h) under the Code, or any successor
regulations, (ii) employment by a parent or subsidiary corporation of the
Company shall be deemed to be employment by the Company and (iii) if this option
shall be assumed or a new option substituted therefor in a transaction to which
Section 424(a) of the Code applies, employment by such assuming or substituting
corporation (hereinafter a "Successor Corporation") shall be considered for all
purposes of this option to be employment by the Company. As used herein, the
terms "parent" and "subsidiary" mean "parent corporation" and "subsidiary
corporation", respectively, as those terms are defined in Sections 424(e) and
424(f) or successor provisions of the Code.
(d) Exercise Period Upon Termination of Employment. If the Employee
ceases to be employed by the Company for any reason, then, except as provided in
paragraphs (e) and (f) below, the right to exercise this option shall terminate
on the date which is three (3) months after the date of cessation of employment
(but in no event after the Expiration Date); provided, however, that this option
shall be exercisable only to the extent that the Employee was entitled to
exercise this option on the date of such cessation. Notwithstanding the
foregoing, if, in the judgment of the Company, the Employee, prior to the
Expiration Date, materially violates the non-competition or confidentiality
provisions of any employment contract, confidentiality and nondisclosure
agreement or other agreement between the Employee and the Company, the right to
exercise this option shall terminate immediately upon written notice to the
Employee from the Company describing such violation.
(e) Exercise Period Upon Death or Disability. If the Employee dies
or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior
to the Expiration Date while he or she is an employee of the Company, or if the
Employee dies within three (3) months after
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the date on which the Employee ceases to be an employee of the Company (other
than as the result of a discharge for "cause" as specified in Paragraph (f)
below), this option shall be exercisable within the period of one (1) year
following the date of death or disability of the Employee (but in no event after
the Expiration Date), by the Employee or by the person to whom this option is
transferred by will or the laws of descent and distribution; provided, however,
that this option shall be exercisable only to the extent that this option was
exercisable by the Employee on the date of his or her death or disability.
Except as otherwise indicated by the context, the term "Employee", as used in
this Agreement, shall include the estate of the Employee, the Employee's
personal representative, or any other person who acquires the right to exercise
this option by bequest or inheritance or otherwise by reason of the death of the
Employee or by reason of the Employee's incapacity.
(f) Discharge for Cause. If the Employee, prior to the Expiration
Date, is discharged by the Company for "cause" (as defined below), the right to
exercise this option shall terminate immediately upon such discharge. "Cause"
shall mean willful misconduct or willful failure by the Employee to perform his
or her employment responsibilities in the best interests of the Company
(including, without limitation, breach by the Employee of any provision of any
employment, nondisclosure, non-competition or other similar agreement between
the Employee and the Company), as determined by the Company, which determination
shall be conclusive. The Employee shall be considered to have been discharged
"for cause" if the Company determines, within thirty (30) days after the
Employee's resignation, that discharge for cause was warranted.
4. Payment of Purchase Price. Payment of the purchase price for shares
purchased upon exercise of this option shall, at the Employee's election, be
made by delivery to the Company of cash or wire transfer or a check payable to
the order of the Company in an amount equal to the purchase price per share as
hereinabove set forth times the number of shares so purchased (the "exercise
price").
5. Delivery of Shares.
(a) General. The Company shall, upon payment of the exercise price
for the number of shares purchased and paid for, make prompt delivery of such
shares to the Employee; provided, however, that if any law or regulation
requires the Company to take any action with respect to such shares before the
issuance thereof, then the date of delivery of such shares shall be extended for
the period necessary to complete such action.
(b) Listing, Registration, Qualification, Etc. This option shall be
subject to the requirement that if, at any time, counsel to the Company shall
determine that the listing, registration or qualification of the shares subject
hereto upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, or that the
disclosure of non-public information or the satisfaction of any other condition
is necessary as a condition of, or in connection with, the issuance or purchase
of shares hereunder, this option may not be exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval,
disclosure or satisfaction of such other condition shall have
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been effected or obtained on terms acceptable to the Board of Directors of the
Company. Nothing herein shall be deemed to require the Company to apply for,
effect or obtain such listing, registration, qualification, or disclosure, or to
satisfy such other condition.
6. Nontransferability of Option. Except as provided in Paragraph (e) of
Section 3 hereof, this option is personal and no rights granted hereunder may be
transferred, assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise) nor shall any such rights be subject to execution,
attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this option or of such rights contrary to
the provisions hereof, or upon the levy of any attachment or similar process
upon this option or such rights, this option and such rights shall, at the
election of the Company, become null and void.
7. No Special Employment Rights. Nothing contained in the Plan or this
Agreement shall be construed or deemed by any person under any circumstances to
obligate the Company to continue the employment of the Employee for any period.
8. Rights as a Shareholder. The Employee shall have no rights as a
shareholder with respect to any shares which may be purchased by exercise of
this option (including, without limitation, any rights to vote or to receive
dividends or other distributions with respect to such shares) unless and until a
certificate representing such shares is duly issued and delivered to the
Employee. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date such stock certificate is issued.
9. Adjustment Provisions.
(a) General. If through, or as a result of, any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, (i) the outstanding shares of
Common Stock are increased or decreased or are exchanged for a different number
or kind of shares or other securities of the Company, or (ii) additional shares
or new or different shares or other securities of the Company or other non-cash
assets are distributed with respect to such shares of Common Stock or other
securities, the Employee shall, with respect to this option or any unexercised
portion hereof, be entitled to the rights and benefits, and be subject to the
limitations, set forth in Paragraph 14 of the Plan.
(b) Board Authority to Make Adjustments. Any adjustments under this
Section 9 shall be made by the Board of Directors of the Company, whose
determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive. No fractional shares will be
issued with respect to this option on account of any such adjustments.
(c) Limits on Adjustments. No adjustment shall be made under this
Section 9 which would, for purposes of any applicable provision of the Code,
constitute a modification, extension or renewal of this option or a grant of
additional benefits to the Employee.
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10. Mergers, Consolidations, Asset Sales, Liquidations, Etc. In the event
of a consolidation or merger or sale of all or substantially all of the assets
of the Company in which outstanding shares of Common Stock are exchanged for
securities, cash or other property of any other corporation or business entity,
or in the event of the liquidation of the Company, prior to the Expiration Date
or other termination of this option, the Employee shall, with respect to this
option or any unexercised portion hereof, be entitled to the rights and
benefits, and be subject to the limitations, set forth in Paragraph 16 of the
Plan.
11. Withholding of Taxes. The Company's obligation to deliver shares upon
the exercise of this option shall be subject to the Employee's satisfaction of
all applicable federal, state and local income and employment tax withholding
requirements as described in Paragraph 23 of the Plan. Without limiting the
generality of the foregoing, if the Company in its discretion determines that it
is obligated to withhold tax with respect to a Disqualifying Disposition (as
defined in Section 12 hereof), the Employee agrees that the Company may withhold
from the Employee's wages the appropriate amount of federal, state and local
withholding taxes attributable to such Disqualifying Disposition. If any portion
of this option is treated as a Non-Qualified Option, the Employee agrees that
the Company may withhold from the Employee's wages the appropriate amount of
federal, state and local withholding taxes attributable to the Employee's
exercise of such Non-Qualified Option. At the Company's discretion, the amount
required to be withheld may be withheld in cash from such wages, or otherwise as
may be permitted under the Plan. The Employee further agrees that, if the
Company does not withhold an amount from the Employee's wages sufficient to
satisfy the Company's withholding obligation or if such obligation is not
otherwise satisfied, as determined by the Company, the Employee will reimburse
the Company on demand, in cash, for the amount underwithheld.
12. Holding Period Requirements for Incentive Stock Option Shares. It is
understood and intended that this option shall qualify as an "incentive stock
option" as defined in Section 422 of the Code (an "ISO"). Accordingly, the
Employee understands that in order to obtain the beneficial tax treatment
accorded an ISO, no sale or other disposition may be made of any shares acquired
upon exercise of the option within one (1) year after the day of the transfer of
such shares to the Employee, nor within two (2) years after the Grant Date. If
the Employee intends to dispose, or does dispose (whether by sale, exchange,
gift, transfer or otherwise), of any such shares within either of said periods,
he or she will notify the Company in writing within ten (10) days after such
disposition (a "Disqualifying Dispositions").
13. Investment Representations, Warranties and Covenants; Legends.
(a) Representations. The Employee represents, warrants and covenants
that:
(i) Any shares purchased upon exercise of this option shall be
acquired for the Employee's account for investment only and not with a view to,
or for sale in connection with, any distribution of the shares in violation of
the Securities Act of 1933 (the "Securities Act") or any rule or regulation
under the Securities Act.
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(ii) The Employee has had such opportunity as he or she has
deemed adequate to obtain from representatives of the Company such information
as is necessary to permit the Employee to evaluate the merits and risks of his
or her investment in the Company.
(iii) The Employee is able to bear the economic risk of
holding shares acquired pursuant to the exercise of this option for an
indefinite period.
(iv) The Employee understands that (A) the shares acquired
pursuant to the exercise of this option will not be registered under the
Securities Act and are "restricted securities" within the meaning of Rule 144
under the Securities Act; (B) such shares cannot be sold, transferred or
otherwise disposed of unless they are subsequently registered under the
Securities Act or an exemption from registration is then available; (C) in any
event, an exemption from registration under Rule 144 or otherwise under the
Securities Act may not be available for at least two years and even then will
not be available unless a public market then exists for the Common Stock,
adequate information concerning the Company is then available to the public and
other terms and conditions of Rule 144 are complied with; and (D) there is now
no registration statement on file with the Securities and Exchange Commission
with respect to any stock of the Company and the Company has no obligation or
current intention to register any shares acquired pursuant to the exercise of
this option under the Securities Act.
(v) The Employee agrees that, if the Company offers for the
first time any of its Common Stock for sale pursuant to a registration statement
under the Securities Act, the Employee will not, without the prior written
consent of the Company, publicly offer, sell, contract to sell or otherwise
dispose of, directly or indirectly, any shares purchased upon exercise of this
option for a period of ninety (90) days, or such longer period as the Company
may reasonably require, after the effective date of such registration statement.
(vi) The Employee's principal residence is at the address set
forth below on the signature page. The Employee shall promptly notify the
Company of any change in the Employee's principal residence.
By making payment upon any exercise of this option, in whole or in part, the
Employee shall be deemed to have reaffirmed, as of the date of such payment, the
representations made in this Section 13.
(b) Legends on Stock Certificates. All stock certificates
representing shares of Common Stock issued to the Employee upon exercise of this
option shall have affixed thereto legends substantially in the following forms,
in addition to any other legends required by applicable state law:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SHARES
EVIDENCED BY THIS CERTIFICATE, FILED AND MADE EFFECTIVE UNDER THE
SECURITIES ACT OF 1933, OR AN OPINION OF
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COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION
UNDER SUCH ACT IS NOT REQUIRED.
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER CONTAINED IN AN OPTION AGREEMENT, A
COPY OF WHICH WILL BE FURNISHED UPON REQUEST BY THE ISSUER.
14. Transfer and Other Restrictions; Company's Purchase Right. Except as
set forth in this Section 14, no disposition (whether by sale, exchange, gift,
transfer or otherwise) may be made of any shares acquired upon exercise of this
option, other than by will or the laws of descent and distribution.
(a) First Refusal Rights.
(i) If the Employee or the Employee's successor in interest
desires to sell all or any part of the shares acquired under this option
(including any securities received in respect thereof pursuant to
recapitalizations and the like), and an offeror (the "Offeror") has made an
offer therefor, which offer the Employee desires to accept, the Employee shall:
(y) obtain in writing an irrevocable and unconditional bona fide offer (the
"Bona Fide Offer") for the purchase thereof from the Offeror; and (z) give
written notice (the "Option Notice") to the President of the Company setting
forth the Employee's desire to sell such shares, which Option Notice shall be
accompanied by a photocopy of the original executed Bona Fide Offer and shall
set forth at least the name and address of the Offeror and the price and terms
of the Bona Fide Offer. Upon receipt of the Option Notice, the Company shall
have an option to purchase any or all of the shares specified in the Option
Notice, such option to be exercisable by giving, within thirty (30) days after
receipt of the Option Notice, a written counter-notice to the Employee. If the
Company elects to purchase, the Employee shall be obligated to sell to the
Company such shares at the price and terms indicated in the Bona Fide Offer
within sixty (60) days from the date of receipt by the Company of the Option
Notice. The Company's purchase rights under this Section 14 are assignable by
the Company.
(ii) Subject to Paragraph 14(b) below, the Employee may sell,
pursuant to the terms of the Bona Fide Offer, any or all of such shares not
purchased by the Company or which the Company does not elect to purchase in the
manner set forth hereinabove after the expiration of the 30-day period during
which the Company may give the aforesaid counter-notice; provided, however, that
the Employee may not sell such shares to the Offeror if the Offeror is (w) a
competitor of the Company, or (x) a person that controls, is controlled by or
under common control with a competitor of the Company, or (y) a member of
management of a competitor of the Company (any person described in clauses (w)
through (y) being hereinafter referred to as a "Competitor") or (z) a person or
entity to which the Board of Directors determines, in its sole discretion, that
a transfer of shares of the Company would be against the Company's best
interest, and the Company gives to the Employee, within thirty (30) days of its
receipt of the Option Notice, written notice stating that the Employee shall not
sell the shares to the Offeror; and provided, further, that prior to the sale of
any such shares to the Offeror, the Offeror shall execute an agreement with the
Company under which the Offeror agrees not to
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become a Competitor of the Company and further agrees to be subject to the
restrictions set forth in this Agreement. If any or all of such shares are not
sold pursuant to a Bona Fide Offer within the time permitted above, the unsold
shares shall remain subject to the terms of this Agreement.
(iii) The first refusal rights of the Company set forth above
shall remain in effect until the closing of an initial underwritten public
offering of the Company's Common Stock pursuant to a registration statement
filed under the Securities Act of 1933, as amended, or a successor statute, at
which time the first refusal rights set forth herein will automatically expire.
(b) Option to Purchase Upon Termination of Business Relationship.
(i) Option. If the Employee ceases to be employed by the
Company for any reason, the Company shall have the option, exercisable at any
time within thirty (30) days after the later of the date on which the Employee's
employment terminates or the expiration of the applicable exercise period set
forth in Section 3(d), (e) or (f) above, to purchase all or any part of the
Employee's shares purchased under this option. The Company may assign this right
to purchase in its sole discretion. The Company or its assignee(s) shall
exercise the foregoing option by sending written notice to the Employee within
the thirty (30)-day period.
(ii) Purchase Price. The purchase price of any shares to be
sold to the Company and/or its assigns under this paragraph (c) shall be the
fair market value thereof as determined by the Board of Directors as of the date
on which the Employee's employment terminated. Such purchase price shall be
payable in eight (8) equal quarterly payments with interest at the applicable
Federal rate, as defined in Section 1274(d) of the Code, with the first payment
to be made at the closing of a purchase and sale of shares pursuant to
Subparagraph (iii) below, and each subsequent payment to be made at three
(3)-month intervals.
(iii) Settlement. The closing of a purchase and sale of shares
under this Paragraph (c) shall take place at the principal office of the Company
at such time and date as shall be mutually agreed between the Company and the
Employee; provided, that if the parties cannot reach such agreement, settlement
shall be ninety (90) days after the date of termination of the Employee's
employment with the Company (or if such day is a holiday, the first business day
thereafter). At the closing, the Employee shall deliver to the Company (i) the
certificate or certificates representing the shares held by such Employee, duly
endorsed for transfer, or (ii) if such certificate or certificates are already
in the Company's possession, such duly endorsed stock powers as the Company may
request to permit it to record the repurchase by the Company on the records of
the Company.
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15. Miscellaneous.
(a) Except as otherwise expressly provided herein, this Agreement
may not be amended or otherwise modified unless evidenced in writing and signed
by the Company and the Employee.
(b) All notices under this Agreement shall be delivered by hand,
sent by commercial overnight courier service or sent by registered or certified
mail, return receipt requested, and first-class postage prepaid, to the parties
at their respective addresses set forth beneath their names below or at such
other address as may be designated in a notice by either party to the other.
Notwithstanding the foregoing, any notice sent to such an address in a country
other than that from which the notice is sent may be sent by telefax, telegram
or commercial air courier.
(c) Any reference in this Agreement to a Section of the Code shall
refer to that Section as it reads as of the date of this Agreement and as it may
be amended from time to time, and to any successor provision.
(d) Each provision of this Agreement shall be considered separable.
The invalidity or unenforceability of any provision shall not affect the other
provisions, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.
(e) Sections 12, 13, 14 and 15 hereof shall survive any termination
of this Agreement.
(f) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.
(g) The failure of the Company or the Employee to insist upon strict
performance of any provision hereunder, irrespective of the length of time for
which such failure continues, shall not be deemed a waiver of such party's right
to demand strict performance at any time in the future. No consent or waiver,
express or implied, to or of any breach or default in the performance of any
obligation or provision hereunder shall constitute a consent or waiver to or of
any other breach or default in the performance of the same or any other
obligation hereunder.
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Date of Grant: As of , 19 .
-------------- --
BOSTON LIGHT SOFTWARE CORP.
By:
--------------------------------
Title:
--------------------------------
Address:
60 Lowell Street
Arlington, MA 02476
Employee's Acceptance
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions of this Agreement. The undersigned hereby acknowledges
receipt of a copy of the Company's 1999 Stock Option/Stock Issuance Plan.
[name of employee]
---------------------------------------
Signature
Address:
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Exhibit 4.02
BOSTON LIGHT SOFTWARE CORP.
NON-QUALIFIED STOCK OPTION AGREEMENT
Boston Light Software Corp., a Massachusetts corporation (the "Company"),
hereby grants this ________ day of ________, 19__ (the "Grant Date"), to
____________ (the "Optionee"), an option to purchase a maximum of ________ (___)
shares of the Company's Common Stock, no par value per share (the "Common
Stock"), at the price of $___ per share, on the following terms and conditions:
1. Grant Under 1999 Amended and Restated Stock Option/Stock Issuance Plan.
This option is granted pursuant to and is governed by and subject to the
Company's 1999 Amended and Restated Stock Option/Stock Issuance Plan (the
"Plan"), the terms and conditions of which are incorporated herein by this
reference. Unless the context otherwise requires, terms used herein shall have
the same meaning as in the Plan. Determinations made pursuant to the Plan in
connection with this option shall be governed by the Plan as it exists on the
date of this option agreement ("Agreement").
2. Grant as Non-Qualified Option; Other Options. This option is intended
to be a Non-Qualified Option; it is not intended to qualify as an incentive
stock option within the meaning of Section 422 of the Internal Revenue Code of
1986 (the "Code"). A duplicate original of this instrument shall not effect the
grant of another option.
3. Exercise of Option and Provisions for Termination.
(a) Exercise. Except as otherwise provided in this Agreement, and
subject to all other terms and conditions of this Agreement, if the Optionee has
continued to have a Business Relationship, as that term is defined in Paragraph
(c) of this Section 3, with the Company through any applicable date in the table
below, this option may be exercised prior to the tenth anniversary of the Grant
Date (hereinafter the "Expiration Date") in installments for not more than the
number of shares set forth opposite such applicable date:
As of the Grant Date _______ shares
As of _____________ _______ shares
As of _____________ an additional __________ shares
As of _____________ an additional __________ shares
As of _____________ an additional __________ shares
(b) Method of Exercise. Subject to the terms and conditions set forth in
this Agreement, this option shall be exercised by the Optionee's delivery of
written notice of exercise to the Treasurer of the Company, specifying the
number of shares to be purchased and the purchase price to be paid therefor and
accompanied by payment in full in accordance with
Section 4 hereof. Such exercise shall be effective upon receipt by the Treasurer
of the Company of such written notice together with the required payment. The
Optionee may purchase less than the number of shares covered hereby, provided
that no partial exercise of this option may be for any fractional share.
(c) Continuous Business Relationship Required. Except as otherwise
provided in this Section 3, this option may not be exercised unless the
Optionee, at the time the Optionee exercises this option, is and has been at all
times since the Grant Date, an employee, officer or director of, or consultant
or advisor to the Company (any of such relationships, a "Business
Relationship").
(d) Exercise Period Upon Termination of Business Relationship. If the
Optionee ceases to have a Business Relationship with the Company, then, except
as provided in paragraphs (e) and (f) below, the right to exercise this option
shall terminate on the date which is three (3) months after the date on which
the Optionee ceases to have any Business Relationship with the Company (but in
no event after the Expiration Date); provided, however, that this option shall
be exercisable only to the extent that the Optionee was entitled to exercise
this option on the date of such cessation. Notwithstanding the foregoing, if, in
the judgment of the Company, the Optionee, prior to the Expiration Date,
materially violates the non-competition or confidentiality provisions of any
employment contract, confidentiality and nondisclosure agreement or other
agreement between the Optionee and the Company, the right to exercise this
option shall terminate immediately upon written notice to the Optionee from the
Company describing such violation.
(e) Exercise Period Upon Death or Disability. If the Optionee is a natural
person who dies or becomes disabled (within the meaning of Section 22(e)(3) of
the Code) prior to the Expiration Date while he or she has a Business
Relationship with the Company, or if such an Optionee dies within three (3)
months after the date on which he or she ceases to have a Business Relationship
with the Company (other than as the result of a discharge for "cause" as
specified in Paragraph (f) below), this option shall be exercisable within the
period of one (1) year following the date of death or disability of the Optionee
(but in no event after the Expiration Date), by the Optionee or by the person to
whom this option is transferred by will or the laws of descent and distribution;
provided, however, that this option shall be exercisable only to the extent that
this option was exercisable by the Optionee on the date of his or her death or
disability. Except as otherwise indicated by the context, the term "Optionee",
as used in this Agreement, shall include the estate of the Optionee, the
Optionee's personal representative, or any other person who acquires the right
to exercise this option by bequest or inheritance or otherwise by reason of the
death of the Optionee or by reason of the Optionee's incapacity.
(f) Discharge for Cause. If the Optionee, prior to the Expiration Date, is
discharged by the Company for "cause" (as defined below), the right to exercise
this option shall, terminate immediately upon such discharge. "Cause" shall mean
willful misconduct or willful failure to perform the Optionee's responsibilities
in the best interests of the Company (including, without limitation, breach by
the Optionee of any provision of any employment, nondisclosure, non-competition
or other similar agreement between the Optionee and the Company), as
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determined by the Company, which determination shall be conclusive. The Optionee
shall be considered to have been discharged "for cause" if the Company
determines, within thirty (30) days after the Optionee's resignation, that
discharge for cause was warranted.
4. Payment of Purchase Price. Payment of the purchase price for shares
purchased upon exercise of this option shall be made in any of the following
ways: (i) delivery to the Company of cash or wire transfer or a check payable to
the order of the Company in an amount equal to the purchase price per share as
hereinabove set forth times the number of shares so purchased (the "exercise
price"), (ii) by delivery of a recourse promissory note of the Optionee bearing
interest payable not less than annually at the applicable Federal rate as
defined in Section 1274(d) of the Code and otherwise payable on such terms as
are specified by the Board in its sole discretion; or (iii) by any combination
of the above methods of payment.
5. Delivery of Shares.
(a) General. The Company shall, upon payment of the exercise price
for the number of shares purchased and paid for, make prompt delivery of such
shares to the Optionee; provided, however, that if any law or regulation
requires the Company to take any action with respect to such shares before the
issuance thereof, then the date of delivery of such shares shall be extended for
the period necessary to complete such action.
(b) Listing, Registration, Qualification, Etc. This option shall be
subject to the requirement that if, at any time, counsel to the Company shall
determine that the listing, registration or qualification of the shares subject
hereto upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, or that the
disclosure of nonpublic information or the satisfaction of any other condition
is necessary as a condition of, or in connection with, the issuance or purchase
of shares hereunder, this option may not be exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval,
disclosure or satisfaction of such other condition shall have been effected or
obtained on terms acceptable to the Board of Directors of the Company. Nothing
herein shall be deemed to require the Company to apply for, effect or obtain
such listing, registration, qualification, or disclosure, or to satisfy such
other condition.
6. Nontransferability of Option. Except as provided in Paragraph (e) of
Section 3 hereof, this option is personal and no rights granted hereunder may be
transferred, assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise) nor shall any such rights be subject to execution,
attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this option or of such rights contrary to
the provisions hereof, or upon the levy of any attachment or similar process
upon this option or such rights, this option and such rights shall, at the
election of the Company, become null and void.
7. No Special Employment or Other Rights. Nothing contained in the Plan or
this Agreement shall be construed or deemed by any person under any
circumstances to obligate the Company to continue any employment or other
Business Relationship of the Optionee for any period.
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8. Rights as a Shareholder. The Optionee shall have no rights as a
shareholder with respect to any shares which may be purchased by exercise of
this option (including, without limitation, any rights to vote or to receive
dividends or other distributions with respect to such shares) unless and until a
certificate representing such shares is duly issued and delivered to the
Optionee. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date such stock certificate is issued.
9. Adjustment Provisions.
(a) General. If through, or as a result of, any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, (i) the outstanding shares of
Common Stock are increased or decreased or are exchanged for a different number
or kind of shares or other securities of the Company, or (ii) additional shares
or new or different shares or other securities of the Company or other non-cash
assets are distributed with respect to such shares of Common Stock or other
securities, the Optionee shall, with respect to this option or any unexercised
portion hereof, be entitled to the rights and benefits, and be subject to the
limitations, set forth in Paragraph 14 of the Plan.
(b) Board Authority to Make Adjustments. Any adjustments under this
Section 9 will be made by the Board of Directors of the Company, whose
determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive. No fractional shares will be
issued with respect to this option on account of any such adjustments.
10. Mergers, Consolidations, Asset, Sales, Liquidations, Etc. In the event
of a consolidation or merger or sale of all or substantially all of the assets
of the Company in which outstanding shares of Common Stock are exchanged for
securities, cash or other property of any other corporation or business entity,
or in the event of the liquidation of the Company, prior to the Expiration Date
or other termination of this option, the Optionee shall, with respect to this
option or any unexercised portion hereof, be entitled to the rights and
benefits, and be subject to the limitations, set forth in Paragraph 16 of the
Plan.
11. Withholding of Taxes. The Company's obligation to deliver shares upon
the exercise of this option shall be subject to the Optionee's satisfaction of
all applicable federal, state and local income and employment tax withholding
requirements as described in Paragraph 23 of the Plan. Without limiting the
generality of the foregoing, the Optionee agrees that the Company may withhold
from the Optionee's wages the appropriate amount of federal, state and local
withholding taxes attributable to the Optionee's exercise of the option. At the
Company's discretion, and to the extent permitted by the Plan, the amount
required to be withheld may be withheld in cash from such wages, or otherwise as
may be permitted under the Plan. The Optionee further agrees that, if the
Company does not withhold an amount from the Optionee's wages sufficient to
satisfy the Company's withholding obligation or if such obligation is not
otherwise satisfied, as determined by the Company, the Optionee will reimburse
the Company on demand, in cash, for the amount underwithheld.
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12. Investment Representations, Warranties and Covenants; Legends.
(a) Representations. The Optionee represents, warrants and covenants
that:
(i) Any shares purchased upon exercise of this option shall be
acquired for the Optionee's account for investment only and not with a view to,
or for sale in connection with, any distribution of the shares in violation of
the Securities Act of 1933 (the "Securities Act") or any rule or regulation
under the Securities Act.
(ii) The Optionee has had such opportunity as the Optionee has
deemed adequate to obtain from representatives of the Company such information
as is necessary to permit the Optionee to evaluate the merits and risks of the
Optionee's investment in the Company.
(iii) The Optionee is able to bear the economic risk of holding
shares acquired pursuant to the exercise of this option for an indefinite
period.
(iv) The Optionee understands that (A) the shares acquired pursuant
to the exercise of this option will not be registered under the Securities Act
and are "restricted securities" within the meaning of Rule 144 under the
Securities Act; (B) such shares cannot be sold, transferred or otherwise
disposed of unless they are subsequently registered under the Securities Act or
an exemption from registration is then available; (C) in any event, an exemption
from registration under Rule 144 or otherwise under the Securities Act may not
be available for at least two years and even then will not be available unless a
public market then exists for the Common Stock, adequate information concerning,
the Company is then available to the public and other terms and conditions of
Rule 144 are complied with; and (D) there is now no registration statement on
file with the Securities and Exchange Commission with respect to any stock of
the Company and the Company has no obligation or current intention to register
any shares acquired pursuant to the exercise of this option under the Securities
Act.
(v) The Optionee agrees that, if the Company offers for the first
time any of its Common Stock for sale pursuant to a registration statement under
the Securities Act, the Optionee will not, without the prior written consent of
the Company, publicly offer, sell, contract to sell or otherwise dispose of,
directly or indirectly, any shares purchased upon exercise of this option for a
period of ninety (90) days, or such longer period as the Company may reasonably
require, after the effective date of such registration statement.
(vi) The Optionee's principal residence is at the address set forth
below on the signature page. The Optionee shall promptly notify the Company of
any change in the Optionee's principal address.
By making payment upon any exercise of this option, in whole or in part, the
Optionee shall be deemed to have reaffirmed, as of the date of such payment, the
representations made in this Section 12.
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(b) Legends on Stock Certificates. All stock certificates representing
shares of Common Stock issued to the Optionee upon exercise of this option shall
have affixed thereto legends substantially in the following forms, in addition
to any other legends required by applicable state law:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SHARES
EVIDENCED BY THIS CERTIFICATE, FILED AND MADE EFFECTIVE UNDER THE
SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT REGISTRATION UNDER SUCH ACT IS NOT
REQUIRED."
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER CONTAINED IN AN OPTION AGREEMENT, A
COPY OF WHICH WILL BE FURNISHED UPON REQUEST BY THE ISSUER."
13. Transfer and Other Restrictions; Company's Purchase Rights. Except as
set forth in this Section 13, no disposition (whether by sale, exchange, gift,
transfer or otherwise) may be made of any shares acquired upon exercise of this
option, other than by will or the laws of descent and distribution.
(a) First Refusal Rights.
(i) If the Optionee or the Optionee's successor in interest
desires to sell all or any part of the shares acquired under this option
(including any securities received in respect thereof pursuant to
recapitalizations and the like), and an offeror (the "Offeror") has made an
offer therefor, which offer the Optionee desires to accept, the Optionee shall:
(y) obtain in writing an irrevocable and unconditional bona fide offer (the
"Bona Fide Offer") for the purchase thereof from the Offeror; and (z) give
written notice (the "Option Notice") to the President of Company setting forth
the Optionee's desire to sell such shares, which Option Notice shall be
accompanied by a photocopy of the original executed Bona Fide Offer and shall
set forth at least the name and address of the Offeror and the price and terms
of the Bona Fide Offer. Upon receipt of the Option Notice, the Company shall
have an option to purchase any or all of the shares specified in the Option
Notice, such option to be exercisable by giving, within thirty (30) days after
receipt of the Option Notice, a written counter-notice to the Optionee. If the
Company elects to purchase, the Optionee shall be obligated to sell to the
Company such shares at the price and terms indicated in the Bona Fide Offer
within sixty (60) days from the date of receipt by the Company of the Option
Notice. The Company's purchase rights under this Section 13 are assignable by
the Company.
(ii) Subject to the provisions of Paragraph (b) of this
Section 13, the Optionee may sell, pursuant to the terms of the Bona Fide Offer,
any or all of such shares not purchased by the Company or which the Company does
not elect to purchase in the manner set forth hereinabove after the expiration
of the 30-day period during which the Company may give
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the aforesaid counter-notice; provided, however, that the Optionee may not sell
such shares to the Offeror if the Offeror is (A) a competitor of the Company, or
(B) a person that controls, is controlled by or under common control with a
competitor of the Company, or (C) a member of management of a competitor of the
Company (any person described in clauses (A) through (C) being hereinafter
referred to as a "Competitor") or (D) a person or entity to which the Board of
Directors determines in its sole discretion, that a transfer of shares of the
Company would be against the Company's best interest, and the Company gives to
the Optionee, within thirty (30) days of its receipt of the Option Notice,
written notice stating that the Optionee shall not sell the shares to the
Offeror; and provided, further, that prior to the sale of any such shares to the
Offeror, the Offeror shall execute an agreement with the Company under which the
Offeror agrees not to become a Competitor of the Company and further agrees to
be subject to the restrictions set forth in this Agreement. If any or all of
such shares are not sold pursuant to a Bona Fide Offer within the time permitted
above, the unsold shares shall remain subject to the terms of this Agreement.
(iii) The first refusal rights of the Company set forth above
shall remain in effect until the closing of an initial underwritten public
offering of the Company's Common Stock pursuant to a registration statement
filed under the Securities Act of 1933, as amended, or a successor statute, at
which time the first refusal rights set forth herein will automatically expire.
(b) Option to Purchase Upon Termination of Business Relationship.
(i) Option. If the Optionee ceases to have a Business
Relationship (as defined in Section 3(c)) with the Company for any reason, the
Company shall have the option, exercisable at any time within thirty (30) days
after the later of the date on which the Optionee's Business Relationship with
the Company terminates or the expiration of the applicable exercise period set
forth in Section 3(d), or (e) or (f) above, to purchase all or any part of the
Optionee's shares purchased under this option. The Company may assign this right
to purchase in its sole discretion. The Company or its assignee(s) shall
exercise the foregoing option by sending written notice to the Optionee within
the thirty (30)-day period.
(ii) Purchase Price. The purchase price of any shares to be
sold to the Company and/or its assigns under this paragraph (c) shall be the
fair market value thereof as determined by the Board of Directors as of the date
on which the Optionee's Business Relationship with the Company terminated. Such
purchase price shall be payable in eight (8) equal quarterly payments with
interest at the applicable Federal rate, as defined in Section 1274(d) of the
Code, with the first payment to be made at the closing of a purchase and sale of
shares pursuant to Subparagraph (iii) below, and each subsequent payment to be
made at [three (3)-month intervals.
(iii) Settlement. The closing of a purchase and sale of shares
under this Paragraph (c) shall take place at the principal office of the Company
at such time and date as shall be mutually agreed between the Company and the
Optionee; provided, that if the parties cannot reach such agreement, settlement
shall be ninety (90) days after the date of termination of the Optionee's
Business Relationship with the Company (or if such day is a holiday, the first
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business day thereafter). At the closing, the Optionee shall deliver to the
Company (i) the certificate or certificates representing the shares held by such
Optionee, duly endorsed for transfer, or (ii) if such certificate or
certificates are already in the Company's possession, such duly endorsed stock
powers as the Company may request to permit it to record the repurchase by the
Company on the records of the Company.
14. Miscellaneous.
(a) Except as otherwise expressly provided herein, this Agreement
may not be amended or otherwise modified unless evidenced in writing and signed
by the Company and the Optionee.
(b) All notices under this Agreement shall be delivered by hand,
sent by commercial overnight courier service or sent by registered or certified
mail, return receipt requested, and first-class postage prepaid, to the parties
at their respective addresses set forth beneath their names below or at such
other address as may be designated in a notice by either party to the other.
Notwithstanding the foregoing, any notice sent to such an address in a country
other than that from which the notice is sent may be sent by telefax, telegram
or commercial air courier.
(c) Any reference in this Agreement to a Section of the Code shall
refer to that Section as it reads as of the date of this Agreement and as it may
be amended from time to time, and to any successor provision.
(d) Each provision of this Agreement shall be considered separable.
The invalidity or unenforceability of any provision shall not affect the other
provisions, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.
(e) Sections 12, 13 and 14 hereof shall survive any termination of
this Agreement.
(f) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.
(g) The failure of the Company or the Optionee to insist upon strict
performance of any provision hereunder, irrespective of the length of time for
which such failure continues, shall not be deemed a waiver of such party's right
to demand strict performance at any time in the future. No consent or waiver,
express or implied, to or of any breach or default in the performance of any
obligation or provision hereunder shall constitute a consent or waiver to or of
any other breach or default in the performance of the same or any other
obligation hereunder.
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Date of Grant: As of , 19 .
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BOSTON LIGHT SOFTWARE CORP.
By:
--------------------------------
Title:
--------------------------------
Address:
60 Lowell Street
Arlington, MA 02476
Optionee's Acceptance
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions of this Agreement. The undersigned hereby acknowledges
receipt of a copy of the Company's 1999 Amended and Restated Stock Option/Stock
Issuance Plan.
[optionee's name]
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Signature
Address:
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