Non-Qualified Stock Option Agreement - Roving Software Inc.
ROVING SOFTWARE INCORPORATED
NON-QUALIFIED STOCK OPTION AGREEMENT
Roving Software Incorporated, a Delaware corporation (the "Company"),
hereby grants this ______________ (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 Stock Option/Stock Issuance Plan. (a) This option is
granted pursuant to and is governed by and subject to the Company's 1999 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 Optionee.
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"). This option is in addition to any other options heretofore or
hereafter granted to the Optionee 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 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:
[VESTING SCHEDULE]
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 Optionee's
delivery of written notice of exercise
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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 paragraph (e) 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.
(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, 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.
4. Payment of Purchase Price. Payment of the purchase price for shares
purchased upon exercise of this option shall 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 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.
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(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.
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) Acceleration of Vesting of Unvested Shares for Certain Business
Combinations. Immediately prior to the effective date of any Change in Control
(as defined below) of the Company (the "Change in Control Effective Date"),
fifty percent (50%) of all of
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the Participant's Unvested Shares as of such date shall be deemed to be Vested
Shares for purposes of this Agreement. For purposes of this Agreement, "Change
in Control" means the consummation of (i) the sale, transfer or other
disposition of all or substantially all of the assets of the Company to a Third
Party Entity (as defined below), (ii) a merger or consolidation of the Company
with a Third Party Entity, or (iii) a transfer of more than fifty percent (50%)
of the outstanding voting equity of the Company to a Third Party Entity,
provided no financing transaction involving issuance of additional securities of
the Company to a Third Party Entity shall constitute a Change in Control. A
"Third Party Entity" means any entity other than the Company except (i) an
entity which, prior to the transaction in question, directly or indirectly
controls, is controlled by, or is under common control with the Company or (ii)
an entity of which a majority of the voting equity following the transaction in
question is owned directly or indirectly by the shareholders of a majority of
the voting equity of the Company prior to the transaction.
If the Participant's employment with such a Third Party Entity is
terminated by the Third Party Entity at any time prior to the one (1) year
anniversary of such Change of Control Effective Date, all of the Participant's
remaining Unvested Shares shall be deemed to be Vested Shares for purposes of
this Agreement.
(c) 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. 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.
12. Investment Representations, Warranties and Covenants; Legends.
(a) Representations. The Optionee represents, warrants and covenants
that:
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(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.
(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
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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 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
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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) 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
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.
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(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:
__________________
ROVING SOFTWARE INCORPORATED
By: ______________________________
Name: Gail F. Goodman
Title: CEO
Address:
1601 Trapelo Road, Suite 246
Waltham, MA 02451
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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 Stock Option/Stock Issuance Plan.
[Name]
________________________________________
Signature
Address:
________________________________________
________________________________________
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