CONSTANT CONTACT, INC. Form of Performance Stock Option Agreement (Revenue Based) Granted Under 2007 Stock Incentive Plan
Exhibit 10.35
Form of Performance Stock Option Agreement (Revenue Based)
Granted Under 2007 Stock Incentive Plan
Granted Under 2007 Stock Incentive Plan
1. Grant of Option.
This agreement evidences the grant by Constant Contact, Inc., a Delaware corporation (the
“Company”), on December 1, 2009 (the “Grant Date”) to [ ], an employee of
the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms
provided herein and in the Company’s 2007 Stock Incentive Plan (the “Plan”), a total of [ ] shares (the “Shares”) of common stock, $0.01 par value per share, of the Company
(“Common Stock”) at $[ ] per Share. Unless earlier terminated or unless this
option expires earlier pursuant to Section 2(a) below, this option shall expire at 5:00 p.m.,
Eastern time, on December 1, 2019 (the “Final Exercise Date”).
It is intended that the option evidenced by this agreement shall be an incentive stock option
as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the “Code”), to the fullest extent permitted thereby. Except as otherwise
indicated by the context, the term “Participant”, as used in this option, shall be deemed to
include any person who acquires the right to exercise this option validly under its terms.
2. Vesting Schedule.
(a) This option will become exercisable (“vest”) as to 25% of the original number of Unexpired
Shares (as defined below) on December 31, 2010 (the “Initial Vest Date”) and as to an additional
6.25% of the original number of Unexpired Shares at the end of each successive quarterly period
following the Initial Vest Date until the third anniversary of the Initial Vest Date.
Notwithstanding anything to the contrary herein, on the Initial Vest Date (before this option shall
vest as to any Shares), this option shall:
(1) expire as to 100% of the Shares if the Company does not
achieve revenue growth in
excess of % over revenue;
(2) expire as to 50% of the Shares if the Company achieves revenue growth in excess of
% but not in excess of %, over
revenue; and
(3) not expire as to any of the Shares underlying such performance stock option if the Company
achieves revenue growth in excess of %
over revenue.
The number of Shares underlying the unexpired portion (if any) of this option, after giving effect
to the foregoing clauses (1), (2) and (3), is referred to herein as the “Unexpired Shares.” As
used herein, “revenue” for any period means the consolidated revenue of the Company for such
period, as determined in accordance with United States generally accepted accounting principles and
reflected on the Company’s audited consolidated statement of operations for such period.
(b) The right of exercise shall be cumulative so that to the extent the option is not
exercised in any period to the maximum extent permissible it shall continue to be exercisable, in
whole or in part, with respect to all Unexpired Shares for which it is vested until the earlier of
the Final Exercise Date or the termination of this option under Section 3 hereof or the Plan.
(c) In the event of a Change of Control (as defined below), notwithstanding anything herein to
the contrary, immediately prior to the closing of the Change of Control, 50% of the then unvested
Unexpired Shares shall automatically vest and become exercisable. In such event, the balance of
the unvested Unexpired Shares shall continue to vest as set forth in Section 2(a) until this option
is vested in full.
If, following a Change of Control, the Participant’s employment with the Company is terminated
by the Company without Cause (as defined below) prior to the one year anniversary of such Change of
Control, all then unvested Unexpired Shares shall automatically vest and become exercisable.
(d) For the purposes of this Agreement, “Change of Control” shall mean (i) the consolidation
or merger of the Company with or into any other corporation or other entity (other than a merger or
consolidation in which all or substantially all of the individuals and entities who were beneficial
owners of the outstanding securities entitled to vote generally in the election of directors of the
Company immediately prior to such transaction beneficially own, directly or indirectly, more than
50% of the outstanding securities entitled to vote generally in the election of directors of the
resulting, surviving or acquiring corporation in such transaction), (ii) the sale of all or
substantially all of the properties and assets of the Company as an entirety to any other person,
or (iii) the sale or transfer, in a single transaction or series of related transactions, of
outstanding capital stock representing at least a majority of the voting power of the outstanding
capital stock of the Company immediately following such transaction.
3. Exercise of Option.
(a) Form of Exercise.
(1) Except as otherwise permitted in Section 3(a)(2) below, each election to exercise this
option shall be in writing, signed by the Participant, and received by the Company at its principal
office, accompanied by this agreement. The Participant may purchase less than the number of shares
covered hereby, provided that no partial exercise of this option may be for any fractional share.
Each exercise shall be accompanied by payment in full for the Shares purchased pursuant to such
exercise in the manner provided in the Plan.
(2) If permitted by the Company at the time of exercise, this option may be exercised by
providing a notice of exercise to a third-party administrator (as the Company’s agent) by or
through any means permitted by the Company and such third-party administrator from time to time,
including, without limitation, by providing notice of exercise to the third-party administrator by
using the third-party administrator’s Internet website to provide notice of exercise, and in such
event, the notice of exercise may be provided, but shall not be required to be provided, in
writing. For purposes hereof, “third-party administrator” means E*Trade Corporate Financial
Services, Inc. as the Company’s third-party stock option administrator, or, as
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applicable, any successor third-party stock option administrator designated by the Company
from time to time.
(b) Continuous Relationship with the Company Required. Except as otherwise provided
in this Section 3, this option may not be exercised unless the Participant, at the time he or she
exercises this option, is, and has been at all times since the Grant Date, an employee or officer
of, or consultant or advisor to, the Company or any parent or subsidiary of the Company as defined
in Section 424(e) or (f) of the Code (an “Eligible Participant”).
(c) Termination of Relationship with the Company. If the Participant ceases to be an
Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the
right to exercise this option shall terminate three months after such cessation (but in no event
after the Final Exercise Date), provided that this option shall be exercisable only
to the extent that the Participant was entitled to exercise this option on the date of such
cessation. Notwithstanding the foregoing, if the Participant, prior to the Final Exercise Date,
violates the non-competition or confidentiality provisions of any employment contract,
confidentiality and nondisclosure agreement or other agreement between the Participant and the
Company, the right to exercise this option shall terminate immediately upon written notice to the
Participant from the Company describing such violation.
(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes
disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date
while he or she is an Eligible Participant and the Company has not terminated such relationship for
“cause” as specified in paragraph (e) below, this option shall be exercisable, within the period of
one year following the date of death or disability of the Participant, by the Participant (or in
the case of death by an authorized transferee), provided that this option shall be
exercisable only to the extent that this option was exercisable by the Participant on the date of
his or her death or disability, and further provided that this option shall not be exercisable
after the Final Exercise Date.
(e) Termination for Cause. If, prior to the Final Exercise Date, the Participant’s
employment is terminated by the Company for Cause (as defined below), the right to exercise this
option shall terminate immediately upon the effective date of such termination of employment. If
the Participant is party to an employment or severance agreement with the Company that contains a
definition of “cause” for termination of employment, “Cause” shall have the meaning ascribed to
such term in such agreement. Otherwise, “Cause” shall mean willful misconduct by the Participant
or willful failure by the Participant to perform his or her responsibilities to the Company
(including, without limitation, breach by the Participant of any provision of any employment,
consulting, advisory, nondisclosure, non-competition or other similar agreement between the
Participant and the Company), as determined by the Company, which determination shall be
conclusive. The Participant shall be considered to have been discharged for Cause if the Company
determines, within 30 days after the Participant’s resignation, that discharge for Cause was
warranted.
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4. Tax Matters.
(a) Withholding. No Shares will be issued pursuant to the exercise of this option
unless and until the Participant pays to the Company, or makes provision satisfactory to the
Company for payment of, any federal, state or local withholding taxes required by law to be
withheld in respect of this option.
(b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon
exercise of this option within two years from the Grant Date or one year after such Shares were
acquired pursuant to exercise of this option, the Participant shall notify the Company in writing
of such disposition.
5. Nontransferability of Option.
This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the lifetime of the Participant, this option shall be exercisable only by
the Participant.
6. Provisions of the Plan.
This option is subject to the provisions of the Plan, a copy of which is furnished to the
Participant with this option.
IN WITNESS WHEREOF, the Company has caused this option to be executed by its duly authorized
officer. This option shall take effect as a sealed instrument.
| CONSTANT CONTACT, INC. | ||||||||||||
Dated:
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By: | |||||||||||
| Name: | ||||||||||||
| Title: | ||||||||||||
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PARTICIPANT’S ACCEPTANCE
By signing below (or by accepting the foregoing option through such other means as may be
established by the Company or its third-party administrator from time to time, including, without
limitation, via the third-party administrator’s Internet website), the Participant accepts the
foregoing option and agrees to the terms and conditions thereof and acknowledges receipt of a copy
of the Company’s 2007 Stock Incentive Plan.
| PARTICIPANT: | ||||||
| Address: | ||||||
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