EXHIBIT 10.1.2
NETOBJECTS, INC.
STOCK OPTION AGREEMENT
NetObjects, Inc., a Delaware corporation (the "Company"), hereby
grants to (the "Optionee"), an option (the "Option") to purchase a total of ( )
shares of Common Stock (the "Shares") of the Company, at the price set forth
herein, and in all respects subject to the terms, definitions and provisions of
the Company's 1997 Stock Option Plan (the "Plan"), which is incorporated herein
by this reference.
1. NATURE OF THE OPTION. The Option is intended to be an incentive
stock option within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
2. OPTION PRICE. The Option Price is ( ) for each Share.
3. VESTING AND EXERCISE OF OPTION. The Option shall vest and become
exercisable during its term in accordance with the provisions of Section 9 of
the Plan as follows:
(a) Vesting and Right to Exercise.
(i) The Option shall vest and become exercisable with
respect to twenty-five (25%) of the Shares subject to the Option on the first
anniversary of the Vesting Commencement Date set forth in the signature page
of this Agreement, and one thirty-sixth (1/36) of the remaining Shares
subject to the Option at the end of each successive month thereafter, until
all of the Shares have vested, subject to the Optionee's Continuous
Employment with the Company. Subject to the provisions of subparagraphs (ii)
and (iii) below, the Optionee can exercise any portion of the Option which
has vested until the expiration of the Option term.
(ii) In the event of the Optionee's death, disability
or other termination of employment, the exercisability of the Option shall be
governed by Sections 9(d), (e) and (f) of the Plan, as the case may be.
(iii) The Option may not be exercised for fractional
shares or for less than ten (10) Shares.
(b) METHOD OF EXERCISE. In order to exercise any portion of
this Option which has vested, the Optionee shall notify the Company in
writing of the election to exercise the Option and the number of shares in
respect of which the Option is being exercised, by executing and delivering
the Notice of Exercise of Stock Option in the form attached as Exhibit B
hereto, and shall execute and deliver to the Chief Financial Officer of the
Company the Restricted Stock Transfer Agreement, together with the Stock
Assignments, Escrow Agreement and, if applicable, the Consent of
Spouse, forms of which are attached as exhibits to the Purchase Agreement.
The Restricted Stock Transfer Agreement must be accompanied by payment in
full of the aggregate purchase price for the Shares to be purchased. The
certificate or certificates representing Shares as to which this Option has
been exercised shall be registered in the name of the Optionee.
(c) RESTRICTIONS ON EXERCISE. This Option may not be
exercised if the issuance of the Shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation of any
applicable Federal or state securities law or other law or regulation.
Furthermore, the method and manner of payment of the Option Price will be
subject to the rules under Part 207 of Title 12 of the Code of Federal
Regulations ("Regulation G") as promulgated by the Federal Reserve Board if
such rules apply to the Company at the date of exercise. As a condition to
the exercise of this Option, the Company may require the Optionee to make any
representation or warranty to the Company at the time of exercise of this
Option as in the opinion of legal counsel for the Company may be required by
any applicable law or regulation, including the execution and delivery of an
appropriate representation statement. Accordingly, the stock certificates for
the Shares issued upon exercise of this Option may bear appropriate legends
restricting transfer.
4. NON-TRANSFERABILITY OF OPTION. This Option may be exercised
during the lifetime of the Optionee only by the Optionee and, subject to the
provisions of Section 9(f) of the Plan, may not be transferred in any manner
other than by will or by the laws of descent and distribution. The terms of
this Option shall be binding upon the executors, administrators, heirs and
successors of the Optionee.
5. METHOD OF PAYMENT. Payment of the exercise price shall be by
any of the following, or a combination thereof, at the election of the
Optionee:
(a) cash;
(b) certified or bank cashier's check; or
(c) in the event there exists a public market for the
Company's Common Stock on the date of exercise, by surrender of shares of the
Company's Common Stock, provided that if such shares were acquired upon
exercise of an incentive stock option, the Optionee must have first satisfied
the holding period requirements under Section 422(a)(1) of the Code. In this
case payment shall be made as follows:
(i) In addition to the execution and delivery of the
Restricted Stock Transfer Agreement, Optionee shall deliver to the Secretary
of the Company a written notice which shall set forth the portion of the
purchase price the Optionee wishes to pay with Common Stock, and the number
of shares of such Common Stock the Optionee intends to surrender pursuant to
the exercise of this Option, which shall be determined by dividing the
aforementioned portion of the
purchase price by the average of the last reported bid and asked prices per
share of Common Stock of the Company, as reported in THE WALL STREET JOURNAL
(or, if not so reported, as otherwise reported by Nasdaq or, in the event the
Common Stock is listed on a national securities exchange, or on the Nasdaq
National Market (or any successor national market system), the closing price
of Common Stock of the Company on such exchange as reported in THE WALL
STREET JOURNAL, for the day on which the notice of exercise is sent or
delivered;
(ii) Fractional shares shall be disregarded and the
Optionee shall pay in cash an amount equal to such fraction multiplied by the
price determined under subparagraph (i) above;
(iii) The written notice shall be accompanied by a duly
endorsed blank stock power with respect to the number of Shares set forth in
the notice, and the certificate(s) representing said Shares shall be
delivered to the Company at its principal offices within three (3) working
days from the date of the notice of exercise;
(iv) The Optionee hereby authorizes and directs the
Secretary of the Company to transfer so many of the Shares represented by
such certificate(s) as are necessary to pay the purchase price in accordance
with the provisions herein;
(v) If any such transfer of Shares requires the
consent of the California Commissioner of Corporations or of some other
agency under the securities laws of any other state, or an opinion of counsel
for the Company or Optionee that such transfer may be effected under
applicable Federal and state securities laws, the time periods specified
herein shall be extended for such periods as the necessary request for
consent to transfer is pending before said Commissioner or other agency, or
until counsel renders such an opinion, as the case may be. All parties agree
to cooperate in making such request for transfer, or in obtaining such
opinion of counsel, and no transfer shall be effected without such consent or
opinion if required by law; and
(vi) Notwithstanding any other provision herein, the
Optionee shall only be permitted to pay the purchase price with Shares of the
Company's Common Stock owned by him as of the exercise date in the manner and
within the time periods allowed under 17 CFR Section 240.16b-3 promulgated
under the Securities Exchange Act of 1934 as such regulation is presently
constituted, as it is amended from time to time, and as it is interpreted now
or hereafter by the Securities and Exchange Commission.
6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. The
number of Shares covered by this Option shall be adjusted in accordance with
the provisions of Section 11 of the Plan in the event of changes in the
capitalization or organization of the Company, or if the Company is a party
to a merger or other
corporate reorganization.
7. TERM OF OPTION. This Option may not be exercised more than
ten (10) years from the Vesting Commencement Date set forth in the signature
page of this Agreement, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
8. REPURCHASE RIGHTS. The Optionee hereby agrees that any Shares
acquired upon the exercise of this Option shall be subject to the rights of
the Company to repurchase such Shares and to certain restrictions on transfer
specified in the Restricted Stock Transfer Agreement.
9. NOT EMPLOYMENT CONTRACT. Nothing in this Agreement or in the
Plan shall confer upon the Optionee any right to continue in the employ of
the Company or shall interfere with or restrict in any way the rights of the
Company, which are hereby expressly reserved, to discharge the Optionee at
any time for any reason whatsoever, with or without cause, subject to the
provisions of applicable law. This is not an employment contract.
10. INCOME TAX WITHHOLDING.
(a) The Optionee authorizes the Company to withhold in
accordance with applicable law from any compensation payable to him or her
any taxes required to be withheld by Federal, state or local laws as a result
of the exercise of this Option. The Optionee agrees to notify the Company
immediately in the event of any disqualifying disposition (within the meaning
of Section 421(b) of the Code) of the shares acquired upon exercise of an
incentive stock option. Furthermore, in the event of any determination that
the Company has failed to withhold a sum sufficient to pay all withholding
taxes due in connection with the exercise of this Option, or a disqualifying
disposition of the shares acquired upon exercise of an incentive stock
option, the Optionee agrees to pay the Company the amount of such deficiency
in cash within five (5) days after receiving a written demand from the
Company to do so, whether or not Optionee is an employee of the Company at
that time.
(b) After the effective date of the first registration
statement filed by the Company pursuant to Section 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), at such time as the
Optionee is required to pay to the Company an amount with respect to tax
withholding obligations as set forth in paragraph (a), the Optionee may elect
prior to the date the amount of such withholding tax is determined to make
such payment, or such increased payment as the Optionee elects to make up to
the maximum federal, state and local marginal tax rates (including any
related FICA obligation) applicable to the Optionee and the particular
transaction in accordance with the provisions of Section 9(g) of the Plan.
(c) Any adverse consequences incurred by an Optionee with
respect to the use of shares of Common Stock to pay any part of the Option
Price or of
any tax in connection with the exercise of an Option, including, without
limitation, any adverse tax consequences arising as a result of a
disqualifying disposition within the meaning of Section 422 of the Code shall
be the sole responsibility of the Optionee.
VESTING COMMENCEMENT DATE: ____________, 19___
NetObjects, Inc.
By:_________________________________
Title:______________________________
The Optionee acknowledges receipt of a copy of the Plan and the
exhibits referred to therein, the Option Agreement and the exhibits referred to
therein, the Restricted Stock Transfer Agreement and the exhibits referred to
therein, and he or she represents and warrants as follows:
1. The Optionee is familiar with the terms and provisions of these
documents, and hereby accepts this Option subject to all of the terms and
provisions thereof.
2. The Optionee is aware of and familiar with the restrictions
and limitations imposed on the transfer by the Optionee of any shares of
Common Stock, including, without limitation, the restrictions contained in
the Restricted Stock Transfer Agreement. The Optionee is aware of and
familiar with the restrictions on ownership of the Common Stock, including,
without limitation, certain rights of first refusal and call rights contained
in the Restricted Stock Transfer Agreement. The Optionee is aware that he or
she shall have no right to transfer any shares of Common Stock in any manner,
except as expressly permitted by the Restricted Stock Transfer Agreement, or
to require the registration of any shares of Common Stock, except as
expressly permitted by the Restricted Stock Transfer Agreement.
3. The Optionee is aware of and familiar with the provisions of
the Restated Certificate of Incorporation of the Company ("Restated
Certificate") and the Stockholders Agreement dated as of March 18, 1997 among
IBM, the Company and certain investors in the Companies ("Stockholders
Agreement"), which are exhibits to the Plan. The Optionee is aware of and
familiar with Article VII of the Restated Certificate and Section 4 of the
Stockholders Agreement, each of which contains provisions defining the rights
of International Business Machines Corporation, a New York corporation
("IBM"), as a substantial shareholder of the Company with respect to freedom
of action by IBM to compete with the Company, the duties of members on the
Board of Directors of the Company who are affiliated with IBM, and other
matters.
4. The Optionee acknowledges that the Company is entering into this
Agreement in reliance upon the Optionee's representations and warranties in this
Agreement.
The Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Committee upon any questions arising
under the Plan.
Dated: ____________, 19___
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CONSENT OF SPOUSE
I, ____________________, spouse of the Optionee who executed the
foregoing Option Agreement, hereby agree that my spouse's interest in the
shares of Common Stock subject to said Option Agreement shall be irrevocably
bound by the Option Agreement's terms. I further agree that my community
property interest in such shares, if any, shall similarly be bound by said
Option Agreement and that such consent is binding upon my executors,
administrators, heirs and assigns. I agree to execute and deliver such
documents as may be necessary to carry out the intent of said Option
Agreement and this consent.
Dated: , 199
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EXHIBIT B
NOTICE OF EXERCISE OF STOCK OPTION
TO: NetObjects, Inc.
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ATTN: President
SUBJECT: Notice of Exercise of Stock Option
(Payment in cash or check)
In respect to the stock option granted to the undersigned on
____________, 19__, to purchase an aggregate of _________ shares of the Common
Stock of NetObjects, Inc. (the "Company"), this is official notice that the
undersigned hereby elects to exercise such option to purchase shares as follows:
Number of Shares: __________________________
Date of Purchase: ___________________, 19___
Mode of Payment: __________________________
(Certified Check, Cash, Other Consideration as
permitted by the terms of the Option Agreement)
The shares should be issued as follows:
Name: ____________________________________
Address: ____________________________________
____________________________________
____________________________________
Signed: _________________________
Date: _________________________
Please send this notice of exercise to:
NetObjects, Inc.
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Attention: President