EXHIBIT (a)(7)
FORM OF
PROMISE TO GRANT STOCK OPTION(S)
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TO: __________________________
In exchange for your agreement to cancel certain stock options ("Old
Option(s)") you received from Entrust, Inc. ("Entrust"), Entrust will grant you
a stock option or options, as applicable, covering [_________] shares of
Entrust's common stock on or about January 31, 2002 (the "New Option(s)"). If
you are a resident of either the United States or the United Kingdom for tax
purposes and are not subject to the tax laws of Canada, the exercise price of
each New Option will be the closing price of Entrust's common stock as listed on
the Nasdaq National Market on January 31, 2002, except as otherwise set forth in
the Exchange Offer Documents (as defined below). If you are a resident of
Canada for tax purposes, the exercise price of each New Option will be the
greater of (i) the closing price of Entrust's common stock as listed on the
Nasdaq National Market on January 31, 2002 and (ii) the closing price of
Entrust's common stock as listed on the Nasdaq National Market on July 30, 2001,
the date your tendered options were cancelled, except as otherwise set forth in
the Exchange Offer Documents (as defined below). Each New Option will vest
according to the same vesting schedule as the Old Option it replaces, subject to
your continued employment with Entrust, as described below. Each New Option
will otherwise be subject to the standard terms and conditions under Entrust's
1999 Non-Officer Employee Stock Incentive Plan and applicable form of stock
option agreement.
Prior to the grant of New Options on or about January 31, 2002, it is
possible that Entrust might effect or enter into a merger or other similar
transaction whereby Entrust would be acquired by another company. This promise
to grant stock options (this "Promise") evidences the binding commitment made
pursuant to the terms of the offer to exchange options, as set forth in the
Exchange Offer Documents, that Entrust's successors must honor and, accordingly,
in the event of any such merger transaction, the acquirer would be obligated to
grant you a stock option on or about January 31, 2002. Such a stock option
could be for the purchase of the acquirer's stock (as opposed to Entrust's) and
the number of shares subject to your new option would be adjusted. For example,
if we were acquired by means of a merger, the number of shares would be equal to
the number of our shares that you would have received, multiplied by the
exchange ratio that was used in the merger. If you are a resident of either the
United States or the United Kingdom for tax purposes and are not subject to the
tax laws of Canada, any such option to purchase the acquirer's stock will have
an exercise price equal to the fair market value of such acquirer's stock on the
date the New Option is granted, and would be unaffected by the acquirer's
treatment of Entrust's existing stock option plans. If you are a resident of
Canada for tax purposes, any such option to purchase the acquirer's stock will
have an exercise price equal to the greater of (i) the fair market value of such
acquirer's stock on the date the new options are granted and (ii) the fair
market value of such acquirer's common stock on the date the acquirer acquires
Entrust, and would be unaffected by the acquirer's treatment of Entrust's
existing stock option plans.
In order to receive the New Option(s), you must continue to be employed by
Entrust (or one of its subsidiaries), or a successor of Entrust, as of January
31, 2002. This Promise does not constitute a guarantee of employment with
Entrust for any period. Unless otherwise expressly provided in your employment
agreement or the applicable laws of a non-U.S. jurisdiction, your employment
with Entrust will remain "at-will" and can be terminated by you or Entrust at
any time, with or without cause or notice. If your employment with Entrust
terminates before January 31, 2002, for any reason, including but not limited to
your voluntary resignation, a reduction in force, or as the result of a merger
or acquisition of Entrust by another company, you will lose all rights pursuant
to this Promise to receive New Options.
This Promise is subject to the terms and conditions of the offer to
exchange options as set forth in: (i) the Offer to Exchange; (ii) the
memorandum from ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ dated June 19, 2001; (iii) the Election Form
previously completed and submitted by you to Entrust; and (iv) the Notice to
Withdraw from the Offer (the "Exchange Offer Documents"), all of which are
incorporated herein by reference. The documents described herein reflect the
entire agreement between you and Entrust with respect to this transaction. This
Promise may only be amended by means of a writing signed by you and a duly
authorized officer of Entrust.
ENTRUST, INC.
By: ________________________________ Date: _________________________, 2001