SciQuest Holdings, Inc. 2004 Stock Incentive Plan Stock Option Agreement
Exhibit 10.3
SciQuest Holdings, Inc., a Delaware corporation (the “Company”), hereby grants
to the optionee named below (“Optionee”) an option (this “Option”) to purchase the
total number of shares shown below of Common Stock of the Company (“Shares”) at the
exercise price per share set forth below (the “Exercise Price”), subject to all of
the terms and conditions on the reverse side of this Stock Option Agreement and the
SciQuest Holdings, Inc. 2004 Stock Incentive Plan (the “Plan”). Unless otherwise
defined herein, capitalized terms used herein shall have the meanings ascribed to
them in the Plan. The terms and conditions set forth on the reverse side hereof and
the terms and conditions of the Plan are incorporated herein by reference.
Shares Subject to Option:
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Exercise Price Per Share:
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Term of Option: TEN (10) YEARS
Vesting:
Shares subject to issuance under this Option shall be eligible for exercise according
to the vesting schedule described in Section 10 on the reverse of this Stock Option
Agreement.
IN WITNESS WHEREOF, this Stock Option Agreement has been executed by the Company by a duly
authorized officer as of the date specified hereon.
| SciQuest Holdings, Inc. |
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Grant Date:
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Vesting Start Date:
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Type of Stock Option Intended:
o Incentive Stock Option (ISO)
o Non-Qualified Stock Option (NQSO)
Optionee hereby acknowledges receipt of a copy of the Plan, represents that Optionee has
read and understands the terms and provisions of the Plan, and accepts this Option subject
to all the terms and conditions of the Plan and this Stock Option Agreement. Optionee
acknowledges that there may be adverse tax consequences upon exercise of this Option or
disposition of Shares purchased by exercise of this Option, and that Optionee should
consult a tax adviser prior to such exercise or disposition.
| [Name of Optionee] | ||||
1. Exercise Period of Option. Subject to the terms and conditions of this Stock
Option Agreement and the Plan, and unless otherwise modified in writing signed by the Company and
Optionee, this Option may be exercised with respect to all of the Shares subject to this Option,
but only according to the vesting schedule described in Section 10 below, prior to the date which
is the last day of the Term set forth on the face hereof following the Grant Date (hereinafter
“Expiration Date”).
2. Restrictions on Exercise. This Option may not be exercised, unless such exercise is in
compliance with the Securities Act of 1933 and all applicable state securities laws, as they are in
effect on the date of exercise, and the requirements of any stock exchange or national market
system on which the Company’s Shares may be listed at the time of exercise. Optionee understands
that the Company is under no obligation to register, qualify or list the Shares subject to this
Option with the Securities and Exchange Commission (“SEC”), any state securities commission or any
stock exchange to effect such compliance. [Also, this Option may not be exercised within the first
six (6) months of the Grant Date noted hereon (except in situations otherwise allowed by this
Option and Section 7(e)(8)(B) of the FLSA) if the Optionee is currently, at the time of exercise,
or has been at any time within the two (2) year period immediately preceding exercise, a non-exempt
(as defined in the Fair Labor Standards Act) employee of the Company.]
3. Termination of Option. Except as provided below in this Section, this Option shall be
immediately forfeited and may not be exercised after the date which is ninety (90) days after
Optionee ceases to perform services for the Company, or any Parent or Subsidiary. Optionee shall
be considered to perform services for the Company, or any Parent or Subsidiary, for all purposes
under this Section and Section 10 hereof, if Optionee is an officer or full-time employee of the
Company, or any Parent or Subsidiary, or if the Board determines that Optionee is rendering
substantial services as a part-time employee, consultant, contractor or advisor to the Company, or
any Parent or Subsidiary. The Board shall have discretion to determine whether Optionee has ceased
to perform services for the Company, or any Parent or Subsidiary, and may determine that a material
reduction or decrease in responsibilities is a cessation of the performance of services. The
effective date on which services are determined by the Board to have ceased is the “Termination
Date”.
(a) Termination for Cause. If Optionee ceases to perform services for the Company, or any
Parent or Subsidiary, for Cause, this Option shall immediately be forfeited, along with any and all
rights or subsequent rights attached thereto, as of the Termination Date, but in no event later
than the Expiration Date. For this purpose, “Cause” shall be defined as set forth in the written
employment agreement between the Optionee and the Company, or, if no such written agreement exists
or if “Cause” is not defined in such written employment agreement, “Cause” shall be defined as set
forth in the Plan, or, if not defined in the Plan, “Cause” shall mean actions or omissions harmful
to the Company as determined by the Board in its sole and absolute discretion.
(b) Death. If Optionee ceases to perform services for the Company, or any Parent or
Subsidiary, as a result of the death of Optionee, this Option, to the extent (and only to the
extent) that it would have been exercisable by Optionee on the Termination Date, may be exercised
by Optionee’s legal representative within one (1) year after the Termination Date, but in no event
later than the Expiration Date.
(c) Disability. If Optionee ceases to perform services for the Company, or any Parent or
Subsidiary, as a result of the disability (within the meaning of Code §22(e)(3)) of Optionee (as
determined by the Board in its sole discretion), this Option, to the extent (and only to the
extent) that it would have been exercisable by Optionee on the Termination Date, may be exercised
by Optionee within one (1) year after the Termination Date, but in no event later than the
Expiration Date.
(d) No Right to Employment or Other Relationship. Nothing in the Plan or this Stock Option
Agreement shall confer on Optionee any right to continue in the employ of, or other relationship
with, the Company, or any Parent or Subsidiary, or limit in any way the right of the Company, or
any Parent or Subsidiary, to terminate Optionee’s employment or other relationship at any time,
with or without cause.
4. Manner of Exercise.
(a) Exercise Agreement. This Option shall be exercisable by delivery to the Company of an
executed Exercise and Stockholder Agreement (“Exercise Agreement”) in such form as may be approved
or accepted by the Company, which shall set forth Optionee’s election to exercise this Option with
respect to some or all of the Shares subject to this Option, the number of Shares subject to this
Option being purchased, and any restrictions imposed on the Shares subject to this Option
(including, without limitation, vesting or performance-based restrictions, rights of the Company to
re-purchase Shares acquired pursuant to the exercise of an Option, voting restrictions, investment
intent restrictions, restrictions on transfer, “first refusal” rights of the Company to purchase
Shares acquired pursuant to the exercise of an Option prior to their sale to any other person,
“drag along” rights requiring the sale of shares to a third party purchaser in certain
circumstances, “lock up” type restrictions in the case of an initial public offering of the
Company’s stock, restrictions or limitations that would be applied to stockholders under any
applicable restriction agreement among the stockholders, and restrictions under applicable federal
securities laws, under the requirements of any stock exchange or market upon which such Shares are
then listed and/or traded, and/or under any blue sky or state securities laws applicable to such
Shares). The Company may modify the required Exercise Agreement at any time for any reason
consistent with the Plan.
(b) Exercise Price. Such Exercise Agreement shall be accompanied by full payment of the
Exercise Price for the Shares being purchased. Payment for the Shares being purchased may be made
in U.S. dollars in cash (by check), or by delivery to the Company of a number of Shares which have
been owned and completely paid for by the holder for at least six (6) months prior to the date of
exercise (i.e., “mature shares” for accounting purposes) having an aggregate fair market value
equal to the amount to be tendered, or a combination thereof. In addition, this Option may be
exercised through a brokerage transaction following registration of the Shares under Section 12 of
the Securities Exchange Act of 1934 as permitted under the provisions of Regulation T promulgated
by the Federal Reserve Board applicable to cashless exercises.
(c) Withholding Taxes. Prior to the issuance of Shares upon exercise of this Option, Optionee
must pay, or make adequate provision for, any applicable federal or state withholding obligations
of the Company. Optionee may provide for payment of withholding taxes upon exercise of the Option
by requesting that the Company retain Shares with a Fair Market Value equal to the minimum amount
of taxes required to be withheld. In such case, the Company shall issue the net number of Shares
to Optionee by deducting the Shares retained from the Shares exercised.
(d) Issuance of Shares. Provided that such Exercise Agreement and payment are in form and
substance satisfactory to counsel for the Company, the Company shall cause the Shares purchased to
be issued in the name of Optionee or Optionee’s legal representative. Optionee shall not be
considered a Stockholder until such time as Shares have been issued as noted on the books of the
Company.
5. Notice of Disqualifying Disposition of ISO Shares. If this Option is an ISO, and if Optionee
sells or otherwise disposes of any of the Shares acquired pursuant to this ISO on or before the
later of (a) the date two (2) years after the Grant Date, or (b) the date one (1) year after
exercise of the ISO, with respect to the Shares to be sold or disposed, Optionee shall and hereby
agrees to immediately notify the Company in writing of such sale or disposition. Optionee
acknowledges and agrees that Optionee may be subject to income tax withholding by the Company on
the compensation income recognized by Optionee from any such early disposition by payment in cash
or out of the current wages or earnings payable to Optionee, and Optionee agrees to remit same to
Company upon request. Optionee also hereby agrees that Optionee shall include the compensation
from such early disposition in the Optionee’s gross income for federal tax purposes.
6. Nontransferability of Option. This Option may not be transferred in any manner, other than by
will or by the laws of descent and distribution, and may be exercised during Optionee’s lifetime
only by Optionee. The terms of this Option shall be binding upon the executor, administrators,
successors and assigns of Optionee. However, if this Option is a NQSO, it may be transferred to
the extent allowed by the Plan.
7. Tax Consequences. Optionee understands that the grant and exercise of this Option, and the
sale of Shares obtained through the exercise of this Option, may have tax implications that could
result in adverse tax consequences to Optionee. Optionee represents that Optionee has consulted
with, or will consult with, his or her tax advisor; Optionee further acknowledges that Optionee is
not relying on the Company for any tax, financial or legal advice; and it is specifically
understood by the Optionee that no representations or assurances are made as to the qualification
of this Option as an ISO or as to any particular tax treatment with respect to the Option.
Optionee also acknowledges that exercise of an ISO option must generally occur within ninety
(90) days of termination of employment, regardless of any longer period allowed by this Stock
Option Agreement.
8. Interpretation. Any dispute regarding the interpretation of this Stock Option Agreement shall
be submitted to the Board or the Committee, which shall review such dispute in accordance with the
Plan. The resolution of such a dispute by the Board or Committee shall be final and binding on the
Company and Optionee.
9. Entire Agreement and Other Matters. The Plan and the Exercise Agreement are incorporated herein
by this reference. Optionee acknowledges and agrees that the granting of this Option constitutes a
full accord, satisfaction and release of all obligations or commitments made to Optionee by the
Company or any of its officers, directors, stockholders or affiliates with respect to the issuance
of any securities, or rights to acquire securities, of the Company or any of its affiliates. This
Stock Option Agreement, the Plan and the Exercise Agreement constitute the entire agreement of the
parties hereto, and supersede all prior understandings and agreements with respect to the subject
matter hereof. This Stock Option Agreement and the underlying Option are void ab initio unless
this Certificate has been executed by the Optionee and the Optionee has agreed to all terms and
provisions hereof.
10. Vesting and Exercise of Shares. Subject to the terms of the Plan, this Stock Option Grant
Certificate and the Exercise Agreement, the Optionee shall be entitled to purchase, pursuant to the
exercise of this Option, the percentage of the Shares subject to this Option shown below based upon
the Continuous Service of the Optionee from the Vesting Start Date of this Option (as noted on the
first page hereon) at the time of exercise:
| Vesting Schedule: | ||
| Percentage Vested: | Continuous Service: | |
| 0% | Less than 12 months | |
| (25+((X-12)*2.083)) % where X is the number of whole months of Continuous Service from the Vesting Start Date |
At least 12 months, but not 48 months | |
| 100% | 48 or more months | |
If the above calculation of Shares available for purchase through exercise of this Option would
result in a fraction, any fraction will be rounded to zero. For purposes of this Stock Option
Grant Certificate, “Continuous Service” means a period of continuous performance of services by
Optionee for the Company, a Parent, or a Subsidiary, as determined by the Board in its sole and
absolute discretion.