EXHIBIT 10.20
EXECUTIVE EMPLOYMENT AGREEMENT
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This Executive Employment Agreement, dated as of February 5, 2002, is between
SciQuest, Inc., a Delaware corporation and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇. As ▇▇. ▇▇▇▇▇'▇
employment contract expires in February 2002 the Board of Directors desires to
extend the agreement for his services.
This agreement extends the terms of the Executive Employment Agreement, dated as
of February 5, 2001 (attached). All terms and conditions of the agreement
(including stock options) shall remain in effect until February 5, 2002 with the
following provisions:
o This agreement is effective February 5, 2002
o Term of the agreement is 12 months
o ▇▇. ▇▇▇▇▇ will receive 12 months severance pay if he is terminated by
the Board of Directors for any reason other than cause during the term
of the agreement
o Medical coverage (through COBRA) will be covered for 18 months from
date of termination if ▇▇. ▇▇▇▇▇ is terminated by the Board of
Directors for any reason other than cause during the term of agreement
o Base salary will remain at $275,000 per year
o ▇▇. ▇▇▇▇▇ will be reimbursed for the cost of an automobile. Terms of
the reimbursement to be worked out
SCIQUEST, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
EXECUTIVE EMPLOYMENT AGREEMENT
between
▇▇▇▇▇▇▇▇.▇▇▇, INC.
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
February 1, 2001
EXECUTIVE EMPLOYMENT AGREEMENT
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This Executive Employment Agreement ("Agreement"), dated as of February 5,
2001, is between ▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation (the "Company"), and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("Executive"). The Company and Executive are collectively
referred to in this Agreement as the "Parties."
WHEREAS, the Company desires to retain the services of Executive, and
Executive desires to be employed by the Company, in accordance with this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
indicated:
1.1 "Cause" means any of the following:
(a) The continued failure of Executive to substantially or
satisfactorily perform his duties under this Agreement as determined by the
good-faith judgment of the Company's Board of Directors (the "Board"),
other than any such failure resulting from death or a Disability;
(b) The conviction of Executive based on, or Executive's pleading nolo
contendre to, an allegation of, fraud, embezzlement, theft or another
felony (excluding a traffic violation).
(c) Any willful and continued act or omission by Executive that, in
the good-faith judgment of the Board, is demonstrably and materially
injurious to the Company's business or reputation.
(d) A willful and continued breach of any of the material terms of
this Agreement, and/or any attachments.
No act or omission under any of subsections (a), (c) and (d) of this Paragraph
1.1 shall constitute "Cause" (and will not be considered "willful and
continued") unless such act or omission continues after the Board (i) provides
Executive written notice describing the particular act(s) or omission(s) which
the Board believes in good faith to constitute Cause, (ii) provides Executive an
opportunity, as soon as reasonably possible, but in no event greater than thirty
(30) days following that notice, to meet in person with the Board to explain or
defend the alleged act(s) or omission(s) and, to the extent practicable, to cure
such act(s) or omission(s), and (iii) following the expiration of such notice
and cure period, determines that such act(s) or omission(s) have not been cured.
Except with respect to any material breach of the Employee Noncompetition,
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Nondisclosure and Developments Agreement attached hereto as Exhibit A, Executive
shall further have the right to contest an allegation of Cause by requesting
arbitration of that issue in accordance with Section 8. No act or omission shall
be considered "willful" if Executive believed in good faith and based upon
reasonable business judgment that such acts or omissions were in the best
interests of the Company.
1.2 "Disability" means a permanent and total disability, which shall be
deemed to exist (i) if Executive is unable reasonably to perform his duties
under this Agreement because of any medically determinable physical or mental
incapacity that has lasted or can reasonably be expected to last for at least
one hundred eighty (180) consecutive days and (ii) a qualified independent
physician selected by or acceptable to the Chairman of the Board (the
"Chairman") and Executive (or his legal representative) confirms such
disability. If Executive (or his legal representative) and the Company cannot
agree as to a qualified independent physician, each shall appoint such a
physician, and those two physicians shall select a third. The determination of
Disability by such third physician, made in writing to the Company and
Executive, shall be final and conclusive for all purposes of this Agreement. In
this circumstance, Executive shall, if there is any question about his
Disability, submit to a physical examination by such third physician. All costs
of the physician(s) shall be borne by the Company.
1.3 "Good Reason" means any of the following:
(a) Executive is not elected or appointed to, or is removed from, the
position of either President, Chief Executive Officer or a member of the
Board for any reason, other than for Cause or by reason of Executive's
death or Disability; or
(b) Executive is assigned duties and responsibilities that are
inconsistent, in any material respect, with the scope of duties and
responsibilities associated with Executive's position of President and
Chief Executive Officer of the Company; or
(c) the Company fails to timely pay Executive any amounts otherwise
vested and due hereunder, including any bonus, and such failure continues
for ten (10) business days following written notice of nonpayment to the
Company;
(d) the Company takes any action which would adversely affect
Executive's participation in, or materially reduce Executive's benefits
under any Benefit Plans (as defined in Paragraph 3.3); or
(e) the Company fails to provide Executive with the number of paid
vacation days or the other perquisites to which Executive is entitled under
Section 3.
Except as expressly provided in Paragraph 1.3(c), nothing described above in
this Paragraph 1.3 shall constitute "Good Reason" unless Executive (i) provides
the Board written notice of the occurrence of any act(s) or omissions(s)
described above that may constitute Good Reason describing the particular act(s)
or omission(s) which Executive believes in good faith to constitute Good Reason,
(ii) provides the Board an opportunity, within thirty (30) days following
delivery of that notice, for the Board to explain or defend the alleged act(s)
or omission(s) and to
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cure such act(s) or omission(s), and (iii) following the expiration of such
notice and cure period, determines that such act(s) or omission(s) have not been
cured. The Company shall have the right to contest an allegation of Good Reason
by requesting arbitration of that issue in accordance with Section 8.
1.4 "Change of Control" means a change of control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") whether or not the Company in fact is required to comply with
Regulation 14A. Notwithstanding the foregoing, a Change of Control shall be
deemed to have occurred if:
(a) any "person" (as used in Section 13(d) of the Exchange Act)
becomes the "beneficial owner" (as determined pursuant to Rule 13d-3 under
the Exchange Act), directly or indirectly, of equity securities of the
Company representing fifty and one-tenth percent (50.1%) or more of the
combined voting power of the Company's then outstanding equity securities;
or
(b) the Company shall reorganize or merge with or consolidate into any
other entity, other than a reorganization, merger, or consolidation which
would result in the holders of the voting securities of the Company
outstanding immediately prior thereto holding immediately thereafter
securities representing less than fifty percent (50.0%) of the combined
voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such reorganization, merger, or
consolidation; or
(c) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition of
all or substantially all of the Company's assets.
For purposes of the definition of "Change of Control," a person has "control"
over another person if that first person has the power, directly or indirectly,
to direct the management and policies of that other person.
1.5 "Successor" means any person who or which acquired all or substantially
all of the assets or business or all or substantially all of the equity
securities of the Company, whether by purchase, reorganization, merger,
consolidation, or otherwise, in a transaction or series of transactions
constituting or causing a Change of Control.
1.6 "Term" means the term of this Agreement, and includes both the initial
Term and any extended Term, as set forth in Section 4.
1.7 "Termination Date" means (i) the date the Term expires and one or both
of the Parties have elected not to extend the Term, in accordance with Paragraph
4.2; (ii) the date of Executive's death, (iii) the third business day after the
date on which the Company gives notice of termination of Executive's employment
because of Disability, or (iv) the date of termination specified in any other
Notice of Termination (as defined in Paragraph 5.9) of Executive's employment,
or if not specified in the Notice of Termination, the date that Notice of
Termination is given.
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2. EMPLOYMENT
2.1 Generally. Executive shall be employed by the Company, and the Company
shall employ Executive, on the terms and conditions set forth in this Agreement.
2.2 Specific Duties. During the Term (as defined herein), Executive shall
be employed as the President and Chief Executive Officer of the Company.
Executive shall have such authority and shall perform such duties as are
assigned to him by the Board and that are customary for such positions including
responsibility for the following departments of the Company: accounting/finance,
human resources, legal, investor relations, and strategic planning. Executive
shall, subject to the direction and instruction of the Board, (a) perform all
duties incident to Executive's employment hereunder; (b) promote the interests
of the Company; and (c) perform such other duties appropriate for Executive's
position as the Chairman may from time to time reasonably direct. In addition,
for so long as Executive remains employed by the Company, Executive shall be
appointed for election to the Board and perform such duties customarily assumed
by Board members.
2.3 Full-Time Employment. Executive shall devote his full time (except for
permitted vacation time and absence for any illness or disability), attention,
and efforts to the performance of his duties under this Agreement. Executive
may, however, engage in civic, charitable, investing, and professional or trade
activities so long as those activities are disclosed to the Board and do not
interfere with the performance of his duties under this Agreement.
3. COMPENSATION.
3.1 Base Salary . During the Term, the Company shall pay Executive for his
services an annual base salary of $275,000.00, less required withholdings,
payable in substantially equal installments in accordance with the Company's
normal payroll procedures. Executive's base salary will be reviewed annually by
the Compensation Committee of the Board (the "Compensation Committee") and may
be increased (but not decreased) at the discretion of the Chairman or the
Compensation Committee. Executive's annual base salary in effect from time to
time, exclusive of any other compensation hereunder, is hereinafter called the
"Base Salary."
3.2 Annual Bonus. In addition to the Base Salary payable to Executive,
Executive may be entitled to receive additional cash compensation, as of the end
of each fiscal year of the Company during the Term, as an incentive bonus (the
"Annual Bonus"). Payment of the Annual Bonus for any year of the Term will be
dependent upon Executive's achieving stated performance objectives for the
fiscal year. Subject to the foregoing provisions of this Paragraph, the
Compensation Committee, in consultation with Executive, will determine
reasonable performance objectives and the potential amount of the Annual Bonus
in accordance with the Company's annual budgeting and planning process. The
Annual Bonus shall be earned upon satisfaction of the performance objectives and
shall be payable promptly after the end of the fiscal year, but in no event
later than March 31 of each calendar year for the prior fiscal year of the
Company.
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3.3 Participation in Benefit Plans. Executive shall be entitled to
participate in any and all health, dental, disability and life insurance and
other welfare benefit plans; profit-sharing plans; long-term incentive
compensation plans; stock award, stock option, or other stock-related
compensation plans (in addition to those expressly provided for in this
Agreement); and other benefits, plans, or arrangements provided or available
generally to senior executives of the Company in effect during the Term
(collectively, "Benefit Plans"). Executive's participation in any or all of the
Benefit Plans will be subject to the terms and conditions of the Benefit Plans
as they may hereafter be amended or restated (or discontinued) by the Company,
including the satisfaction of all applicable eligibility requirements and
vesting provisions of the Benefit Plans.
3.4 Vacation. Executive will be entitled to paid vacation, in accordance
with the Company's vacation policies, practices, and procedures, of at least
four (4) weeks each calendar year.
3.5 Stock Options.
(a) Incentive Stock Options. Upon the execution of this Agreement, Company
and Executive are entering into that certain Stock Option Agreement, of even
date herewith and attached hereto as Exhibit B, between the Company and
Executive (the "Stock Option Agreement"), pursuant to which the Company is
granting Executive the right and option to purchase up to nine hundred thousand
(900,000) shares of the Company's common stock on the terms provided therein
(the "Option"). The parties acknowledge that the Company's execution of the
Stock Option Agreement is a material inducement to Executive entering into this
Agreement. Any other provision of the Stock Option Agreement notwithstanding,
the Parties agree that the Option granted under the Stock Option Agreement shall
be allocated between incentive stock options and non-qualified stock options, as
permitted by Internal Revenue Service regulations, in such a manner so as to
maximize the number of incentive stock options granted to Executive, and such
allocation shall be set forth in an exhibit which shall be attached to the Stock
Option Agreement.
(b) Acceleration. Notwithstanding the foregoing, with respect to the Option
Shares, upon any Change of Control (a "Triggering Event"), fifty percent of
Option Shares then outstanding that are not vested at such time shall become
vested and immediately exercisable upon the occurrence of the Triggering Event.
3.6 Reimbursement. Executive shall be entitled to reimbursement from the
Company, in accordance with the relevant policies, practices, and procedures of
the Company, for all reasonable business expenses incurred by Executive in
performing his duties under this Agreement. In addition, Executive shall be
entitled to reimbursement (in an amount not to exceed $5,000) for reasonable
attorneys' fees incurred by Executive in preparing or reviewing this Agreement,
the Stock Option Agreement, the Stock Option Plan associated therewith and other
relevant documents pertinent to Executive's employment by the Company.
3.7 Indemnification. Executive shall have rights to indemnification and
advancement of expenses to the maximum extent allowed by applicable law. The
Company shall maintain directors' and officers' liability coverage for
Executive, and shall execute indemnity agreements
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with Executive, to the same extent as provided generally to other executive
officers and directors of the Company.
4. TERM
The term of Executive's employment under this Agreement (the "Term") shall
be as follows:
4.1 Initial Term. The Term shall commence on February 12, 2001 and shall
expire at 11:59:59 p.m., Eastern Time, February 11, 2002 (subject to extension
pursuant to Paragraph 4.2), unless Executive's employment hereunder is earlier
terminated pursuant to Section 5.
4.2 Extended Term. Upon the expiration of the initial Term described in
Paragraph 4.1, or of any subsequent extended Term described in this Paragraph
4.2, the Term shall be automatically extended, without the need for any action
by either Party, for additional consecutive one-year terms, (i) unless the
Company notifies Executive, at least ninety (90) days before the expiration date
of the then-current Term, that the Company does not wish to extend the Term, or
(ii) Executive notifies the Company, at least ninety (90) days before the
expiration date, that Executive does not wish to extend the then-current Term.
If such a notice of non-extension is timely given, the Term will expire at the
end of the then-currentTerm.
5. TERMINATION
5.1 Termination By the Company - Generally. The Company may terminate
Executive's employment at any time, either with or without Cause; provided the
Company complies with this Section 5 and the other provisions of this Agreement.
Executive may terminate his employment at any time with Good Reason or upon
ninety (90) days notice without Good Reason; provided Executive complies with
this Section 5 and the other provisions of this Agreement. The Parties'
respective rights and obligations upon a Termination Date shall be those set
forth in this Section 5.
5.2 Benefits Payable Upon Termination. Upon the occurrence of a Termination
Date, the Company shall pay or provide Executive the following:
(a) Any Base Salary earned by, but not yet paid to, Executive through
the Termination Date;
(b) Any Annual Bonus (as described in Paragraph 3.2) that has been
earned by, but not yet been paid to, Executive through the Termination
Date, unless Executive terminates this Agreement without Good Reason;
(c) All benefits, or (at the Company's option) the cash equivalent of
all benefits, that have been earned by or vested in, and are payable to,
Executive under, and subject to the terms (including all eligibility
requirements) of, the Benefit Plans in which Executive participated through
the Termination Date;
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(d) All reimbursable expenses due, but not yet paid, to Executive as
of the Termination Date under Paragraph 3.6; and
(e) An amount equal to Executive's accrued and unused vacation in
accordance with Company policy.
Any amounts due under this Paragraph 5.2 shall be paid in the same manner and on
the same date(s) as would have occurred if Executive's employment under this
Agreement had not ceased. The amounts or benefits due under subparagraph (c) of
this Paragraph 5.2 shall be paid or provided in accordance with the terms of the
Benefit Plans under which such amounts or benefits are due to Executive. The
amounts due under subparagraphs (d) and (e) of this Paragraph 5.2, if any, shall
be paid in accordance with the terms of the Company's policies, practices, and
procedures regarding reimbursable expenses and accrued and unused vacation,
respectively. Except as expressly provided in the following provisions of this
Section 5, upon paying or providing Executive the preceding amounts or benefits,
the Company shall have no further obligation or liability under this Agreement
for Base Salary, Annual Bonus or any other cash compensation or for any benefits
under any of the Benefit Plans. Upon the occurrence of a Termination Date, and
without any written resignation, Executive shall be deemed to have resigned from
any position as an officer or director, or both, of any subsidiary, division, or
affiliate of the Company or any other entity in which the Company holds an
equity interest or which it sponsors that Executive then holds.
5.3 Termination Upon Disability. If a Termination Date occurs due to notice
by the Company because of Disability, Executive (or his legal representative)
shall be entitled to receive from the Company any benefits under the Company's
then-current disability plan applicable to Executive, if any, for senior
executives, as may be amended from time to time.
5.4 Termination Without Cause or for Good Reason. If Executive's employment
is terminated by either the Company without Cause or by Executive for Good
Reason, or in the event that the Company elects not to extend the Term of this
Agreement and fails to provide Executive with at least ninety (90) days notice
of such election, as required by Paragraph 4.2, then Executive shall be entitled
to receive the following from the Company, as liquidated damages (the "Severance
Payment") upon the Executive's release of the Company in a form acceptable to
the Company (the "Release"):
(a) an amount equal to one-half of the Base Salary, as in effect on
the Termination Date (i.e., six (6) month's salary);
(b) the insurance required by Paragraph 5.7;
(c) the amount incurred by Executive for all reasonable legal fees and
expenses as a result of such termination incurred in successfully seeking
to obtain or enforce any right or benefit provided by this Agreement or the
Stock Option Agreement.
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The portion of the Severance Payment described in subparagraph (a) above shall
be paid in a lump-sum payment. The Severance Payment shall be in addition to the
amounts or benefits to which Executive is entitled under Paragraph 5.2 and any
rights Executive may have under the Benefit Plans. The Company will promptly
make the Severance Payment within ten business days after Executive's execution
of the Release.
5.5 Termination for Cause or Without Good Reason. If Executive's employment
is terminated either by the Company for Cause or by Executive without Good
Reason, or if a Termination Date occurs due to Executive's death or Executive's
election not to extend the Term and such election is not communicated to the
Company at least ninety (90) days prior to the expiration of the Term, as
required by Paragraph 4.2, then Executive shall not be entitled to any payments
other than the amounts or benefits to which Executive is entitled under
Paragraph 5.2.
5.6 Insurance. Unless Executive is terminated for Cause, the Company shall
maintain or cause to be maintained in full force and effect for a period of one
(1) year from the Termination Date, (the "Benefits Period") all health, dental
and life insurance in which Executive participated or was entitled to
participate immediately prior to the Termination Date, provided that Executive's
continued participation is possible under the general terms and provisions of
such plans and programs. If Executive's participation in any such plan or
program is barred, during the Benefits Period the Company shall reimburse
Executive for any coverage costs under the Consolidated Omnibus Budget Reform
Act of 1985 ("COBRA") for those plans in which Executive participated or was
entitled to participate immediately prior to the Termination Date. At the end of
the Benefits Period, Executive will be entitled to take advantage of any
conversion privileges applicable to the benefits available under any such plans
or programs. The Company shall pay any and all premiums associated with
maintaining such insurance coverage.
5.7 No Offset. There will be no offset against any Severance Payment or
other severance benefit under this Agreement on account of any remuneration or
benefits from any subsequent employment (including self-employment) that
Executive may obtain after the Termination Date.
5.8 Notice of Termination. Any purported termination by the Company or by
Executive shall be communicated by written Notice of Termination to the other
party in accordance with the requirements of Paragraph 9.1. A "Notice of
Termination" shall mean a notice indicating the specific termination provision
in this Agreement relied upon and setting forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated.
6. CONFIDENTIALITY; RESTRICTIVE COVENANTS
Executive acknowledges and agrees that he is bound by the terms of the
Company's standard Employee Noncompetition, Nondisclosure and Developments
Agreement attached hereto as Exhibit A. Employee further represents and warrants
that his performance of all the terms of this Agreement and including any
attachments does not and will not breach any
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agreement with any third parties to keep in confidence proprietary information
or to restrain from competitive activities.
7. REFORMATION AND SEVERABILITY
The Parties intend all provisions of this Agreement and any attachments
hereto to be enforced to the fullest extent permitted by law. Accordingly,
should a court of competent jurisdiction determine that the scope of any
provision of this Agreement and any attachments hereto is too broad to be
enforced as written, the Parties intend that the court reform the provision to
such narrower scope as it determines to be reasonable and enforceable. In
addition, however, Executive agrees that each of the covenants set forth in
Exhibit A constitutes a separate agreement independently supported by good and
adequate consideration, shall be severable from the other provisions of this
Agreement, and (with this Section 7) shall survive the occurrence of a
Termination Date. If any provision of this Agreement, including any attachments
hereto, is held to be illegal, invalid, or unenforceable under present or future
laws, (i) such provision shall be fully severable, (ii) this Agreement shall be
construed and enforced as if such illegal, invalid, or unenforceable provision
never constituted a part of this Agreement, and (iii) the remaining provisions
of this Agreement shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid, or unenforceable
provision, there shall be added as part of this Agreement a provision as similar
in its terms to such illegal, invalid, or unenforceable provision as may be
possible and be legal, valid, and enforceable.
8. DISPUTE RESOLUTION
8.1 Arbitration. Except with respect to any claim or dispute arising out of
the restrictive covenants set forth in Exhibit A, the exclusive remedy or method
of resolving all disputes or questions arising out of or relating to this
Agreement or the expiration or termination of Executive's employment hereunder
shall be arbitration held in Raleigh, North Carolina. The Company expressly
reserves the right to resolve any claim or dispute arising out of the covenants
set forth in Exhibit A in a court of competent jurisdiction, including the right
to seek and obtain injunctive relief. Any arbitration may be requested or
initiated by a Party by written notice to the other Party specifying the subject
of requested arbitration and appointing the notifying party's arbitrator
("Arbitration Notice"). The prevailing Party in any such arbitration shall also
be entitled to an award of reasonable attorneys' fees and expenses incurred in
connection with any such arbitration.
8.2 Arbitrators. Arbitration shall be before three arbitrators, one to be
appointed by the Company, a second to be appointed by Executive, and a third to
be appointed by the two arbitrators chosen by the Company and Executive. All
such arbitrators shall be selected from a list of potential arbitrators provided
by the American Arbitration Association. The third arbitrator shall act as
chairman. If either Party fails to appoint an arbitrator by written notice to
the other Party within ten days after the Arbitration Notice is given or the two
arbitrators appointed by the Parties fail to appoint a third arbitrator within
ten (10) days after the date of the appointment of the second arbitrator, then
the American Arbitration Association in Raleigh, North Carolina, upon
application of a Party shall appoint an arbitrator to fill that position.
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8.3 Award and Costs. The arbitration proceeding shall be conducted in
accordance with the then-current Commercial Arbitration Rules of the American
Arbitration Association. A determination or award made or approved by at least
two of the arbitrators shall be the valid and binding action of the arbitrators.
The costs of arbitration shall be borne by the Company and/or Executive as
determined by the arbitrators. The arbitration determination or award shall be
final and conclusive on the Parties, and judgment upon such award may be entered
and enforced in any court of competent jurisdiction.
9. MISCELLANEOUS
9.1 Notices. Any notice, consent, demand, request, approval, or other
communication to be given under this Agreement by one Party to the other must be
in writing and must be either (i) personally delivered, (ii) mailed by
registered or certified mail, postage prepaid with return receipt requested, or
(iii) delivered by overnight express delivery service or same-day or overnight
local courier service, in any event to the address set forth below or to such
other address as may be designated by either or both of the Parties from time to
time in accordance with this Paragraph 9.1:
If to the Company: ▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman
Copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to Executive: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
11216 Brass ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Copy to: ▇▇▇▇▇ ▇▇▇▇▇ Mulliss & ▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Notices delivered personally or by overnight express delivery service or by
local courier service shall be deemed given and received as of actual receipt.
Notices mailed as described above shall be deemed given and received three
business days after mailing or upon actual receipt, whichever is earlier.
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9.2 Entire Agreement. This Agreement and any attachments hereto replace and
supersede any and all other agreements and understandings of any kind, either
oral or written, between the Parties with respect to the subject matter of this
Agreement and contain all of the covenants and agreements between the Parties
with respect to the subject matter of this Agreement.
9.3 Modification. No change or modification of this Agreement will be valid
or binding upon the Parties, nor will any waiver of any term or condition be so
binding, unless the change or modification or waiver is in writing and signed by
both Parties.
9.4 Governing Law and Venue. This Agreement and the obligations and
undertakings of the Parties under this Agreement are performable in Morrisville,
North Carolina. This Agreement and all matters related hereto shall be governed
by, and construed in accordance with, the laws of the State of North Carolina,
without reference to conflict of law principles.
9.5 Counterparts. This Agreement may be executed in counterparts, each of
which constitutes an original, but all of which constitute one document.
9.6 Estate. If Executive dies during his employment hereunder, any amounts
due him from the Company under this Agreement as of the date of his death shall
be paid to his estate or heirs.
9.7 Assignment. The Company shall not have the right to assign this
Agreement, except to a Successor. The rights, duties, and benefits to Executive
hereunder are unique and personal to him, and no such right, duty, or benefit
may be assigned by him.
9.8 Binding Effect; Survival. This Agreement is binding upon the Parties,
together with their respective executors, administrators, successors, personal
representatives, heirs, and permitted assigns. The respective rights and
obligations of the Parties under this Agreement shall survive the expiration or
termination of the Term to the extent necessary to give full effect to those
rights and obligations.
9.9 Waiver of Breach. Any waiver by a Party of a breach of any provision of
this Agreement by the other Party will not operate or be construed as a waiver
of any other or any subsequent breach.
11
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.
▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:
-------------------------------------
M. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Chairman of the Board
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
12
EXHIBIT A
---------
Employee Noncompetition, Nondisclosure and Developments Agreement
-----------------------------------------------------------------
THIS AGREEMENT (the "Agreement") is made and entered into this ____ day of
________ 2001, by and between ▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation (the
"Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("you" or the "Employee") in connection with
the Employment Agreement of even date herewith.
1. Performance of Duties. You will devote your entire time and best
efforts, skill, ability and attention to the business and affairs of the
Company, and will perform such services and duties as you may be assigned from
time to time by the Company.
2. Confidentiality. You will not at any time, whether during or after the
termination of this Agreement, reveal to any person or entity any trade secrets
or confidential information concerning the organization, business or finances of
the Company or of any third party that you receive from or through your
employment by the Company (including but not limited to trade secrets or
confidential information respecting inventions, research, products, designs,
methods, know-how, formulae, techniques, systems, processes, software programs,
works of authorship, customer lists, projects, plans and proposals) (the
"Confidential Information"), except as may be required in the ordinary course of
performing your duties for the Company. You shall keep secret all matters
entrusted to you and shall not use or attempt to use any such information except
for the benefit of the Company. Upon request of the Company and, in any event,
upon termination of your employment, you will promptly return to the Company any
Confidential Information in your possession or under your control. You will also
return at such time any keys, pass cards, identification cards and other
property belonging to the Company. At the Company's request, promptly after you
leave the employ of the Company, you will certify in writing to the Company that
you have complied with this Section 2.
3. Employee Developments. If at any time or times during your work for the
Company, you shall (either alone or with others) make, conceive, discover or
reduce to practice any invention, modification, discovery, design, development,
improvement, process, software program, work of authorship, documentation,
formula, data, technique, know-how, secret or other intellectual property right
or any interest therein, whether or not patentable or registrable under
copyright or similar statutes or subject to analogous protection (herein called
"Developments") that relates to the business of the Company or any of the
products or services being developed, manufactured or sold by the Company or
that may be used in relation therewith, such Developments and the benefits
thereof shall immediately become the sole and absolute property of the Company
and its assigns. You shall promptly disclose to the Company each such
Development and hereby assign any rights you may have or acquire in the
Developments to the Company and its assigns without further compensation and
shall communicate, without cost or delay, and without publishing the same, all
available information relating thereto to the Company. Upon the request of the
Company, you will execute and deliver all documents and do all other acts that
are or may be necessary to document such transfer or to enable the Company to
file and prosecute applications for and to acquire, maintain, extend and enforce
any and all patent, trademark or copyrights registrations under United States or
foreign
13
law with respect to any such Developments. If, for any reason, the Company is
unable to obtain your signature to apply for or to pursue any application for
any United States or foreign patent, trademark or copyright covering the
Developments assigned to the Company hereunder, you hereby irrevocably designate
and appoint the Company and its agents and officers as your agents and
attorneys-in-fact, to act for you and in your behalf and stead to execute and
file any such applications and to do other lawfully permitted acts to further
the prosecution and issuance of U.S. and foreign patents, trademarks and
copyrights with the same legal force and effect as if executed by you. You
further represent that your performance of all the terms of this Agreement and
work for the Company does not and will not breach any agreement to keep in
confidence proprietary information acquired by you in confidence or in trust.
You have not entered into, and agree that you will not enter into, any agreement
in conflict herewith.
4. Noncompetition and Nonsolicitation Covenants. For a period of one year
following your termination of employment, regardless of the manner of such
termination, you will not, in any country or other jurisdiction: (a) engage
directly or indirectly in any business that competes with the Company in
providing an Internet based, interactive marketplace for scientific and
laboratory products used by pharmaceutical, clinical, biotechnology, chemical,
industrial or educational organizations (the "Restricted Businesses"); or (b)
directly or indirectly solicit any employee or consultant of the Company to
provide services to any Restricted Business or to cease providing services to
the Company; or (c) directly or indirectly solicit any customer or supplier of
the Company to become a customer or supplier of any Restricted Business or to
cease its status as a customer or supplier of the Company.
5. Survival; Binding Effect. Your obligations under this Agreement shall
survive your termination of employment, regardless of the manner of such
termination, and shall be binding upon your heirs, executors, administrators and
legal representatives.
6. Assignment. The term "Company" shall include the company described in
the first paragraph of this Agreement and any of its subsidiaries, subdivisions
or affiliates. The Company shall have the right to assign this Agreement to its
successors and assigns, and all covenants and agreements hereunder shall inure
to the benefit of and be enforceable by such successors or assigns.
7. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina, without regard to
conflicts of law provisions thereof. This Agreement may be executed in
counterparts. This Agreement may be amended only in a writing signed by each of
the parties hereto. This Agreement, as it may be amended pursuant to the terms
hereof, represents the complete and final agreement of the parties and shall
control over any other statement, representation or agreement by the Company
(for example, such as may appear in employment or policy manuals). This
Agreement supersedes any prior negotiations or discussions between the parties
with regard to the subject matter hereof.
COMPANY: EMPLOYEE:
▇▇▇▇▇▇▇▇.▇▇▇, INC. ____________________________________
14
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
__________________________
By: ______________________
Title: ___________________
15
EXHIBIT B
---------
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
-------------------------------------------
▇▇▇▇▇▇▇▇.▇▇▇, INC. INCENTIVE STOCK OPTION AGREEMENT
▇▇▇▇▇▇▇▇.▇▇▇, Inc. (the "Company") granted to the individual named below an
option to purchase certain shares of common stock of the Company pursuant to the
▇▇▇▇▇▇▇▇.▇▇▇, Inc. 1999 Stock Incentive Plan, in the manner and subject to the
provisions of this Option Agreement.
1. Definitions:
(a) "Code" shall mean the Internal Revenue Code of 1986, as amended. (All
citations to sections of the Code are to such sections as they may
from time to time be amended or renumbered.)
(b) "Company" shall mean ▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation, and
any successor corporation thereto.
(c) "Date of Option Grant" shall mean ____________, ___, 2001.
(d) "Disability" shall mean disability within the meaning of section
22(e)(3) of the Code, as determined by the Board in its discretion
under procedures established by the Board.
(e) "Exercise Price" shall mean ____________ ($_______) [Exercise_Price_1]
per share as adjusted from time to time pursuant to paragraph 9 below.
(f) "Number of Option Shares" shall mean Nine Hundred Thousand (900,000)
shares of common stock of the Company (the "Common Stock") as adjusted
from time to time pursuant to paragraph 9 below.
(g) "Option Term Date" shall mean the date ten (10) years after the Date
of Option Grant.
(h) "Optionee" shall mean ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
(i) "Participating Company" shall mean (i) the Company and (ii) any
present or future parent and/or subsidiary corporation of the Company
while such
16
corporation is a parent or subsidiary of the Company. For purposes of
this Option Agreement, a parent corporation and a subsidiary
corporation shall be as defined in sections 424(e) and 424(f) of the
Code.
(j) "Participating Company Group" shall mean at any point in time all
corporations collectively which are then a Participating Company.
(k) "Plan" shall mean the ▇▇▇▇▇▇▇▇.▇▇▇, Inc. 1999 Stock Incentive Plan.
Other capitalized terms used herein and without definition shall have
the meanings ascribed to such terms in the Plan.
2. Status of the Option. This Option is intended to be an incentive stock
option as described in Section 422 of the Code, but the Company does not
represent or warrant that this Option qualifies as such. The Optionee
should consult with the Optionee's own tax advisors regarding the tax
effects of this Option and the requirements necessary to obtain favorable
income tax treatment under Section 422 of the Code, including, but not
limited to, holding period requirements.
3. Administration; Delegation.
(a) Administration by Board. The Plan shall be administered by the Board.
The Board shall have authority to grant Options and to adopt, amend
and repeal such administrative rules, guidelines and practices
relating to the Plan as it shall deem advisable from time to time. The
Board may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Option in the manner and to the
extent it shall deem expedient to carry the Plan into effect and it
shall be the sole and final judge of such expediency. No member of the
Board shall be liable for any action or determination relating to the
Plan. All decisions by the Board shall be made in the Board's sole
discretion and shall be final and binding on all persons having or
claiming any interest in the Plan or in any Option. No director or
person acting pursuant to the authority delegated by the Board shall
be liable for any action or determination under the Plan made in good
faith.
(b) Delegation to Executive Officers. To the extent permitted by
applicable law, the Board may delegate to one or more executive
officers of the Company the power to make Options and exercise such
other powers under the Plan as the Board may determine, provided that
the Board shall fix the maximum number of shares subject to Options
and the maximum number of shares for any one Optionee to be made by
such executive officers.
(c) Appointment of Committees. To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one
or more committees or subcommittees of the Board (each, a
"Committee"). For so long as the common stock, $.001 par value per
share (the "Common Stock"), of the Company is registered under the
Securities Exchange Act of 1934 (the "Exchange
17
Act"), the Board shall appoint one such Committee of not less than two
members, each member of which shall be a "non-employee director" as
defined in Rule 16b-3 promulgated under the Exchange Act. All
references in the Plan to the "Board" shall mean a Committee or the
Board or the executive officer referred to in Section 3(b) to the
extent that the Board's powers or authority under the Plan have been
delegated to such Committee or executive officer.
4. Exercise of the Option.
(a) Right to Exercise. The Option shall vest and become exercisable from
time to time, subject to the schedule set forth below, in whole or in
part, until termination thereof as provided in paragraph 6 hereof;
provided, however, that if, on the Date of Option Grant, the Optionee
is subject to the provisions of Section 16 of the Exchange Act, the
Option shall vest according to the schedule set forth below, but shall
in no event become exercisable for a period of six (6) months
following the Date of Option Grant:
(i) On or after August 11, 2001, (the "Initial Vesting Date"), the
Option may be exercised to purchase up to twelve and one half
percent (12.5%) of the number of Option Shares.
(ii) On or after the last day of each successive full month beginning
on or after the Initial Vesting Date, the Option may be exercised
to purchase up to an additional 1/48th of the Number of Option
Shares. This provision shall be interpreted such that on or after
the fourth annual anniversary date of the Initial Vesting Date,
the Option may be exercised to purchase up to 100% of the Number
of Option Shares.
The schedule set forth above is cumulative, such that shares as to
which the Option has become exercisable on and after a date indicated
by the schedule may be purchased pursuant to exercise of the Option at
any subsequent date prior to termination of the Option pursuant to
paragraph 6 hereof.
Notwithstanding the foregoing, if the aggregate fair market value,
determined as of the Date of Option Grant, of the stock with respect
to which the Optionee may exercise incentive stock options for the
first time during any calendar year (under this Plan or under any
other plan of the Participating Company Group), as determined in
accordance with Section 422(d) of the Code, shall exceed one hundred
thousand dollars ($100,000), the Option shall be deemed a nonqualified
stock option to the extent of such excess.
(b) Method of Exercise. The Option shall be exercised by written notice to
the Company in the form of Exhibit A to this Agreement (or such other
form as the Company may require) stating the election to exercise the
Option, the number of shares for which the Option is being exercised
and such other representations and
18
agreements as may be required by the Company in its discretion. The
written notice must be signed by the Optionee and must be delivered in
person or by certified or registered mail, return receipt requested,
to the Chief Financial Officer of the Company, or other authorized
representative of the Participating Company Group, prior to the
termination of the Option as set forth in paragraph 6 below,
accompanied by full payment of the exercise price for the number of
shares being purchased.
(c) Form of Payment of Option Price. Such payment may be made (i) in cash
or by check, (ii) in the Board's discretion, by delivery of an
irrevocable and unconditional undertaking by a creditworthy broker to
deliver promptly to the Company sufficient funds to pay the exercise
price, or delivery by the Optionee to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to
deliver promptly to the Company cash or a check sufficient to pay the
exercise price, (iii) in the Board's discretion, by delivery of shares
of Common Stock owned by the Optionee valued at their Fair Market
Value, as determined by the Board of Directors (the "Fair Market
Value"), which shares have been owned by the Optionee for a period of
at least one (1) year prior to such delivery, (iv) in the Board's
discretion and to the extent permitted by law, by delivery of a
promissory note of the Optionee to the Company secured by valuable
collateral acceptable to the Board and on other terms acceptable to
the Board, or (v) by payment of such other lawful consideration as the
Board may determine in its discretion.
(d) Withholding. Each Optionee shall pay to the Company, or make provision
satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Option to such Optionee no later than
the date of the event creating the tax liability. The Board may allow
Optionee to satisfy such tax obligations in whole or in part in shares
of Common Stock, including shares retained from the Option creating
the tax obligation, valued at their Fair Market Value. The Company
may, to the extent permitted by law, deduct any such tax obligations
from any payment of any kind otherwise due to an Optionee.
(e) Certificate Registration. The certificate or certificates for the
shares as to which the Option shall be exercised shall be registered
in the name of the Optionee, or, if applicable, the heirs of the
Optionee.
(f) Restrictions on Grant of the Option and Issuance of Shares. The grant
of the Option and the issuance of the shares upon exercise of the
Option shall be subject to compliance with all applicable requirements
of federal or state law with respect to such securities. The Option
may not be exercised if the issuance of shares upon such exercise
would constitute a violation of any applicable federal or state
securities laws or other law or regulations. In addition, no Option
may be exercised unless (i) a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), shall at
the time of exercise of the Option be in effect with respect to the
shares issuable upon exercise of the Option or (ii) in the
19
opinion of legal counsel to the Company, the shares issuable upon
exercise of the Option may be issued in accordance with the terms of
an applicable exemption from the registration requirements of the
Securities Act.
THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISABLE
UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE
OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN
THOUGH THE OPTION IS VESTED.
As a condition to the exercise of the Option, the Company may require
the Optionee to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or
regulation and to make any representation or warranty with respect
thereto as may be requested by the Company.
(g) Fractional Shares. The Company shall not be required to issue
fractional shares upon the exercise of the Option.
5. Non-Transferability of the Option. The Option may be exercised during the
lifetime of the Optionee only by the Optionee and may not be sold,
assigned, pledged, transferred or otherwise encumbered in any manner,
either voluntarily or by operation of law, except by will or by the laws of
descent and distribution.
6. Termination of the Option. The Option shall terminate and may no longer be
exercised on the first to occur of (a) the Option Term Date as defined
above, (b) the last date for exercising the Option following termination of
employment as described in paragraph 7 below, or (c) upon the occurrence of
an Acquisition Event, as described in paragraph 8 below.
7. Termination of Employment.
(a) Termination of the Option. If the Optionee ceases to be an employee of
the Participating Company Group for any reason except death or
Disability, the Option may be exercised by the Optionee, to the extent
unexercised and exercisable by the Optionee on the date on which the
Optionee ceased to be an employee (or, to the extent unexercised and
vested if the Optionee is, on the Date of Option Grant, subject to
Section 16 of the Exchange Act and the Optionee ceases to be an
employee within six (6) months following the Date of Option Grant),
within three (3) months after the date on which the Optionee's
employment terminates, but in any event no later than the Option Term
Date; provided, however, that the Option shall not be exercisable
after the date the Optionee's employment with the Participating
Company Group is terminated for cause (as determined in the sole
discretion of the Board). If the Optionee's employment with the
Participating Company Group is terminated because of the
20
death or Disability of the Optionee, the Option may be exercised by
the Optionee (or the Optionee's legal representative), to the extent
unexercised and exercisable by the Optionee on the date on which the
Optionee ceased to be an employee (or, to the extent unexercised and
vested if the Optionee is, on the Date of Option Grant, subject to
Section 16 of the Exchange Act and the Optionee ceases to be an
employee within six (6) months following the Date of Option Grant), at
any time prior to the expiration of twelve (12) months from the date
the Optionee's employment terminated, but in any event no later than
the Option Term Date. The Optionee's employment shall be deemed to
have terminated on account of death if the Optionee dies within three
(3) months after the Optionee's termination of employment. This
paragraph shall be interpreted such that the Option ceases to vest on
the date on which the Optionee ceases to be an employee of the
Participating Company Group (pursuant to this paragraph 7) for any
reason, notwithstanding any period after such cessation of employment
during which the Option may remain exercisable as provided in this
paragraph 7.
(b) Termination of Employment Defined. For purposes of this paragraph 7,
the Optionee's employment shall be deemed to have terminated either
upon an actual termination of employment or upon the Optionee's
employer ceasing to be a Participating Company.
(c) Exercise Prevented by Law. Except as provided in this paragraph 7, the
Option shall terminate and may not be exercised after the Optionee's
employment with the Participating Company Group terminates unless the
exercise of the Option in accordance with this paragraph 7 is
prevented by the provisions of paragraph 4(f) above. If the exercise
of the Option is so prevented, the Option shall remain exercisable
until three (3) months after the date the Optionee is notified by the
Company that the Option is exercisable, but in any event no later than
the Option Term Date.
(d) Optionee Subject to Section 16(b). Notwithstanding the foregoing, if
the exercise of the Option within the applicable time periods set
forth above would subject the Optionee to suit under Section 16(b) of
the Exchange Act, the Option shall remain exercisable until the
earliest to occur of (i) the tenth (10th) day following the date on
which the Optionee would no longer be subject to such suit, (ii) the
one hundred and ninetieth (190th) day after the Optionee's termination
of employment, or (iii) the Option Term Date.
(e) Leave of Absence. For purposes hereof, the Optionee's employment with
the Participating Company Group shall not be deemed to terminate if
the Optionee takes any military leave, sick leave, or other bona fide
leave of absence approved by the Company of ninety (90) days or less.
In the event of a leave in excess of ninety (90) days, the Optionee's
employment shall be deemed to terminate on the ninety-first (91st) day
of the leave unless the Optionee's right to reemployment with the
Participating Company Group remains guaranteed by statute or contract.
21
8. Acquisition Events. Except to the extent otherwise provided herein or in
any other agreement between the Optionee and the Company, upon the
occurrence of an Acquisition Event (as hereinafter defined), fifty percent
(50%) of the portion of this Option then outstanding and unvested, shall
become vested and immediately exercisable upon the occurrence of the
Acquisition Event or such earlier date as may be specified by the Board by
written notice to the Optionee, and, as applicable, the Board may take one
or both of the following additional actions with respect to the Option: (i)
provide that such Option shall be assumed, or equivalent Options be
substituted by the acquiring or succeeding corporation (or an affiliate
thereof), or (ii) upon written notice to the Optionee, provide that all the
unexercised portion of the Option, or, in the Board's discretion, such
portions thereof as become vested solely by reason of this provision, will
terminate to the extent not exercised by the Optionee prior to the
consummation of such Acquisition Event or such earlier date as may be
specified by the Board by written notice to Optionee.
As used in this Section 8, an "Acquisition Event" shall mean: (a) any
merger or consolidation which results in the voting securities of the
Company outstanding immediately prior thereto representing (either by
remaining outstanding or by being converted into voting securities of the
surviving or acquiring entity) less than 50% of the combined voting power
of the voting securities of the Company or such surviving or acquiring
entity outstanding immediately after such merger or consolidation; (b) any
sale of all or substantially all of the assets of the Company; (c) the
complete liquidation of the Company; or (d) the acquisition of "beneficial
ownership" (as defined in Rule 13d-3 under the Exchange Act) of securities
of the Company representing 50% or more of the combined voting power of the
Company's then outstanding securities (other than through a merger or
consolidation or an acquisition of securities directly from the Company) by
any "person," as such term is used in Section 13(d) and 14(d) of the
Exchange Act, other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
corporation owned directly or indirectly by the stockholders of the
Company.
9. Adjustments to Common Stock. In the event of any stock split, stock
dividend, recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, liquidation, spin-off or other similar
change in capitalization or event, or any distribution to holders of Common
Stock other than a normal cash dividend, the number and class of security
and exercise price per share subject to this Option shall be appropriately
adjusted by the Company (or substituted Options may be made, if applicable)
to the extent the Board shall determine, in good faith, that such an
adjustment (or substitution) is necessary and appropriate. If this Section
9 applies and Section 8 also applies to any event, Section 8 shall be
applicable to such event, and this Section 9 shall not be applicable.
10. Rights as a Stockholder or Employee.
(a) No Rights as Stockholder. Subject to the provisions of this Option, no
Optionee or Designated Beneficiary shall have any right as a stockholder
with
22
respect to any shares of Common Stock to be distributed with respect to an
Option until becoming the record holder of such shares.
(b) No Right to Employment or Other Status. No person shall have any claim
or right to be granted an Option, and the grant of an Option shall not be
construed as giving an Optionee the right to continued employment or any
other relationship with the Company. The Company expressly reserves the
right at any time to dismiss or otherwise terminate its relationship with a
Optionee free from any liability or claim under the Plan, except as
expressly provided in the applicable Option.
11. Notice of Sales Upon Disqualifying Disposition. The Optionee shall dispose
of the shares acquired pursuant to the Option only in accordance with the
provisions of this Option Agreement. In addition, the Optionee shall
promptly notify the Chief Financial Officer of the Company if the Optionee
disposes of any of the shares acquired pursuant to the Option within one
(1) year from the date the Optionee exercises all or part of the Option or
within two (2) years of the date of grant of the Option. Until such time as
the Optionee disposes of such shares in a manner consistent with the
provisions of this Option Agreement, the Optionee shall hold all shares
acquired pursuant to the Option in the Optionee's name (and not in the name
of any nominee) for the one-year period immediately after exercise of the
Option and the two-year period immediately after grant of the Option. At
any time during the one-year or two-year periods set forth above, the
Company may place a legend or legends on any certificate or certificates
representing shares acquired pursuant to the Option requesting the transfer
agent for the Company's stock to notify the Company of any such transfers.
The obligation of the Optionee to notify the Company of any such transfer
shall continue notwithstanding that a legend has been placed on the
certificate or certificates pursuant to the preceding sentence.
12. Legends. The Company may at any time place legends referencing affiliate
status or any applicable federal or state securities law restriction on all
certificates representing shares of stock subject to the provisions of this
Option Agreement. The Optionee shall, at the request of the Company,
promptly present to the Company any and all certificates representing
shares acquired pursuant to the Option in the possession of the Optionee in
order to effectuate the provisions of this paragraph. Unless otherwise
specified by the Company, legends placed on such certificates may include
(as applicable), but shall not be limited to, the following:
THE REGISTERED HOLDER OF THE SHARES REPRESENTED BY THIS CERTIFICATE,
AT THE TIME OF ISSUANCE HEREOF, MAY BE DEEMED AN AFFILIATE OF THE
ISSUER UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE
CORPORATION TO THE REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE
STOCK OPTION AS DEFINED IN SECTION 422 OF THE INTERNAL REVENUE CODE OF
1986, AS
23
AMENDED. THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL
NOTIFY THE CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY
THE REGISTERED HOLDER HEREOF MADE ON OR BEFORE THE REGISTERED HOLDER
SHALL HOLD ALL SHARES PURCHASED UNDER THE OPTION IN THE REGISTERED
HOLDER'S NAME (AND NOT IN THE NAME OF ANY NOMINEE) FOR A PERIOD OF ONE
YEAR FROM THE DATE OF EXERCISE OF THE OPTION OR TWO YEARS FROM THE
DATE OF GRANT OF THE OPTION.
13. Public Offering. The Optionee hereby agrees that in the event of an
underwritten public offering of stock made by the Company under the
Securities Act, the Optionee shall not offer, sell, contract to sell,
pledge, hypothecate, grant any option to purchase or make any short sale
of, or otherwise dispose of any shares of stock of the Company or any
rights to acquire stock of the Company for such period of time as may be
established by the underwriter for such public offering; provided, however,
that such period of time shall not exceed one hundred eighty (180) days
from the effective date of the registration statement to be filed in
connection with such public offering. The foregoing limitation shall not
apply to shares registered under the Securities Act.
14. Binding Effect. This Option Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
15. Termination or Amendment of Option. The Board may amend, modify or
terminate any outstanding Option, including but not limited to,
substituting therefor another Option of the same or a different type,
changing the date of exercise, and converting an Incentive Stock Option to
a Nonstatutory Stock Option, provided that the Optionee's consent to such
action shall be required unless the Board determines that the action,
taking into account any related action, would not materially and adversely
affect the Optionee.
16. Integrated Agreement. This Option Agreement (together with the Plan)
constitutes the entire understanding and agreement of the Optionee and the
Participating Company Group with respect to the subject matter contained
herein, and there are no other agreements, understandings, restrictions,
representations, or warranties between the Optionee and the Company with
respect to the subject matter contained herein other than those as set
forth or provided for herein. To the extent contemplated herein, the
provisions of this Option Agreement shall survive any exercise of the
Option and shall remain in full force and effect.
17. Terms and Conditions of Plan. The terms and conditions included in the Plan
are incorporated by reference herein, and to the extent that any conflict
may exist between any term or provision of this Option Agreement and any
term or provision of the Plan, the term or provision of the Plan shall
control.
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18. Applicable Law. This Option Agreement shall be governed by the laws of the
State of Delaware, without regard to any applicable conflicts of law.
▇▇▇▇▇▇▇▇.▇▇▇, INC.
---------------------------------------
By:
Title:
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The Optionee represents that the Optionee is familiar with the terms and
provisions of this Option Agreement, and hereby accepts the Option subject to
all of the terms and provisions thereof. The Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board of
Directors of the Company made in good faith upon any questions arising under
this Option Agreement.
The undersigned hereby acknowledges receipt of a copy of the Plan.
Date:
------------------------------ ---------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
Date: Name:
------------------------------ ---------------------------------
▇▇▇▇▇▇▇▇.▇▇▇, Inc. -- NOTICE OF STOCK OPTION EXERCISE
(Transaction must be completed within 30 days or
-------
this Notice of Stock Option Exercise shall be void)
The Undersigned Elects to Purchase:
----------------------------------
----------------------------------------------------------------------------
Grant Number of Exercise Total Control No.
ISO/ Date Shares Price Amount Due (▇▇▇▇▇▇▇▇.▇▇▇
NSO to Exercise Per Share Company Use Only)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Please Check the Applicable Procedure:
-------------------------------------
[_] Same-Day-Sale: The Company is hereby directed and instructed to
authorize the transfer agent to issue _______________
shares of Common Stock in the designated broker's name
for my benefit.
[_] Sell to Cover The Company is hereby directed and instructed to
authorize the transfer agent to issue _______________
shares of Common Stock in the designated broker's name
for my benefit.
[_] Cash Exercise: I elect to exercise my option and pay for the shares
in full. Enclosed is my check payable to ▇▇▇▇▇▇▇▇.▇▇▇,
Inc. for $______________ which represents the full
exercise price for _______________ shares of Common
Stock at ______________ per share.
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Please distribute shares as follows:
[_] as a certificate to me at the address specified
below by first class mail
[_] electronically issue via DWAC to the broker
indicated below for my benefit
[_] I hereby irrevocably authorize the broker designated above to pay the
total option price and any applicable taxes due to ▇▇▇▇▇▇▇▇.▇▇▇.
Please Specify Broker:
----------------------
[_] Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ [_] Name:
-------------------------
Address: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ Address:
-------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------
Attn: ▇▇▇▇▇ ▇▇▇▇ / ▇▇▇▇▇ ▇▇▇▇ Attn:
-------------------------
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Tel:
-------------------------
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax:
-------------------------
Broker DTC #0443 Broker DTC #
---------------------
Acct # Acct #
-------------------- -------------------------
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Broker Instructions:
-------------------
- Broker will notify ▇▇▇▇▇▇▇▇.▇▇▇ when trade occurs and at what price less
all commissions and fees. ▇▇▇▇▇▇▇▇.▇▇▇ will calculate any applicable taxes
and notify broker of total amount due the Company.
- Broker will either overnight a check or wire the total funds due using the
following wire details:
Account Name: ▇▇▇▇▇▇▇▇.▇▇▇, Inc.
Bank Name: Chase, New York, NY
Account Number: 323021476
ABA#: ▇▇▇▇▇▇▇▇▇
- Broker will distribute the balance of the Same-Day-Sale proceeds as
designated by the undersigned.
---------------------------------------------------------------------------
I understand that the shares being issued to me upon the exercise of my options
(the "Shares") are being issued to me pursuant to an effective registration
statement on Form S-8 filed with the Securities and Exchange Commission covering
the shares issuable under the ▇▇▇▇▇▇▇▇.▇▇▇, Inc. Stock Option Plan and the
▇▇▇▇▇▇▇▇.▇▇▇, Inc. 1999 Stock Incentive Plan. In connection with my exercise and
purchase of the Shares and by my signature below, I hereby represent, warrant
and agree as follows:
1. I am not acquiring the Shares based upon any representation, oral or
written, by any person with respect to the future value of, or income
from, the Shares, but rather upon independent examination and judgment
as to the prospects of the Company.
2. I have had complete access to and the opportunity to review all
material documents related to the business of the Company and to ask
answers with respect thereto, have examined all such documents as I
have desired as may be necessary for me to make an informed decision
with respect to the investment in the Company represented by the
Shares, and I am is familiar with the business and affairs of the
Company and realize that any purchase of the Shares is a speculative
investment and that any possible profit therefrom is uncertain.
3. I have not relied upon the Company or an employee or agent of the
Company with respect to any tax consequences related to exercise of me
options or the disposition of the Shares. I assume full responsibility
for all such tax consequences and the filing of all tax returns and
elections I may be required to or find desirable to file in connection
therewith.
Optionee Signature:
------------------------------------------
Print Name:
------------------------------------------
Mail to Address:
------------------------------------------
Daytime Phone Number:
------------------------------------------
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Social Security Number:
------------------------------------------
▇▇▇▇▇▇▇▇.▇▇▇ Authorization Signature:
------------------------------------------
Forward Completed form to:
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
29