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EXHIBIT 10.10
EROOM TECHNOLOGY, INC.
NON-QUALIFIED STOCK OPTION AND STOCK REPURCHASE AGREEMENT
COVER SHEET (E)
eRoom Technology, Inc., a Delaware corporation (the "Company"), hereby
grants to the person named below (the "Optionee") and the Optionee hereby
accepts, an option to purchase the number of shares (the "Option Shares") listed
below of the Company's Common Stock, $.01 par value ("Common Stock"), at the
price per share and with a vesting date (the "Vesting Date") listed below, such
option to be on the terms and conditions specified in the attached EXHIBIT F.
Optionee Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Grant Date: July 7, 2000
Vesting Date: July 19, 2000
Number of Option Shares: 200,000
Exercise Price Per Share: $4.50
IN WITNESS WHEREOF, the Company and the Optionee have caused this
instrument to be executed as of the Grant Date set forth above.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------- eRoom Technology, Inc.
(Optionee Signature) ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇
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(Street Address) By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
(City/State/Zip Code)
Title: President and CEO
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eRoom Technology, Inc.
NON-QUALIFIED STOCK OPTION AND STOCK REPURCHASE AGREEMENT
TERMS AND CONDITIONS
1. GRANT UNDER 1996 STOCK PLAN. This option is granted pursuant to and is
governed by the Company's 1996 Stock Plan, as amended on August 8, 1997, August
13, 1998, March 3, 1999, September 1, 1999 and February 18, 2000 (the "Plan")
and, unless the context otherwise requires, terms used herein shall have the
same meaning as in the Plan. Determinations made in connection with this option
pursuant to the Plan shall be governed by the Plan as it exists on this date.
2. GRANT AS NON-QUALIFIED OPTION; OTHER OPTIONS. This option shall be
treated for federal income tax purposes as a Non-Qualified Option and is not
intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder (the
"Code"). This option is in addition to any other options heretofore or hereafter
granted to the Optionee by the Company or any Related Corporation (as defined in
the Plan), but a duplicate original of this instrument shall not effect the
grant of another option.
3. VESTING OF OPTION IF BUSINESS RELATIONSHIP CONTINUES.
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(a) FULL EXERCISABILITY. Subject to Sections 4 and 5 hereof, this
option may be exercised at any time and from time to time for all or any portion
of the Option Shares, except that this option may not be exercised for a
fraction of a share.
(b) VESTING. If the Optionee has continued to serve the Company or any
Related Corporation in the capacity of an employee, officer, director or
consultant (such service is described herein as maintaining or being involved in
a "Business Relationship with the Company") through the vesting dates specified
below, Unvested Shares shall become Vested Shares (or shall "VEST") on such
dates in an amount equal to the number of Option Shares set forth opposite the
applicable date:
Less than one year from - 0 Option Shares
the Vesting Start Date
One year from - 25% of
the Vesting Start Date (the the Option Shares
"Anniversary Date")
Every month after the Anniversary Date - an additional
(E.G., if the Anniversary Date is 2.0833% of
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August 10, then on the 10th day of each the Option Shares
month thereafter; if the Anniversary
Date is on a day of the month for which
there is no corresponding day in a
given month, then on the last day of
such month) up to and including the
35th month after the Anniversary Date)
The 36th month after the Anniversary The balance of the Option
Date Shares
Option Shares shall be called "UNVESTED SHARES" and, when issued, shall be
subject to the Company's Repurchase Option described in Section 6 unless and
until they become "VESTED SHARES" in accordance with the vesting schedule set
forth above (at which time such Repurchase Option shall terminate as to such
Vested Shares). Any vesting of Option Shares under this option shall first be
deemed to apply to shares issued upon exercise of this option (in the order of
such exercise) and then to unissued shares subject to this option; and any
exercise of this option shall be deemed to apply first to any then unissued
Vested Shares. The term "OPTION SHARES" used without reference to either
Unvested Shares or Vested Shares shall mean both Unvested Shares and Vested
Shares, without distinction.
In addition, in the event the Company's Repurchase Option is triggered
pursuant to Section 6 below, and the Company elects not to exercise its option
for the repurchase of any or all of the Unvested Shares, then upon the
expiration of the Repurchase Option Period, any and all Option Shares not
repurchased by the Company shall become Vested Shares.
(c) VESTING ON SALE. Notwithstanding the foregoing, upon the
consummation of a Sale of the Company (as defined below), 50% of the Option
Shares which remain Unvested Shares at the time of the consummation of such Sale
of the Company shall immediately become Vested Shares, and the remaining
Unvested Shares (the "Remaining Unvested Shares") shall continue to vest at the
rate set forth in Subsection 3(b) hereof (providing that for purposes of this
Subsection, "Option Shares," as used in Subsection 3(b), shall mean the number
of Option Shares set forth on the Cover Sheet to this Agreement), beginning with
the first such date following the consummation of such Sale of the Company on
which Option Shares would have continued to vest had there not been a Sale of
the Company, and PROVIDED FURTHER that all of the Remaining Unvested Shares
shall become Vested Shares (i) at the time of the consummation of the Sale of
the Company if, at or prior to the Sale of the Company, the Optionee is not
offered employment by the successor to the Company (1) at the same or higher
total
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compensation level than in effect for the Optionee as an employee of the
Company prior to the Sale of the Company, (2) consisting of responsibilities not
materially reduced from the level of responsibilities undertaken by the Optionee
as an employee of the Company prior to the Sale of the Company, and (3) within a
40-mile radius of the Company's principal offices prior to the Sale of the
Company (except for business travel consistent with Optionee's responsibilities
as an employee of the Company), or (ii) if the Optionee is offered and accepts
employment meeting the criteria set forth in clause (i) of this sentence but,
within the 12 months following the Sale of the Company, (1) the Optionee's total
compensation level is reduced below the total compensation in effect for the
Optionee as an employee of the Company prior to the Sale of the Company, (2) the
Optionee's responsibilities are materially reduced below the level of
responsibilities the Optionee had as an employee of the Company prior to the
Sale of the Company, (3) the Optionee is transferred by the successor to the
Company (the "New Employer") to a location beyond a 40-mile radius of the
Company's principal offices prior to the Sale of the Company (except for
business travel consistent with Optionee's responsibilities as an employee of
the New Employer), or (4) the Optionee's employment with the New Employer is
terminated by the New Employer without Cause, at the time of the happening of
any event enumerated in this clause (ii).
For purposes of the foregoing, "Sale of the Company" shall mean (i) the
sale by the Company of all, or substantially all, of its assets; (ii) the sale
by Company shareholders of greater than 50% of the stock of the Company in a
single transaction or a group of related transactions; or, (iii) the merger or
consolidation of the Company with, or into, another company where the
outstanding shares of the Company immediately prior to such merger or
consolidation represent or are converted into or exchanged for securities which
represent less than 50% of the voting power of the surviving or resulting
entity.
For purposes of the foregoing, "Cause" shall mean a material violation
by the Optionee that is not cured within a reasonable time after written notice
thereof of any noncompetition agreement between the Optionee and the New
Employer or any of its subsidiaries or a finding in a criminal proceeding that
the Optionee has committed felonious criminal misconduct in connection with the
Optionee's employment by the New Employer, which misconduct has been materially
injurious to the interests of the New Employer. Further, and without limiting
the generality of the foregoing, the following circumstances shall be deemed not
to involve the voluntary resignation by a Optionee or a termination by the New
Employer for Cause: (i) the death of the Optionee, (ii) the disability or
incapacity of the Optionee which prevents the Optionee from continuing his
employment with the New Employer, in Optionee's then-current capacity, or (iii)
the resignation of the Optionee within 30 days of a vote of the board of
directors of the New Employer to remove a Optionee from his then-current office
(other than for Cause).
(d) OTHER ACCELERATION. Notwithstanding the foregoing, in
accordance with and subject to the provisions of the Plan, the Committee may,
in its
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discretion, accelerate the date that any Unvested Shares become Vested
Shares under this Option.
The foregoing rights are cumulative and (subject to Sections 4 or 5
hereof if the Optionee ceases to maintain a Business Relationship with the
Company and all Related Corporations) may be exercised up to and including the
date which is ten years from the date this option is granted.
(e) PARTIAL EXERCISE. This option may be exercised in part at
any time and from time to time within the above limits, except that this option
may not be exercised for a fraction of a share unless such exercise is with
respect to the final installment of stock subject to this option and cash in
lieu of a fractional share must be paid, in accordance with Paragraph 13(G) of
the Plan, to permit the Optionee to exercise completely such final installment.
Any fractional share with respect to which an installment of this option cannot
be exercised because of the limitation contained in the preceding sentence shall
remain subject to this option and shall be available for later purchase by the
Optionee in accordance with the terms hereof.
4. TERMINATION OF BUSINESS RELATIONSHIP. If the Optionee's Business
Relationship with the Company and all Related Corporations is terminated, other
than by reason of death, disability or dissolution as defined in Section 5,
vesting of Unvested Shares shall immediately cease, this option may be exercised
only as to any Option Shares that are Vested Shares on the date of termination
of the Optionee's Business Relationship and this option shall terminate (and may
no longer be exercised) after the passage of 90 days after the date of
termination of the Optionee's Business Relationship (but in no event later than
the scheduled expiration date). In the event of termination the Optionee's
Business Relationship with the Company, the Repurchase Option described in
Section 6 shall also be applicable and Optionee's only rights hereunder shall be
those which are properly exercised before the termination of this option
(subject to Section 6).
5. DEATH; DISABILITY; DISSOLUTION.
(a) DEATH. If the Optionee is a natural person who dies while in a
Business Relationship with the Company, vesting of Unvested Shares shall
immediately cease. In such event, this option may be exercised only as to any
Option Shares that are Vested Shares on the date of the Optionee's death, by the
Optionee's estate, personal representative or beneficiary to whom this option
has been transferred or assigned pursuant to Section 10, and this option may be
exercised only on or prior to the date which is 180 days after the date of death
(but not later than the scheduled expiration date). In the event of death, the
Repurchase Option described in Section 6 shall also be applicable.
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(b) DISABILITY. If the Optionee is a natural person that ceases to
maintain a Business Relationship with the Company by reason of his or her
disability, vesting of Unvested Shares shall immediately cease. In such event,
this option may be exercised only as to any Option Shares that are Vested Shares
on the date of termination of the Optionee's Business Relationship with the
Company; and this option may be exercised only on or prior to the date which is
180 days after the date of termination of the Optionee's Business Relationship
with the Company (but not later than the scheduled expiration date). In the
event of such termination of the Optionee's Business Relationship with the
Company, the Repurchase Option described in Section 6 shall also be applicable.
For purposes hereof, "DISABILITY" means "PERMANENT AND TOTAL DISABILITY" as
defined in Section 22(e)(3) of the Code.
(c) EFFECT OF TERMINATION. At the expiration of such 180-day
period provided in paragraph (a) or (b) of this Section 5 or the scheduled
expiration date, whichever is the earlier, this option shall terminate (and
shall no longer be exercisable) and the only rights hereunder shall be those as
to which the option was properly exercised before such termination (subject to
Section 6 hereof).
(d) DISSOLUTION. If the Optionee is a corporation, partnership,
trust or other entity that is dissolved, is liquidated, becomes insolvent or
enters into a merger or acquisition with respect to which the Optionee is not
the surviving entity, at a time when the Optionee is involved in a Business
Relationship with the Company, this option shall immediately terminate as of the
date of such event (and shall thereafter not be exercisable to any extent
whatsoever), and the only rights hereunder shall be those as to which this
option was properly exercised before such dissolution or other event (subject to
Section 6 hereof).
6. REPURCHASE OPTION. In the event of any voluntary or involuntary
termination of the Optionee's Business Relationship by the Company for any or no
reason, including by reason of death or disability, the Company shall, upon and
from the date of such termination (as reasonably fixed and determined by the
Company) have an irrevocable, exclusive, assignable option (the "REPURCHASE
OPTION") for a period of ninety (90) days (the "REPURCHASE OPTION PERIOD") to
repurchase all or any portion of the Optionee's Unvested Shares at the original
purchase price per share paid by the Optionee. Such option may be exercised by
the Company by sending written notice to the Optionee, which notice shall
specify the number of Unvested Shares being so repurchased and which notice
shall be accompanied by the Company's check for the purchase price of those
shares. Upon the sending of such notice and payment, the Company shall become
the legal and beneficial owner of the Unvested Shares being repurchased and all
rights and interests therein or relating thereto, and the Company shall have the
right to retain and transfer to its own name the number of Unvested Shares being
repurchased by the Company. Upon exercise of the Repurchase Option in the manner
provided in this Section 6, if the Company does not have possession of the
certificate or certificates representing the Unvested Shares being repurchased,
the
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Optionee shall deliver to the Company, within ten (10) days of receipt of
the Company's notice of such repurchase, such certificate or certificates duly
endorsed and free and clear of any and all liens, charges and encumbrances. If
the Company does have possession of such certificate or certificates pursuant to
Section 18 hereof, it may use the Optionee's stock assignment to effectuate the
repurchase.
7. PAYMENT OF PRICE:
(a) FORM OF PAYMENT. The option price shall be paid in the
following manner:
(i) in cash or by check;
(ii) subject to paragraph 7(b) below, by delivery of shares
of the Company's Common Stock having a fair market value
(as determined by the Committee) equal as of the date of
exercise to the option price;
(iii) by delivery of an assignment satisfactory in form and
substance to the Company of a sufficient amount of the
proceeds from the sale of the Option Shares and an
instruction to the broker or selling agent to pay that
amount to the Company; or
(iv) by any combination of the foregoing.
(b) LIMITATIONS ON PAYMENT BY DELIVERY OF COMMON STOCK. If the
Optionee delivers Common Stock held by the Optionee ("Old Stock") to the Company
in full or partial payment of the option price, and the Old Stock so delivered
is subject to restrictions or limitations imposed by agreement between the
Optionee and the Company, an equivalent number of Option Shares shall be subject
to all restrictions and limitations applicable to the Old Stock to the extent
that the Optionee paid for the Option Shares by delivery of Old Stock, in
addition to any restrictions or limitations imposed by this Agreement.
Notwithstanding the foregoing, the Optionee may not pay any part of the exercise
price hereof by transferring Common Stock to the Company unless such Common
Stock has been owned by the Optionee free of any substantial risk of forfeiture
for at least six months.
8. RESTRICTIONS ON TRANSFER. The Optionee agrees not to sell, assign,
transfer, pledge, hypothecate, gift, mortgage or otherwise encumber or dispose
of (except to the Company or any successor to the Company) all or any Unvested
Shares or any interest therein, and any Unvested Shares purchased upon exercise
of this option shall be held in escrow by the Company in accordance with the
terms of Section 18 below unless and until they become Vested Shares. Option
Shares will be of an illiquid nature and will be
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deemed to be "restricted securities" for purposes of the Securities Act of
1933, as amended. Accordingly, such shares must be sold in compliance with the
registration requirements of such Act or an exemption therefrom. Certificates
representing the Option Shares shall bear the Securities Exchange Act of 1934
legend and legends which state the restrictions imposed upon the Option Shares
as set forth in this Agreement.
9. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of
this Agreement, this option may be exercised by written notice to the Company,
at the principal executive office of the Company, or to such transfer agent as
the Company shall designate. Such notice shall state the election to exercise
this option and the number of Option Shares for which it is being exercised and
shall be signed by the person or persons so exercising this option. Such notice
shall be accompanied by payment of the full purchase price of such shares, and
the Company shall deliver a certificate or certificates representing such shares
as soon as practicable after the notice shall be received. Such certificate or
certificates shall be registered in the name of the person or persons so
exercising this option (or, if this option shall be exercised by the Optionee
and if the Optionee shall so request in the notice exercising this option, shall
be registered in the name of the Optionee and another person jointly, with right
of survivorship). In the event this option shall be exercised, pursuant to
Section 5 hereof, by any person or persons other than the Optionee, such notice
shall be accompanied by appropriate proof of the right of such person or persons
to exercise this option.
10. OPTION NOT TRANSFERABLE. This option is not transferable or assignable
except by will or by the laws of descent and distribution or pursuant to a valid
domestic relations order. Except as set forth in the preceding sentence, during
the Optionee's lifetime, only the Optionee can exercise this option.
11. NO OBLIGATION TO EXERCISE OPTION. The grant and acceptance of this
option imposes no obligation on the Optionee to exercise it.
12. NO OBLIGATION TO CONTINUE BUSINESS RELATIONSHIP. Neither the Plan, this
Agreement, nor the grant of this option imposes any obligation on the Company or
any Related Corporation to continue to maintain a Business Relationship with the
Optionee.
13. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE. The Optionee shall have no
rights as a stockholder with respect to the Option Shares until such time as the
Optionee has exercised this option by delivering a notice of exercise and has
paid in full the purchase price for the number of shares for which this option
is to be so exercised in accordance with Section 9. Except as is expressly
provided in the Plan with respect to certain
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changes in the capitalization of the Company, no adjustment shall be made
for dividends or similar rights for which the record date is prior to such date
of exercise.
14. CAPITAL CHANGES AND BUSINESS SUCCESSIONS. The Plan contains provisions
covering the treatment of options in a number of contingencies such as stock
splits and mergers. Provisions in the Plan for adjustment with respect to stock
subject to options and the related provisions with respect to successors to the
business of the Company are hereby made applicable hereunder and are
incorporated herein by reference.
15. WITHHOLDING TAXES; 83(b) ELECTION:
(a) WITHHOLDING TAXES. If the Company or any Related Corporation
in its discretion determines that it is obligated to withhold any tax in
connection with the exercise of this option, or in connection with the transfer
of, or the lapse of restrictions on, any Common Stock or other property acquired
pursuant to this option, the Optionee hereby agrees that the Company or any
Related Corporation may withhold from the Optionee's wages or other remuneration
the appropriate amount of tax. At the discretion of the Company or Related
Corporation, the amount required to be withheld may be withheld in cash from
such wages or other remuneration or in kind from the Common Stock or other
property otherwise deliverable to the Optionee on exercise of this option. The
Optionee further agrees that, if the Company or Related Corporation does not
withhold an amount from the Optionee's wages or other remuneration sufficient to
satisfy the withholding obligation of the Company or Related Corporation, the
Optionee will make reimbursement on demand, in cash, for the amount
underwithheld.
THE FILING OF AN ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, MAY BE REQUIRED BY SECTION 15(b) OF THIS AGREEMENT. IF
REQUIRED, SUCH AN ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE
WITHIN 30 DAYS FOLLOWING EACH EXERCISE OF THIS OPTION.
(b) SECTION 83(b) ELECTION. Optionee acknowledges that the
Unvested Shares acquired upon exercise of this option may be treated as subject
to a substantial risk of forfeiture within the meaning of Section 83 of the Code
and that, in the absence of an election under Section 83(b) of the Code, such
treatment could delay the determination of the tax consequences of such exercise
for both the Company and Optionee. In order to ensure that the tax consequences
of such exercise will be determined at the time of exercise, Optionee agrees to
file a timely election under Section 83(b) of the Code to include in Optionee's
taxable income, at the time of exercise, the difference between the fair market
value of the Unvested Shares received upon exercise of this option and the
amount paid for such shares; provided, however, that the Board, in its sole and
absolute discretion, may waive the requirement that the Optionee file such
election.
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16. COMPANY'S RIGHT OF FIRST REFUSAL:
(a) EXERCISE OF RIGHT. If the Optionee or his or her legal
representative (the "Transferor") desires to transfer all or any part of the
Option Shares to any person other than the Company (an "Offeror"), the
Transferor shall: (i) obtain in writing an irrevocable and unconditional bona
fide offer (the "Offer") for the purchase thereof from the Offeror; and (ii)
give written notice (the "Option Notice") to the Company setting forth the
Optionee's desire to transfer such shares, which Option Notice shall be
accompanied by a photocopy of the Offer and shall set forth at least the name
and address of the Offeror and the price and terms of the bona fide offer. Upon
receipt of the Option Notice, the Company shall have an assignable option to
purchase any or all of such shares (the "Company Option Shares") specified in
the Option Notice, such option to be exercisable by giving, within 30 days after
receipt of the Option Notice, a written counter-notice to the Transferor. If the
Company elects to purchase any or all of such Company Option Shares, it shall be
obligated to purchase, and the Transferor shall be obligated to sell to the
Company, such Company Option Shares at the price and terms indicated in the
Offer within 30 days from the date of delivery by the Company of such
counter-notice.
(b) SALE OF OPTION SHARES TO OFFEROR. The Transferor may, for 60
days after the expiration of the 30-day period during which the Company may give
the counter-notice, sell, pursuant to the terms of the Offer, any or all of such
Company Option Shares not purchased or agreed to be purchased by the Company or
its assignee; PROVIDED, HOWEVER, that the Transferor shall not sell such Company
Option Shares to the Offeror if the Offeror is a competitor of the Company and
the Company gives written notice to the Transferor, within 30 days of its
receipt of the Option Notice, stating that the Transferor shall not sell such
Company Option Shares to such Offeror; and PROVIDED, FURTHER, that prior to the
sale of such Company Option Shares to the Offeror, the Offeror shall execute an
agreement with the Company pursuant to which the Offeror agrees to be subject to
the restrictions set forth in this Agreement. If any or all of such Company
Option Shares are not sold pursuant to an Offer within the time permitted above,
the unsold Company Option Shares shall remain subject to the terms of this
Section 16.
(c) ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. If there shall
be any change in the Common Stock of the Company through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, combination or
exchange of shares, or the like, the restrictions contained in Section 8 or this
Section 16 shall apply with equal force to additional and/or substitute
securities, if any, received by the Optionee in exchange for, or by virtue of
his or her ownership of, Company Option Shares, except as otherwise determined
by the Board of Directors of the Company.
(d) FAILURE TO DELIVER COMPANY OPTION SHARES: If the Transferor
fails or refuses to deliver on a timely basis duly endorsed certificates
representing Company Option Shares to be sold to the Company or its assignee
pursuant to this Section 16, the Company shall have the right to deposit the
purchase price for such Company Option
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Shares in a special account with any bank or trust company in the State of
Delaware, giving notice of such deposit to the Transferor, whereupon such
Company Option Shares shall be deemed to have been purchased by the Company. All
such monies shall be held by the bank or trust company for the benefit of the
Transferor. All monies deposited with the bank or trust company remaining
unclaimed for two years after the date of deposit shall be repaid by the bank or
trust company to the Company on demand, and the Transferor shall thereafter look
only to the Company for payment. The Company may place a legend on any stock
certificate delivered to the Transferor reflecting the restrictions on transfer
provided in Section 8 hereof and this Section 16.
(e) EXPIRATION OF COMPANY'S RIGHT OF FIRST REFUSAL AND TRANSFER
RESTRICTIONS: The first refusal rights of the Company and the transfer
restrictions set forth above shall remain in effect until such time, if ever, as
a distribution to the public is made of shares of the Company's Common Stock
pursuant to a registration statement filed under the Securities Act of 1933, as
amended, or a successor statute, at which time the first refusal rights of the
Company and the transfer restrictions set forth herein will automatically
expire.
17. LOCK-UP AGREEMENT. The Optionee agrees that in connection with an
underwritten public offering of Common Stock, upon the request of the Company or
the principal underwriter managing such public offering, this Option and the
Option Shares may not be sold, offered for sale or otherwise disposed of without
the prior written consent of the Company or such underwriter, as the case may
be, for at least 180 days after the effectiveness of the Registration Statement
filed in connection with such offering, or such longer period of time as the
Board of Directors may determine if all of the Company's directors and officers
agree to be similarly bound. The lock-up agreement established pursuant to this
paragraph 17 shall have perpetual duration, except with respect to those Options
or Option Shares which are sold pursuant to Rule 701, Rule 144 or similar
exemption.
18. ESCROW OF UNVESTED SHARES.
(a) If this option is exercised as to any Unvested Shares,
such Unvested Shares shall be issued in the name of the Optionee, but shall be
held in escrow by the Company, acting in the capacity of escrow agent, together
with a stock assignment executed by the Optionee with respect to such Unvested
Shares.
(b) With respect to any Unvested Shares held in escrow that
become Vested Shares, the Company shall promptly issue a new certificate for the
number of shares that have become Vested Shares and shall deliver such
certificate to the Optionee and shall retain in escrow a new certificate for any
remaining Unvested Shares in exchange for the all or the relevant portion of the
applicable certificate then being held by the Company as escrow agent.
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(c) Subject to the terms hereof, the Optionee shall have all
the rights of a shareholder with respect to the Unvested Shares while they are
held in escrow, including, without limitation, the right to vote the Unvested
Shares and receive any cash dividends declared thereon.
(d) The Company may terminate this escrow at any time. The
Company may also appoint another entity to serve as escrow agent hereunder, in
which event the Optionee agrees to execute all documents requested by the
Company in connection therewith.
19. PROVISION OF DOCUMENTATION TO OPTIONEE. By signing this Agreement the
Optionee acknowledges receipt of a copy of this Agreement and a copy of the
Plan.
20. MISCELLANEOUS:
(a) NOTICES. All notices hereunder shall be in writing and shall
be deemed given when sent by certified or registered mail, postage prepaid,
return receipt requested, to the address set forth below. The addresses for such
notices may be changed from time to time by written notice given in the manner
provided for herein.
(b) ENTIRE AGREEMENT; MODIFICATION. This Agreement (consisting of
the terms and conditions set forth in this EXHIBIT E and the Cover Sheet
attached hereto) constitutes the entire agreement between the parties relative
to the subject matter hereof, and supersedes all proposals, written or oral, and
all other communications between the parties relating to the subject matter of
this Agreement. This Agreement may be modified, amended or rescinded only by a
written agreement executed by both parties.
(c) SEVERABILITY. The invalidity, illegality or unenforceability
of any provision of this Agreement shall in no way affect the validity, legality
or enforceability of any other provision.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, subject to the limitations set forth in this agreement.
(e) GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Delaware, without giving
effect to the principles of the conflicts of laws thereof. The preceding choice
of law provision shall apply to all claims, under any theory whatsoever, arising
out of the relationship of the parties contemplated herein.
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(f) DEFINED TERMS. Capitalized terms not otherwise defined herein
shall have the meaning assigned to such terms in the Stock Option Agreement to
which these terms and conditions are attached.
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