EXHIBIT 10.30
CONCORD COMMUNICATIONS, INC.
Executive
Incentive Stock Option Agreement
1. Grant Under 1997 Stock Plan
This Option Agreement is effective only when attached to a Notice of Grant
of Stock Options (the "Notice") signed on behalf of Concord
Communications, Inc. (the "Company") and by the option holder (the
"Employee"). The option granted under the Notice (the "Option") is granted
pursuant to and is governed by the Company's 1997 Stock Plan (the e 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. In the event of any inconsistency or conflict between
this Agreement and the Plan, the terms of the Plan shall govern.
2. Other Options
This Option is in addition to any other Options heretofore or hereafter
granted to the Employee by the Company, but a duplicate original of this
instrument shall not effect the grant of another Option.
3. Extent of Option if Employment Continues
If the Employee continues to be employed by the Company on the date(s)
described in the Notice, the Employee may exercise the Option for the
number of shares indicated. Shares which vest "quarterly" vest in equal
installments as of the end of each three-month period during the interval
described in the Notice.
The foregoing rights are cumulative and, while the Employee continues to
be employed by the Company, may be exercised up to and including the time
of Expiration set forth in the Notice. All of the foregoing rights are
subject to Sections 4 and 5 of this Agreement, as appropriate, if the
Employee ceases to be employed by the Company or becomes disabled or dies
while in the employ of the Company.
Effective upon the date immediately following any Change in Control (as
defined) of the Company, the "Full Vest" date(s) ser forth in the Notice
shall be automatically accelerated by twenty-four (24) months.
Notwithstanding the foregoing, of within twenty-four (24) months after a
Change in Control there is a Termination Event (as defined), all of the
Employee's unvested Options shall automatically become fully vested as of
the date of such Termination Event.
For purposes hereof, a "Change in Control" shall have occurred if at any
time any of the
-2-
following events shall occur:
(A) The Company is merged, consolidated or reorganized into or with
another corporation or other legal person, and as a result of such
merger, consolidation or reorganization less than a majority of the
combined voting power of then-outstanding securities of the combined
corporation or person immediately after such transaction are held in
the aggregate by the holders of the combined voting power of the
then-outstanding securities entitled to vote generally in the
election of directors of the Company ("Voting Stock") immediately
prior to such transaction;
(B) The Company sells or other wise transfers all or substantially
all of its assets to any other corporation or other legal person,
and less than a majority of the combined voting power of the
then-outstanding securities of such corporation or person
immediately after such sale or transfer is held in the aggregate by
the holders of the Voting Stock of the Company immediately prior to
such sale or transfer;
(C) There is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated
pursuant to the Exchange Act of 1934 (the "1934 Act"), disclosing
that any person (as the term "person" is used in Section 13(d)(3) or
Section 14(d)(2) of the 0000 Xxx) has become the beneficial owner
(as the term "beneficial owner" is defined under Rule 13d-3 or any
successor rule or regulation promulgated under the 0000 Xxx) of
securities representing 33% or more of the Voting Stock; or
(D) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the 1934 Act
disclosing in response to Form 8-K or Schedule 14A (or any successor
schedule, form or report or item therein) that a change in control
of the Company has or may have occurred or will or may occur in the
future pursuant to any then-existing contract or transaction.
provided, however, that notwithstanding the foregoing provisions of this
Section, a "Change in Control" shall not be deemed to have occurred for purposes
of this Agreement solely because (i) the Company, (ii) an entity in which the
Company directly or indirectly beneficially owns 50% or more of the voting
securities (iii) any Company sponsored employee stock ownership plan or any
other employee benefit plan of the Company, or (iv) any corporation or legal
person approved by the Board of Directors prior to the occurrence of the event
that, absent such approval by the Board of Directors, would have constituted a
Change in Control, either files or become obligated to file a report or a proxy
statement under or in response to the Schedule 13D, Schedule 14D-1, Form 8-K or
Schedule 14A (or any successor schedule, form or report or item therein) under
the 1934 Act, disclosing beneficial ownership by it of shares of Voting Stock,
whether in excess of 33% or otherwise, or because the Company reports that a
change in
-3-
control of the Company has or may have occurred or will or may occur in the
future by reason of such beneficial ownership.
Notwithstanding anything to the contrary in the Agreement, if the Employee is a
Disqualified Individual (as defined in Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code")) and if any portion of any acceleration of
vesting, payment or transfer of property under this Agreement would be an Excess
Parachute Payment (as defined in Section 280G of the Code) but for the
application of this sentence, then the amount of such acceleration, payment or
transfer otherwise payable to the Employee pursuant to the Agreement shall be
reduced to the minimum extent necessary (but in no event to less than zero) so
that no portion of such payment, as so reduced, constitutes an Excess Parachute
Payment; provided, however, that no reduction shall be made if the net economic
effect would be disadvantageous to eh Employee, taking into account all the
facts and circumstances including any tax savings resulting from the reduction.
For purposes hereof, "Cause" shall mean:
(i) the Employee's willful and substantial misconduct with respect to the
business and affairs of the Company, or any subsidiary or affiliate
thereof;
(ii) the Employee's gross neglect of duties, dishonesty, deliberate
disregard of any material rule or policy of the Company or the commission
by the Employee of any other action with the intent to injure the Company,
or any subsidiary or affiliate thereof;
(iii) the Employee's commission of an act involving embezzlement or fraud
or commission of a felony; or
(iv) the commission of an act which induces any customer of the Company to
breach a contract or purchase order with the Company, or any subsidiary or
affiliate thereof.
"Good Reason" means the occurrence of one or more of the following events
following a Change in Control:
(i) Without the Employee's express written consent, the Company shall
reduce the Employee's duties and responsibilities from those assigned
to the Employee immediately prior to the Change in Control; or
(ii) Without the Employee's express written consent, the Company shall
require the Employee to have his principal location of work changed to any
location which is in excess of 60 miles from the location thereof
immediately prior to the Change in Control; or
-4-
(iii) Without the Employee's express written consent, the Company shall
materially reduce the Employee's benefits under existing benefit plans,
unless there is a concurrent reduction uniformly among all persons
entitled to such benefits.
For purposes hereof, a "Termination Event" shall occur if at any time after a
Change in Control of the Company, the Company (or any successor corporation)
terminates the Employee's employment without Cause or the Employee voluntarily
terminates his employment for Good Reason.
The rights afforded to the Employee under this Section shall terminate (except
as to options that have been deemed to vest immediately upon a Change in
Control) upon the earlier of (i) twenty-four (24) months following any Change in
Control of the Company, (ii) the date prior to any Change in Control of the
Company that the Employee for any reason ceases to be an employee of the Company
and (iii) the date following any Change in Control of the Company that the
Employee is terminated for Cause or voluntarily terminates his employment (other
than for Good Reason).
4. Termination of Employment
If the Employee ceases to be employed by the Company other than by reason of
death or disability, the Option shall terminate after the passage of sixty (60)
days from the date employment ceases, but in no event later than the scheduled
expiration date. In such a case, the Employee's only rights hereunder shall be
those which are properly exercised before the termination of the Option.
5. Death or Disability
If the Employee dies while in the employ of the Company, the Option may be
exercised, to the extent of the number of shares with respect to which the
Employee could have exercised it on the date of his death, by his estate,
personal representative, or beneficiary to whom the Option has been assigned
pursuant to Section 9, at any time within 180 days after the date of death, but
not later than the scheduled expiration date. If the Employee ceases to be
employed by the Company by reason of his disability (as defined in the Plan),
the Option may be exercised to the extent of the number of shares with respect
to which he could have exercised it on the date of the termination of his
employment, at any time within 180 days after such termination, but not later
than the scheduled expiration date. At the expiration of such 180 day period or
the scheduled expiration date, whichever is the earlier, the Option shall
terminate and the only rights hereunder shall be those as to which the Option
was properly exercised before such termination.
6. Partial Exercise
-5-
Exercise of the Option up to the extent stated in the Notice of Grant may be
made in part at any time and from time to time within the above limits, except
that the Option may not be exercised for a fraction of a share.
7. Agreement to Purchase for Investment
By acceptance of the Option, the Employee agrees that a purchase of shares under
the Option will not be made with a view to their distribution, as that term is
used in the Securities Act of 1933, as amended, unless in the opinion of counsel
to the Company such distribution is in compliance with or exempt from the
registration and prospectus requirements of the Act, and the Employee agrees if
requested to sign a certificate to such effect at the time of exercising the
Option and agrees that the certificate for the shares so purchased may be
inscribed with a legend to ensure compliance with the Act and with any
applicable state securities laws.
8. Method of Exercising Option
(a) Subject to the terms and conditions of this Agreement, the 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 the Option and the number of shares
in respect of which it is being exercised and shall be signed by the person or
persons so exercising the 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 and payment have been received.
(b) The Option price shall be paid in cash or by check or, with the
consent of the Committee in its sole discretion, in the following manner:
(i) subject to Section 8(c) 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;
(ii) by delivery of the Employee's personal recourse note bearing
interest payable not less than annually at the rate set forth
in the Plan; or
(iii) by any combination of the foregoing.
(c) If the Employee delivers Common Stock held by the Employee ("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 Employee and the Company, an equivalent number of option
shares shall be subject to all
-6-
restrictions and limitations applicable to the Old Stock to the extent that the
Employee 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 Employee 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 Employee free of any substantial risk of forfeiture for at least six
months.
(d) The certificate or certificates for the shares as to which the Option
shall have been so exercised shall be registered in the name of the person or
persons so exercising the Option (or, if the Option shall be exercised by the
Employee and if the Employee shall so request in the notice exercising the
Option, shall be registered in the name of the Employee and another person
jointly, with right of survivorship) and shall be delivered as provided above to
or upon the written order of the person or persons exercising the Option. In the
event the Option shall be exercised, pursuant to Section 5 hereof, by any person
or persons other than the Employee, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise the Option.
All shares that shall be purchased upon the exercise of the Option as provided
herein shall be fully paid and nonassessable.
9. Option Not Transferable
The Option is not transferable or assignable except by will or by the laws of
descent and distribution. During the Employee's lifetime, only the Employee can
exercise the Option.
10. No Obligation to Exercise Option
The grant and acceptance of the Option imposes no obligation on the Employee to
exercise it.
11. No Obligation to Continue Employment
The Company is not by the Plan or the Option obligated to continue the Employee
in employment.
12. No Rights as Stockholder Until Exercise
The Employee shall have no rights as a stockholder with respect to shares
subject to the Option until a stock certificate therefor has been issued to the
Employee and is fully paid for. Except as expressly provided in the Plan with
respect to certain 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 the date such stock certificate is issued.
13. Early Disposition
-7-
The Employee agrees to notify the Company of any disposition of any shares of
Common Stock acquired on the exercise of the Option within the two year period
beginning on the date of grant or within one year after the date of the transfer
of such shares to the Employee. The Employee also agrees to provide the Company
with any information which it shall request concerning any such disposition.
Employees who receive incentive stock options will be disqualified under Section
422 of the Internal Revenue Code from receiving the favorable income tax
treatment otherwise available with respect to the exercise of such an option if
they dispose of the stock received on exercise of the option within either of
the one or two year periods described in the preceding sentence.
14. Withholding Taxes
If the Company 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 the Option, the Employee hereby agrees that the Company may
withhold from the Employee's wages or other remuneration the appropriate amount
of tax. At the discretion of the Company, 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 Employee on exercise
of the Option. The Employee further agrees that, if the Company does not
withhold an amount from the Employee's wages or other remuneration sufficient to
satisfy the withholding obligation of the Company, the Employee will make
reimbursement on demand, in cash, for the amount underwithheld.
15. Arbitration
Any dispute, controversy, or claim arising out of, in connection with, or
relating to the performance of this Agreement or its termination shall be
settled by arbitration in the Commonwealth of Massachusetts, pursuant to the
rules then obtaining of the American Arbitration Association. Any award shall be
final, binding and conclusive upon the parties and a judgment rendered thereon
may be entered in any court having jurisdiction thereof.
16. Provision of Documentation to Employee
By signing the Notice the Employee acknowledges receipt of a copy of this
Agreement and a copy of the Plan.
17. Miscellaneous
(a) Notices. All communications 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 in the Notice. The addresses for
such communications may be changed from time to time by written notice given in
the manner provided for
-8-
herein.
-9-
(b) Entire Agreement; Modification. The Notice and this Agreement
constitute the entire agreement between the parties relative to the subject
matter hereof, and supersede 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 the Notice or this Agreement shall in no way affect the validity,
legality or enforceability of any other provision.
(d) Successors and Assigns. The Notice and 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 Section 9
hereof.
(e) Governing Law. This Agreement shall be governed by and interpreted in
accordance with the internal laws of The Commonwealth of Massachusetts.
