Exhibit (d)(3)
RSA SECURITY INC.
NON-STATUTORY STOCK OPTION AGREEMENT
1. GRANT OF OPTION. RSA Security Inc., a Delaware corporation (the
"Company"), hereby grants to (the "Optionee") an option, pursuant to the
Company's 1994 Stock Option Plan, as amended and restated (the "Plan"), to
purchase an aggregate of shares of Common Stock, $.01 par value per share
("Common Stock"), of the Company at a price of $ per share, purchasable as set
forth in and subject to the terms and conditions of this option and the Plan.
Except where the context otherwise requires, the term "Company" shall include
the parent and all present and future subsidiaries of the Company as defined in
Sections 424(e) and 424(f) of the United States Internal Revenue Code of 1986,
as amended or replaced from time to time (the "Code").
2. NON-STATUTORY STOCK OPTION. This option is not intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.
3. EXERCISE OF OPTION AND PROVISIONS FOR TERMINATION.
(a) VESTING SCHEDULE. Except as otherwise provided in this Agreement, this
option shall vest and become exercisable in installments (each, an
"installment") as to not more than the number of shares set forth in the table
below during the respective exercise periods set forth in the table below. No
installment shall be exercisable after the fourth anniversary of the vesting
date of such installment (each, an "Installment Expiration Date"), except as
otherwise provided in Section 3(e) below. If, after the respective Installment
Expiration Date, an installment shall for any reason not have been exercised in
full (except as otherwise provided in Section 3(e) below), the option shall be
deemed to have expired with respect to the unpurchased shares in such
installment.
Number of
Shares as to which
Installment Exercise Period Option is Exercisable
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The right of exercise of this option shall be cumulative so that if any
installment is not exercised to the maximum extent permissible during the
respective installment exercise period, it shall be exercisable, in whole or in
part, with respect to all shares not so purchased at any time prior to the
respective Installment Expiration Date or the earlier termination of this
option.
(b) EXERCISE PROCEDURE. Subject to the conditions set forth in this
Agreement, this option shall be exercised by the Optionee's delivery of written
notice of exercise to the Controller of the Company, specifying the number of
shares to be purchased and the purchase price to be paid therefor and
accompanied by payment in full in accordance with Section 4. Such exercise shall
be effective upon receipt by the Controller of the Company of such written
notice together with the required payment. The Optionee may purchase less than
the number of shares covered hereby, provided that no partial exercise of this
option may be for any fractional share or for fewer than ten whole shares.
(c) CONTINUOUS RELATIONSHIP WITH THE COMPANY REQUIRED. Except as otherwise
provided in this Section 3, this option may not be exercised unless the
Optionee, at the time he or she exercises this option, is, and has been at all
times since the date of grant of this option, an employee, officer or director
of, or consultant or advisor to, the Company (an "Eligible Optionee").
(d) TERMINATION OF RELATIONSHIP WITH THE COMPANY. If the Optionee ceases
to be an Eligible Optionee for any reason, then, except as provided in
paragraphs (e) and (f) below, the right to exercise this option shall terminate
three months after such cessation (but in no event after the final Installment
Expiration Date), PROVIDED THAT, except as otherwise provided in Section 9, this
option shall be exercisable only to the extent that the Optionee was entitled to
exercise this option on the date of such cessation.
(e) EXERCISE PERIOD UPON DEATH OR DISABILITY. If the Optionee dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
the final Installment Expiration Date while he or she is an Eligible Optionee,
or if the Optionee dies within three months after the Optionee ceases to be an
Eligible Optionee (other than as the result of a termination of such
relationship by the Company for "cause" as specified in paragraph (f) below),
this option shall be exercisable, within the period of one year following the
date of death or disability of the Optionee (whether or not such exercise occurs
before the final Installment Expiration Date), by the Optionee or by the person
to whom this option is transferred by will or the laws of descent and
distribution, PROVIDED THAT this option shall be exercisable only to the extent
that this option was exercisable by the Optionee on the date of his or her death
or disability. Except as otherwise indicated by the context, the term
"Optionee", as used in this option, shall be deemed to include the estate of the
Optionee or any person who acquires the right to exercise this option by bequest
or inheritance or otherwise by reason of the death of the Optionee.
(f) DISCHARGE FOR CAUSE. If the Optionee, prior to the final Installment
Expiration Date, is discharged by the Company for "cause" (as defined below),
the right to exercise this option shall terminate immediately upon such
cessation of employment. "Cause" shall mean willful misconduct by the Optionee
or willful failure to perform his or her responsibilities in the best interests
of the Company (including, without limitation, breach by the Optionee of any
provision of any employment, consulting, advisory, nondisclosure,
non-competition or other similar agreement between the Optionee and the
Company), as determined by the Company, which determination shall be conclusive.
The Optionee shall be considered to have been discharged "for cause" if the
Company determines, within 30 days after the Optionee's resignation, that
discharge for cause was warranted.
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4. PAYMENT OF PURCHASE PRICE.
(a) METHOD OF PAYMENT. Payment of the purchase price for shares
purchased upon exercise of this option shall be made (i) by delivery to the
Company of cash or a check to the order of the Company in an amount equal to the
purchase price of such shares, (ii) subject to the consent of the Company, by
delivery to the Company of shares of Common Stock of the Company then owned by
the Optionee having a fair market value equal in amount to the purchase price of
such shares, (iii) by any other means which the Board of Directors determines
are consistent with the purpose of the Plan and with applicable laws and
regulations (including, without limitation, the provisions of Rule 16b-3 under
the United States Securities Exchange Act of 1934 and Regulation T promulgated
by the Federal Reserve Board), or (iv) by any combination of such methods of
payment.
(b) VALUATION OF SHARES OR OTHER NON-CASH CONSIDERATION TENDERED IN
PAYMENT OF PURCHASE PRICE. For the purposes hereof, the fair market value of any
share of the Company's Common Stock or other non-cash consideration which may be
delivered to the Company in exercise of this option shall be determined in good
faith by the Board of Directors of the Company.
(c) DELIVERY OF SHARES TENDERED IN PAYMENT OF PURCHASE PRICE. If the
Optionee exercises this option by delivery of shares of Common Stock of the
Company, the certificate or certificates representing the shares of Common Stock
of the Company to be delivered shall be duly executed in blank by the Optionee
or shall be accompanied by a stock power duly executed in blank suitable for
purposes of transferring such shares to the Company. Fractional shares of Common
Stock of the Company will not be accepted in payment of the purchase price of
shares acquired upon exercise of this option.
(d) RESTRICTIONS ON USE OF OPTION STOCK. Notwithstanding the
foregoing, no shares of Common Stock of the Company may be tendered in payment
of the purchase price of shares purchased upon exercise of this option if the
shares to be so tendered were acquired within twelve (12) months before the date
of such tender, through the exercise of an option granted under the Plan or any
other stock option or restricted stock plan of the Company.
5. DELIVERY OF SHARES; COMPLIANCE WITH SECURITIES LAWS, ETC.
(a) GENERAL. The Company shall, upon payment of the option price for
the number of shares purchased and paid for, make prompt delivery of such shares
to the Optionee, provided that if any law or regulation requires the Company to
take any action with respect to such shares before the issuance thereof, then
the date of delivery of such shares shall be extended for the period necessary
to complete such action.
(b) LISTING, QUALIFICATION, ETC. This option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject hereto upon any
securities exchange or under any U.S. federal, state or foreign law, or the
consent or approval of any governmental or regulatory body, or that the
disclosure of non-public information or the satisfaction of any other condition
is necessary as a condition of, or in connection with, the issuance or purchase
of shares hereunder, this option may not be exercised, in whole or in part,
unless such listing, registration, qualification, consent
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or approval, disclosure or satisfaction of such other condition shall have been
effected or obtained on terms acceptable to the Board of Directors. Nothing
herein shall be deemed to require the Company to apply for, effect or obtain
such listing, registration, qualification or disclosure, or to satisfy such
other condition.
6. NONTRANSFERABILITY OF OPTION. This option is personal and no rights
granted hereunder may be transferred, assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) nor shall any such rights be
subject to execution, attachment or similar process, except that this option may
be transferred (i) by will or the laws of descent and distribution or (ii)
pursuant to a qualified domestic relations order as defined in Section 414(p) of
the Code. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of this option or of such rights contrary to the provisions hereof, or
upon the levy of any attachment or similar process upon this option or such
rights, this option and such rights shall, at the election of the Company,
become null and void.
7. NO SPECIAL EMPLOYMENT OR SIMILAR RIGHTS. Nothing contained in the Plan
or this option shall be construed or deemed by any person under any
circumstances to bind the Company to continue the employment or other
relationship of the Optionee with the Company for the period within which this
option may be exercised.
8. RIGHTS AS A STOCKHOLDER. The Optionee shall have no rights as a
stockholder with respect to any shares which may be purchased by exercise of
this option (including, without limitation, any rights to receive dividends or
non-cash distributions with respect to such shares) unless and until a
certificate representing such shares is duly issued and delivered to the
Optionee. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date such stock certificate is issued.
9. CHANGE IN CONTROL EVENTS.
(a) DEFINITIONS.
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(i) A "Change in Control Event" shall mean:
(A) the acquisition by an individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership of any capital stock of the Company if, after
such acquisition, such Person beneficially owns (within the meaning of Rule
13d-3 promulgated under the Exchange Act) 50% or more of either (x) the
then-outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or (y) the combined voting power of the then-outstanding
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however, that
for purposes of this subsection (i), the following acquisitions shall not
constitute a Change in Control Event: (A) any acquisition directly from the
Company (excluding an acquisition pursuant to the exercise, conversion or
exchange of any security exercisable for, convertible into or exchangeable for
common stock or voting securities of the Company, unless the Person exercising,
converting or exchanging such security acquired such security directly from the
Company or an underwriter or agent of the Company), (B) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, or (C) any acquisition by any
corporation pursuant to a Business Combination (as defined below) which complies
with clauses (x) and (y) of subsection (C) of this definition; or
(B) such time as the Continuing Directors (as defined
below) do not constitute a majority of the Board (or, if applicable, the Board
of Directors of a successor corporation to the Company), where the term
"Continuing Director" means at any date a member of the Board (x) who was a
member of the Board on the date of the initial adoption of this Plan by the
Board or (y) who was nominated or elected subsequent to such date by at least a
majority of the directors who were Continuing Directors at the time of such
nomination or election or whose election to the Board was recommended or
endorsed by at least a majority of the directors who were Continuing Directors
at the time of such nomination or election; provided, however, that there shall
be excluded from this clause (y) any individual whose initial assumption of
office occurred as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents, by or on behalf of a person other than the
Board; or
(C) the consummation of a merger, consolidation,
reorganization, recapitalization or statutory share exchange involving the
Company or a sale or other disposition of all or substantially all of the assets
of the Company (a "Business Combination"), unless, immediately following such
Business Combination, each of the following two conditions is satisfied: (x) all
or substantially all of the individuals and entities who were the beneficial
owners of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include,
without limitation, a corporation which as a result of such transaction owns the
Company or substantially all of the Company's assets either directly or through
one or more subsidiaries) (such resulting or acquiring corporation is referred
to herein as the "Acquiring Corporation") in substantially the same proportions
as their ownership of the Outstanding
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Company Common Stock and Outstanding Company Voting Securities, respectively,
immediately prior to such Business Combination and (y) no Person (excluding the
Acquiring Corporation or any employee benefit plan (or related trust) maintained
or sponsored by the Company or by the Acquiring Corporation) beneficially owns,
directly or indirectly, 50% or more of the then-outstanding shares of common
stock of the Acquiring Corporation, or of the combined voting power of the
then-outstanding securities of such corporation entitled to vote generally in
the election of directors (except to the extent that such ownership existed
prior to the Business Combination).
(ii) "Good Reason" shall mean any material diminution in the
Participant's position, duties, responsibilities, power, title, capacity or
office from and after a Change in Control Event, or any reduction in the annual
base salary or benefits payable to the Participant from and after such Change in
Control Event, or the relocation after such Change in Control Event of the
Participant's principal place of business to a location that is greater than 50
miles from the current site.
(iii) "Cause" shall have the meaning set forth in Section 3(f)
hereof.
(b) EFFECT OF CHANGE IN CONTROL EVENT ON OPTION. Subject to Section
9(c) below, if, at any time during the period commencing on the date of the
consummation of a Change in Control Event and ending on the first anniversary of
such date, the Participant's employment with the Company or the acquiring or
succeeding corporation is terminated by the Participant for Good Reason or is
terminated by the Company or the acquiring or succeeding corporation without
Cause, then, except to the extent specifically provided to the contrary in any
other agreement between the Participant and the Company, this option shall
automatically become immediately exercisable in full. The terms and provisions
of this Section 9 shall be in addition to, and not in limitation of, any terms
and provisions of the Plan, including without limitation Section 8(c) of the
Plan, or any other agreement between the Participant and the Company.
(c) POOLINGS OF INTERESTS. Notwithstanding any other provision of
this Agreement, in the event that anything in Section 9(b) is determined to
prevent any Business Combination from being accounted for as a pooling of
interests and the Board of Directors of the Company desires that such Business
Combination be accounted for as a pooling of interests, then Section 9(b) shall
be inapplicable to such Business Combination.
10. WITHHOLDING TAXES. The Company's obligation to deliver shares upon the
exercise of this option shall be subject to the Optionee's satisfaction of all
applicable U.S. federal, state, local and foreign income tax, employment tax,
and other withholding requirements.
11. MISCELLANEOUS.
(a) Except as provided herein, this option may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the
Optionee.
(b) All notices under this option shall be mailed or delivered by
hand to the parties at their respective addresses set forth beneath their names
below or at such other address as may be designated in writing by either of the
parties to one another.
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(c) This option shall be governed by and construed in accordance with
the laws of the State of Delaware.
Date of Grant: _____________ RSA SECURITY INC.
By:____________________________________
Title:_________________________________
Address: 00 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
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Exhibit (d)(3)
OPTIONEE'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company's 1994 Stock Option Plan.
OPTIONEE
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(Signature)
ADDRESS:
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