NON-QUALIFIED STOCK OPTION AGREEMENT eSCRIPTION, INC.
Exhibit 4.3
eSCRIPTION, INC.
AGREEMENT made as of the ___day of 2008, between eSCRIPTION, INC. (the “Company”), a
Delaware corporation having a principal place of business in Needham, Massachusetts, and
(the “Participant”).
WHEREAS, the Company desires to grant to the Participant an Option to purchase shares of its
common stock, $.001 par value per share (the “Shares”), under and for the purposes set forth in the
Company’s Amended and Restated 1999 Employee, Director and Consultant Equity Incentive Plan (the
“Plan”);
WHEREAS, the Company and the Participant understand and agree that any terms used and not
defined herein have the same meanings as in the Plan; and
WHEREAS, the Company and the Participant each intend that the Option granted herein shall be a
Non-Qualified Option.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the parties hereto agree as follows:
1. GRANT OF OPTION.
The Company hereby grants to the Participant the right and option to purchase all or any part
of an aggregate of (___) Shares, on the terms and conditions and subject to all
the limitations set forth herein and in the Plan, which is incorporated herein by reference. The
Participant acknowledges receipt of a copy of the Plan.
2. PURCHASE PRICE.
The purchase price of the Shares covered by the Option shall be ($___) per
Share, subject to adjustment, as provided in the Plan, in the event of a stock split, reverse stock
split or other events affecting the holders of Shares. Payment shall be made in accordance with
Paragraph 7 of the Plan.
3. EXERCISABILITY OF OPTION.
Subject to the terms and conditions set forth in this Agreement and the Plan, the Option
granted hereby shall become exercisable as follows:
[INSERT VESTING SCHEDULE]
The foregoing rights are cumulative and are subject to the other terms and conditions of this
Agreement and the Plan.
4. TERM OF OPTION.
The Option shall terminate ten (10) years from the date of this Agreement, but shall be
subject to earlier termination as provided herein or in the Plan.
If the Participant ceases to be an employee, director or consultant of the Company or of an
Affiliate (for any reason other than the death or Disability of the Participant or termination of
the Participant for “cause” (as defined in the Plan), the Option may be exercised, if it has not
previously terminated, within three (3) months after the date the Participant ceases to be an
employee, director or consultant of the Company or an Affiliate, or within the originally
prescribed term of the Option, whichever is earlier, but may not be exercised thereafter. In such
event, the Option shall be exercisable only to the extent that the Option has become exercisable
and is in effect at the date of such cessation of employment, directorship or consultancy.
Notwithstanding the foregoing, in the event of the Participant’s Disability or death within
three (3) months after the termination of employment, directorship or consultancy, the Participant
or the Participant’s Survivors may exercise the Option within one (1) year after the date of the
Participant’s termination of employment, directorship or consultancy, but in no event after the
date of expiration of the term of the Option.
In the event the Participant’s employment, directorship or consultancy is terminated by the
Company or an Affiliate for “cause” (as defined in the Plan), the Participant’s right to exercise
any unexercised portion of this Option shall cease as of such termination, and this Option shall
thereupon terminate. Notwithstanding anything herein to the contrary, if subsequent to the
Participant’s termination, but prior to the exercise of the Option, the Board of Directors of the
Company determines that, either prior or subsequent to the Participant’s termination, the
Participant engaged in conduct which would constitute “cause,” then the Participant shall
immediately cease to have any right to exercise the Option and this Option shall thereupon
terminate.
In the event of the Disability of the Participant, as determined in accordance with the Plan,
the Option shall be exercisable within one (1) year after the Participant’s termination of service
or, if earlier, within the term originally prescribed by the Option. In such event, the Option
shall be exercisable:
| (a) | to the extent exercisable but not exercised as of the date of Disability; and | ||
| (b) | in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion of any additional rights to exercise the Option as would have accrued had the Participant not become Disabled prior to the end of the accrual period which next ends following the date of Disability. The proration shall be based upon the number of days during the accrual period prior to the date of Disability. |
In the event of the death of the Participant while an employee, director or consultant of the
Company or of an Affiliate, the Option shall be exercisable by the Participant’s Survivors
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within
one (1) year after the date of death of the Participant or, if earlier, within the originally
prescribed term of the Option. In such event, the Option shall be exercisable:
| (x) | to the extent exercisable but not exercised as of the date of death; and | ||
| (y) | in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion of any additional rights to exercise the Option as would have accrued had the Participant not died prior to the end of the accrual period which next ends following the date of death. The proration shall be based upon the number of days during the accrual period prior to the Participant’s death. |
5. METHOD OF EXERCISING OPTION.
Subject to the terms and conditions of this Agreement, the Option may be exercised by written
notice to the Company at its principal executive office, in substantially the form of
Exhibit A attached hereto. Such notice shall state the number of Shares with respect to
which the Option is being exercised and shall be signed by the person exercising the Option.
Payment of the purchase price for such Shares shall be made in accordance with Paragraph 7 of the
Plan. The Company shall deliver a certificate or certificates representing such Shares as soon as
practicable after the notice shall be received, provided, however, that the Company may delay
issuance of such Shares until completion of any action or obtaining of any consent, which the
Company deems necessary under any applicable law (including, without limitation, state securities
or “blue sky” laws). 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 Participant and if the Participant shall so
request in the notice exercising the Option, shall be registered in the name of the Participant 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 4 hereof, by any person or persons other than the
Participant, 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.
6. PARTIAL EXERCISE.
Exercise of this Option to the extent above stated may be made in part at any time and from
time to time within the above limits, except that no fractional share shall be issued pursuant to
this Option.
7. NON-ASSIGNABILITY.
The Option shall not be transferable by the Participant otherwise than by will or by the laws
of descent and distribution or pursuant to a qualified domestic relations order as defined by the
Code or Title I of the Employee Retirement Income Security Act or the rules thereunder. Except as
provided in the previous sentence, the Option shall be exercisable, during the Participant’s
lifetime, only by the Participant (or, in the event of legal incapacity or
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incompetency, by the
Participant’s guardian or representative) and shall not be assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or
similar process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this Section 7, or the
levy of any attachment or similar process upon the Option shall be null and void.
8. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.
The Participant shall have no rights as a stockholder with respect to Shares subject to this
Agreement until registration of the Shares in the Company’s share register in the name of the
Participant. Except as is 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 of such registration.
9. 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.
10. TAXES.
The Participant acknowledges that upon exercise of the Option the Participant will be deemed
to have taxable income measured by the difference between the then fair market value of the Shares
received upon exercise and the price paid for such Shares pursuant to this Agreement. The
Participant acknowledges that any income or other taxes due from him or her with respect to this
Option or the Shares issuable pursuant to this Option shall be the Participant’s responsibility.
The Participant agrees that the Company may withhold from the Participant’s remuneration, if
any, the appropriate amount of federal, state and local withholding taxes attributable to such
amount that is considered compensation includable in such person’s gross income. At the Company’s
discretion, the amount required to be withheld may be withheld in cash from such remuneration, or
in kind from the Shares otherwise deliverable to the Participant on exercise of the Option. The
Participant further agrees that, if the Company does not withhold an amount from the Participant’s
remuneration sufficient to satisfy the Company’s income tax
withholding obligation, the Participant will reimburse the Company on demand, in cash, for the
amount under-withheld.
11. PURCHASE FOR INVESTMENT.
Unless the offering and sale of the Shares to be issued upon the particular exercise of the
Option shall have been effectively registered under the Securities Act of 1933, as now in force or
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hereafter amended (the “1933 Act”), the Company shall be under no obligation to issue the Shares
covered by such exercise unless and until the following conditions have been fulfilled:
| (a) | The person(s) who exercise the Option shall warrant to the Company, at the time of such exercise, that such person(s) are acquiring such Shares for their own respective accounts, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in which event the person(s) acquiring such Shares shall be bound by the provisions of the following legend which shall be endorsed upon the certificate(s) evidencing the Shares issued pursuant to such exercise: |
“The shares represented by this certificate have been taken for investment
and they may not be sold or otherwise transferred by any person, including a
pledgee, unless (1) either (a) a Registration Statement
with respect to such shares shall be effective under the Securities Act of 1933, as amended, or
(b) the Company shall have received an opinion of counsel satisfactory to it
that an exemption from registration under such Act is then available, and
(2) there shall have been compliance with all applicable state securities
laws;” and
| (b) | If the Company so requires, the Company shall have received an opinion of its counsel that the Shares may be issued upon such particular exercise in compliance with the 1933 Act without registration thereunder. Without limiting the generality of the foregoing, the Company may delay issuance of the Shares until completion of any action or obtaining of any consent, which the Company deems necessary under any applicable law (including without limitation state securities or “blue sky” laws). |
12. RESTRICTIONS ON TRANSFER OF SHARES.
12.1 The Shares acquired by the Employee pursuant to the exercise of the Option granted hereby
shall not be transferred by the Employee except as permitted in the Amended and Restated
Stockholders Agreement dated October 5, 2005 between the Company and its stockholders (the
“Stockholders Agreement”).
12.2 In the event of the Employee’s termination of employment for any reason, the disposition
of the Shares issued pursuant to this Agreement, as well as the Employee’s and the
Company’s rights and obligations with respect to such Shares, shall be governed by the
Stockholders Agreement.
12.3 Upon acquiring any Shares pursuant to the exercise of the Option, the Employee agrees to
become a party to the Stockholders Agreement.
12.4 The provisions of Sections 12.1, 12.2 and 12.3 shall terminate upon the effective date of
the registration of the Shares pursuant to the Securities Exchange Act of 1934.
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12.5 The Employee acknowledges and agrees that neither the Company, its shareholders nor its
directors and officers, has any duty or obligation to disclose to the Employee any material
information regarding the business of the Company or affecting the value of the Shares before, at
the time of, or following a termination of the employment of the Employee by the Company,
including, without limitation, any information concerning plans for the Company to make a public
offering of its securities or to be acquired by or merged with or into another firm or entity.
12.6 All certificates representing the Shares to be issued to the Employee pursuant to this
Agreement shall have endorsed thereon a legend substantially as follows: “The shares represented
by this certificate are subject to restrictions set forth in a Non-Qualified Stock Option Agreement
dated , 2008 with this Company, a copy of which Agreement is available for inspection at
the offices of the Company or will be made available upon request.”
13. NO OBLIGATION TO MAINTAIN RELATIONSHIP.
The Company is not by the Plan or this Option obligated to continue the Participant as an
employee, director or consultant of the Company.
14. NOTICES.
Any notices required or permitted by the terms of this Agreement or the Plan shall be given by
recognized courier service, facsimile, registered or certified mail, return receipt requested,
addressed as follows:
If to the Company:
If to the Participant:
or to such other address or addresses of which notice in the same manner has previously been given.
Any such notice shall be deemed to have been given upon the earlier of receipt, one business day
following delivery to a recognized courier service or three business days following mailing by
registered or certified mail.
15. GOVERNING LAW.
This Agreement shall be construed and enforced in accordance with the law of the State of
Delaware, without giving effect to the conflict of law principles thereof.
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16. BENEFIT OF AGREEMENT.
Subject to the provisions of the Plan and the other provisions hereof, this Agreement shall be
for the benefit of and shall be binding upon the heirs, executors, administrators, successors and
assigns of the parties hereto.
17. ENTIRE AGREEMENT.
This Agreement, together with the Plan, embodies the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and supersedes all prior oral
or written agreements and understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement not expressly set forth in this Agreement shall
affect or be used to interpret, change or restrict, the express terms and provisions of this
Agreement, provided, however, in any event, this Agreement shall be subject to and governed by the
Plan.
18. MODIFICATIONS AND AMENDMENTS.
The terms and provisions of this Agreement may be modified or amended as provided in the Plan.
19. WAIVERS AND CONSENTS.
Except as provided in the Plan, the terms and provisions of this Agreement may be waived, or
consent for the departure therefrom granted, only by written document executed by the party
entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to
be or shall constitute a waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be effective only in the
specific instance and for the purpose for which it was given, and shall not constitute a continuing
waiver or consent.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer, and the Participant has hereunto set his or her hand, all as of the day and
year first above written.
| E/SCRIPTION, INC. |
||||
| By: | ||||
| Name | ||||
| Title | ||||
| Participant | ||||
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Exhibit A
NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION
[Form For Unregistered Shares]
| To: | eScription, Inc. |
Ladies and Gentlemen:
I hereby exercise my Non-Qualified Stock Option to purchase shares (the “Shares”)
of the common stock, $.001 par value, of eScription, Inc. (the “Company”), at the exercise price of
$ per share, pursuant to and subject to the terms of that certain Non-Qualified Stock Option
Agreement between the undersigned and the Company dated , 2008.
I am aware that the Shares have not been registered under the Securities Act of 1933, as
amended (the “1933 Act”), or any state securities laws. I understand that the reliance by the
Company on exemptions under the 1933 Act is predicated in part upon the truth and accuracy of the
statements by me in this Notice of Exercise.
I hereby represent and warrant that (1) I have been furnished with all information which I
deem necessary to evaluate the merits and risks of the purchase of the Shares; (2) I have had the
opportunity to ask questions concerning the Shares and the Company and all questions posed have
been answered to my satisfaction; (3) I have been given the opportunity to obtain any additional
information I deem necessary to verify the accuracy of any information obtained concerning the
Shares and the Company; and (4) I have such knowledge and experience in financial and business
matters that I am able to evaluate the merits and risks of purchasing the Shares and to make an
informed investment decision relating thereto.
I hereby represent and warrant that I am purchasing the Shares for my own personal account for
investment and not with a view to the sale or distribution of all or any part of the Shares.
I understand that because the Shares have not been registered under the 1933 Act, I must
continue to bear the economic risk of the investment for an indefinite time and the Shares cannot
be sold unless the Shares are subsequently registered under applicable federal and state securities
laws or an exemption from such registration requirements is available.
I agree that I will in no event sell or distribute or otherwise dispose of all or any part of
the Shares unless (1) there is an effective registration statement under the 1933 Act and
applicable state securities laws covering any such transaction involving the Shares or (2) the
Company receives an opinion of my legal counsel (concurred in by legal counsel for the
Company) stating that such transaction is exempt from registration or the Company otherwise
satisfies itself that such transaction is exempt from registration.
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I consent to the placing of a legend on my certificate for the Shares stating that the Shares
have not been registered and setting forth the restriction on transfer contemplated hereby and to
the placing of a stop transfer order on the books of the Company and with any transfer agents
against the Shares until the Shares may be legally resold or distributed without restriction.
I understand that at the present time Rule 144 of the Securities and Exchange Commission (the
“SEC”) may not be relied on for the resale or distribution of the Shares by me. I understand that
the Company has no obligation to me to register the sale of the Shares with the SEC and has not
represented to me that it will register the sale of the Shares.
I understand the terms and restrictions on the right to dispose of the Shares set forth in the
1999 Employee, Director and Consultant Stock Option Plan and the Non-Qualified Stock Option
Agreement, both of which I have carefully reviewed. I consent to the placing of a legend on my
certificate for the Shares referring to such restriction and the placing of stop transfer orders
until the Shares may be transferred in accordance with the terms of such restrictions.
I have considered the Federal, state and local income tax implications of the exercise of my
Option and the purchase and subsequent sale of the Shares.
I am paying the option exercise price for the Shares as follows:
Please issue the stock certificate for the Shares (check one):
o to me; or
o to me and , as joint tenants with right of survivorship
and mail the certificate to me at the following address:
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My mailing address for shareholder communications, if different from the address listed above
is:
| Very truly yours, | ||||
| Participant (signature) | ||||
| Print Name | ||||
| Date | ||||
| Social Security Number |
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Exhibit A
NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION
[Form For Registered Shares]
| TO: | eScription, Inc. |
IMPORTANT NOTICE: This form of Notice of Exercise may only be used at such time as the Company has
filed a Registration Statement with the Securities and Exchange Commission under which the issuance
of the Shares for which this exercise is being made is registered and such Registration Statement
remains effective.
Ladies and Gentlemen:
I hereby exercise my Non-Qualified Stock Option to purchase shares (the “Shares”) of
the common stock, $.001 par value, of eScription, Inc. (the “Company”), at the exercise price of
$ per share, pursuant to and subject to the terms of that certain Non-Qualified Stock
Option Agreement between the undersigned and the Company dated , 199_.
I understand the nature of the investment I am making and the financial risks thereof. I am
aware that it is my responsibility to have consulted with competent tax and legal advisors about
the relevant national, state and local income tax and securities laws affecting the exercise of the
Option and the purchase and subsequent sale of the Shares.
I am paying the option exercise price for the Shares as follows:
Please issue the stock certificate for the Shares (check one):
o
to me; or
o to me and , as joint tenants with right of
survivorship,
and mail the certificate to me at the following address:
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My mailing address for shareholder communications, if different from the address listed above,
is:
| Very truly yours, | ||||
| Participant (signature) | ||||
| Print Name | ||||
| Date | ||||
| Social Security Number |
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