EXHIBIT 10.20
AMENDMENT NO. 1 TO NON-QUALIFIED STOCK OPTION AGREEMENT
AMENDMENT NO. 1 made as of this 22nd day of January, 1999, by and
between Breakaway Solutions, Inc., a Delaware corporation (the "Company") and
Xxxxx Xxxxxxxx (the "Optionee"), to the Non-Qualified Stock Option Agreement
between the parties hereto effective as of August 5, 1997 (the "Stock Option
Agreement").
WHEREAS, in consideration of Optionee's commitment and service to the
Company and her acceptance of employment with the Company, the Company wishes to
amend the Stock Option Agreement to remove the provision for expiration of the
unexercised Options within thirty days of any change in the Optionee's Business
Relationship with the Company;
NOW, THEREFORE, in consideration of the premises and other mutual
covenants contained herein, and in furtherance of the parties' agreement to
amend the Stock Option Agreement, it is hereby agreed between the parties as
follows:
1. Sections 3, 4 and 5 of the Stock Option Agreement are amended
and now reads as follows:
"3. VESTING OF OPTION IF BUSINESS RELATIONSHIP CONTINUES.
If the Optionee has continued to serve the Company or any Related
Corporation in the capacity as set forth in the terms of the Consulting
Agreement attached hereto as SCHEDULE B or as an employee (such service
is defined herein as maintaining the "Business Relationship" with the
Company), on the following dates, the Optionee may exercise this option
for the number of shares of Common Stock set opposite the applicable
date: (attached as Schedule A)
Notwithstanding the foregoing, in accordance with and subject
to the provisions of the Plan, the Committee may, in its discretion,
accelerate the date that any installment of this Option becomes
exercisable.
The foregoing rights are cumulative and, during the term of
the Business Relationship, may be exercised on or before the date which
is ten (10) years from the date this option is granted. All of the
foregoing rights are subject to Sections 4 and 5, as appropriate, if
the Business Relationship is terminated.
4. TERMINATION OF BUSINESS RELATIONSHIP.
(A) TERMINATION OTHER THAN FOR CAUSE. If the
Optionee's Business Relationship terminates, other than by reason of
death or disability as defined in Section 5 or termination for Cause as
defined in Section 4(c), no further installments of this option shall
become exercisable, and this option shall terminate on the earlier of
(i) ninety (90) days after the date of termination of the Business
Relationship, or (ii) the scheduled expiration date of this option. In
such a case, the Optionee's only rights hereunder shall be those which
are properly exercised before the termination of this option.
(B) TERMINATION FOR CAUSE. If the Business
Relationship is terminated for Cause (as defined in Section 4(c)), this
option shall terminate upon the Optionee's receipt of written notice of
such termination and shall thereafter not be exercisable to any extent
whatsoever.
(C) DEFINITION OF CAUSE. For the purpose of this
Agreement, "Cause" means: (1) Optionee's substantial and continuing
failure to perform Optionee's duties and responsibilities as an
employee of the Company other than due to death or disability; (2)
Optionee's disloyalty, gross negligence, willful misconduct, dishonesty
or breach of fiduciary duty to the Company; (3) Optionee's deliberate
disregard of material rules, regulations, instructions, personnel
practices and policies of the Company (as amended from time to time in
the Company's sole discretion) which results in direct or indirect
loss, damage or injury to the Company; (4) Optionee's material breach
of any agreement not to compete with the Company or solicit its
customers, employees or contractors; or (5) Optionee's conviction of
any crime which constitutes a felony in the jurisdiction involved.
5. DEATH; DISABILITY; DISSOLUTION.
(A) DEATH. If the Optionee dies while involved in a Business
Relationship with the Company, this option may be exercised, to the
extent otherwise exercisable on the date of death, by the estate,
personal representative or beneficiary who has acquired this option by
will or by the laws of descent and distribution, until the earlier of
(i) the specified expiration date of this option or (ii) one hundred
eighty (180) days from the date of the Optionee's death.
(B) DISABILITY. If the Optionee's Business Relationship with
the Company is terminated by reason of his or her disability (as
defined in Paragraph 10(B) of the Plan), the Optionee shall have the
right to exercise this option on the date of termination of the
Business Relationship, for the number of shares for which he or she
could have exercised it on that date, until the earlier of (i) the
specified expiration date of this option or (ii) one hundred eighty
(180) days from the date of the termination of the Optionee's Business
Relationship.
(C) EFFECT OF TERMINATION. At the expiration of the one
hundred eighty (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 the only rights hereunder
shall be those as to which the option was properly exercised before
such termination."
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2. RIGHT OF FIRST REFUSAL. The right of first refusal of the Company as
set forth in Section 16 of the Stock Option Agreement shall be amended such that
the Company must purchase all of the Company Option Shares and no portion less
than all of the Company Option Shares if it elects to exercise its option to
purchase Company Option Shares.
3. NOTE. If the Company elects to repurchase any Option Shares pursuant
to Sections 16 or 17 of the Stock Option Agreement and the Company, in its sole
discretion, elects to pay the repurchase amount in accordance with the terms of
a promissory note, the promissory note shall be substantially in the form
attached hereto as Exhibit A.
4. AMENDMENT. The Stock Option Agreement is hereby deemed to be amended
to the extent necessary to carry out the terms of this Amendment No. 1. Except
as provided herein, each of the provisions of the Stock Option Agreement shall
remain in full force and effect, and this Amendment No. 1 shall not constitute a
modification, acceptance or waiver of any other provision of such Stock Option
Agreement except as set forth herein. This Amendment No. 1 shall be governed by
and construed in accordance with the terms of the Stock Option Agreement. The
Stock Option Agreement remains governed by the terms and conditions of the 1998
Stock Plan of Breakaway Solutions, Inc.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year first above written.
/S/ XXXXX XXXXXXX
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Xxxxx Xxxxxxxx
BREAKAWAY SOLUTIONS, INC.
By: /S/ XXX XXXXXXX
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Xxx Xxxxxxx
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EXHIBIT A
FORM OF
PROMISSORY NOTE
$ , 199
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For value received, the undersigned, Breakaway Solutions, Inc., a
Delaware corporation ("Obligor"), hereby promises to pay to the order of Xxxxx
Xxxxxxxx ("Lender") at such place as may be designated from time to time in
writing by Lender, the principal sum of ___________ Dollars and ______ Cents
($_________), together with interest in arrears from and including the date
hereof on the unpaid principal balance hereunder, calculated daily, at the rate
of: ____ percent (___%) per annum [the prime rate in effect on the date hereof
for major banks as published in the Wall Street Journal], payable as set forth
below. At the option of Lender and to the extent permitted by applicable law,
the rate of interest on any unpaid principal or interest not paid when due and
payable hereunder shall be two percent (2%) per annum above the rate of interest
set forth in the immediately preceding sentence. Interest shall be calculated on
the basis of actual number of days elapsed over a year of 360 days.
Notwithstanding any other provision of this Promissory Note, Lender does not
intend to charge and Obligor shall not be required to pay any interest or other
fees or charges in excess of the maximum permitted by applicable law; any
payments in excess of such maximum shall be refunded to Obligor or credited to
reduce principal hereunder. All payments received by Lender hereunder will be
applied first to costs of collection, if any, then to interest and the balance
to principal. Principal and interest shall be payable in lawful money of the
United States of America.
Principal shall be paid in sixty (60) equal monthly installments of
________________ Dollars and ______ Cents ($______) each, commencing on
________, 199_, and continuing on the same day of each successive month
thereafter with a final payment of all unpaid principal on ______, 199_;
interest shall be paid monthly commencing on ________, 199_, and continuing on
the same day of each successive month thereafter with a final payment of all
unpaid interest at the time of payment of the principal.
If any day on which a payment is due pursuant to the terms of this
Promissory Note is not a day on which banks in the Commonwealth of Massachusetts
are generally open (a "Business Day"), such payment shall be due on the next
Business Day following.
This Promissory Note may be prepaid at any time, without premium or
penalty, in whole or in part, all such prepayments to be applied upon
installments of most remote maturity. Any prepayment of principal shall be
accompanied by a payment of accrued interest in respect of the principal being
prepaid.
This Promissory Note shall, at the option of the holder hereof, become
due and payable without notice or demand, upon the happening of any one of the
following specified events: (1) failure to pay any amount as herein set forth;
(2) default in the performance of any other obligation to Lender, which default
is not cured within thirty (30) days after written notice of such default from
Lender; (3) insolvency (however evidenced) or the commission of any act of
insolvency; (4) the making of a general assignment for the benefit of creditors;
(5) the filing of any
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petition or the commencement of any proceeding by Obligor or any endorser or
guarantor of this Promissory Note for any relief under any bankruptcy or
insolvency laws, or any laws relating to the relief of debtors, readjustment of
indebtedness, reorganizations, compositions, or extensions; (6) the filing of
any petition or the commencement of any proceeding against Obligor or any
endorser or guarantor of this Promissory Note for any relief under any
bankruptcy or insolvency laws, or any laws relating to the relief of debtors,
readjustment of indebtedness, reorganizations, compositions, or extensions,
which proceeding is not dismissed within sixty (60) days; (7) suspension of the
transaction of the usual business of Obligor; or (8) the past or future making
of a false representation or warranty by Obligor in connection with any loan or
loans by Lender.
If this Promissory Note is not paid in accordance with its terms,
Obligor shall pay to Lender, in addition to principal and accrued interest
thereon, all costs of collection of the principal and accrued interest,
including, but not limited to, reasonable attorneys' fees, court costs and other
costs for the enforcement of payment of this Promissory Note.
No waiver of any obligation of Obligor under this Promissory Note shall
be effective unless it is in a writing signed by Lender. A waiver by Lender of
any right or remedy under this Promissory Note on any occasion shall not be a
bar to exercise of the same right or remedy on any subsequent occasion or of any
other right or remedy at any time.
Any notice required or permitted under this Promissory Note shall be in
writing and shall be deemed to have been given on the date of delivery, if
personally delivered to the party to whom notice is to be given, or on the fifth
business day after mailing, if mailed to the party to whom notice is to be
given, by certified mail, return receipt requested, postage prepaid, and
addressed to the addressee at the address of the addressee set forth herein, or
to the most recent address, specified by written notice, given to the sender
pursuant to this paragraph.
This Promissory Note is delivered in and shall be enforceable in
accordance with the laws of the Commonwealth of Massachusetts, and shall be
construed in accordance therewith, and shall have the effect of a sealed
instrument.
Obligor hereby expressly waives presentment, demand, and protest,
notice of demand, dishonor and nonpayment of this Promissory Note, and all other
notices or demands of any kind in connection with the delivery, acceptance,
performance, default or enforcement hereof, and hereby consents to any delays,
extensions of time, renewals, waivers or modifications that may be granted or
consented to by the holder hereof with respect to the time of payment or any
other provision hereof .
In the event any one or more of the provisions of this Promissory Note
shall for any reason be held to be invalid, illegal or unenforceable, in whole
or in part or in any respect, or in the event that any one or more of the
provisions of this Promissory Note operate or would prospectively operate to
invalidate this Promissory Note, then and in any such event, such provision(s)
only shall be deemed null and void and shall not affect any other provision of
this Promissory Note and the remaining provisions of this Promissory Note shall
remain operative and in full force and effect and in no way shall be affected,
prejudiced, or disturbed thereby.
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OBLIGOR:
By:
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Name:
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Title:
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Attested:
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By:
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Name:
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Title:
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