Exhibit 10.20
Confidential Treatment Requested
--------------------------------
Incentive Stock Option Agreement
under the Boron, XxXxxx & Associates, Inc.
1996 Stock Option and Grant Plan
Name of Optionee: Xxxxxxx X. XxXxxxxx
No./Class of Option Shares: 300,000 Shares of Class A Common Stock
Grant Date: June 9, 1997
Expiration Date: June 9, 2007
Option Exercise Price/Share: $6.30
Pursuant to the Boron, XxXxxx & Associates, Inc. 1996 Stock Option and
Grant Plan (the "Plan"), Boron, XxXxxx & Associates, Inc., a Delaware
corporation (the "Company"), hereby grants to the person named above (the
"Optionee"), who is an officer or full-time employee of the Company or any of
its subsidiaries, an option (the "Stock Option") to purchase on or prior to the
expiration date specified above (the "Expiration Date") all or any part of the
number of shares of Class A Common Stock, par value $0.01 per share ("Common
Stock"), of the Company indicated above (the "Option Shares"), at the per share
option exercise price specified above, subject to the terms and conditions set
forth in this Incentive Stock Option Agreement (the "Agreement") and in the
Plan. This Stock Option is intended to qualify as an "incentive stock option"
as defined in Section 422(b) of the Internal Revenue Code of 1986, as amended
from time to time (the "Code"). To the extent that any portion of the Stock
Option does not so qualify (e.g. upon vesting of more than $100,000 of options
in any year based on exercise price or in the event of a disqualifying
disposition), it shall be deemed a non-qualified stock option. All capitalized
terms used herein and not otherwise
defined shall have the respective meanings set forth in the Plan.
1. Vesting and Exercisability.
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(a) No portion of this Stock Option may be exercised until such
portion shall have vested.
(b) Except as set forth below and in Section 6, and subject to the
determination of the Compensation Committee of the Board of Directors of the
Company or the Board of Directors of the Company, as applicable (the
"Committee"), in its sole discretion to accelerate the vesting schedule
hereunder, this Stock Option shall be vested and exercisable as provided in
Schedule A hereto.
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(c) In the event that the Optionee's Service Relationship (as
hereinafter defined) with the Company and its subsidiaries terminates for any
reason or under any circumstances, including the Optionee's resignation,
retirement or termination by the Company, upon the Optionee's death or
disability, or for any other reason, regardless of the circumstances thereof, or
in the event that as of October 1, 1997, the Optionee has failed to permanently
relocate to the greater New York Metropolitan area, this Stock Option shall no
longer vest or become exercisable with respect to any Option Shares not vested
as of the date of such termination from and after the date of such termination,
except as provided in Section 1(d) and Section 5 of Schedule A hereto, and this
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Stock Option may thereafter be exercised, to the extent it was vested and
exercisable on such date of such termination or as of October 1, 1997, if
applicable, until the Expiration Date contemplated by Section 1(d). Except as
the Committee may otherwise determine, after either such event this Stock Option
shall be null and void as to any Option Shares not then vested. For purposes
hereof, a "Service Relationship"
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shall mean any relationship as an employee, part-time employee or consultant of
the Company or any subsidiary of the Company such that, for example, a Service
Relationship shall be deemed to continue without interruption in the event the
Optionee's status changes from full-time employee to part-time employee or
consultant.
(d) Once any portion of this Stock Option becomes vested and
exercisable, it shall continue to be exercisable by the Optionee or his
successors as contemplated herein at any time or times prior to the earlier of
(i) the date which is 12 months following the date on which the Optionee's
Service Relationship with the Company and its subsidiaries terminates due to
death or disability or for three months following the date on which the
Optionee's Service Relationship with the Company and its subsidiaries terminates
if the termination is due to any other reason, except as provided in Section 5
of Schedule A, or (ii) June 9, 2007, subject to the provisions hereof,
----------
including, without limitation, Section 7 hereof which provides for the
termination of unexercised options upon completion of certain transactions as
described therein (the "Expiration Date").
(e) It is understood and intended that this Stock Option shall qualify
as an "incentive stock option" as defined in Section 422 of the Code.
Accordingly, the Optionee understands that in order to obtain the benefits of an
incentive stock option under Section 422 of the Code, no sale or other
disposition may be made of any Option Shares within the one-year period
beginning on the day after the day of the transfer of such Option Shares to him,
nor within the two-year period beginning on the day after the grant of this
Stock Option, and that exercise of this Stock Option must occur while Optionee
is an employee of the Company or within three months after he ceases to be an
employee of the Company (or twelve months in
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the case of death or disability). If the Optionee disposes (whether by sale,
gift, transfer or otherwise) of any such Option Shares within either of these
holding periods, he will notify the Company within thirty (30) days after such
disposition. The Optionee also agrees to provide the Company with any
information concerning any such dispositions required by the Company for tax
purposes.
2. Exercise of Stock Option.
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(a) The Optionee may exercise only vested portions of this Stock
Option and only in the following manner: Prior to the Expiration Date (subject
to Section 7 and Schedule A ), the Optionee may deliver a Stock Option Exercise
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Notice (an "Exercise Notice") in the form of Appendix A hereto indicating his
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election to purchase some or all of the Option Shares with respect to which this
Stock Option has vested at the time of such notice. Such notice shall specify
the number of Option Shares to be purchased.
Payment of the purchase price for the Option Shares may be made by one or
more (if applicable) of the following methods: (a) in cash, by certified or
bank check or other instrument acceptable to the Option Committee; or (b) if the
closing of the first underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, covering
the offer and sale of Common Stock of the Company to the public has occurred,
then (i) in the form of shares of Common Stock that are not then subject to
restrictions under any Company plan and that have been held by the Optionee for
at least six months, if permitted by the Committee in its discretion; (ii) by
the Optionee delivering to the Company a properly executed Exercise Notice
together with irrevocable instructions to a broker to promptly deliver to the
Company cash or a check payable and acceptable to the
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Company to pay the option purchase price, provided that in the event the
Optionee chooses to pay the option purchase price as so provided, the Optionee
and the broker shall comply with such procedures and enter into such agreements
of indemnity and other agreements as the Option Committee shall prescribe as a
condition of such payment procedure, or (c) a combination of (a), (b)(i) and
(b)(ii) above. Payment instruments will be received subject to collection.
(b) Certificates for the Option Shares so purchased will be issued and
delivered to the Optionee upon compliance to the satisfaction of the Option
Committee with all requirements under applicable laws or regulations in
connection with such issuance. Until the Optionee shall have complied with the
requirements hereof and of the Plan, the Company shall be under no obligation to
issue the Option Shares subject to this Stock Option, and the determination of
the Option Committee as to such compliance shall be final and binding on the
Optionee. The Optionee shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares of stock subject to this
Stock Option unless and until this Stock Option shall have been exercised
pursuant to the terms hereof, the Company shall have issued and delivered the
Option Shares to the Optionee, and the Optionee's name shall have been entered
as a stockholder of record on the books of the Company. Thereupon, the Optionee
shall have full dividend and other ownership rights with respect to such Option
Shares, subject to the terms of this Agreement.
(c) Notwithstanding any other provision hereof or of the Plan, no
portion of this Stock Option shall be exercisable after the Expiration Date,
including such date as is contemplated by Section 7 hereof.
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3. Incorporation of Plan. Notwithstanding anything herein to the
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contrary, this Stock Option shall be subject to and governed by all the terms
and conditions of the Plan, provided that in the event of any inconsistency in
the specific terms, this Stock Option shall be given effect.
4. Transferability. This Agreement is personal to the Optionee and is
---------------
not transferable by the Optionee in any manner other than by will or by the laws
of descent and distribution. This Stock Option may be exercised during the
Optionee's lifetime only by the Optionee. The Optionee may elect to designate a
beneficiary by providing written notice of the name of such beneficiary to the
Company, and may revoke or change such designation at any time by filing written
notice of revocation or change with the Company; such beneficiary may exercise
the Optionee's Stock Option in the event of the Optionee's death to the extent
provided herein. If the Optionee does not designate a beneficiary, or if the
designated beneficiary predeceases the Optionee, the personal representative of
the Optionee may exercise this Stock Option to the extent provided herein in the
event of the Optionee's death.
5. Adjustment Upon Changes in Capitalization. The shares of stock
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covered by this Stock Option are shares of Class A Common Stock of the Company.
Subject to Section 6 hereof, if the shares of Class A Common Stock as a whole
are increased, decreased, changed or converted into or exchanged for a different
number or kind of shares or securities of the Company, whether through merger or
consolidation, reorganization, recapitalization, reclassification, stock
dividend, stock split, combination of shares, exchange of shares, change in
corporate structure or the like, an appropriate and proportionate adjustment
shall be made in
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the number and kind of shares and in the per share exercise price of shares
subject to any unexercised portion of this Stock Option. In the event of any
such adjustment in this Stock Option, the Optionee thereafter shall have the
right to purchase the number of shares under this Stock Option at the per share
price, as so adjusted, which the Optionee could purchase at the total purchase
price applicable to this Stock Option immediately prior to such adjustment.
Adjustments under this Section 5 shall be determined by the Option Committee of
the Company, whose determination as to what adjustment shall be made, and the
extent thereof, shall be conclusive. No fractional shares of Common Stock shall
be issued under the Plan resulting from any such adjustment, but the Company in
its discretion may make a cash payment in lieu of fractional shares.
6. Effect of Certain Transactions. In the case of (a) the dissolution
------------------------------
or liquidation of the Company; (b) the sale of all or substantially all of the
assets of the Company and its Subsidiaries to another person or entity; (c) a
merger, reorganization or consolidation in which the holders of the Company's
outstanding voting power immediately prior to such transaction do not own a
majority of the outstanding voting power of the surviving or resulting entity
immediately upon completion of such transaction; (d) the sale of the outstanding
stock of the Company to an unrelated person or entity; or (e) any other
transaction or series of transactions effectively constituting a sale of the
Company in which the owners of the Company's outstanding voting power
immediately prior to such transaction do not own a majority of the outstanding
voting power of the surviving or resulting entity immediately upon completion of
such transaction (a "Sale Event"), this Stock Option (i) shall be deemed fully
vested and exercisable (to the extent not previously vested) immediately prior
to the effective
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date of (or, if relevant, the record date for determining stockholders entitled
to participate in) such transaction to the extent, but only to the extent,
provided in Schedule A hereto, provided that such acceleration and any notice
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of exercise of options that become vested as a result thereof shall in all cases
be subject to and contingent upon the closing or consummation of such
transaction, and (ii) shall no longer vest as to any Option Shares not then
vested or which do not vest as a result of such transaction except as the
Committee otherwise may determine in its sole discretion. In any case, this
Stock Option (with respect to both vested and unvested Stock Options) shall
terminate on the effective date of (or, if relevant, the record date for
determining stockholders entitled to participate in) such transaction or event;
provided, however, that if (and only if) the Optionee agrees, provision may be
made in such transaction in the sole discretion of the parties thereto for the
assumption of this Stock Option or the substitution for this Stock Option of a
new stock option of the successor person or entity or a parent or subsidiary
thereof, with such adjustment as to the number and kind of shares and the per
share exercise price as such parties shall agree to, and, in the case of an
assumption, with references to the Company being deemed to refer to such
successor entity. In the event of any transaction which will result in such
termination, the Company shall give to the Optionee written notice thereof at
least fifteen (15) days prior to the effective date of such transaction or the
record date on which stockholders of the Company entitled to participate in such
transaction shall be determined, whichever comes first. Until the earlier to
occur of such effective date or record date, the Optionee may exercise any
vested portion of this Stock
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Option, but after such effective date or record date, as the case may be, the
Optionee may not exercise this Stock Option unless it is assumed or substituted
by the successor as provided above.
7. Withholding Taxes. The Optionee shall, not later than the date as of
-----------------
which the exercise of this Stock Option becomes a taxable event for federal
income tax purposes, pay to the Company or make arrangements satisfactory to the
Committee for payment of any federal, state and local taxes required by law to
be withheld on account of such taxable event. Subject to approval by the
Committee, the Optionee may elect to have such tax withholding obligation
satisfied, in whole or in part, by authorizing the Company to withhold from
shares of Common Stock to be issued or transferring to the Company, a number of
shares of Common Stock with an aggregate Fair Market Value that would satisfy
the withholding amount due. For purposes of this Section 7 "Fair Market Value"
on any given date means the last reported sale price at which Common Stock is
traded on such date or, if no Common Stock is traded on such date, the next
preceding date on which Common Stock was traded, as reflected on the principal
stock exchange or, if applicable, any other national stock exchange on which the
Common Stock is traded or admitted to trading. The Optionee acknowledges and
agrees that the Company or any subsidiary of the Company has the right to deduct
from payments of any kind otherwise due to the Optionee, or from the Option
Shares to be issued in respect of an exercise of this Stock Option, any federal,
state or local taxes of any kind required by law to be withheld with respect to
the issuance of Option Shares to the Optionee.
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8. Miscellaneous Provisions.
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(a) Equitable Relief. The parties hereto agree and declare that legal
----------------
remedies may be inadequate to enforce the provisions of this Agreement and that
equitable relief, including specific performance and injunctive relief, may be
used to enforce the provisions of this Agreement.
(b) Change and Modifications. This Agreement may not be orally
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changed, modified or terminated, nor shall any oral waiver of any of its terms
be effective. This Agreement may be changed, modified or terminated only by an
agreement in writing signed by the Company and the Optionee.
(c) Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Delaware.
(d) Headings. The headings are intended only for convenience in
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finding the subject matter and do not constitute part of the text of this
Agreement and shall not be considered in the interpretation of this Agreement.
(e) Saving Clause. If any provision(s) of this Agreement shall be
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determined to be illegal or unenforceable, such determination shall in no manner
affect the legality or enforceability of any other provision hereof.
(f) Notices. All notices, requests, consents and other communications
-------
shall be in writing and be deemed given when delivered personally, by telex or
facsimile transmission or when received if mailed by first class registered or
certified mail, postage
10
prepaid. Notices to the Company or the Optionee shall be addressed as set forth
underneath their signatures below, or to such other address or addresses as may
have been furnished by such party in writing to the other.
(g) Benefit and Binding Effect. This Agreement shall be binding upon
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and shall inure to the benefit of the parties hereto, their respective
successors, permitted assigns, and legal representatives. The Company has the
right to assign this Agreement, and such assignee shall become entitled to all
the rights of the Company hereunder to the extent of such assignment.
(h) Counterparts. For the convenience of the parties and to facilitate
------------
execution, this Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same document.
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The foregoing Agreement is hereby accepted and the terms and conditions
thereof hereby agreed to by the undersigned.
BORON, XXXXXX & ASSOCIATES, INC.
By:
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Title:
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Address: BORON, XXXXXX & ASSOCIATES, INC.
Attention: President
00-00 Xxxxx 000 Xxxxx
Xxxx Xxxx, Xxx Xxxxxx 00000
OPTIONEE:
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Xxxxxxx X. XxXxxxxx
Optionee's Address:
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DESIGNATED BENEFICIARY:
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Beneficiary's Address:
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Schedule A
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Vesting Schedule
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1. Defined Terms. All capitalized terms used herein and not defined
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shall have the respective meanings provided in the attached Agreement.
2. Time-Based Vesting. Subject to Section 1(c) of the attached
------------------
Agreement, this Stock Option and the Option Shares subject thereto shall vest
and become exercisable to the extent not previously vested, on June 9, 2004.
3. Performance Vesting Events. Notwithstanding anything hereunder to the
--------------------------
contrary and as contemplated by Section 6 of the attached Agreement, the
following numbers of Option Shares shall vest upon attainment of the performance
objectives set forth below for 1997, 1998 and 1999, respectively, subject,
however, in each case to the rights of the Committee in its sole discretion to
grant whole or partial vesting of one or more tranches of Option Shares
notwithstanding failure to attain the specified performance objectives:
Incremental
No. of Shares
Tranche Performance Objective Vesting Date Vested/1/
------- --------------------- ------------ -------------
A. 1997
----
1. Execution prior to December 31, 1997 of Date of Execution of * 25,000
definitive "corporate contract" agreement with Contract
* (the "*" Contract") (provided that no
vesting of this tranche of Option Shares
shall occur pursuant to this Schedule A if
execution occurs after that date).
2. Execution prior to December 31, 1997 of new Date of Execution of contract 25,000
contracts by the Company and customers relating pursuant to which * revenue
to consumer meetings programs providing target achieved
aggregate revenue of at least * for the
Company (provided that no vesting of the
Tranche of Option Shares shall occur pursuant
to this Schedule A if such contracts are not
executed in 1997).
/1/ Subject to stock splits, stock dividends and the like as indicted in the
attached Agreement.
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* Confidential Treatment Requested.
A-1
Incremental
No. of Shares
Tranche Performance Objective Vesting Date Vested/1/
------- --------------------- ------------ -------------
B. 1998
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3. Initial execution prior to December 31, 1998 Date of initial execution or 25,000
of the * contract, or renewal of such contract 1998 renewal
on substantially the same terms in 1998
(provided that no vesting of this Tranche of
Option Shares shall occur pursuant to this
Schedule A if such initial execution or renewal
does not occur in 1998).
/1/ Subject to stock splits, stock dividends and the like as indicated in the
attached Agreement.
# Subject to pro ration as provided under "Vesting Date."
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* Confidential Treatment Requested.
A-2
Incremental
No. of Shares
Tranche Performance Objective Vesting Date Vested/1/
------- --------------------- ------------ -------------
4. Attainment by the Company's BLA Division (or As of December 31, 1998 provided the 100,000#
any successor thereto conducting its provided the Optionee has a
promotional meetings business as Service Relationship as of
determined in good faith by the Company) such date even if such Service
of the financial and strategic Relationship terminates
objectives set forth in the 1998 business thereafter, based on the
plan which is recommended by the CEO of Company's review of its 1998
the Company based upon his good faith assessment financial results; provided,
of the business of the BLA Division and --------
approved by the Board of Directors of however, that if the Service
the Company prior to or shortly following -------
the commencement of the 1998 fiscal year, Relationship is terminated
but no later than January 31, (provided pursuant to Section 6(c), 6(e)
that no vesting of this Tranche of Option Shares or 6(f) of the Employment
shall occur pursuant to this Schedule A if Agreement between the Optionee
such objectives are not obtained.) and the Company dated June 9,
1997, and the performance
objective is obtained, a pro
rata percentage of the 100,000
Option Shares shall vest as of
December 31, 1998, such
percentage to be equal to the
percentage of 1998 which has
transpired (measured in full
months) prior to the
termination of such Service
Relationship.
C. 1999
----
/1/ Subject to stock splits, stock dividends and the like as indicated in the
attached Agreement.
# Subject to pro ration as provided under "Vesting Date."
A-3
Incremental
No. of Shares
Tranche Performance Objective Vesting Date Vested/1/
------- --------------------- ------------ -------------
5. Initial execution prior to December 31, 1999 of Date of initial execution or 25,000
the * Contract, or renewal of such contract 1999 renewal
on substantially the same terms in 1999 (provided
that no vesting of this Tranche of Option Shares
shall occur pursuant to this Schedule A if such
initial execution or renewal does not occur in
1999).
6. Attainment by the Company's BLA Division (or As of December 31, 1999 100,000/#/
any successor thereto conducting its provided the Optionee has a
promotional meetings business as Service Relationship as of
verified in good faith by the Company) of such date even if such Service
the financial and strategic objectives set Relationship terminates
forth in the 1999 business plan which thereafter, based on the
is recommended by the CEO of Company's review of its 1999
the Company based upon his good faith financial results; provided,
assessment of the business of the BLA however that if the Service
Division and approved by the Board Relationship is terminated
of Directors of the Company prior to or pursuant to Section 6(c), 6(e)
shortly following the commencement of or 6(f) of the Employment
the 1999 fiscal year, but no later Agreement between the Optionee
than January 31 (provided that no vesting and the Company dated June 9,
of this Tranche of Option Shares 1997, and the performance
shall occur pursuant to this Schedule A objective is obtained, a pro
if such objectives are not obtained). rata percentage of the 100,000
Option Shares shall vest as of
December 31, 1999, such
percentage to be equal to the
percentage of 1999 which has
transpired (measured in full
months) prior to the
termination of such Service
Relationship.
4. Acceleration of Vesting on Certain Sale Events. As of the effective date
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(or, as applicable, the record date) of any Sale Event (as defined in Section 6
of the attached Agreement), to the extent not previously vested, (i) if such
Sale Event occurs before December 31, 1997, than all unvested Tranches shall
automatically vest , and (ii) if such Sale Event occurs after December 31, 1997,
then to the extent not previously vested, Tranches 4 and 6 shall thereupon vest,
Tranches 3 and 5 shall automatically vest if (and only if) Tranche 1 has
# Subject to pro ration as provided under "Vesting Date."
---------------------------------
* Confidential Treatment Requested.
A-4
Incremental
No. of Shares
Tranche Performance Objective Vesting Date Vested/1/
------- --------------------- ------------ -------------
theretofore vested, and Tranche 5 shall automatically vest if (and only if)
Tranche 3 has theretofore vested, and thereupon vesting shall otherwise cease
and this Stock Option shall terminate as provided in Section 6 of the attached
Agreement.
5. Certain Employment-Related Terminations. Notwithstanding anything herein
---------------------------------------
to the contrary, in the event Tranche 1 has vested in accordance with its terms
as provided above and thereafter the employment of the Grantee terminates as a
result of (i) a termination by the Company without cause, or (ii) resignation or
a termination by the Employee due to an uncured, material default by the Company
pursuant to or under the circumstances contemplated by Sections 6(e) and 6(f) of
the Employment Agreement between the Company and the Grantee dated as of June 9,
1997, then the Stock Option as to Tranches 3 and 5, respectively, shall
nonetheless remain in effect (as a non-qualified option, if applicable), until
such time in 1998 or 1999, respectively, if ever, as the renewal specified above
occurs, whereupon the relevant tranche shall vest as of the date of the renewal
and be exercisable for three months after the Company gives the Optionee notice
thereof, but if such event fails to occur in 1998 or 1999, respectively, then
the Stock Option or the relevant tranche shall lapse and terminate as of
December 31 of the relevant year. In any case this Stock Option shall terminate
as contemplated by Section 6 of the attached Agreement or on the Expiration
Date.
A-5
Appendix A
STOCK OPTION EXERCISE NOTICE
Boron, XxXxxx & Associates, Inc.
Attention: Chief Financial Officer
00-00 Xxxxx 000 Xxxxx
Xxxx Xxxx, Xxx Xxxxxx 00000
Dear Sirs:
Pursuant to the terms of my stock option agreement dated ____________
(the "Agreement") under the Boron, XxXxxx & Associates, Inc 1996 Stock Option
and Grant Plan, I, [Insert Name] ___________________, hereby [Circle One]
partially/fully exercise such option by including herein payment in the amount
of $_______ representing the purchase price for [Fill in number of Option
Shares] __________ option shares. I have chosen the following form(s) of
payment:
[_] 1. Cash
[_] 2. Certified or Bank Check payable to Boron, XxXxxx & Associates, Inc.
[_] 3. Other (as described in the Agreement (please describe)) __________.
Sincerely yours,
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Please Print Name
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Signature
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