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EXHIBIT 99.3
LIGHTSPEED INTERNATIONAL, INC.
1996 STOCK OPTION PLAN
INDIVIDUAL STOCK OPTION AGREEMENT
INCENTIVE STOCK OPTION
VERSION 2.1
This Agreement is made this 18th day of March, 1997, between LightSpeed
International, Inc. (the "Company"), a Virginia corporation, and NAME~ , an
[officer/employee/consultant/adviser]
of the Company (the "Optionee").
WHEREAS, the Company has adopted and maintains the LightSpeed
International, Inc. 1996 Stock Option Plan (the "Plan") for the benefit of its
officers, employees, consultants and advisors; and
WHEREAS, the Plan provides that the Company's Board of Directors (the
"Board"), may grant options to purchase shares of the Company's common stock to
its officers, employees, consultants and advisors; and
WHEREAS, the Board has determined that the Optionee should be given the
opportunity to acquire a stock ownership interest in the Company pursuant to the
Plan, in order to provide the Optionee with additional incentive and motivation
to contribute to the Company's future growth and continued success, and to
encourage the Optionee to continue to provide services to the Company.
NOW, THEREFORE, the Company and the Optionee agree as follows:
1. Grant of Option.
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Pursuant to the provisions of the Plan, the Company hereby grants to the
Optionee the right and option (the "Option") to purchase from the Company, on
the terms and conditions hereinafter provided, up to a maximum number of
OPTIONS_397_~ shares of the Company's no par value common stock (the "Option
Shares"). This Option shall be an "Incentive Stock Option" as defined in the
Plan and in ss. 422 of the Internal Revenue Code of 1986, as amended.
2. Exercise Price.
The exercise or purchase price to be paid by the Optionee for the Option
Shares shall be $.10 per share. The Board has determined that the fair market
value of the Company's common stock on the date of the grant of this option is
$.10 per share.
3. Schedule of Exercise.
(a) Except as provided in Paragraphs 3(b) and (c) below, the Optionee
shall have the right to exercise the Option granted under this Agreement as
follows: (i) 25% of the Option Shares shall be eligible for exercise after
VESTING_DATE~ and (ii) an additional 2.0833% of the Option Shares shall be
eligible for exercise at the end of each month, for a period of 36 months,
beginning MONTHLY~.
(b) Notwithstanding any provisions to the contrary contained in this
Agreement, the Optionee's right to exercise the Option granted under this
Agreement shall vest immediately upon the occurrence of any of the following
events: (i) the sale of
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the Company or substantially all of its assets to a single purchaser or to a
group of associated purchasers; (ii) the sale, exchange, or other disposition,
in one transaction, of two-thirds of the outstanding corporate shares of the
Company; (iii) a bona fide decision by the Company's Board and shareholders to
terminate its business, dissolve and liquidate its assets; or (iv) the merger or
consolidation of the Company in a transaction in which the shareholders of the
Company receive or hold less than 50% of the outstanding voting shares of the
new or surviving corporation.
(c) Notwithstanding any provisions to the contrary contained in this
Agreement, the Optionee's right to exercise the Option granted under this
Agreement shall vest immediately upon the occurrence of any of the following
events: (i) the termination of the Optionee's employment with the Company due to
the Optionee's death, or (ii) the termination of the Optionee's employment with
the Company due to his permanent disability (physical or mental).
(d) In the event of the successful completion of an initial public
offering of the Company's common stock pursuant to
the Securities Act of 1933, as amended, the Optionee's right to exercise the
Option granted under this Agreement shall not vest immediately. Instead, the
Optionee's right to exercise the Option granted under this Agreement shall vest
at the times and in the amounts as otherwise provided in this Agreement.
4. Method of Exercise.
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Subject to the schedule provided in Paragraph (3) of this Agreement, the
Option granted under this Agreement may be exercised by the Optionee in whole or
in part, and from time to time, by written notice signed by the Optionee (or by
such other person as may be entitled to exercise the option) and delivered to
the Company's president or secretary at the Company's principal executive
offices. The written notice shall state the number of shares with respect to
which the Option is being exercised, and shall be accompanied by the payment of
the total exercise or purchase price for that number of shares. The exercise or
purchase price for the Option Shares shall be paid in cash (including certified
check or bank cashier's check), or in the discretion of the Company's Board of
Directors with shares of the Company's common stock or any other property, or in
any combination thereof. Any shares of the Company's common stock that may be
delivered in payment of the exercise or purchase price shall be valued at their
fair market value, as determined by the Board pursuant to the provisions of the
Plan, as of the date of delivery of the shares to the Company. Upon payment of
the full exercise or purchase price, the Option Shares shall be fully paid and
nonassessable, outstanding shares of the Company's common stock. No partial
exercise of the option may be made for less than 1,000 shares, and the Company
shall not be required to issue any fractional shares.
5. Termination of Option.
(a) Subject to the provisions of Subparagraph (5)(b)
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hereof, the Option and all rights granted under this Agreement, to the extent
that those rights have not been exercised, shall terminate on the earliest of:
(i) the date the Optionee's employment with the Company is terminated "for
cause" as defined in Paragraph (8)(g) of the Plan; (ii) the date which is 90
days from the date that the Optionee is discharged or terminates his employment
with the Company for any reason, other than "for cause" as defined above or by
reason of the Optionee's death or permanent disability; or (iii) the date which
is 10 years from the date of the grant of this Option.
(b) If the Optionee dies or becomes permanently disabled while
serving as an employee of the Company, and prior to the 10 year termination date
described above, the Optionee or in the event of the Optionee's death, his
estate, personal representative or heirs, shall have the right to exercise the
Option granted under this Agreement, for a period of 12 months following the
Optionee's date of death or in the event of permanent disability the last date
on which the Optionee provided services to the Company as an employee.
6. Transferability.
The Option and all rights granted under this Agreement shall not
be transferred, assigned, pledged or otherwise encumbered in any manner (whether
by operation of law or otherwise) except, in the event of the Optionee's death,
by will or by the applicable laws of descent or distribution. Upon any attempt
to transfer, assign, pledge, encumber or otherwise
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dispose of this Option contrary to the provisions of this Agreement, or upon the
levy of any attachment or similar process upon this Option, the Option shall
immediately become null and void. The Option and all rights granted under this
Agreement shall be exercisable during the Optionee's lifetime only by the
Optionee, or if permissible under applicable law, by the Optionee's guardian or
legal representative.
7. Adjustment to Option Shares.
(a) In the event that at any time prior to the termination date
of this Option and prior to the exercise thereof, the Company issues common
stock by way of stock dividend or other distribution, or subdivides or combines
its outstanding shares of common stock, the number of shares subject to this
Option and the exercise price shall be adjusted to be consistent with such
change or changes. In the event that at any time prior to the termination date
of this Option and prior to the exercise thereof, there is any reclassification,
capital reorganization or other change of outstanding shares of the Company's
common stock, or in case of any consolidation or merger of the Company with or
into another corporation, or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, the Company shall cause effective provision to be made so that the
Optionee shall have the right thereafter, by exercising this Option, to purchase
the kind and amount of shares of stock and other securities and property
receivable upon such reclassification, capital
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reorganization or other change, consolidation, merger, sale or conveyance. The
determination of the Board as to any adjustments or provisions to be made under
this paragraph shall be final, binding and conclusive.
(b) Except as provided above, the grant of the Option herein
shall not affect in any manner the right or power of the Company or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or to issue bonds,
debentures, preferred or prior preference stock ahead of or affecting the common
stock of the Company or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of the Company's assets
or business.
8. Effect of Agreement on Status of Optionee.
(a) The fact that the Board has granted an Option to
the Optionee pursuant to the Plan, shall not confer on the Optionee any right to
employment with the Company or to a position as an officer or director of the
Company, nor shall it limit the right of the Company to terminate or remove the
Optionee from any position held by him at any time; provided, however, nothing
contained in this Paragraph (8)(a) shall be deemed to affect any rights or
obligations of the Company or the Optionee contained in any separate employment
agreement or similar agreement.
(b) The Optionee shall not be or have any of the
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rights or privileges of a shareholder of the Company with respect to the Option
Shares, unless and until the Option has been exercised, the exercise or purchase
price fully paid, certificates representing such shares endorsed, transferred
and delivered to the Optionee, and the Optionee's name entered as a shareholder
of record on the books of the Company.
9. Securities Laws.
Notwithstanding anything to the contrary contained in this
Agreement, this Option shall not be exercisable by the Optionee except for
shares of the Company's common stock which at the time of such exercise are
registered, exempt, or the subject matter of an exempt transaction, under both
federal and applicable state securities laws. By accepting and executing this
Option Agreement, the Optionee acknowledges and represents to the Company that
any and all shares of the Company's common stock purchased under this Agreement
will be acquired by the Optionee as an investment, and not with a view towards
subsequent distribution.
10. Taxes.
The Optionee agrees to pay all federal, state and local taxes,
including withholding taxes, if any, resulting from the exercise of this Option
and the subsequent sale of the Option Shares.
11. Conditions.
This Option is governed by the terms of this Agreement and the
Plan, the provisions of which are incorporated herein and
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made a part hereof.
12. Restrictions on Transfer.
The Optionee agrees that the Option Shares shall be subject to
the restrictions on transfer, repurchase option and other conditions of
Paragraph (9) of the Plan. In addition, if the restrictions and other conditions
contained in Paragraph (9) of the Plan should terminate as provided therein,
then following exercise of the Option, the Optionee agrees to notify the Company
promptly of any subsequent sale of the Option Shares if the sale occurs within
two years after the date of this Agreement or within one year after exercise.
13. Acknowledgment.
The Optionee's signature on this Agreement also constitutes his
or her acknowledgment that he or she has received a copy of the Plan and the
Company's Summary Plan Description of the Plan dated September 26, 1996.
14. Binding Effect.
This Agreement shall be binding upon and shall inure to the
benefit of any successors or assigns of the Company, and shall be binding upon
and inure to the benefit of the Optionee's executors, administrators, heirs and
personal representatives.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
LIGHTSPEED INTERNATIONAL, INC.
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By:_______________________________
Its: President & CEO
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NAME~(Optionee)
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FIRST AMENDMENT TO INDIVIDUAL STOCK OPTION AGREEMENT
This First Amendment to Individual Stock Option Agreement (the
"Amendment") is made and entered into effective as of the ____ day of
_______________, 1997, by and between LightSpeed International, Inc. (the
"Company") and _______________________ (the "Optionee").
WHEREAS, the Company and the Optionee entered into an Individual Stock
Option Agreement dated __________________, 19___ (the "Agreement"); and
WHEREAS, the Company and the Optionee now desire to amend the Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree to amend the Agreement
as follows:
1. Section 3(a) of the Agreement is hereby amended to provide that, upon
a "change in control" as defined below, the Optionee's vesting schedule, as set
forth in Section 3(a) of the Agreement, will be accelerated by a period of one
(1) year. To illustrate the effect of this provision, assume the Optionee
received his or her Stock Options on January 1, 1997. If a change in control
occurs on January 1, 1998, the Optionee would be 50% instead of 25% vested as of
that date. The remaining 50% of the Optionee's Stock Options would vest monthly
at the rate of 2.0833%, for a period of 24 months beginning in 1998.
2. Sections 3(b) and (c) of the Agreement shall be deleted in their
entireties and replaced with the following:
(b) Notwithstanding any provisions to the contrary contained in
this Agreement, the Optionee's right to exercise the Option granted
under this Agreement shall vest 100% immediately upon the occurrence of
any of the following events: (i) the termination of the Optionee's
employment with the Company due to the Optionee's death or permanent
disability (physical or mental); (ii) the termination by the Company of
the Optionee's employment with the Company for any reason other than
"for cause" as defined in Paragraph 3(c) below; (iii) a bona fide
decision by the Company's Board and shareholders to terminate its
business, dissolve and liquidate its assets; (iv) the termination by the
Optionee of the Optionee's employment with the Company following: (A) a
permanent relocation by the Company of the Optionee's place or location
of employment to an area outside the greater Washington D.C.
metropolitan area; (B) a material change by the Company in the
Optionee's functions, duties or responsibilities; or (C) a material
change in the Optionee's compensation or terms of employment by the
Company to the detriment of the Optionee.
(c) Notwithstanding any provisions to the contrary contained in
this Agreement, an Optionee's employment with the Company shall be
deemed terminated "for cause" only if terminated because of: (i) the
Optionee's material
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breach of an employment agreement, agreement not to compete,
confidentiality agreement or other agreement with the Company; (ii) the
Optionee's theft of Company property; (iii) the Optionee's conviction of
a felony or of a misdemeanor which materially impairs the Optionee's
ability to perform his or her duties with the Company; or (iv) willful
and continued misconduct by the Optionee which is demonstrably and
materially injurious to the Company, monetarily or otherwise.
3. This Amendment shall only become effective in the event of a "change
in control," which shall mean: (i) the sale of the Company or substantially all
of its assets to a single purchaser or to a group of associated purchasers; (ii)
the sale, exchange, or other disposition, in one transaction, of two-thirds of
the outstanding corporate shares of the Company; or (iii) the merger or
consolidation of the Company in a transaction in which the shareholders of the
Company receive or hold less than 50% of the outstanding voting shares of the
new or surviving corporation.
4. Except as amended hereby, the Agreement shall remain in full force
and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment on the day
and year first above written.
By:
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Its:
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__________________________________________
_________________________________(Optionee)
2.
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EXHIBIT B
Sentences to be added at the end of Paragraph (8)(g)(ii) of the Company's 1996
Stock Option Plan.
For purposes of this Plan, a Participant's Company Relationship shall be
terminated "for cause" only if terminated because of (A) the Participant's
material breach of an employment agreement, consulting agreement, agreement not
to compete, confidentiality agreement or other agreement with the Company, (B)
the Participant's theft of Company property, (C) the Participant's conviction of
a felony or of a misdemeanor which materially impairs the Participant's ability
to perform his duties with the Company, (D) the willful and continued failure by
the Participant to substantially perform his duties with the Company, (E) a
material misrepresentation in or omission from a Participant's job application
or job interview, (F) unlawful possession or use of drugs, or (G) willful and
continued conduct by the Participant which is demonstrably and materially
injurious to the Company, monetarily or otherwise. Notwithstanding anything
herein contained to the contrary, if a Participant's Stock Option Agreement
contains a separate definition of "for cause," then such definition shall
control instead of the definition contained in the foregoing sentence.
