Exhibit 4.5
divine, inc.
INCENTIVE STOCK OPTION AGREEMENT FOR OPTIONS GRANTED
UNDER THE OPEN MARKET, INC. 1994 STOCK INCENTIVE PLAN
Explanatory Note
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On October 19, 2001, divine, inc. acquired Open Market, Inc. in a
stock-for-stock merger. As a result, any outstanding options to purchase shares
of Open Market common stock were converted into options to purchase shares of
class A common stock, par value $0.001 per share, of divine. Each Open Market
option now represents an option to purchase a number of divine shares equal to
the number of Open Market shares subject to such Open Market option multiplied
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by 0.8326, the exchange ratio in the merger. The exercise price for each
converted divine option equals the exercise price of the Open Market option
divided by 0.8326.
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Other than as set forth in the paragraph above, the rights and obligations of
each holder of Open Market options granted pursuant to this agreement remain in
full force and effect.
1. Grant of Option. Open Market, Inc., a Delaware corporation, hereby
grants to __________ (the "Optionee"), an option, pursuant to the Open
Market, Inc. 1994 Stock Incentive Plan (the "Plan"), to purchase an
aggregate of ___ shares of class A common stock, par value $.001 per
share, of divine, inc. (the "Company") ("Common Stock") 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 Internal Revenue Code of 1986, as
amended or replaced from time to time (the "Code").
2. Incentive Stock Option. This option is intended to qualify as an
incentive stock option ("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 may be exercised during the period commencing
[exdate] and ending on the tenth anniversary of the Grant Date
set forth on the signature page hereof (the "Expiration Date") in
installments as follows: (1) [quarter_] shares as of the one
year anniversary date of the Grant Date (the "Initial Vesting
Date") and (2) for each subsequent three-month period following
the Initial Vesting Date, as to no more than the number of shares
equal to the product of (i) [remainder] multiplied by (ii) the
number of consecutive three-month periods that the Optionee is
employed by the Company after [exdate]. The right of exercise
shall be cumulative so that if the option is not exercised to the
maximum extent permissible during any 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 Expiration Date or the
earlier termination of this option. This option may not be
exercised at any time on or after the Expiration Date.
(b) Exercise Procedure. Subject to the conditions set forth in this
Agreement, this option shall be exercised by the Optionee's
delivery of a properly completed irrevocable notice of option
exercise, as outlined in the Company's Policy Memorandum on stock
option exercises, to the Stock Administrator of the Company, and
accompanied by payment in full in accordance with Section 4
(unless a cashless exercise is designated on the option exercise
form). Such exercise shall be effective upon receipt by the Stock
Administrator of the Company of such 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 100 whole shares.
(c) Continuous Employment 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 of the Company. For all purposes of this option, (i)
"employment" shall be defined in accordance with the provisions
of Section 1.421-7(h) of the Income Tax Regulations or any
successor regulations, and (ii) if this option shall be assumed
or a new option substituted therefor in a transaction to which
Section 424(a) of the Code applies, employment by such assuming
or substituting corporation (hereinafter called the "Successor
Corporation") shall be considered for all purposes of this option
to be employment by the Company.
d) Exercise Period Upon Termination of Employment. If the Optionee
ceases to be employed by the Company 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 Expiration Date), provided
that this option shall be exercisable only to the extent that the
Optionee was entitled to exercise this option on the date of such
cessation. The Company's obligation to deliver shares upon the
exercise of this option shall be subject to the satisfaction of
all applicable federal, state and local income and employment tax
withholding requirements, arising by reason of this option being
treated under applicable law as a non-statutory option or
otherwise. Notwithstanding the foregoing, if the Optionee, prior
to the Expiration Date, materially violates the non-competition
or confidentiality provisions of any employment contract,
confidentiality and nondisclosure agreement or other agreement
between the Optionee and the Company, the right to exercise this
option shall terminate immediately upon written notice to the
Optionee from the Company describing such violation.
(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 Expiration Date while he or she is an employee
of the Company, or if the Optionee dies within three months after
the Optionee ceases to be an employee of the Company (other than
as the result of a discharge 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 (but in no event after the 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 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. As used herein,
the term "Cause" shall mean any of the following:
(i) a good faith finding by the Company (which finding shall be
conclusive) of failure of the Optionee to perform his or her
assigned duties for the Company, dishonesty, gross
negligence or misconduct, (including without limitation,
breach by the Optionee of any provision of any employment,
nondisclosure, non-competition or other similar agreement
between the Optionee and the Company); further, the Optionee
shall be considered to have been discharged "for cause" if
the Company determines, within 30 days after the Optionee's
resignation or termination, that discharge for cause was
warranted.
(ii) the Optionee's conviction of a felony;
(iii) the Optionee's conviction of any lesser crime or offense
committed in connection with the performance of his duties
hereunder and involving moral turpitude; or
(iv) the Optionee is habitually intoxicated by alcohol or under
the influence of drugs and is therefore unable to perform
his employment obligations.
4. Payment of Purchase Price.
(a) Method of Payment. Payment of the purchase price for shares
purchased upon exercise ofthis 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 theCompany 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
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 options 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 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
state or federal 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 conditionof, 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 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. Except as provided in paragraph (e) of
Section 3, 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. 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 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 of the
Optionee for the period within which this option may be exercised.
8. Rights as a Shareholder. The Optionee shall have no rights as a
shareholder 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. Adjustment Provisions.
(a) General. If, through, or as a result of, any merger,
consolidation, sale of all or substantially all of the assets of
the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other similar
transaction, (i) the outstanding shares of Common Stock are
increased or decreased or are exchanged for a different number or
kind of shares or other securities of the Company, or (ii)
additional shares or new or different shares or other securities
of the Company or other non-cash assets are distributed with
respect to such shares of Common Stock or other securities, the
Optionee shall, with respect to this option or any unexercised
portion hereof, be entitled to the rights and benefits, and be
subject to the limitations, set forth in Section 5(b) of the
Plan.
(b) Board Authority to Make Adjustments. Any adjustments under this
Section 9 will be made by the Board of Directors, whose
determination as to what adjustments, if any, will be made and
the extent thereof will be final, binding and conclusive. No
fractional shares will be issued pursuant to this option on
account of any such adjustments.
(c) Limits on Adjustments. No adjustment shall be made under this
Section 9 which would within the meaning of any applicable
provision of the Code, constitute a modification, extension or
renewal of this option or a grant of additional benefits to the
Optionee.
10. Mergers, Consolidation, Distributions, Liquidations Etc. In the event
of a consolidation or merger or sale of all or substantially all of
the assets of the Company in which outstanding shares of Common Stock
are exchanged for securities, cash or other property of any other
corporation or business entity, or in the event of a liquidation of
the Company, prior to the Expiration Date or termination of this
option, the Optionee shall, with respect to this option or any
unexercised portion hereof, be entitled to the rights and benefits,
and be subject to the limitations, set forth in Section 8(f) of the
Plan.
11. 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 federal, state and local income and
employment tax withholding requirements.
12. Limitations on Disposition of Incentive Stock Option Shares. It is
understood and intended that this 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 421 of the Code,
no sale or other disposition may be made of any shares acquired upon
exercise of the option within one year after the day of the transfer
of such shares to him, nor within two years after the grant of the
option. If the Optionee intends to dispose, or does dispose (whether
by sale, exchange, gift, transfer or otherwise), of any such shares
within said periods, he or she will notify the Company in writing
within ten days after such disposition.
13. Investment Representations; Legends.
(a) Representations. The Optionee represents, warrants and covenants
that:
(i) Any shares purchased upon exercise of this option shall be
acquired for the Optionee's account for investment only and
not with a view to, or for sale in connection with, any
distribution of the shares in violation of the Securities
Act or any rule or regulation under the Securities Act.
(ii) The Optionee has had such opportunity as he or she has
deemed adequate to obtain from representatives of the
Company such information as is necessary to permit the
Optionee to evaluate the merits and risks of his or her
investment in the Company.
(iii) The Optionee is able to bear the economic risk of holding
shares acquired pursuant to the exercise of this option for
an indefinite period.
(iv) The Optionee understands that the shares acquired pursuant
to the exercise of this option are currently registered
under the Securities Act. However, if at some later point in
time the shares acquired pursuant to the exercise of this
option are not registered under the Securities Act, (A) the
shares acquired pursuant to the exercise of this option will
be "restricted securities" within the meaning of Rule 144
under the Securities Act; (B) such shares cannot be sold,
transferred or otherwise disposed of unless they are
subsequently registered under the Securities Act or an
exemption from registration is then available; and (C) in
any event, an exemption from registration under Rule 144 or
otherwise under the Securities Act may not be available for
at least two years and even then will not be available
unless a public market then exists for the Common Stock,
adequate information concerning the Company is then
available to the public and other terms and conditions of
Rule 144 are complied with.
By making payment upon exercise of this option, the Optionee
shall be deemed to have reaffirmed, as of the date of such
payment, the representations made in this Section 13.
(b) Legends on Stock Certificates. All stock certificates
representing shares of Common Stock issued to the Optionee upon
exercise of this option shall have affixed thereto any legend
required by applicable state law:
14. 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.
(c) This option shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
Date of Grant:__________________ divine, inc.
By:____________________________
Title: ________________________
Address: 0 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
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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 Open Market, Inc. 1994 Stock Incentive Plan and Prospectus
thereto.
OPTIONEE
Signature ______________________________
Name: ______________________________
Address: ______________________________
______________________________
Date: ______________________________
