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EXHIBIT 99.2
INCENTIVE STOCK OPTION - ONE THIRD VESTING UPON CHANGE IN CONTROL
INCENTIVE STOCK OPTION AGREEMENT
NASHOBA NETWORKS INC.
AGREEMENT made as of ____________, 199_, between Nashoba Networks Inc.,
a Delaware corporation having a principal place of business at 0 Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the "Company"), and __________________,
an employee of the Company, residing at ________________, _______, ________ (the
"Employee").
WHEREAS, the Company desires to grant to the Employee an Option to
purchase shares of its common stock, $.01 par value (the "Shares"), under and
for the purposes of the 1995 Employee, Director and Consultant Stock Option Plan
of the Company (the "Plan"); and
WHEREAS, the Company and the Employee 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 Employee each intend that the Option
granted herein qualify as an ISO.
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 Employee the right
and option to purchase all or any part of an aggregate of two thousand two
hundred and fifty (2,250) 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 Employee acknowledges receipt of a copy of the Plan.
2. PURCHASE PRICE. The purchase price of the Shares covered by the
Option shall be Three Dollars ($3.00) 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. EXERCISE 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:
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On or after ________ _____, 199__ up to ___________________ (___)
Shares)
On or after ________ ______, 199__ Up to an additional ____________
________ (___) Shares
On or after ________ ______, 199__ up to an additional ____________
_________ (___) Shares
On or after ________ ______, 200__ up to an additional ____________
_________ (___) Shares
On or after ________ ______, 200__ Up to an additional ____________
_________ (___) Shares
The foregoing rights are cumulative and are subject to the other terms
and conditions of this Agreement and the Plan.
Notwithstanding any contrary provision in the Plan or this Agreement,
upon the occurrence of a Change of Control (as hereinafter defined), then one
third (1/3) of any previously unvested portion of the Option shall become fully
exercisable immediately prior to the effectiveness of such Change of Control and
the remaining two thirds (2/3) of any previously unvested portion shall continue
to vest on the Schedule set forth in this Agreement. As used herein, a "Change
of Control" means that any of the following events has occurred:
(i) Any person (as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934) becomes the beneficial owner (as
defined in Rule 13d-3 promulgated under the Securities and Exchange
Commission) directly or indirectly or more than fifty (50%) of the
outstanding common stock of the Company, or otherwise becomes entitled
to vote more than fifty percent (50%) of the voting power entitled to
be cast at elections for directors ("Voting Power") of the Company;
(ii) The stockholders or the Board of Directors shall have
approved any consolidation or merger of the Company in which (A) the
Company is not the continuing or surviving corporation or (B) pursuant
to which the holders of the Company's shares of common stock
immediately prior to such merger or consolidation would not be the
holders immediately after such merger or consolidation of at least 51%
of the Voting Power of the Company;
(iii) The stockholders or the Board of Directors shall have
approved any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company; or
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(iv) The liquidation or dissolution of the Company or the
Company ceasing to do business.
4. TERM OF OPTION. The Option shall terminate ten (10) years from the
date of this Agreement or, if the Employee owns as of the date hereof more than
10% of the total combined voting power of all classes of capital stock of the
Company or an Affiliate, five (5) years from the date of this Agreement, but
shall be subject to earlier termination as provided herein or in the Plan.
If the Employee ceases to be an employee of the Company or of an
Affiliate (for any reason other than the death or Disability of the Employee or
termination by the Employee's employer for "cause" (as defined in the Plan), the
Option may be exercised, if it has not previously terminated, within one (1)
month after the date the Employee ceases to be an employee 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.
Notwithstanding the foregoing, in the event of the Employee's death
within one (1) month after the termination of employment, the Employee's legal
representatives and/or any person or persons who acquired the Employee's rights
to the Option by will or by the laws of descent and distribution may exercise
the Option within one (1) year after the date of the Employee's death, but in no
event after the date of expiration of the term of the Option.
In the event the Employee's employment is terminated by the Employee's
employer for "cause" (as defined in the Plan), the Employee's right to exercise
any unexercised portion of this Option shall cease forthwith, and this Option
shall thereupon terminate. Notwithstanding anything herein to the contrary, if
subsequent to the Employee's termination as an employee, but prior to the
exercise of the Option, the Board of Directors of the Company determines that,
either prior or subsequent to the Employee's termination, the Employee engaged
in conduct which would constitute "cause," then the Employee shall forthwith
cease to have any right to exercise the Option and this Option shall thereupon
terminate.
In the event of the Disability of the Employee, as determined in
accordance with the Plan, the Option shall be exercisable within one (1) year
after the date of such Disability or, if earlier, 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
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(b) In the event rights to exercise the Option accrue
periodically, to the extent of a pro rata portion of any additional
rights as would have accrued had the Employee 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 Employee while an employee of the
Company or of an Affiliate, the Option shall be exercisable by the Employee's
Survivors. In such event, the Option must be exercised, if at all, within one
(1) year after the date of death of the Employee 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 Employee
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 Employee'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
the principal executive office of the Company. Such notice shall state the
election to exercise the Option and the number of Shares in respect of which it
is being exercised, shall be signed by the person or persons so exercising the
Option, and shall be in substantially the form attached hereto. 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 Employee and if Employee shall so request in the notice exercising the
Option, shall be registered in the name of the Employee 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 Paragraph 4 hereof, by any
person or persons other than the Employee, 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.
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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
Employee 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 preceding sentence, the Option shall be exercisable, during
the Employee's lifetime, only by the Employee 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 Paragraph
7, or the levy of any attachment or similar process upon the Option or such
rights, shall be null and void.
8. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE. The Employee shall have no
rights as a stockholder with respect to Shares subject to this Agreement until a
stock certificate therefor has been issued to the Employee and is fully paid
for. 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 such stock
certificate is issued.
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 Employee 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 Employee's responsibility.
In the event of a Disqualifying Disposition (as defined in Paragraph 15
below) or if the Option is converted into a Non-Qualified Option and such
Non-Qualified Option is exercised, the Company may withhold from the Employee's
remuneration, if any, the appropriate amount of federal, state and local
withholding 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 common stock otherwise deliverable to the Employee on
exercise of the Option, provided, however, that with respect to persons subject
to Section 16 of the Securities Exchange Act of 1934 (the "1934 Act") any such
withholding arrangement shall be in compliance with any applicable provisions of
Rule 16b-3 promulgated under Section 16 of the 1934 Act. The Participant further
agrees that, if the Company does not
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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 underwithheld.
11. PURCHASE FOR INVESTMENT. Unless the offering and sale of the
Share 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
hereafter amended (the "1933 Act"), and 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 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 herein.
12.2 In the event of the Employee's termination of employment by
the Company, any parent or subsidiary of the Company, direct or indirect, or any
subsidiary of the parent of the Company, Disability or death, the Company shall
have the option, but not the obligation, to repurchase all or any part of the
Shares issued pursuant to this Agreement (including, without limitation, Shares
purchased after termination of employment, Disability
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or death in accordance with Paragraph 4 hereof). In the event the Company does
not, upon the death or Disability of the Employee or termination of his or her
employment (as described above), exercise its option pursuant to this Paragraph
12.2, the restrictions set forth in the balance of this Agreement shall not
thereby lapse, and the Employee for himself or herself, his or her heirs,
legatees, executors, administrators and other successors in interest, agrees
that the Shares shall remain subject to such restrictions. The following
provisions shall apply to a repurchase under this Paragraph 12.2:
(i) The per share repurchase price of the Shares to be sold to
the Company upon exercise of its option under this Paragraph 12.3 shall
be equal to the Fair Market Value of each such Share determined in
accordance with the Plan as of the date of termination, death or
Disability.
(ii) The Company's option to repurchase the Employee's Shares
in the event of termination of employment, death or Disability shall be
valid for a period of six (6) months commencing with the date of such
termination, death or Disability.
(iii) In the event the Company shall be entitled to and shall
elect to exercise its option to repurchase the Employee's Shares under
this Paragraph 12.2, the Company shall notify the Employee, or in case
of death, his or her representative, in writing of its intent to
repurchase the Shares. Such written notice may be mailed by the Company
up to and including the last day of the time period provided for in
Paragraph 12.2(ii) for exercise of the Company's option to repurchase.
(iv) The written notice to the Employee shall specify the
address at, and the time and date on, which payment of the repurchase
price is to be made (the "Closing"). The date specified shall not be
less than ten (10) days nor more than sixty (60) days from the date of
the mailing of the notice, and the Employee or his or her successor in
interest with respect to the Shares shall have no further rights as the
owner thereof from and after the date specified in the notice. At the
Closing, the repurchase price shall be delivered to the Employee or his
or her successor in interest and the Shares being purchased, duly
endorsed for transfer, shall, to the extent that they are not then in
the possession of the Company, be delivered to the Company by the
Employee or his or her successor in interest.
12.3 It shall be a condition precedent to the validity of any sale or
other transfer of any Shares by the Employee that the following restrictions be
complied with (except as hereinafter otherwise provided):
(i) No Shares owned by the Employee may be sold, pledged or
otherwise transferred (including by gift or devise) to any person or
entity, voluntarily, or by operation of law, except in accordance with
the terms and conditions hereinafter set forth.
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(ii) Before selling or otherwise transferring all or part of
the Shares, the Employee shall give written notice of such intention to
the Company which notice shall include the name of the proposed
transferee, the proposed purchase price per share, the terms of payment
of such purchase price and all other matters relating to such sale or
transfer and shall be accompanied by a copy of the binding written
agreement of the proposed transferee to purchase the Shares of the
Employee. Such notice shall constitute a binding offer by the Employee
to sell to the Company such number of the Shares then held by the
Employee as are proposed to be sold in the notice at the monetary price
per share designated in such notice, payable on the terms offered to
the Employee by the proposed transferee (provided, however, that the
Company shall not be required to meet any non-monetary terms of the
proposed transfer, including, without limitation, delivery of other
securities in exchange for the Shares proposed to be sold). The Company
shall give written notice to the Employee as to whether such offer has
been accepted in whole by the Company within sixty (60) days after its
receipt of written notice from the Employee The Company may only accept
such offer in whole and may not accept such offer in part. Such
acceptance notice shall fix a time, location and date for the closing
on such purchase ("Closing Date") which shall not be less than ten (10)
nor more than sixty (60) days after the giving of the acceptance
notice. The place for such closing shall be at the Company's principal
office. At such closing, the Employee shall accept payment as set forth
herein and shall deliver to the Company in exchange therefor
certificates for the number of Shares stated in the notice accompanied
by duly executed instruments of transfer.
(iii) If the Company shall fail to accept any such offer, the
Employee shall be free to sell all, but not less than all, of the
Shares set forth in his or her notice to the designated transferee at
the price and terms designated in the Employee's notice provided that
(i) such sale is consummated within six (6) months after the giving of
notice by the Employee to the Company as aforesaid, and (ii) the
transferee first agrees in writing to be bound by the provisions of
this Paragraph 12 so that he or she shall thereafter only be permitted
to sell or transfer the Shares in accordance with the terms hereof.
After the expiration of such six (6) months, the provisions of this
Paragraph 12.3 shall again apply with respect to any proposed voluntary
transfer of the Employee's Shares.
The restrictions on transfer contained in this Paragraph 12.3 shall not
apply to (a) transfers by the Employee to the trustee or trustees of a
trust revocable solely by him or her, (b) transfers by the Employee to
his or her guardian or conservator, (c) or transfers by the Employee,
in the event of his or her death, to his or her executor(s) or
administrator(s) or to trustee(s) under his or her will (collectively,
"Permitted Transferees"); provided, however, that in any such event the
Shares so transferred in the hands of each such Permitted Transferee
shall remain subject to this Agreement, and each such Permitted
Transferee shall so acknowledge in writing as a condition precedent to
the effectiveness of such transfer.
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(iv) The provisions of this Paragraph 12.3 may be waived by
the Company. Any such waiver may be unconditional or based upon such
conditions as the Company may impose.
12.4 In the event that the Employee or his or her successor in interest
fails to deliver the Shares to be repurchased by the Company under this
Agreement, the Company may elect (a) to establish a segregated account in the
amount of the repurchase price, such account to be turned over to the Employee
or his or her successor in interest upon delivery of such Shares, and (b)
immediately to take such action as is appropriate to transfer record title of
such Shares from the Employee to the Company and to treat the Employee and such
Shares in all respects as if delivery of such Shares had been made as required
by this Agreement. The Employee hereby irrevocably grants the Company a power of
attorney which shall be coupled with an interest for the purpose of effectuating
the preceding sentence.
12.5 If the Company shall pay a stock dividend or declare a stock split
on or with respect to any of its common capital stock, or otherwise distribute
securities of the Company to the holders of its common capital stock, the number
of shares of stock or other securities of the Company issued with respect to the
Shares then subject to the restrictions contained in this Agreement shall be
added to the Shares subject to the Company's rights to repurchase pursuant to
this Agreement. If the Company shall distribute to its stockholders shares of
stock of another corporation, the shares of stock of such other corporation, the
shares of stock of such other corporation, distributed with respect to the
Shares then subject to the restrictions contained in this Agreement, shall be
added to the Shares subject to the Company's rights to repurchase pursuant to
this Agreement.
12.6 If the outstanding shares of common capital stock of the Company
shall be subdivided into a greater number of shares or combined into a smaller
number of shares, or in the event of a reclassification of the outstanding
shares of common capital stock of the Company, or if the Company shall be a
party to a merger, consolidation or capital reorganization, there shall be
substituted for the Shares then subject to the restrictions contained in this
Agreement such amount and kind of securities as are issued in such subdivision,
combination, reclassification, merger, consolidation or capital reorganization
in respect of the Shares subject immediately prior thereto to the Company's
rights to repurchase pursuant to this Agreement.
12.7 The Company shall not be required to transfer any Shares on its
books which shall have been sold, assigned or otherwise transferred in violation
of this Agreement or to treat as owner of such Shares, or to accord the right to
vote as such owner or to pay dividends to, any person or organization to which
any such Shares shall have been so sold, assigned or otherwise transferred, in
violation of this Agreement.
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12.8 The provisions of Paragraph 12.3 shall terminate upon the
effective date of the registration of the Shares pursuant to the Securities
Exchange Act of 1934.
12.9 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 an Incentive Stock Option Agreement dated
as of April 29, 1996 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 EMPLOY. The Company is not by the Plan or this
Option obligated to continue the Employee as an employee of the Company.
14. OPTION IS AN ISO. The parties each intend that the Option be an ISO
so that the Employee (or the Employee's Survivors) may qualify for the favorable
tax treatment provided to holders of Options that meet the standards of Code
Section 422. Any provision of this Agreement or the Plan which conflicts with
the Code so that this Option would not be deemed an ISO is null and void and any
ambiguities shall be resolved so that the Option qualifies as an ISO.
Nonetheless, if the Option is determined not to be an ISO, the Employee
understands that the Company and any Affiliates are not responsible to
compensate him or her or otherwise make up for the treatment of the Option as a
Non-qualified Option and not as an ISO. The Employee should consult with the
Employee's own tax advisors regarding the tax effects of the Option and the
requirements necessary to obtain favorable tax treatment under Section 422 of
the Code, including, but not limited to, holding period requirements.
15. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. The Employee agrees
to notify the Company in writing immediately after the Employee makes a
Disqualifying Disposition of any of the Shares acquired pursuant to the exercise
of the Option. A Disqualifying Disposition is defined in Section 424(c) of the
Code and includes any disposition (including any sale) of such Shares before the
later of (a) two years after the date the Employee was granted the Option or (b)
one year after the date the Employee acquired Shares by exercising the Option,
except as otherwise provided in Section 424(c) of the Code. If the Employee has
died before the Shares are sold, these holding period requirements do not apply
and no Disqualifying Disposition can occur thereafter.
16. 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 required, addressed as follows:
To the Company: Nashoba Networks Inc.
0 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx, President
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To the Employee: __________________
__________________
__________________
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.
17. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the law of the Commonwealth of Massachusetts.
18. 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.
19. 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 provision of this Agreement, provided, however, in any event, this
Agreement shall be subject to and governed by the Plan.
20. MODIFICATIONS AND AMENDMENTS. The terms and provision of this
Agreement may be modified or amended as provided by the Plan.
21. WAIVERS AND CONSENTS. 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.
22. HOLDING PERIOD APPLICABLE TO PERSONS SUBJECT TO SECTION 16 OF THE
SECURITIES EXCHANGE ACT OF 1934. If the Employee to whom the Option has been
granted pursuant to this Agreement is subject to Section 16 of the 1934 Act,
Section 16 requires that at least six (6) months must elapse from the date of
grant of the Option to the date of disposition of the Shares.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and the Employee has hereunto set his
or her hand, all as of the date and year first above written.
NASHOBA NETWORKS INC.
By:
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Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President, Operations
EMPLOYEE
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[Type in name of employee here]
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NOTICE OF EXERCISE OF INCENTIVE STOCK OPTION
[FORM FOR PRIVATE COMPANIES]
To: Nashoba Networks Inc.
Ladies and Gentlemen:
I hereby exercise my Incentive Stock Option to purchase _________shares
(the "Shares") of the common stock, $.01 par value, of Nashoba Networks Inc.
(the "Company"), at the exercise price of $3.00 per share, pursuant to and
subject to the terms of that certain Incentive Stock Option Agreement between
the undersigned and the Company dated as of , 199 .
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 informal
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 1995 Employee, Director and Consultant Stock Option Plan
and the Incentive Stock Option Agreement 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:
Pleases issue the stock certificate for the Shares (check one):
__________ to me
__________ to me and ___________________ as joint tenants with right of
survivorship and mail the certificate to me at the following address:
________________________________________________________________________________
My mailing address (if different from the above address) for shareholder
communication is:
________________________________________________________________________________
Very truly yours,
______________________________ ______________________________________
Date Employee (signature)
______________________________ ______________________________________
Social Security Number Print Name
2.
