KNOWLEDGELINK INTERACTIVE, INC.
1998 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION GRANT AGREEMENT
This Grant Agreement (the "Agreement") is entered into by and between
KnowledgeLink Interactive, Inc., a Delaware corporation (the "Corporation"), and
XXXX XXXXXXX ("Grantee"), effective as of March 31, 1999 or such later date as
Grantee's employment with the Corporation commences (the "Grant Date").
In consideration of the premises, mutual covenants and agreements
herein, the Corporation and Grantee agree as follows:
ARTICLE 1
GRANT OF OPTION
SECTION 1.1 GRANT OF OPTION. The Corporation hereby grants to Grantee,
pursuant to the provisions of the KnowledgeLink Interactive, Inc. 1998 Stock
Incentive Plan (the "Plan"), an incentive stock option to purchase from the
Corporation, at a price of $1.50 per share (the "Exercise Price"), up to 150,000
shares of common stock of the Corporation, par value of $0.0001 per share
("Stock"), subject to the provisions of this Agreement (the "Option"). The
Option shall expire at 5:00 p.m. Eastern Time on the last business day preceding
the tenth anniversary of the Grant Date (the "Expiration Date"), unless fully
exercised or terminated earlier pursuant to this Agreement. Unless stated
otherwise herein, capitalized terms in this Agreement shall have the meaning set
forth in the Plan.
ARTICLE 2
VESTING
SECTION 2.1 VESTING SCHEDULE. Unless the Option has earlier terminated
pursuant to the provisions of this Agreement, Grantee shall become vested in the
shares subject to the Option pro rata over three years in accordance with the
vesting schedule attached hereto and made a part hereof (the "Vesting
Schedule"); provided, however, that Grantee shall have been in the continuous
employ of the Corporation from the Grant Date through each vesting date
specified on the Vesting Schedule.
ARTICLE 3
EXERCISE OF OPTION
SECTION 3.1 EXERCISABILITY OF OPTION. Pursuant to the terms of the
Agreement, the Option may be exercised at any time, and from time to time, with
respect to the number of shares subject to the Option in which Grantee is then
vested.
SECTION 3.2 SHAREHOLDERS' AGREEMENT. The Administrator in its sole
discretion may require as a condition precedent to the exercise of the Option
granted pursuant to Section 1.1, that Grantee or such other person exercising
the Option be, or shall execute and become, a party to a Shareholders' Agreement
in substantially in the form attached hereto as Exhibit A.
SECTION 3.3 MANNER OF EXERCISE. The Option may be exercised, in whole
or in part, by delivering written notice to the Administrator in such form as
the Administrator may require from time to time; provided, however, that the
Option may not be exercised at any one time as to fewer than one hundred (100)
shares (or such number of shares as to which the Option is then exercisable if
such number of shares then exercisable is less than one hundred (100). Such
notice shall specify the number of shares of Stock subject to the Option as to
which the Option is being exercised, and shall be accompanied by full payment of
the Exercise Price for such shares.
Payment of the Exercise Price shall be made (a) in cash (or cash
equivalents acceptable to the Administrator in the Administrator's discretion);
(b) in the Administrator's discretion at the time of exercise, by tender (via
actual delivery or attestation) to the Corporation of shares of the
Corporation's common stock owned by the Grantee, having a Fair Market Value on
the date of tender not less than the Exercise Price, which have been owned by
the Grantee at least six (6) months; (c) in the Administrator's discretion at
the time of exercise, by withholding shares of the Corporation's common stock
from the number of shares deliverable upon exercise; (d) in the Administrator's
discretion at the time of exercise, by the Grantee's full recourse promissory
note in a form approved by the Administrator; (e) by a broker-assisted cashless
exercise in accordance with Regulation T of the Board of Governors of the
Federal Reserve System and the provisions of the next paragraph; or (f) by any
combination of the foregoing. In the Administrator's sole and absolute
discretion, the Administrator may authorize payment of the Exercise Price to be
made, in whole or in part, by such other means as the Administrator may
prescribe. The Option may be exercised only in multiples of whole shares and no
fractional shares shall be issued.
If the Stock is registered under Section 12(b) of the Securities
Exchange Act of 1934, as amended, payment of the exercise price may be made, in
whole or in part, subject to such limitations as the Administrator may
determine, by delivery of a properly
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executed exercise notice, together with irrevocable instructions: (i) to a
brokerage firm approved by the Corporation to deliver promptly to the
Corporation the aggregate amount of sale or loan proceeds to pay the exercise
price and any withholding tax obligations that may arise in connection with the
exercise, and (ii) to the Corporation to deliver the certificates for such
purchased shares directly to such brokerage firm.
SECTION 3.4 ISSUANCE OF SHARES UPON EXERCISE. Upon exercise of the
Option, in whole or in part, in accordance with the terms of the Agreement and
upon payment of the Exercise Price for the shares of Stock as to which the
Option is exercised and delivery of such executed Shareholders' Agreement as may
be required by the Administrator pursuant to Section 3.2, the Corporation shall
issue to Grantee or such other person exercising the Option, as the case may be,
the number of shares of Stock so paid for, in the form of fully paid and
nonassessable Stock and shall deliver certificates therefor as soon as
practicable thereafter. The stock certificates for any shares of Stock issued
hereunder shall, unless such shares are registered or an exemption from
registration is available under applicable federal and state law, bear a legend
restricting transferability of such shares and referencing the Shareholders'
Agreement, if applicable.
ARTICLE 4
TERMINATION OF OPTION
SECTION 4.1 TERMINATION, IN GENERAL. The Option granted hereby shall
terminate and be of no force or effect after the Expiration Date set forth in
Section 1.1, unless terminated prior to such time as provided below.
SECTION 4.2 TERMINATION OF EMPLOYMENT FOR REASON OTHER THAN RETIREMENT,
DEATH OR DISABILITY. Unless the Option has earlier terminated pursuant to the
provisions of the Agreement, the Option shall terminate in its entirety,
regardless of whether the Option is vested in whole or in part, ninety (90) days
after the date Grantee is no longer employed by the Corporation and its
Affiliates for any reason other than Grantee's Retirement, death or Disability.
Unless sooner terminated, the Option shall terminate upon the expiration of such
ninety-day period. Notwithstanding the foregoing, the Option shall terminate in
its entirety, regardless of whether the Option is vested in whole or in part,
upon termination of the employment of the Grantee by the Corporation or an
Affiliate for "Cause."
If Grantee is a party to a written employment agreement with the
Corporation or an Affiliate which contains a definition of "cause," "termination
for cause" or words of similar import, whether such Grantee is terminated for
"Cause" pursuant to this Section 4.2 shall be determined according to the terms
of and in a manner consistent with the provisions of such written employment
agreement. If Grantee is not party to such a written employment agreement with
the Corporation or an Affiliate, then for purposes of this Section 4.2, "Cause"
shall mean (i) gross negligence or willful misconduct or any substantiated act
by Grantee involving dishonesty or bad faith against the Corporation or an
Affiliate, or any act or omission that demonstrates a lack of integrity of
Grantee with respect to the Corporation or an Affiliate; (ii) Grantee engaging
in acts or omissions the likely consequence of which is material injury to the
Corporation's or an Affiliate's
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business, property or reputation; (iii) breach or threatened breach by Grantee
of any non-competition or confidentiality agreement entered into between Grantee
and the Corporation or its Affiliate; (iv) chronic use of alcohol, drugs or
other similar substances affecting Grantee's work performance; or (v) Grantee
being convicted of, or pleading guilty or nolo contendere to, or being indicted
for a felony or other crime involving theft, fraud or moral turpitude. The good
faith determination by the Administrator of whether the Grantee's employment was
terminated by the Corporation for "Cause" shall be final and binding for all
purposes hereunder.
SECTION 4.3 TERMINATION OF EMPLOYMENT BY REASON OF RETIREMENT. Unless
the Option has earlier terminated pursuant to the provisions of the Agreement,
in the event that Grantee ceases, by reason of Retirement, to be an employee of
the Corporation or an Affiliate, the outstanding Option may be exercised in
whole or in part with respect to the shares of Stock as to which the Option is
vested as of the date of Grantee's termination of employment at any time within
ninety (90) days after such date of termination, but not later than the end of
the stated term of the Option. Unless sooner terminated, the Option shall
terminate upon the expiration of such ninety-day period.
For purposes of this Agreement, Retirement shall mean termination of
employment on or after age 65 or termination of employment on or after the
attainment of such younger age and satisfaction of such minimum service
requirement, if any, specified by the Corporation's qualified retirement plan in
effect at such time, but excluding any termination for Cause.
SECTION 4.4 UPON GRANTEE'S DEATH. Unless the Option has earlier
terminated pursuant to the provisions of the Agreement, upon Grantee's death
Grantee's executor, personal representative, or the person to whom the Option
shall have been transferred by will or the laws of descent and distribution, as
the case may be, may exercise all or any part of the outstanding Option with
respect to the shares of Stock as to which the Option is vested as of the
Grantee's date of death, provided such exercise occurs within six (6) months
after the date of Grantee's death, but not later than the end of the stated term
of the Option. Unless sooner terminated, the Option shall terminate upon the
expiration of such six-month period.
SECTION 4.5 TERMINATION OF EMPLOYMENT BY REASON OF DISABILITY. Unless
the Option has earlier terminated pursuant to the provisions of the Agreement,
in the event that Grantee ceases, by reason of Disability, to be an employee of
the Corporation or an Affiliate, the outstanding Option may be exercised in
whole or in part with respect to the shares of Stock as to which the Option is
vested as of the date of Grantee's termination of employment due to Disability
at any time within ninety (90) days after the date of such termination, but not
later than the end of the stated term of the Option. Unless sooner terminated,
the Option shall terminate upon the expiration of such ninety-day period.
For purposes of this Agreement, Disability shall mean the inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months. The
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Administrator may require such proof of Disability as the Administrator in its
sole discretion deems appropriate and the Administrator's determination as to
whether Grantee is Disabled shall be final and binding on all parties concerned.
ARTICLE 5
DRAG-ALONG RIGHTS
SECTION 5.1 DRAG-ALONG RIGHTS. If at any time any shareholder of the
Corporation or group of shareholders owning a majority or more of the voting
capital stock of the Corporation proposes to enter into any transaction
involving (i) a sale of more than fifty percent (50%) of the outstanding voting
capital stock of the Corporation in a non-public sale or (ii) any merger or
consolidation of the Corporation immediately after which a majority of the
directors of the surviving entity is not comprised of persons who were directors
of the Corporation immediately prior to such transaction or after which persons
who hold a majority of the common stock of the surviving entity are not persons
who held voting capital stock of the Corporation immediately prior to such
transaction, the Corporation may require Grantee to participate in such
transaction by giving Grantee written notice thereof at least ten (10) days in
advance of the date of the transaction or the date that tender is required, as
the case may be. Upon receipt of such notice, Grantee shall sell, assign, tender
or transfer the same percentage of the Option to the extent vested as the
percentage of the shares of Common Stock proposed to be sold, assigned, tendered
or transferred by the transferring shareholders collectively, upon the same
terms and conditions applicable to the transferring shareholders and at a price
equal to the difference between the Exercise Price per share under the Option
and the price per share of Common Stock the transferring shareholders will
receive pursuant to the terms of the transaction. The provisions of this Section
5.1 shall apply in the event of Grantee's death, to Grantee's executor, personal
representative or the person to whom the Option shall have been transferred by
will or the laws of descent and distribution, as though such person is Grantee.
ARTICLE 6
ADJUSTMENTS; BUSINESS COMBINATIONS
SECTION 6.1 ADJUSTMENTS FOR EVENTS AFFECTING COMMON STOCK. In the
event of changes in the Common Stock of the Corporation by reason of any stock
dividend, split-up, recapitalization, merger, consolidation, business
combination or exchange of shares and the like, the Administrator shall, in its
discretion, make appropriate adjustments to the number, kind and price of shares
covered by this Option, and shall, in its discretion and without the consent of
the Grantee, make any other adjustments in this Option, including but not
limited to reducing the number of shares subject to the Option or providing or
mandating alternative settlement methods such as settlement of the Option in
cash or in shares of Common Stock or other securities of the Corporation or of
any other entity, or in any other matters which relate to the Option as the
Administrator shall, in its sole discretion, determine to be necessary or
appropriate.
SECTION 6.2 POOLING OF INTERESTS TRANSACTION. Notwithstanding
anything in the Plan or the Agreement to the contrary and without the consent of
the Grantee, the
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Administrator, in its sole discretion, may make any modifications to the Option,
including but not limited to cancellation, forfeiture, surrender or other
termination of the Option in whole or in part regardless of the vested status of
the Option, in order to facilitate any business combination that is authorized
by the Board to comply with requirements for treatment as a pooling of interests
transaction for accounting purposes under generally accepted accounting
principles.
SECTION 6.3 ADJUSTMENTS FOR UNUSUAL EVENTS. The Administrator is
authorized to make, in its discretion and without the consent of the Grantee,
adjustments in the terms and conditions of, and the criteria included in, the
Option in recognition of unusual or nonrecurring events affecting the
Corporation, or the financial statements of the Corporation or any Subsidiary,
or of changes in applicable laws, regulations, or accounting principles,
whenever the Administrator determines that such adjustments are appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Option or the Plan.
SECTION 6.4 BINDING NATURE OF ADJUSTMENTS. Adjustments under this
Article 6 will be made by the Administrator, 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.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 NON-GUARANTEE OF EMPLOYMENT. Nothing in the Plan or the
Agreement shall be construed as a contract of employment between the Corporation
(or an Affiliate) and Grantee, or as a contractual right of Grantee to continue
in the employ of the Corporation or an Affiliate, or as a limitation of the
right of the Corporation or an Affiliate to discharge Grantee at any time with
or without cause or notice.
SECTION 7.2 NO RIGHTS OF SHAREHOLDER. Grantee shall not have any of the
rights of a shareholder with respect to the shares of Common Stock that may be
issued upon the exercise of the Option until such shares of Common Stock have
been issued to him upon the due exercise of the Option. No adjustment shall be
made for dividends or distributions or other rights for which the record date is
prior to the date such certificate or certificates are issued.
SECTION 7.3 QUALIFIED NATURE OF AGREEMENT. The Option is intended to
qualify as an incentive stock option ("Incentive Stock Option") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), to the fullest extent permitted within the limit set forth under
Section 422(d) of the Code and this Agreement shall be so construed. The
aggregate fair market value (determined as of the Grant Date) of shares of Stock
with respect to which all Incentive Stock Options first become exercisable by
the Grantee in any calendar year under the Plan or any other plan of the
Corporation (and its parent and subsidiary corporations, as may exist from time
to time) may not exceed $100,000 or such other amount as may be permitted from
time to time
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under Section 422 of the Code. To the extent that such aggregate fair market
value shall exceed $100,000 or other applicable amount in any calendar year,
such stock options shall be treated as nonqualified stock options with respect
to the amount of aggregate fair market value thereof that exceeds the Section
422(d) limit. For this purpose, the Incentive Stock Options will be taken into
account in the order in which they were granted. In such case, the Corporation
may designate the shares of Stock that are to be treated as stock acquired
pursuant to the exercise of an Incentive Stock Option and the shares of Stock
that are to be treated as stock acquired pursuant to a nonqualified stock option
by issuing separate certificates for such shares and identifying the
certificates as such in the stock transfer records of the Company.
Notwithstanding anything herein to the contrary, if the Grantee owns,
directly or indirectly through attribution, stock possessing more than 10% of
the total combined voting power of all classes of stock of the Corporation or of
any of its subsidiaries on the Grant Date, then the Exercise Price shall be the
greater of (a) the Exercise Price stated in Section 1.1 or (b) 110% of the Fair
Market Value of the Stock on the Grant Date, and the Expiration Date shall be
the fifth anniversary of the Grant Date.
SECTION 7.4 NOTICE OF DISQUALIFYING DISPOSITION. If Grantee makes a
disposition (as that term is defined in Section 424(c) of the Code) of any
shares of Stock acquired pursuant to the exercise of an Incentive Stock Option
within two (2) years of the Grant Date or within one (1) year after the shares
of Stock are transferred to Grantee, Grantee shall notify the Administrator of
such disposition in writing.
SECTION 7.5 THE CORPORATION'S RIGHTS. The existence of this Option
shall not affect in any way the right or power of the Corporation or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Corporation's capital structure or its
business, or any merger or consolidation of the Corporation, or any issue of
bonds, debentures, preferred or other stocks with preference ahead of or
convertible into, or otherwise affecting the Stock or the rights thereof, or the
dissolution or liquidation of the Corporation, or any sale or transfer of all or
any part of the Corporation's assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
SECTION 7.6 WITHHOLDING OF TAXES. The Corporation or any Affiliate
shall have the right to deduct from any compensation or any other payment of any
kind (including withholding the issuance of shares of Stock) due Grantee the
amount of any federal, state or local taxes required by law to be withheld as
the result of the exercise of the Option or the disposition (as that term is
defined in Section 424(c) of the Code) of shares of Stock acquired pursuant to
the exercise of the Option. In lieu of such deduction, the Administrator may
require Grantee to make a cash payment to the Corporation or an Affiliate equal
to the amount required to be withheld. If Grantee does not make such payment
when requested, the Corporation may refuse to issue any Stock certificate under
the Plan until arrangements satisfactory to the Administrator for such payment
have been made.
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SECTION 7.7 GRANTEE. Whenever the word "Grantee" is used in any
provision of this Agreement under circumstances where the provision should
logically be construed to apply to the estate, personal representative or
beneficiary to whom this Option may be transferred by will or by the laws of
descent and distribution, the word "Grantee" shall be deemed to include such
person.
SECTION 7.8 NONTRANSFERABILITY OF OPTION. The Option shall be
nontransferable otherwise than by will or the laws of descent and distribution
and (ii) during the lifetime of Grantee, the Option may be exercised only by
Grantee or, during the period Grantee is under a legal disability, by Grantee's
guardian or legal representative. Except as provided above, the Option may not
be assigned, transferred, pledged, hypothecated or disposed of in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process.
SECTION 7.9 NOTICES. All notices and other communications made or given
pursuant to the Agreement shall be in writing and shall be sufficiently made or
given if hand delivered or mailed by certified mail, addressed to Grantee at the
address contained in the records of the Corporation, or addressed to the
Administrator, care of the Corporation for the attention of its Secretary at its
principal office or, if the receiving party consents in advance, transmitted and
received via telecopy or via such other electronic transmission mechanism as may
be available to the parties.
SECTION 7.10 ENTIRE AGREEMENT; MODIFICATION. The Agreement contains the
entire agreement between the parties with respect to the subject matter
contained herein and may not be modified, except as provided in the Plan or in a
written document signed by each of the parties hereto. Any oral or written
agreements, representations, warranties, written inducements, or other
communications made prior to the execution of the Agreement shall be void and
ineffective for all purposes.
SECTION 7.11 CONFORMITY WITH PLAN. This Agreement is intended to
conform in all respects with, and is subject to all applicable provisions of,
the Plan, which is incorporated herein by reference. Inconsistencies between
this Agreement and the Plan shall be resolved in accordance with the terms of
the Plan. In the event of any ambiguity in the Agreement or any matters as to
which the Agreement is silent, the Plan shall govern.
SECTION 7.12 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland, other than the
conflict of laws principles thereof.
SECTION 7.13 HEADINGS. The headings in the Agreement are for reference
purposes only and shall not affect the meaning or interpretation of the
Agreement.
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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized officer as of the date first above written.
ATTEST: KNOWLEDGELINK INTERACTIVE, INC.
By:/s/ Xxx X. Xxxxxxx
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The undersigned hereby acknowledges that he/she has carefully read this
Agreement and the Plan and agrees to be bound by all of the provisions set forth
in such documents.
WITNESS: GRANTEE
/s/ Xxxx X. XxXxxxx
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Date:3/30/99
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Enclosure: KnowledgeLink Interactive, Inc. 1998 Stock Incentive Plan
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VESTING SCHEDULE
(Xxxx X. XxXxxxx, 03/30/1999 STOCK OPTION GRANT)
---------------------------------- -------------------------------- --------------------------------
AGGREGATE AGGREGATE AGGREGATE
PERCENTAGE PERCENTAGE PERCENTAGE
VESTING OF VESTED VESTING OF VESTED VESTING OF VESTED
DATE SHARES DATE SHARES DATE SHARES
---------------------------------- -------------------------------- --------------------------------
04/30/99 2.778% 04/30/00 36.111% 04/30/01 69.444%
---------------------------------- -------------------------------- --------------------------------
05/30/99 5.556% 05/30/00 38.889% 05/30/01 72.222%
---------------------------------- -------------------------------- --------------------------------
06/30/99 8.333% 06/30/00 41.667% 06/30/01 75.000%
---------------------------------- -------------------------------- --------------------------------
07/30/99 11.111% 07/30/00 44.444% 07/30/01 77.778%
---------------------------------- -------------------------------- --------------------------------
08/30/99 13.889% 08/30/00 47.222% 08/30/01 80.556%
---------------------------------- -------------------------------- --------------------------------
09/30/99 16.667% 09/30/00 50.000% 09/30/01 83.333%
---------------------------------- -------------------------------- --------------------------------
10/30/99 19.444% 10/30/00 52.778% 10/30/01 86.111%
---------------------------------- -------------------------------- --------------------------------
11/30/99 22.222% 11/30/00 55.556% 11/30/01 88.889%
---------------------------------- -------------------------------- --------------------------------
12/30/99 25.000% 12/30/00 58.333% 12/30/01 91.667%
---------------------------------- -------------------------------- --------------------------------
01/30/00 27.778% 01/30/01 61.111% 01/30/02 94.444%
---------------------------------- -------------------------------- --------------------------------
02/29/00 30.556% 02/28/01 63.889% 02/28/02 97.222%
---------------------------------- -------------------------------- --------------------------------
03/30/00 33.333% 03/30/01 66.667% 03/30/02 100%
---------------------------------- -------------------------------- --------------------------------
The number of shares subject to the Option in which the Grantee shall be vested
as of a particular vesting date shall be rounded down to the nearest whole
share. However, vesting will be rounded up to the nearest whole share with
respect to the last vesting date reflected on this Vesting Schedule.
