Exhibit 10.1
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Confidential Materials omitted and filed
separately with the Securities and Exchange
Commission. Asterisks denote omissions.
Incentive Stock Option Agreement
Granted Under 1999 Stock Incentive Plan
1. Grant of Option.
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This agreement evidences the grant by Switchboard Incorporated, a Delaware
corporation (the "Company"), on March 3, 2004 (the "Grant Date") to Xxxx
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Polnerow, an employee of the Company (the "Participant"), of an option to
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purchase, in whole or in part, on the terms provided herein and in the Company's
1999 Stock Incentive Plan (the "Plan"), a total of 100,000 shares (the "Shares")
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of common stock, $0.01 par value per share, of the Company ("Common Stock") at
$5.72 per Share. Unless earlier terminated, this option shall expire at midnight
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on March 2, 2014 (the "Final Exercise Date").
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To the extent permissible by law, it is intended that the option evidenced
by this agreement shall be an incentive stock option as defined in Section 422
of the Internal Revenue Code of 1986, as amended and any regulations promulgated
thereunder (the "Code"). Except as otherwise indicated by the context, the term
"Participant", as used in this option, shall be deemed to include any person who
acquires the right to exercise this option validly under its terms.
2. Vesting.
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(a) This option will vest as to 100% of the original number of Shares on
the fifth anniversary of the Grant Date, except that (A) fifty percent (50%) of
the original number of Shares shall become immediately vested upon (i) [**], and
(ii) achievement by the Company of either (a) [**], or (b) [**], or (B) 100% of
the original number of Shares shall become immediately vested upon (i) [**], and
(ii) [**], or (b) [**].
The right of exercise shall be cumulative so that to the extent the option
is not exercised in any period to the maximum extent permissible it shall
continue to be exercisable, in whole or in part, with respect to all shares for
which it is vested until the earlier of the Final Exercise Date or the
termination of this option under Section 3 hereof or the Plan.
Notwithstanding anything to the contrary in this option or in the Plan,
this option will vest as to 100% of the then-unvested shares upon the occurrence
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of a Change of Control (as defined herein).
For the purposes of this option, a change in control ("Change in Control")
of the Company shall be deemed to occur if and only if (a) any person or entity
(other than the Company, ePresence, Inc., any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any corporation
owned directly or indirectly by the stockholders of the Company in substantially
the same proportion as their ownership of stock of the Company) is or becomes
the "beneficial owner" (as defined in Rule 13d- 3 under the Securities and
Exchange of 1934, as amended), directly or indirectly, of securities of the
Company representing more than 50% of the combined voting power of the Company's
then outstanding voting securities, (b) a merger or consolidation of the Company
occurs following which the voting securities of the Company outstanding
immediately prior thereto do not continue to represent more than 50% of the
combined voting power of the voting securities of the surviving entity that are
outstanding immediately after such merger or consolidation, (c) there is a sale
of all or substantially all of the assets of the Company or (d) the stockholders
of the Company approve a complete liquidation or dissolution of the Company.
(b) Early Exercise Alternative. Notwithstanding the exercisability schedule
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set forth in paragraph (a), the Participant may elect to exercise this option as
to the unvested shares (in addition to the vested shares) if simultaneously with
such exercise the Participant enters into a Stock Restriction agreement with the
Company in the form attached hereto as Exhibit A (the "Stock Restriction
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Agreement"). The Stock Restriction Agreement provides that the unvested shares
shall be subject to a right of repurchase (the "Purchase Option") in favor of
the Company at the $5.72 exercise price (as adjusted pursuant to the terms
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hereof) in the event that the Participant ceases to be employed by the Company.
3. Exercise of Option.
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(a) Form of Exercise. Each election to exercise this option shall be in
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writing, signed by the Participant, and received by the Company at its principal
office, accompanied by this agreement, and payment in full in the manner
provided in the Plan. The Participant 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 ten whole shares.
(b) Continuous Relationship with the Company Required. Except as otherwise
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provided in this Section 3, this option may not be exercised unless the
Participant, at the time he or she exercises this option, is, and has been at
all times since the Grant Date, an employee, officer or director of, or
consultant or advisor to, the Company or any parent or subsidiary of the Company
as defined in Section 424(e) or (f) of the Code (an "Eligible Participant").
(c) Termination of Relationship with the Company. If the Participant ceases
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to be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
90 days after such cessation (but in no event after the Final Exercise Date),
provided, that, this option shall be exercisable only to the extent that the
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Participant was entitled to exercise this option on the date of such cessation.
Notwithstanding the foregoing, if the Participant, prior to the Final Exercise
Date, violates the non-competition or confidentiality provisions of the Plan or
any employment contract, confidentiality and nondisclosure agreement or other
agreement between the Participant and the Company, the right to exercise this
option shall terminate immediately upon such violation.
(d) Exercise Period Upon Death or Disability. If the Participant dies or
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becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
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the Final Exercise Date while he or she is an Eligible Participant, or if the
Participant dies within three (3) months after he or she ceases to be an
Eligible Participant and the Company has not terminated such relationship for
"cause" as specified in paragraph (e) below, this option shall become
exercisable, within the period of one (1) year following the date of death or
disability of the Participant by the Participant or by the person(s) 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
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option was exercisable by the Participant on the date of his or her death or
disability. Except as otherwise indicated by the context, the term
"Participant", as used in this option, shall be deemed to include the estate of
the Participant or any person who acquires the right to exercise this option by
bequest or inheritance or otherwise by reason of the death of the Participant.
(e) Discharge for Cause. If the Participant, prior to the Final Exercise
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Date, is discharged by the Company for "cause" (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of such
discharge. "Cause" shall mean, with respect to any Participant who has entered
into an employment or consulting agreement with the Company, a material breach
of such agreement by the Participant, or if such agreement provides for
termination for cause, the definition of "cause" set forth in such agreement.
With respect to any other Participant, "cause" shall mean (i) conviction or
pleading guilty (including a plea of nolo contendere) with respect to the
commission of a felony, (ii) acts of dishonesty or moral turpitude which are
materially detrimental to the Company and/or its affiliates as determined in
good faith by the Board, (iii) failure of the Participant to obey the reasonable
and lawful orders of the Board or the chief executive officer of the Company
after written demand that the Participant do so, (iv) gross negligence by the
Participant in the performance of, or wilful disregard by the Participant of,
the Participant's obligations to the Company, or (v) the breach by the
Participant of any of the Participant's obligations of confidentiality with
respect to the Company. The Participant shall be considered to have been
discharged for "cause" if the Company determines, within 30 days after the
Participant's resignation, that discharge for cause was warranted.
4. Withholding.
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No Shares will be issued pursuant to the exercise of this option unless and
until the Participant pays to the Company, or makes provision satisfactory to
the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option. If the Participant
chooses a Sell-to-cover exercise, then the total tax withholding cannot exceed
the Company's minimum statutory withholding (based on minimum statutory
withholding rates for federal and state tax purposes, including payroll taxes,
that are applicable to such supplemental taxable income).
5. Non-transferability of Option.
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This option may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the Participant.
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6. Disqualifying Disposition.
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If the Participant disposes of Shares acquired upon exercise of this option
within two years from the Grant Date or one year after such Shares were acquired
pursuant to exercise of this option, the Participant shall notify the Company in
writing of such disposition.
7. Provisions of the Plan.
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This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this option.
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IN WITNESS WHEREOF, the Company has caused this option to be executed under its
corporate seal by its duly authorized officer. This option shall take effect as
a sealed instrument.
SWITCHBOARD INCORPORATED
Dated: 3/3/4 By: /s/Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: VP, CFO, Treasurer & Secretary
PARTICIPANT'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 Company's 1999 Stock Incentive Plan.
PARTICIPANT:
/s/ Xxxx Xxxxxxxx
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Print Name: Xxxx Xxxxxxxx
Address: __________________________
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