EXHIBIT 10.2
INCENTIVE STOCK OPTION AGREEMENT
UNDER THE HAIGHTS CROSS COMMUNICATIONS, INC.
2000 STOCK OPTION AND GRANT PLAN
NAME OF OPTIONEE: [NAME] (the "Optionee")
NO. OF OPTION SHARES: [Number] Shares of Common Stock
GRANT DATE: [Date] (the "Grant Date")
EXPIRATION DATE: [Date] (the "Expiration Date")
OPTION EXERCISE PRICE/SHARE: [Price] (the "Option Exercise Price")
Pursuant to the Haights Cross Communications, Inc. 2000 Stock Option and
Grant Plan (the "Plan"), Haights Cross Communications, Inc., a Delaware
corporation (together with all successors thereto, the "Company"), hereby grants
to the Optionee, who is an employee of the Company or any of its Subsidiaries,
an option (the "Stock Option") to purchase on or prior to the Expiration Date,
or such earlier date as is specified herein, all or any part of the number of
shares of Common Stock, par value $.001 per share ("Common Stock"), of the
Company indicated above (the "Option Shares," and such shares once issued shall
be referred to as the "Issued Shares"), at the Option Exercise Price, subject to
the terms and conditions set forth in this Incentive Stock Option Agreement
(this "Agreement") and in the Plan. This Stock Option is intended to qualify as
an "incentive stock option" as defined in Section 422(b) of the Internal Revenue
Code of 1986, as amended from time to time (the "Code"). To the extent that any
portion of the Stock Option does not so qualify, it shall be deemed a
non-qualified stock option.
DEFINITIONS. For the purposes of this Agreement, the following terms shall
have the following respective meanings. All capitalized terms used herein and
not otherwise defined shall have the respective meanings set forth in the Plan.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
An "Affiliate" of any Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with the first mentioned Person. A Person shall be deemed
to control another Person if such first Person possesses directly or indirectly
the power to direct, or cause the direction of, the management and policies of
the second Person, whether through the ownership or voting securities, by
contract or otherwise.
"Bankruptcy" shall mean (i) the filing of a voluntary petition under
any bankruptcy or insolvency law, or a petition for the appointment of a
receiver or the making of an assignment for the benefit of creditors, with
respect to the Optionee or any Permitted Transferee, or (ii) the Optionee or any
Permitted Transferee being subjected involuntarily to such a petition or
assignment or to an attachment or other legal or equitable interest with respect
to the
Optionee's assets, which involuntary petition or assignment or attachment is not
discharged within 60 days after its date, and (iii) the Optionee or any
Permitted Transferee being subject to a transfer of the Stock Option or the
Issued Shares by operation of law, except by reason of death.
"Board" shall mean the Board of Directors of the Company or its
successor entity.
"Cause" shall mean that the Optionee has:
Acted with negligence or willful misconduct in connection with
the performance of his or her material duties;
Acted in an insubordinate, recalcitrant, disobedient,
refractory, truculent, or unmanageable manner;
Acted in a violent manner;
Used abusive language toward any manager or employee;
Been the subject of excessive unreported or unexcused
absences;
Committed a material act of common law fraud against the
Company or any of its officers;
Been convicted of a felony;
Breached a fiduciary duty owed to the Company;
Embezzled assets of the Company;
Failed to adequately treat a drug or alcohol dependency
problem which has an adverse impact on the performance of the Optionee's
duties;
Violated any material policy of the Company, including the
Company's Equal Employment and Harassment Policy; or
Voluntarily resigned his or her employment with the Company or
any of its Subsidiaries.
"Committee" shall mean the Board or a committee of the Board then
responsible for administration of the Plan.
"Common Stock" shall mean the Company's Common Stock, par value
$.001 per share, together with any shares into which Common Stock may be
converted or exchanged, as provided above and herein.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
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"Good Reason" shall mean the occurrence of any of the following
events: (i) a substantial adverse change in the nature or scope of the
Optionee's responsibilities, authorities, powers, functions or duties; (ii) a
reduction in the Optionee's annual base salary except for across-the-board
salary reductions similarly affecting all or substantially all management
employees; or (iii) the relocation of the offices at which the Optionee is
principally employed to a location more than fifty (50) miles from such offices.
"Initial Public Offering" shall mean the consummation of the first
fully underwritten, firm commitment public offering pursuant to an effective
registration statement under the Act, other than on Forms S-4 or S-8 or their
then equivalents, covering the offer and sale by the Company of its equity
securities, or such other event as a result of or following which the Common
Stock shall be publicly held.
"Permitted Transferees" shall mean any of the following to whom the
Optionee may transfer Issued Shares hereunder: the Optionee's spouse, children
(natural or adopted), stepchildren or a trust for their sole benefit of which
the Optionee is the settlor; provided, however, that any such trust does not
require or permit distribution of any Issued Shares during the term of this
Agreement unless subject to its terms.
"Person" shall mean any individual, corporation, partnership
(limited or general), limited liability company, limited liability partnership,
association, trust, joint venture, unincorporated organization or any similar
entity.
"Sale Event" shall mean, regardless of form thereof, consummation of
(i) the dissolution or liquidation of the Company, (ii) the sale of all or
substantially all of the assets of the Company on a consolidated basis to an
unrelated person or entity, (iii) a merger, reorganization or consolidation in
which the holders of the Company's outstanding voting power immediately prior to
such transaction do not own a majority of the outstanding voting power of the
successor entity immediately upon completion of such transaction, (iv) the sale
of all or a majority of the outstanding capital stock of the Company to an
unrelated person or entity or (v) any other transaction in which the owners of
the Company's outstanding voting power immediately prior to such transaction do
not own at least a majority of the outstanding voting power of the successor
entity immediately upon completion of the transaction.
"Service Relationship" shall mean any relationship as an employee,
part-time employee, director or consultant of the Company or any Subsidiary of
the Company such that, for example, a Service Relationship shall be deemed to
continue without interruption in the event the Optionee's status changes from
full-time employee to part-time employee or consultant.
"Subsidiary" shall mean any corporation, limited liability company
or other entity (other than the Company) in any unbroken chain of corporations,
limited liability companies or other entities beginning with the Company if each
of the corporations, limited liability companies or entities (other than the
last corporation or entity in the unbroken chain) owns stock or other interests
possessing 50 percent or more of the economic interest or the total combined
voting power of all classes of stock or other interests in one of the other
corporations, limited liability companies or entities in the chain.
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VESTING AND EXERCISABILITY.
No portion of this Stock Option may be exercised until such portion
shall have vested.
Except as set forth below and in Section 6, and subject to the
determination of the Committee in its sole discretion to accelerate the vesting
schedule hereunder, this Stock Option shall vest and be exercisable with respect
to the percentage of the Option Shares on the respective dates indicated below:
Incremental (Aggregate Percentage)
Option Shares Exercisable Vesting Date
------------------------- ------------
[ %] ( %) [Date]
[ % ]( %) [Date]
[ % ]( %) [Date]
---------
100% (100%)
Notwithstanding anything herein to the contrary, but without limitation of
Section 6, in the event that this Stock Option is assumed or continued by the
Company or its successor entity in the sole discretion of the parties to a Sale
Event and thereafter remains in effect following such Sale Event as contemplated
by Section 6, then this Stock Option shall be deemed vested and exercisable in
full upon the date on which the Optionee's Service Relationship with the Company
and its Subsidiaries or successor entity, as the case may be, terminates if (i)
such termination occurs within 18 months of such Sale Event and (ii) such
termination is by the Company or a Subsidiary or successor entity of the Company
without Cause or by the Optionee for Good Reason.
In the event the Optionee's Service Relationship with the Company
and its Subsidiaries is terminated by the Company for Cause, this Stock Option
shall immediately expire and be null and void as of the date of such
termination. In the event that the Optionee's Service Relationship with the
Company and its Subsidiaries terminates for any other reason or under any other
circumstances, including the Optionee's resignation, retirement or termination
by the Company (other than for Cause), or upon the Optionee's death or
disability (as defined in Section 422(c)(6) of the Code), this Stock Option may
thereafter be exercised, to the extent it was vested and exercisable on the date
of such termination, until the date specified in Section 1(d) below. Any portion
of the Stock Option that is not exercisable on the date of such termination of
the Service Relationship shall immediately expire and be null and void.
Subject to the provisions of Section 2(c) and Section 6 below, once
any portion of this Stock Option becomes vested and exercisable, it shall
continue to be exercisable by the Optionee or his or her successors as
contemplated herein at any time or times prior to the earliest of (i) the date
which is (A) twelve (12) months following the date on which the Optionee's
Service Relationship with the Company and its Subsidiaries terminates due to
death or disability or (B) 90 days following the date on which the Optionee's
Service Relationship with the Company terminates if the termination is due to
any other reason (other than termination by the Company for Cause), or (ii) the
Expiration Date. For purposes of this Agreement the Committee
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shall have sole discretion to determine the reason for the termination of the
Optionee's Service Relationship with the Company or any Subsidiary.
It is understood and intended that this Stock Option is intended to
qualify as an "incentive stock option" as defined in Section 422 of the Code to
the extent permitted under applicable law. Accordingly, the Optionee understands
that in order to obtain the benefits of an incentive stock option under Section
422 of the Code, no sale or other disposition may be made of Issued Shares for
which incentive stock option treatment is desired within the one-year period
beginning on the day after the day of the transfer of such Issued Shares to him
or her, nor within the two-year period beginning on the day after the grant of
this Stock Option and further that this Stock Option must be exercised within
three months after termination of employment (or twelve months in the case of
death or disability) to qualify as an incentive stock option. If the Optionee
disposes (whether by sale, gift, transfer or otherwise) of any such Issued
Shares within either of these periods, he or she will notify the Company within
thirty (30) days after such disposition. The Optionee also agrees to provide the
Company with any information concerning any such dispositions required by the
Company for tax purposes. Further, to the extent Option Shares and any other
incentive stock options of the Optionee having an aggregate Fair Market Value in
excess of $100,000 (determined as of the Grant Date) vest in any year, such
options will not qualify as incentive stock options.
EXERCISE OF STOCK OPTION.
The Optionee may exercise this Stock Option only in the following
manner: Prior to the Expiration Date (subject to Section 6), the Optionee may
deliver a Stock Option exercise notice (an "Exercise Notice") in the form of
Appendix A hereto indicating his or her election to purchase some or all of the
Option Shares with respect to which this Stock Option is exercisable at the time
of such notice. Such notice shall specify the number of Option Shares to be
purchased. Payment of the purchase price may be made by one or more of the
following methods:
in cash, by certified or bank check, or other instrument
acceptable to the Committee in U.S. funds payable to the order of the
Company in an amount equal to the purchase price of such Option Shares;
by the Optionee delivering to the Company a promissory note if
the Board has expressly authorized the loan of funds to the Optionee for
the purpose of enabling or assisting the Optionee to effect the exercise
of his or her Stock Option; provided that at least so much of the exercise
price as represents the par value of the Stock shall be paid other than
with a promissory note if otherwise required by state law;
if the Initial Public Offering covering the offer and sale of
Common Stock of the Company to the public has occurred, then (A) through
the delivery (or attestation to ownership) of shares of Common Stock that
have been purchased by the Optionee on the open market or that have been
held by the Optionee for at least six months and are not subject to
restrictions under any plan of the Company, (B) by the Optionee delivering
to the Company a properly executed Exercise Notice together with
irrevocable instructions to a broker to promptly deliver to the Company
cash or a check payable and acceptable to
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the Company to pay the option purchase price, provided that in the event
the Optionee chooses to pay the option purchase price as so provided, the
Optionee and the broker shall comply with such procedures and enter into
such agreements of indemnity and other agreements as the Committee shall
prescribe as a condition of such payment procedure, or (C) a combination
of (i), (iii)(A) and (iii)(B) above. Payment instruments will be received
subject to collection.
Certificates for the Option Shares so purchased will be issued and
delivered to the Optionee upon compliance to the satisfaction of the Committee
with all requirements under applicable laws or regulations in connection with
such issuance. Until the Optionee shall have complied with the requirements
hereof and of the Plan, the Company shall be under no obligation to issue the
Option Shares subject to this Stock Option, and the determination of the
Committee as to such compliance shall be final and binding on the Optionee. The
Optionee shall not be deemed to be the holder of, or to have any of the rights
of a holder with respect to, any shares of Common Stock subject to this Stock
Option unless and until this Stock Option shall have been exercised pursuant to
the terms hereof, the Company shall have issued and delivered the Option Shares
to the Optionee, and the Optionee's name shall have been entered as a
stockholder of record on the books of the Company. Thereupon, the Optionee shall
have full dividend and other ownership rights with respect to such Issued
Shares, subject to the terms of this Agreement.
Notwithstanding any other provision hereof or of the Plan, no
portion of this Stock Option shall be exercisable after the Expiration Date.
INCORPORATION OF PLAN. Notwithstanding anything herein to the
contrary, this Stock Option shall be subject to and governed by all the terms
and conditions of the Plan.
TRANSFERABILITY. This Agreement is personal to the Optionee and is
not transferable by the Optionee in any manner other than by will or by the laws
of descent and distribution. The Stock Option may be exercised during the
Optionee's lifetime only by the Optionee (or by the Optionee's guardian or
personal representative in the event of the Optionee's incapacity). The Optionee
may elect to designate a beneficiary by providing written notice of the name of
such beneficiary to the Company, and may revoke or change such designation at
any time by filing written notice of revocation or change with the Company; such
beneficiary may exercise the Optionee's Stock Option in the event of the
Optionee's death to the extent provided herein. If the Optionee does not
designate a beneficiary, or if the designated beneficiary predeceases the
Optionee, the executor of the Optionee may exercise this Stock Option to the
extent provided herein in the event of the Optionee's death.
EFFECT OF CERTAIN TRANSACTIONS. In the case of a Sale Event, this
Stock Option shall terminate upon the effective time of any such Sale Event
unless provision is made in connection with such transaction in the sole
discretion of the parties thereto for the assumption of this Stock Option
heretofore granted, or the substitution of this Stock Option with a new Stock
Option of the successor entity or a parent thereof, with such adjustment as to
the number and kind of shares and the per share exercise prices as such parties
shall agree. In the event of such termination, the Optionee shall be permitted,
for a specified period of time prior to the consummation of the Sale
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Event as determined by the Committee, to exercise all portions of the Stock
Option which are then exercisable.
WITHHOLDING TAXES. The Optionee shall, not later than the date as of which
the exercise of this Stock Option becomes a taxable event for federal income tax
purposes, pay to the Company or make arrangements satisfactory to the Committee
for payment of any federal, state and local taxes required by law to be withheld
on account of such taxable event. Subject to approval by the Committee, the
Optionee may elect to have the minimum tax withholding obligation satisfied, in
whole or in part, by authorizing the Company to withhold from shares of Common
Stock to be issued, or transferring to the Company, a number of shares of Common
Stock with an aggregate Fair Market Value that would satisfy the withholding
amount due. The Optionee acknowledges and agrees that the Company or any
Subsidiary of the Company has the right to deduct from payments of any kind
otherwise due to the Optionee, or from the Option Shares to be issued in respect
of an exercise of this Stock Option, any federal, state or local taxes of any
kind required by law to be withheld with respect to the issuance of Option
Shares to the Optionee.
RESTRICTIONS ON TRANSFER OF ISSUED SHARES. None of the Issued Shares
acquired upon exercise of the Stock Option shall be sold, assigned, transferred,
pledged, hypothecated, given away or in any other manner disposed of or
encumbered, whether voluntarily or by operation of law, unless such transfer is
in compliance with all applicable securities laws (including, without
limitation, the Act), and such disposition is in accordance with the terms and
conditions of Sections 8 and 9. In connection with any transfer of Issued
Shares, the Company may require the transferor to provide at the Optionee's own
expense an opinion of counsel to the transferor, satisfactory to the Company,
that such transfer is in compliance with all foreign, federal and state
securities laws (including, without limitation, the Act). Any attempted
disposition of Issued Shares not in accordance with the terms and conditions of
Sections 8 and 9 shall be null and void, and the Company shall not reflect on
its records any change in record ownership of any Issued Shares as a result of
any such disposition, shall otherwise refuse to recognize any such disposition
and shall not in any way give effect to any such disposition of any Issued
Shares. Subject to the foregoing general provisions, Issued Shares may be
transferred pursuant to the following specific terms and conditions:
Transfers to Permitted Transferees. The Optionee may sell, assign,
transfer or give away any or all of the Issued Shares to Permitted Transferees;
provided, however, that such Permitted Transferee(s) shall, as a condition to
any such transfer, agree to be subject to the provisions of this Agreement to
the same extent as the Optionee (including, without limitation, the provisions
of Sections 8, 9 and 11) and shall have delivered a written acknowledgment to
that effect to the Company.
Transfers Upon Death. Upon the death of the Optionee, any Issued
Shares then held by the Optionee at the time of such death and any Issued Shares
acquired thereafter by the Optionee's legal representative pursuant to this
Agreement shall be subject to the provisions of Sections 8 and 9, if applicable,
and the Optionee's estate, executors, administrators, personal representatives,
heirs, legatees and distributees shall be obligated to convey such Issued Shares
to the Company or its assigns under the terms contemplated hereby.
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Company's Right of First Refusal. In the event that the Optionee (or
any transferee holding Issued Shares subject to this Section 8(c)) desires to
transfer all or any part of the Issued Shares to any person other than the
Company (an "Offeror"), the Optionee shall: (i) obtain in writing an irrevocable
and unconditional bona fide offer (the "Offer") for the purchase thereof from
the Offeror; and (ii) give written notice (the "Option Notice") to the Company
setting forth the Optionee's desire to transfer such shares, which Option Notice
shall be accompanied by a photocopy of the Offer and shall set forth the name
and address of the Offeror and the price and terms of the Offer. Upon receipt of
the Option Notice, the Company shall have an assignable option to purchase any
or all of such Issued Shares (the "Company Option Shares") specified in the
Option Notice, such option to be exercisable by giving, within 30 days after
receipt of the Option Notice, a written counternotice to the Optionee. If the
Company elects to purchase any or all of such Company Option Shares, it shall be
obligated to purchase, and the Optionee shall be obligated to sell to the
Company, such Company Option Shares at the price and terms indicated in the
Offer within 30 days from the date of delivery by the Company of such
counternotice.
Sale of Option Shares to Offeror. The Optionee may, for 60 days
after the expiration of the 30-day option period as set forth in Section 8(c),
sell to the Offeror, pursuant to the terms of the Offer, any or all of such
Company Option Shares not purchased or agreed to be purchased by the Company or
its assignee. If any or all of such Company Option Shares are not sold pursuant
to an Offer within the time permitted above, the unsold Company Option Shares
shall remain subject to the terms of this Section 8.
Adjustments for Changes in Capital Structure. If, as a result of any
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar change in the Common Stock, the outstanding
shares of Common Stock are increased or decreased or are exchanged for a
different number or kind of shares of the Company's stock, the restrictions
contained in this Section 8 shall apply with equal force to additional and/or
substitute securities, if any, received by the Optionee in exchange for, or by
virtue of his or her ownership of, Issued Shares.
COMPANY'S RIGHT OF REPURCHASE.
Right of Repurchase. The Company shall have the right (the
"Repurchase Right") upon the occurrence of any of the events specified in
Section 9(b) below (the "Repurchase Event") to repurchase from the Optionee (or
his or her estate) some or all (as determined by the Company) of the Issued
Shares held or subsequently acquired upon exercise of this Stock Option in
accordance with the terms hereof by the Optionee (or his or her estate) at the
price per share specified below. The Repurchase Right may be exercised by the
Company within 19 months following the date of such event (the "Repurchase
Period"). The Repurchase Right shall be exercised by the Company by giving the
holder written notice on or before the last day of the Repurchase Period of its
intention to exercise the Repurchase Right, and, together with such notice,
tendering to the holder an amount equal to the Fair Market Value of the Issued
Shares, determined as provided in Section 9(c). The Company may assign the
Repurchase Right to one or more persons. Upon exercise of the Repurchase Right
in the manner provided in this Section 9(a), the Optionee (or his or her estate)
shall deliver to the Company the stock certificate or
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certificates representing the shares being repurchased, duly endorsed and free
and clear of any and all liens, charges and encumbrances.
If Issued Shares are not purchased under the Repurchase Right, the
Optionee and his or her successor in interest, if any, will hold any such shares
in his or her possession subject to all of the provisions of this Section 8 and
Section 9 and Section 11 hereof.
Company's Right to Exercise Repurchase Right. The Company shall have
the Repurchase Right in the event that any of the following events shall occur:
The termination of the Optionee's Service Relationship with
the Company and its Subsidiaries for any reason whatsoever, regardless of
the circumstances thereof, and including, without limitation, upon death,
disability, retirement, discharge or resignation for any reason, whether
voluntarily or involuntarily; or
The Optionee's Bankruptcy.
Determination of Fair Market Value. The Fair Market Value of the
Issued Shares shall be, for purposes of this Section 9, reasonably determined by
the Board in good faith as of the date the Board decides to exercise the
Repurchase Right.
ESCROW ARRANGEMENT.
Escrow. In order to carry out the provisions of Sections 8 and 9 of
this Agreement more effectively, the Company shall hold any Issued Shares in
escrow together with separate stock powers executed by the Optionee in blank for
transfer, and any Permitted Transferee shall, as an additional condition to any
transfer of Issued Shares, execute a like stock power as to such Issued Shares.
The Company shall not dispose of the Issued Shares except as otherwise provided
in this Agreement. In the event of any purchase by the Company (or any of its
assigns), the Company is hereby authorized by the Optionee and any Permitted
Transferee, as the Optionee's and each such Permitted Transferee's
attorney-in-fact, to date and complete the stock powers necessary for the
transfer of the Issued Shares being purchased and to transfer such Issued Shares
in accordance with the terms hereof. At such time as any Issued Shares are no
longer subject to the Company's Repurchase Right and first refusal rights, the
Company shall, at the written request of the Optionee, deliver to the Optionee
(or the relevant Permitted Transferee) a certificate representing such Issued
Shares with the balance of the Issued Shares to be held in escrow pursuant to
this Section 10.
Remedy. Without limitation of any other provision of this Agreement
or other rights, in the event that the Optionee, any Permitted Transferees or
any other person or entity is required to sell the Optionee's Issued Shares
pursuant to the provisions of Section 8, Section 9, and Section 11 of this
Agreement and in the further event that he or she refuses or for any reason
fails to deliver to the Company or its designated purchaser of such Issued
Shares the certificate or certificates evidencing such Issued Shares together
with a related stock power, the Company or such designated purchaser may deposit
the applicable purchase price for such Issued Shares with a bank designated by
the Company, or with the Company's independent public accounting firm, as agent
or trustee, or in escrow, for the Optionee, any Permitted Transferees or other
person or entity, to be held by such bank or accounting firm for the benefit of
and for delivery to
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him, them or it, and/or, in its discretion, pay such purchase price by
offsetting any indebtedness then owed by the Optionee as provided above. Upon
any such deposit and/or offset by the Company or its designated purchaser of
such amount and upon notice to the person or entity who was required to sell the
Issued Shares to be sold pursuant to the provisions of Sections 8, 9 and 11,
such Issued Shares shall at such time be deemed to have been sold, assigned,
transferred and conveyed to such purchaser, the holder thereof shall have no
further rights thereto (other than the right to withdraw the payment thereof
held in escrow, if applicable), and the Company shall record such transfer in
its stock transfer book or in any appropriate manner.
DRAG ALONG RIGHT. In the event the holders of a majority of the Company's
equity securities then outstanding (the "Majority Shareholders") determine that
the Company should enter into a Sale Event, the Optionee, including any
Permitted Transferees, shall be obligated to and shall upon the written request
of the Majority Shareholders (subject to Section 6): (a) sell, transfer and
deliver, or cause to be sold, transferred and delivered, to the purchaser in
such Sale Event, his or her Issued Shares (including for this purpose all of
such Optionee's or his or her Permitted Transferee's Issued Shares that
presently or as a result of any such transaction may be acquired upon the
exercise of options (following the payment of the exercise price therefor)) on
substantially the same terms applicable to the Majority Shareholders (with
appropriate adjustments to reflect the conversion of convertible securities, the
redemption of redeemable securities and the exercise of exercisable securities
as well as the relative preferences and priorities of preferred stock); and (b)
execute and deliver such instruments of conveyance and transfer and take such
other action, including voting such Issued Shares in favor of any Sale proposed
by the Majority Shareholders and executing any purchase agreements, merger
agreements, indemnity agreements, escrow agreements or related documents, as the
Majority Shareholders or such purchaser may reasonably require in order to carry
out the terms and provisions of this Section 11.
LOCKUP PROVISION. The Optionee agrees, if requested by the Company and any
underwriter engaged by the Company, not to sell or otherwise transfer or dispose
of any securities of the Company (including, without limitation pursuant to Rule
144 under the Act) held by him or her for such period following the effective
date of any registration statement of the Company filed under the Act as the
Company or such underwriter shall specify reasonably and in good faith, not to
exceed 180 days in the case of the Company's Initial Public Offering or 90 days
in the case of any other public offering.
MISCELLANEOUS PROVISIONS.
Equitable Relief. The parties hereto agree and declare that legal
remedies may be inadequate to enforce the provisions of this Agreement and that
equitable relief, including specific performance and injunctive relief, may be
used to enforce the provisions of this Agreement.
Change and Modifications. This Agreement may not be orally changed,
modified or terminated, nor shall any oral waiver of any of its terms be
effective. This Agreement may be changed, modified or terminated only by an
agreement in writing signed by the Company and the Optionee.
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Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of Delaware without regard to conflict of
law principles.
Headings. The headings are intended only for convenience in finding
the subject matter and do not constitute part of the text of this Agreement and
shall not be considered in the interpretation of this Agreement.
Saving Clause. If any provision(s) of this Agreement shall be
determined to be illegal or unenforceable, such determination shall in no manner
affect the legality or enforceability of any other provision hereof.
Notices. All notices, requests, consents and other communications
shall be in writing and be deemed given when delivered personally, by telex or
facsimile transmission or when received if mailed by first class registered or
certified mail, postage prepaid. Notices to the Company or the Optionee shall be
addressed as set forth underneath their signatures below, or to such other
address or addresses as may have been furnished by such party in writing to the
other.
Benefit and Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their respective successors,
permitted assigns, and legal representatives. The Company has the right to
assign this Agreement, and such assignee shall become entitled to all the rights
of the Company hereunder to the extent of such assignment.
Dispute Resolution. Except as provided below, any dispute arising
out of or relating to this Agreement or the breach, termination or validity
hereof shall be finally settled by binding arbitration conducted expeditiously
in accordance with the J.A.M.S./Endispute Comprehensive Arbitration Rules and
Procedures (the "J.A.M.S. Rules"). The arbitration shall be governed by the
United States Arbitration Act, 9 U.S.C. Sections 1-16, and judgment upon the
award rendered by the arbitrators may be entered by any court having
jurisdiction thereof. The place of arbitration shall be New York, New York.
The parties covenant and agree that the arbitration shall commence within
60 days of the date on which a written demand for arbitration is filed by any
party hereto. In connection with the arbitration proceeding, the arbitrator
shall have the power to order the production of documents by each party and any
third-party witnesses. In addition, each party may take up to three depositions
as of right, and the arbitrator may in his or her discretion allow additional
depositions upon good cause shown by the moving party. However, the arbitrator
shall not have the power to order the answering of interrogatories or the
response to requests for admission. In connection with any arbitration, each
party shall provide to the other, no later than 7 business days before the date
of the arbitration, the identity of all persons that may testify at the
arbitration and a copy of all documents that may be introduced at the
arbitration or considered or used by a party's witness or expert. The
arbitrator's decision and award shall be made and delivered within 6 months of
the selection of the arbitrator. The arbitrator's decision shall set forth a
reasoned basis for any award of damages or finding of liability. The arbitrator
shall not have power to award damages in excess of actual compensatory damages
and shall not multiply actual damages or award punitive damages or any other
damages that are specifically excluded under this Agreement, and each party
hereby irrevocably waives any claim to such damages.
11
The parties covenant and agree that they will participate in the
arbitration in good faith. This Section 13(h) applies equally to requests for
temporary, preliminary or permanent injunctive relief, except that in the case
of temporary or preliminary injunctive relief any party may proceed in court
without prior arbitration for the limited purpose of avoiding immediate and
irreparable harm.
Each of the parties hereto (i) hereby irrevocably submits to the
jurisdiction of any United States District Court of competent jurisdiction for
the purpose of enforcing the award or decision in any such proceeding, (ii)
hereby waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution (except as protected
by applicable law), that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that this Agreement or the subject matter hereof may not be enforced in or by
such court, and hereby waives and agrees not to seek any review by any court of
any other jurisdiction which may be called upon to grant an enforcement of the
judgment of any such court. Each of the parties hereto hereby consents to
service of process by registered mail at the address to which notices are to be
given. Each of the parties hereto agrees that its, his or her submission to
jurisdiction and its, his or her consent to service of process by mail is made
for the express benefit of the other parties hereto. Final judgment against any
party hereto in any such action, suit or proceeding may be enforced in other
jurisdictions by suit, action or proceeding on the judgment, or in any other
manner provided by or pursuant to the laws of such other jurisdiction.
Counterparts. For the convenience of the parties and to facilitate
execution, this Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same document.
Termination. The Company's repurchase rights under Section 9, the
restrictions on transfer of Issued Shares under Section 8 and the drag along
obligations under Section 11 shall terminate upon the closing of the Company's
Initial Public Offering or upon consummation of any Sale Event, as a result of
which shares of the Company (or the surviving or resulting entity) of the same
class as the Issued Shares are registered under Section 12 of the Exchange Act
and publicly traded on NASDAQ/NMS or any national security exchange.
12
The foregoing Agreement is hereby accepted and the terms and conditions
thereof hereby agreed to by the undersigned as of the Grant Date first above
written.
HAIGHTS CROSS COMMUNICATIONS, INC.
By: ____________________________________
Name: Xxxxx X. Xxxxxx
Title: Chairman and Chief Executive
Officer
Address:
00 Xxx Xxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
The foregoing Agreement is hereby accepted and the terms and conditions
thereof hereby agreed to by the undersigned as of the Grant Date first above
written.
OPTIONEE:
________________________________________
Name :
Address:
________________________________________
________________________________________
________________________________________
SPOUSE'S CONSENT(1)
I acknowledge that I have read the
foregoing Incentive Stock Option Agreement
and understand the contents thereof.
_______________________________________
Name:
--------------------------
(1) Only required if Optionee's state of residence is AZ, CA, ID, LA, NM,
NV, TX, WA or WI.
13
DESIGNATED BENEFICIARY:
________________________________________
Beneficiary's Address:
___________________________________
___________________________________
___________________________________
14
APPENDIX A
STOCK OPTION EXERCISE NOTICE
Haights Cross Communications, Inc.
00 Xxx Xxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Chief Financial Officer
Pursuant to the terms of my stock option agreement dated __________ (the
"Agreement") under the Haights Cross Communications, Inc. 2000 Stock Option and
Grant Plan, I, [Insert Name] ________________, hereby [Circle One]
partially/fully exercise such option by including herein payment in the amount
of $______ representing the purchase price for [Fill in number of Option Shares]
_______ option shares. I have chosen the following form(s) of payment:
[ ] 1. Cash
[ ] 2. Certified or bank check payable to Haights Cross
Communications, Inc.
[ ] 3. Other (as described in the Agreement (please describe))
___________________________________
Sincerely yours,
___________________________________
Name:
Address:
___________________________
___________________________
___________________________
