EXHIBIT 4.1
RWD TECHNOLOGIES, INC.
STOCK OPTION GRANT AGREEMENT
This Grant Agreement (the "Agreement") is entered into this ___ day of ____,
199__, to be effective ________, 199__ (the "Grant Date"), by and between RWD
Technologies, Inc., a Maryland corporation (the "Corporation"), and ___________
("Grantee").
ARTICLE 1
GRANT OF OPTION
SECTION 1.1 GRANT OF OPTIONS. Subject to the provisions of the Agreement
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and pursuant to the provisions of the RWD Technologies, Inc. 1998 Omnibus Stock
Incentive Plan adopted by the Stockholders of the Corporation on May 19, 1998
(the "Plan"), the Corporation hereby grants to Grantee as of the Grant Date a
stock option (the "Option") of the type stated on Schedule A, attached hereto
and made a part hereof, to purchase all or any part of the number of shares of
Common Stock of the Corporation, par value of $.10 per share, set forth on
Schedule A, at the exercise price per share (the "Exercise Price") set forth on
Schedule A.
SECTION 1.2 TERM OF OPTIONS. Unless the Option granted pursuant to
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Section 1.1 terminates earlier pursuant to other provisions of the Agreement,
the Option shall expire at 5:00 p.m. Eastern Time on the expiration date
specified in Schedule A. Notwithstanding the foregoing, in no event shall an
Option that is specified on Schedule A as being an Incentive Stock Option expire
later than 5:00 p.m. Eastern Time on the day prior to the tenth (10th)
anniversary of its Grant Date.
ARTICLE 2
VESTING
SECTION 2.1 VESTING SCHEDULE. Unless the Option has earlier terminated
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pursuant to the provisions of the Agreement, Grantee shall become vested in a
portion of the Option with respect to a percentage or number of the underlying
shares specified on Schedule A, beginning on the First Vesting Date, as
specified on Schedule A and on each annual anniversary of such First Vesting
Date, in accordance with the vesting schedule specified on Schedule A; provided,
however, that Grantee shall have been in the continuous employ of or affiliation
with the Corporation from the Grant Date through the specified anniversary of
such Grant Date.
SECTION 2.2 ACCELERATION OF VESTING. Unless the Option has earlier
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terminated pursuant to the provisions of the Agreement, vesting of the Option
granted to Grantee hereunder shall be accelerated so that the unvested portion
of the Option shall become one hundred percent (100%) vested in Grantee upon the
earlier to occur of: (i) Grantee's Retirement or Disability, as defined
in Article 4 hereunder, or (ii) termination of Grantee's employment or
affiliation with the Corporation as a result of Grantee's death.
ARTICLE 3
EXERCISE OF OPTION
SECTION 3.1 EXERCISABILITY OF OPTION. No portion of the Option granted to
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Grantee shall be exercisable by Grantee prior to the time such portion of the
Option has vested.
SECTION 3.2 MANNER OF EXERCISE. The vested portion of the Option may be
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exercised, in whole or in part, by delivering written notice to the Committee in
accordance with Section 5.9 hereof in such form as the Committee may require
from time to time; provided, however, that the Option may not be exercised at
any one time as to fewer than fifty (50) shares (or such number of shares as to
which the Option is then exercisable if such number of shares then exercisable
is less than fifty (50). Such notice shall specify the number of shares of
Common Stock subject to the Option as to which the Option is being exercised,
and shall be accompanied by full payment of the Exercise Price of the shares of
Common Stock as to which the Option is being exercised. Payment of the Exercise
Price shall be made in cash (or cash equivalents acceptable to the Committee in
the Committee's discretion). The Option may be exercised only in multiples of
whole shares and no partial shares shall be issued.
Unless the Committee otherwise determines and notifies the Grantee of such
determination prior to exercise of any portion of the Option, payment of the
exercise price may be made, in whole or in part, by delivery of a properly
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 stock 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. In the Committee's sole
and absolute discretion, the Committee may authorize payment of the Exercise
Price to be made, in whole or in part, by such other means as the Committee may
prescribe.
SECTION 3.3 ISSUANCE OF SHARES AND PAYMENT OF CASH UPON EXERCISE. Upon
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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 Common Stock
as to which the Option is exercised, the Corporation shall issue to Grantee or
Grantee's permitted transferee, as the case may be, the number of shares of
Common Stock so paid for, in the form of fully paid and nonassessable Common
Stock. The stock certificates for any shares of Common 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.
ARTICLE 4
TERMINATION OF OPTION
SECTION 4.1 TERMINATION OF EMPLOYMENT OR AFFILIATION FOR REASON OTHER THAN
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DEATH, DISABILITY OR RETIREMENT. Unless the Option has earlier terminated
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pursuant to the provisions of the Agreement, the Option granted to Grantee shall
terminate in its entirety, regardless of whether the Option is vested in whole
or in part, thirty (30) calendar days after the
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date Grantee is no longer employed by, nor affiliated with, the Corporation and
its affiliates for any reason other than Grantee's death, disability or
retirement. Notwithstanding the foregoing, the Option granted to Grantee 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 any other similar term or phrase, whether
such Grantee is terminated for "cause" pursuant to this Section 4.1 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 4.1, "cause" shall mean (i) 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 that demonstrably and materially injure the business and
affairs of the Corporation or an affiliate, monetarily or otherwise; (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
Committee of whether the Grantee's employment was terminated by the Corporation
for "cause" shall be final and binding for all purposes hereunder.
SECTION 4.2 UPON GRANTEE'S DEATH. Unless the Option has earlier
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terminated pursuant to the provisions of the Agreement, upon Grantee's death
Grantee's executor, personal representative, the person to whom the Option shall
have been transferred by will or the laws of descent and distribution, or such
other permitted transferee, as the case may be, may exercise all or any part of
the outstanding Option with respect to shares of Common Stock as to which the
Option is vested as of the Grantee's date of death, provided such exercise
occurs within twelve (12) months after the date of Grantee's death, but not
later than the end of the stated term of the Option.
SECTION 4.3 TERMINATION OF EMPLOYMENT OR AFFILIATION BY REASON OF
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DISABILITY OR RETIREMENT. Unless the Option has earlier terminated pursuant
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to the provisions of the Agreement, in the event that Grantee ceases, by reason
of Disability or Retirement, to be an employee of or affiliated with the
Corporation or an affiliate, the vested portion of the outstanding Option may be
exercised in whole or in part at any time within twelve (12) months after the
date of Disability or Retirement, but not later than the end of the stated term
of the Option. 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. Retirement shall mean the
termination of employment without cause at or after the Grantee reaches the
retirement age set forth in the Corporation's Personnel Policy. The Committee
may require such proof of Disability as the Committee in its sole discretion
deems appropriate and the Committee's determination as to whether Grantee is
Disabled shall be final and binding on all parties concerned.
SECTION 4.4 ENGAGING IN PROHIBITED ACTIVITIES. (a) Unless the Option has
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earlier terminated pursuant to the provisions of the Agreement, the Option
granted to Grantee shall
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terminate in its entirety, regardless of whether the Option is vested in whole
or in part, upon determination by the Committee that the Grantee has engaged in
"Prohibited Activities," as that term is defined below. The term "Prohibited
Activities" shall encompass all activities listed in clauses (i) through (iii)
of Section 4.1 above as well as (i) participating in an attempt to gain control
of the Corporation, which attempt has not been approved by the Board of
Directors of the Corporation; (ii) recruiting or otherwise soliciting employees
of the Corporation to terminate employment with the Corporation; or (iii)
accepting employment with or serving as a consultant, advisor or in any other
capacity to, an entity or person who engages or has engaged in any of the
activities listed in clauses (i), (ii) or (iii) of Section 4.1 above or clauses
(i) or (ii) of this paragraph (a) of Section 4.4, or is in any way competing
with the business interests of the Corporation. The good faith determination by
the Committee of whether the Grantee has engaged in Prohibited Activities shall
be final and binding for all purposes hereunder.
(b) If, subsequent to the time the Grantee exercises all or any portion of
the Option, the Committee determines that, while in the employ of the
Corporation or during the one year period thereafter, the Grantee engaged in any
Prohibited Activities, in addition to the termination of all outstanding
portions of the Option as set forth in paragraph (a) of this Section 4.4, the
Grantee shall be required to remit to the Corporation a "Recapture Payment," as
that term is defined below, within 30 days after notice by the Corporation that
this Section 4.4 applies to the Grantee's Option or portion thereof. The term
"Recapture Payment" shall be defined as: (i) to the extent the Grantee
beneficially owns any shares of Common Stock issued upon exercise of any portion
of the Option, a sum (in immediately available funds) equal to the excess of (i)
the Fair Market Value of said shares over (ii) the aggregate exercise price paid
for said shares of Common Stock.; or (ii) to the extent the Grantee has sold or
otherwise disposed of any shares of Common Stock issued upon exercise of any
portion of the Option, a sum (in immediately available funds) equal to the
excess of (i) the gross proceeds or other benefits to the Grantee from the
disposition of said shares over (ii) the aggregate exercise price paid for said
shares of Common Stock.
ARTICLE 5
MISCELLANEOUS
SECTION 5.1 NON-GUARANTEE OF EMPLOYMENT. Nothing in the Plan or the
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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.
SECTION 5.2 NO RIGHTS OF STOCKHOLDER. Grantee shall not have any of the
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rights of a stockholder 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.
SECTION 5.3 NOTICE OF DISQUALIFYING DISPOSITION. If Grantee makes a
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disposition (as that term is defined in (S)424(c) of the Code) of any shares of
Common 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 Common Stock are transferred to Grantee, Grantee shall notify the Committee
of such disposition in writing.
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SECTION 5.4 WITHHOLDING OF TAXES. The Corporation or any affiliate shall
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have the right to deduct from any compensation or any other payment of any kind
(including withholding the issuance of shares of Common Stock) due Grantee the
amount of any federal, state and/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 (S)424(c) of the Code) of shares of Common Stock acquired pursuant to
the exercise of the Option; provided, however, that the value of the shares of
Common Stock withheld may not exceed the statutory withholding amount required
by law. In lieu of such deduction, the Committee 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 Common Stock certificate under the Plan
until arrangements satisfactory to the Committee for such payment have been
made.
SECTION 5.5 NONTRANSFERABILITY OF OPTION. The Option shall be
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nontransferable otherwise than by will or the laws of descent and distribution
and, 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.
SECTION 5.6 AGREEMENT SUBJECT TO CHARTER, BY-LAWS AND GOVERNING LAWS.
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This Agreement is subject to the Charter and By-Laws of the Corporation, and any
applicable Federal or state laws, rules or regulations, including without
limitation, the laws, rules, and regulations of the State of Maryland, other
than the conflict of laws principles thereof.
SECTION 5.7 GENDER. As used herein the masculine shall include the
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feminine as the circumstances may require.
SECTION 5.8 HEADINGS. The headings in the Agreement are for reference
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purposes only and shall not affect the meaning or interpretation of the
Agreement.
SECTION 5.9 NOTICES. All notices and other communications made or given
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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
Committee, 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 5.10 ENTIRE AGREEMENT; MODIFICATION. The Agreement contains the
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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.
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SECTION 5.11 CONFORMITY WITH PLAN. This Agreement is intended to conform
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in all respects with, and is subject to all applicable provisions of, the Plan,
which is incorporated herein by reference. Unless stated otherwise herein,
capitalized terms in this Agreement shall have the same meaning as defined in
the Plan. 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.
IN WITNESS WHEREOF, the parties have executed the Agreement as of the date
first above written.
ATTEST: RWD TECHNOLOGIES, INC.
By:
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Xxxxxx X. Deutsch, Chairman and CEO
WITNESS: GRANTEE
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Name:
Address:
Attachments:
Schedule A- Notice of Stock Options Grant and Option Agreement Option
Exercise Request Form (Exhibit A)
1998 Omnibus Stock Incentive Plan (Exhibit B)
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