Exhibit 4.10
THE SOFTWARE DEVELOPER'S COMPANY, INC.
Incentive Stock Option Agreement
for
1994 Stock Plan
THE SOFTWARE DEVELOPER'S COMPANY, INC., a Delaware corporation (the
"COMPANY"), hereby grants this day of , , to (the "EMPLOYEE"), an option to
purchase a maximum of shares (the "OPTION SHARES") of its Common Stock, $.01 par
value (the "COMMON STOCK"), at the price of per share, on the following terms
and conditions:
1. XXXXX UNDER 1994 STOCK PLAN. This Option is granted pursuant to and is
governed by the Company's 1994 Stock Plan (the "Plan") and, unless the context
otherwise requires, terms used herein shall have the same meaning as in the
Plan. Determinations made in connection with this Option pursuant to the Plan
shall be governed by the Plan as it exists on this date.
2. GRANT AS INCENTIVE STOCK OPTION; OTHER OPTIONS. This Option is intended
to qualify as an incentive stock option under Section 422A of the Internal
Revenue Code of 1986 (the "Code"). This Option is in addition to any other
options heretofore or hereafter granted to the Employee by the Company, but a
duplicate original of this instrument shall not effect the grant of another
option.
3. EXTENT OF OPTION IF EMPLOYMENT CONTINUES. If the Employee has continued
to be employed by the Company on the following dates, the Employee may exercise
this Option for the number of shares set opposite the applicable date:
Less than one year - -0- Option Shares
from
One year but less than two years from - 30% of the total Option Shares
Two years but less than three years from - an additional 20% of the total
Option Shares
Three years but less than four years - an additional 20% of the total
from Option Shares
Four years but less than five years from - an additional 20% of the total
Option Shares
More than five years from - an additional 10% of the total
Option Shares
The foregoing rights are cumulative and, while the Employee continues to be
employed by the Company, may be exercised up to and including the date which is
ten (10) years from the date this Option is granted. All of the foregoing rights
are subject to Sections 4 and 5, as appropriate, if the Employee ceases to be
employed by the Company or dies or becomes disabled while in the employ of the
Company.
4. TERMINATION OF EMPLOYMENT. If the Employee ceases to be employed by the
Company, other than by reason of death or disability as defined in Section 5, no
further installments of this Option shall become exercisable and this Option
shall terminate after the passage of ninety (90) days from the date employment
ceases, but in no event later than the scheduled expiration date. In such a
case, the Employee's only rights hereunder shall be those which are properly
exercised before the termination of this Option.
5. DEATH; DISABILITY. If the Employee dies while in the employ of the
Company, this Option may be exercised, to the extent of the number of Option
Shares with respect to which the Employee could have exercised it on the date of
his death, by his estate, personal representative or beneficiary to whom this
Option has been assigned pursuant to Section 10, at any time within 180 days
after the date of death, but not later than the scheduled expiration date. If
the Employee ceases to be employed by the Company by reason of his disability
(as defined in the Plan), this Option may be exercised, to the extent of the
number of Option Shares with respect to which he could have exercised it on the
date of the termination of his employment, at any time within 180 days after
such termination, but not later than the scheduled expiration date. At the
expiration of such 180-day period or the scheduled expiration date, whichever is
the earlier, this Option shall terminate and the only rights hereunder shall be
those as to which the Option was properly exercised before such termination.
6. PARTIAL EXERCISE. Exercise of this Option up to the extent above stated
may be made in part at any time and from time to time within the above limits,
except that this Option may not be exercised for a fraction of a share unless
such exercise is with respect to the final installment of Option Shares subject
to this Option and a fractional share (or cash in lieu thereof) must be issued
to permit the Employee to exercise completely such final installment. Any
fractional share with respect to which an installment of this Option cannot be
exercised because of the limitation contained in the preceding sentence shall
remain subject to this Option and shall be available for later purchase by the
Employee in accordance with the terms hereof.
7. PAYMENT OF PRICE. The option price is payable in United States dollars
and may be paid:
(a) in cash or by check, or any combination of the foregoing, equal in
amount to the Option price; or
(b) in the discretion of the Board of Directors, in cash, by check, by
delivery of shares of the Company's Common Stock having an aggregate fair market
value as determined by
the Board of Directors equal to the Option exercise price as of the date of
exercise, or by any combination of the foregoing, equal in amount to the Option
price.
Notwithstanding the foregoing, the Employee may not pay any part of the
exercise price for the Option by transferring shares of Common Stock to the
Company if such Common Stock is both subject to a substantial risk of forfeiture
and not transferable within the meaning of Section 83 of the Code.
8. AGREEMENT TO PURCHASE FOR INVESTMENT. By acceptance of this Option, the
Employee agrees that a purchase of Option Shares under this Option will not be
made with a view to their distribution, as that term is used in the Securities
Act of 1933, as amended (the "Securities Act"), unless in the opinion of counsel
to the Company such distribution is in compliance with or exempt from the
registration and prospectus requirements of the Securities Act and applicable
state securities laws, and the Employee agrees to sign a certificate to such
effect at the time of exercising this Option and agrees that the certificate for
the Option Shares so purchased may be inscribed with a legend to ensure
compliance with the Securities Act and applicable state securities laws.
9. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of this
Agreement, this Option may be exercised by written notice to the Company, at the
principal executive office of the Company, or to such transfer agent as the
Company shall designate. Such notice shall state the election to exercise this
Option and the number of Option Shares in respect of which it is being exercised
and shall be signed by the person or persons so exercising this Option. Such
notice shall be accompanied by payment of the full purchase price of such Option
Shares, and the Company shall deliver a certificate or certificates representing
such Option Shares as soon as practicable after the notice shall be received.
The certificate or certificates for the Option Shares as to which this Option
shall have been so exercised shall be registered in the name of the person or
persons so exercising this Option (or, if this Option shall be exercised by the
Employee and if the Employee shall so request in the notice exercising this
Option, shall be registered in the name of the Employee and another person
jointly, with right of survivorship) and shall be delivered as provided above to
or upon the written order of the person or persons exercising this Option. In
the event this Option shall be exercised, pursuant to Section 5 hereof, by any
person or persons other than the Employee, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise this
Option. All Option Shares that shall be purchased upon the exercise of this
Option as provided herein shall be fully paid and non-assessable.
10. OPTION NOT TRANSFERABLE. This Option is not transferable or assignable
except by will or by the laws of descent and distribution. During the Employee's
lifetime only the Employee can exercise this Option.
11. NO OBLIGATION TO EXERCISE OPTION. The grant and acceptance of this
Option imposes no obligation on the Employee to exercise it.
12. NO OBLIGATION TO CONTINUE EMPLOYMENT. The Company and any Related
Corporations (as defined in the Plan) are not by the Plan or this Option
obligated in any manner to continue the Employee in its employment.
13. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE. The Employee shall have no
rights as a stockholder with respect to Option Shares subject to this Agreement
until a stock certificate therefor has been issued to the Employee and is fully
paid for by the Employee. Except as is expressly provided in the Plan with
respect to certain changes in the capitalization of the Company, no adjustment
shall be made for dividends or similar rights for which the record date is prior
to the date such stock certificate is issued.
14. CAPITAL CHANGES AND BUSINESS SUCCESSIONS. In the event of any stock
dividend, stock split, recapitalization or other change in the capital structure
of the Company, this Option and the Option price shall be equitably adjusted
and, in lieu of issuing fractional shares upon exercise thereof, this Option
(and the corresponding Option Shares) shall be rounded upward or downward to the
nearest whole share (rounding upward for all amounts equal to or in excess of
.51). In particular, without affecting the generality of the foregoing, it is
understood that for the purposes of Sections 3 through 5 hereof, both inclusive,
employment by the Company includes employment by a Related Corporation (as
defined in the Plan).
15. DISQUALIFYING DISPOSITION. The Employee agrees to notify the Company in
writing immediately after the Employee makes a Disqualifying Disposition of any
Option Shares received pursuant to the exercise of this Option. A Disqualifying
Disposition is any disposition (including any sale) of such Option Shares before
the later of (a) two years after the date the Employee was granted this Option,
or (b) one year after the date the Employee acquired Option Shares by exercising
this Option. If the Employee has died before such Option Shares are sold, these
holding period requirements do not apply and no Disqualifying Disposition can
occur thereafter. The Employee also agrees to provide the Company with any
information which it shall request concerning any such disposition. The Employee
acknowledges that he or she will forfeit the favorable income tax treatment
otherwise available with respect to the exercise of an incentive stock option if
he or she makes a Disqualifying Disposition of the Option Shares received on
exercise of this Option.
16. WITHHOLDING TAXES. If the Company in its discretion determines that it
is obligated to withhold tax with respect to a Disqualifying Disposition (as
defined in Section 15) of Common Stock received by the Employee on exercise of
this Option, the Employee hereby agrees that the Company may withhold from the
Employee's wages the appropriate amount of federal, state and local withholding
taxes attributable to such Disqualifying Disposition. If any portion of this
Option is treated as a Non-Qualified Option, the Employee hereby agrees that the
Company may withhold from the Employee's wages the appropriate amount of
federal, state and local withholding taxes attributable to the Employee's
exercise of such Non-Qualified Option. At the Company's discretion, the amount
required to be withheld may be withheld in cash from such wages, or in kind
(with respect to compensation income attributable to the exercise of this
Option) from the Common Stock otherwise deliverable to the Optionee on exercise
of this Option. The Employee further agrees that, if the Company does not
withhold an amount from the Employee's
wages sufficient to satisfy the Company's withholding obligation, the Employee
will reimburse the Company on demand, in cash, for the amount underwithheld.
17. COMPANY'S RIGHT OF FIRST REFUSAL. [This Section Intentionally Omitted.]
18. NO EXERCISE OF OPTION IF EMPLOYMENT TERMINATED FOR MISCONDUCT. If the
employment of the Employee is terminated for "Misconduct", this Option shall
terminate on the date of such termination of employment and this Option shall
thereupon not be exercisable to any extent whatsoever. "Misconduct" is conduct,
as determined by the Board of Directors, involving one or more of the following:
(i) disloyalty, gross negligence, dishonesty or breach of fiduciary duty to the
Company; or (ii) the commission of an act of embezzlement, fraud or deliberate
disregard of the rules or policies of the Company which results in loss, damage
or injury to the Company, whether directly or indirectly; or (iii) the
unauthorized disclosure of any trade secret or confidential information of the
Company; or (iv) the commission of an act which constitutes unfair competition
with the Company or which induces any customer of the Company to break a
contract with the Company. In making such determination, the Board of Directors
shall act fairly and in utmost good faith. For the purposes of this Section 18,
termination of employment shall be deemed to occur when the Employee receives
notice that his employment is terminated.
19. COMPANY'S RIGHT OF REPURCHASE. (a) Rights of Repurchase. If any of the
events specified in Section 19(b) below occur, then,
(i) with respect to Option Shares acquired upon exercise of this Option
prior to the occurrence of such event, within 90 days after the Company receives
actual knowledge of the event, and
(ii) with respect to Option Shares acquired upon exercise of this
Option after the occurrence of such event, within 90 days following the date of
such exercise, (in either case, the "Repurchase Period"), the Company shall have
the option, but not the obligation, to repurchase all, but not a portion of, the
Option Shares from the Employee, or his or her legal representatives, as the
case may be (the "Repurchase Option"). The Repurchase Option shall be exercised
by the Company by giving the Employee, or his or her legal representative,
written notice of its intention to exercise the Repurchase Option on or before
the last day of the Repurchase Period, and, together with such notice, tendering
to the Employee, or his or her legal representative, an amount equal to the
higher of the option price or the fair market value of the Option Shares. The
Company may, in exercising the Repurchase Option, designate one or more nominees
to purchase the Option Shares either within or without the Company. Upon timely
exercise of the Repurchase Option in the manner provided in this Section 19(a),
Employee, or his or her legal representative, shall deliver to the Company the
stock certificate or certificates representing the Option Shares, duly endorsed
and free and clear of any and all liens, charges and encumbrances.
If the Option Shares are not purchased under the Repurchase Option, the
Employee and his or her successor in interest, if any, will hold any of the
Option Shares in his or her possession subject to all of the provisions of this
Agreement.
Notwithstanding anything contained herein to the contrary, in the event of
any termination for "Misconduct" (as defined in Section 18), the Company at its
election may repurchase the Option Shares at the lesser of the option price or
the fair market value of the Option Shares.
(b) COMPANY'S RIGHT TO EXERCISE REPURCHASE OPTION. The Company shall
have the Repurchase Option in the event that any of the following events shall
occur:
(i) The receivership, bankruptcy or other creditor's proceeding
regarding the Employee or the taking of any of Employee's Option Shares by legal
process, such as a levy of execution; or
(ii) Distribution of shares held by the Employee to his or her
spouse as such spouse's joint or community interest pursuant to a decree of
dissolution, operation of law, divorce, property settlement agreement or for any
other reason, except as may be otherwise permitted by the Company; or
(iii) The termination of the Employee's employment with the
Company or any related corporation, whether voluntarily or involuntarily, for
any reason, prior to the time this Option shall be fully vested in Section 3
hereof; or
(iv) The termination of the Employee for "misconduct" (as defined
in Section 18).
(c) DETERMINATION OF FAIR MARKET VALUE. The fair market value of the
Option Shares, as used in this Section 19, shall be an amount per share
determined on the basis of the price at which shares of the Common Stock could
reasonably be expected to be sold in an arms-length transaction, for cash, other
than on an installment basis, to a person not employed by, controlled by, in
control of or under common control with the Company. Fair market value shall be
determined by the Board of Directors, giving due consideration to recent grants
of incentive stock options for shares of Common Stock, recent transactions
involving shares of the Common Stock, if any, earnings of the Company to the
date of such determination, projected earnings of the Company, the effect of the
transfer restrictions to which the Option Shares are subject under law and this
Agreement, the absence of a public market for the Common Stock and such other
matters as the Board of Directors deems pertinent. If the Common Stock of the
Company is traded on any national securities exchange or the NASDAQ Interdealer
Quotation System, fair market value shall be (i) the average of the high and low
closing sale prices, or (ii) the average of the last reported sale price on the
NASDAQ National Market System, or (iii) the average of the closing bid prices
for the twenty (20) consecutive trading days preceding the date the Company
exercises its Repurchase Option and tenders payment for the Option Shares. The
determination by the Board of Directors of the fair market value shall be
conclusive and binding. The fair market value of the Option Shares shall be
determined as of the day on which the event occurs.
20. GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the internal laws of the State of Delaware.
21. EXPRESS CONSIDERATION FOR OPTION GRANT. This Option is being granted to
the Employee on the express condition and for the express consideration that the
Employee has previously executed, or will immediately execute in connection with
this Option grant, the Company's standard form of nondisclosure, assignment of
inventions and/or noncompetition agreement (or any combination thereof) in a
form satisfactory to the Company. If such agreement has not been executed, or if
the Employee refuses to execute such agreement, this Option may be canceled by
the Company in its sole and absolute discretion.
IN WITNESS WHEREOF the Company and the Employee have caused this instrument
to be executed, and the Employee whose signature appears below acknowledges
receipt of a copy of the Plan and acceptance of an original copy of this
Agreement.
_____________________________ THE SOFTWARE DEVELOPER'S
Signature of Employee COMPANY, INC.
By:____________________________
______________________________ Title:___________________________
Name of Employee
