Exhibit 10.23
Incentive Stock Option Agreement
under the Boron, XxXxxx & Associates, Inc.
1996 Stock Option and Grant Plan
Name of Optionee: Xxxxxx X. Xxxxxxxx
No./Class of Option Shares: 70,000 Shares of Class A Common Stock
Grant Date: August 6, 1997
Final Expiration Date: August 6, 2007
Option Exercise Price/Share: $8.00
Pursuant to the Boron, XxXxxx & Associates, Inc. 1996 Stock Option and
Grant Plan (the "Plan"), Boron, XxXxxx & Associates, Inc., a Delaware
corporation (the "Company"), hereby grants to the person named above (the
"Optionee"), who is an officer or full-time employee of the Company or any of
its subsidiaries, an option (the "Stock Option") to purchase on or prior to the
expiration date specified above (the "Expiration Date") all or any part of the
number of shares of Class A Common Stock, par value $0.01 per share ("Common
Stock"), of the Company indicated above (the "Option Shares"), at the per share
option exercise price specified above, subject to the terms and conditions set
forth in this Incentive Stock Option Agreement (the "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.
All capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Plan.
1. Vesting and Exercisability.
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(a) No portion of this Stock Option may be exercised until such
portion shall have vested.
(b) Except as set forth below and in Section 6, and subject to the
determination of the Compensation Committee of the Board of Directors of the
Company or the Board of Directors of the Company, as applicable (the
"Committee"), in its sole discretion to accelerate the vesting schedule
hereunder, this Stock Option shall be vested and exercisable with respect to the
following number of Option Shares on the date indicated:
Incremental (Aggregate Number)
Of Option Shares Exercisable Vesting Date
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1. 17,500 August 6, 1998
2. 17,500 August 6, 1999
3. 17,500 August 6, 2000
4. 17,500 August 6, 2001
Further, subject to the provisions of Section 6 hereof, this Stock
Option shall be deemed vested and exercisable in full upon the date on which the
Optionee's employment with the Company and its Subsidiaries terminates if such
termination occurs in the year following a Change of Control (as hereinafter
defined) of the Company and either (i) such termination occurs pursuant to or
under the circumstances contemplated by Section 6(e) or Section 6(f) of the
Employment Agreement dated August 12, 1997, between the Company and the Optionee
(the "Employment Agreement") (i.e., without cause termination by the Company or
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* Subject to Section 5.
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termination by the Optionee following a material and uncured default by the
Company) or (ii) without limitation of clause (i) above, such termination is
preceded during such year by any material elimination or adverse modification in
the duties, responsibilities, principal employment location or compensation of
the Optionee without his written consent (provided that it shall not be deemed a
material elimination or adverse modification in duties or responsibilities of
the Optionee if the Employee continues to be the financial officer principally
responsible for the business of the Company immediately prior to the Change of
Control (e.g., if the Employee is the financial officer principally responsible
for the Boron, XxXxxx division of another company following a Change of Control
involving an acquisition by another company)).
For purposes hereof, a "Change of Control" shall mean any of the
following events occurring after the date hereof: (i) the direct or indirect
beneficial ownership (within the meaning of Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and Regulation 13D-G
thereunder) of a majority of the outstanding Common Stock of the Company is
acquired or becomes held by any person or group of persons (within the meaning
of Section 13(d)(3) of the Exchange Act) (a "Group"), other than holders of the
Company's equity securities on the date hereof or their respective affiliates,
(ii) the sale, mortgage, lease or other transfer to any person or Group in one
or more transactions not in the ordinary course of business of all or
substantially all of the assets on a consolidated basis the Company and the
Company's Subsidiaries (taken as a whole), (iii) a change of stock ownership of
the Company of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A promulgated under the Exchange Act and any successor
Item of a similar nature;
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or (iv) the acquisition of beneficial ownership, directly or indirectly, by any
person (as such term is used in Section 13(d) and 14(d)(2) of the Exchange Act)
of securities of the Company representing 25% or more of the combined voting
power of the Company's then outstanding securities, other than an acquisition of
such beneficial ownership by holders of the Company's equity securities on the
date hereof or their respective affiliates; or (E) a change during any period of
two consecutive years of a majority of the members of the Board of Directors of
the Company for any reason.
(c) In the event that the Optionee's Service Relationship (as
hereinafter defined) with the Company and its subsidiaries terminates for any
reason or under any circumstances other than those described in Section 1(b)
above, including the Optionee's resignation, retirement or termination by the
Company, upon the Optionee's death or disability, or for any other reason,
regardless of the circumstances thereof, this Stock Option shall no longer vest
or become exercisable with respect to any Option Shares not vested as of the
date of such termination from and after the date of such termination, and this
Stock Option may thereafter be exercised, to the extent it was vested and
exercisable on such date of such termination, until the Expiration Date
contemplated by Section 1(d), except as the Committee may otherwise determine.
Upon a termination of employment following a Change of Control under the
circumstances contemplated by Section 1(b), vesting shall occur as contemplated
by such Section. For purposes hereof, a "Service Relationship" shall mean any
relationship as an employee, part-time employee 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
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in the event the Optionee's status changes from full-time employee to part-time
employee or consultant.
(d) 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 earlier of
(i) the date which is 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 for three months following the date on which the
Optionee's Service Relationship with the Company terminates if the termination
is due to any other reason or (ii) August 6, 2007, subject to the provisions
hereof, including, without limitation, Section 6 hereof which provides for the
termination of unexercised options upon completion of certain transactions as
described therein (the "Expiration Date").
(e) It is understood and intended that this Stock Option shall qualify
as an "incentive stock option" as defined in Section 422 of the Code.
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 any Option Shares within the one-year period
beginning on the day after the day of the transfer of such Option Shares to him
or her, nor within the two-year period beginning on the day after the grant of
this Stock Option. If the Optionee disposes (whether by sale, gift, transfer or
otherwise) of any such Option 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.
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2. Exercise of Stock Option.
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(a) The Optionee may exercise only vested portions of this Stock
Option and 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 election to
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purchase some or all of the Option Shares with respect to which this Stock
Option has vested at the time of such notice. Such notice shall specify the
number of Option Shares to be purchased.
Payment of the purchase price for the Option Shares may be made by one
or more (if applicable) of the following methods: (a) in cash, by certified or
bank check or other instrument acceptable to the Option Committee; or (b) if the
closing of the first underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, covering
the offer and sale of Common Stock of the Company to the public has occurred,
then (i) in the form of shares of Common Stock that are not then subject to
restrictions under any Company plan and that have been held by the Optionee for
at least six months, if permitted by the Committee in its discretion; (ii) 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 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 Option Committee shall prescribe as a condition of such
payment procedure, or (c) a
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combination of (a), (b)(i) and (b)(ii) above. Payment instruments will be
received subject to collection.
(b) Certificates for the Option Shares so purchased will be issued and
delivered to the Optionee upon compliance to the satisfaction of the Option
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 Option 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 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 Option
Shares, subject to the terms of this Agreement.
(c) Notwithstanding any other provision hereof or of the Plan, no
portion of this Stock Option shall be exercisable after the Expiration Date,
including such date as is contemplated by Section 6 hereof.
3. Incorporation of Plan. Notwithstanding anything herein to the
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contrary, this Stock Option shall be subject to and governed by all the terms
and conditions of the Plan.
4. Transferability. This Agreement is personal to the Optionee and
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is not transferable by the Optionee in any manner other than by will or by the
laws of descent and
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distribution. This Stock Option may be exercised during the Optionee's lifetime
only by the Optionee. 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 personal representative of
the Optionee may exercise this Stock Option to the extent provided herein in the
event of the Optionee's death.
5. Adjustment Upon Changes in Capitalization. The shares of stock
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covered by this Stock Option are shares of Class A Common Stock of the Company.
Subject to Section 6 hereof, if the shares of Class A Common Stock as a whole
are increased, decreased, changed or converted into or exchanged for a different
number or kind of shares or securities of the Company, whether through merger or
consolidation, reorganization, recapitalization, reclassification, stock
dividend, stock split, combination of shares, exchange of shares, change in
corporate structure or the like, an appropriate and proportionate adjustment
shall be made in the number and kind of shares and in the per share exercise
price of shares subject to any unexercised portion of this Stock Option. In the
event of any such adjustment in this Stock Option, the Optionee thereafter shall
have the right to purchase the number of shares under this Stock Option at the
per share price, as so adjusted, which the Optionee could purchase at the total
purchase price applicable to this Stock Option immediately prior to such
adjustment. Adjustments under this Section 5 shall be determined by the Option
Committee of the Company, whose determination as to what adjustment shall be
made, and the extent thereof,
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shall be conclusive. No fractional shares of Common Stock shall be issued under
the Plan resulting from any such adjustment, but the Company in its discretion
may make a cash payment in lieu of fractional shares.
6. Effect of Certain Transactions. In the case of (a) the
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dissolution or liquidation of the Company; (b) the sale of all or substantially
all of the assets of the Company and its subsidiaries to another person or
entity; (c) 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 surviving or resulting
entity immediately upon completion of such transaction; (d) the sale of the
outstanding stock of the Company to an unrelated person or entity; or (e) any
other transaction or series of transactions where the owners of the Company's
outstanding voting power immediately prior to such transaction do not own a
majority of the outstanding voting power of the surviving or resulting entity
immediately upon completion of such transaction, this Stock Option shall no
longer vest except as the Committee may determine in its sole discretion and in
any case this Stock Option (with respect to both vested and unvested Stock
Options) shall terminate on the effective date of (or, if relevant, the record
date for determining stockholders entitled to participate in) such transaction,
unless provision is made in such transaction in the sole discretion of the
parties thereto for the assumption of this Stock Option or the substitution for
this Stock Option of a new stock option of the successor person or entity or a
parent or subsidiary thereof, with such adjustment as to the number and kind of
shares and the per share exercise price as such parties shall agree to, and (in
the case of an assumption) with references to the Company deemed to refer to
such successor entity. In the event of any transaction which will result in
such
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termination, the Company shall give to the Optionee written notice thereof at
least fifteen (15) days prior to the effective date of such transaction or the
record date on which stockholders of the Company entitled to participate in such
transaction shall be determined, whichever comes first. Until the earlier to
occur of such effective date or record date, the Optionee may exercise any
vested portion of this Stock Option, but after such effective date or record
date, as the case may be, the Optionee may not exercise this Stock Option unless
it is assumed or substituted by the successor as provided above.
7. Withholding Taxes. The Optionee shall, not later than the date as
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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 such 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. For purposes of this Section 7 "Fair Market Value"
on any given date means the last reported sale price at which Common Stock is
traded on such date or, if no Common Stock is traded on such date, the next
preceding date on which Common Stock was traded, as reflected on the principal
stock exchange or, if applicable, any other national stock exchange on which the
Common Stock is traded or admitted to trading. 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
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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.
8. Miscellaneous Provisions.
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(a) Equitable Relief. The parties hereto agree and declare that legal
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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.
(b) Change and Modifications. This Agreement may not be orally
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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.
(c) Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Delaware.
(d) Headings. The headings are intended only for convenience in
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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.
(e) Saving Clause. If any provision(s) of this Agreement shall be
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determined to be illegal or unenforceable, such determination shall in no manner
affect the legality or enforceability of any other provision hereof.
(f) Notices. All notices, requests, consents and other communications
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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
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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.
(g) Benefit and Binding Effect. This Agreement shall be binding upon
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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.
(h) Counterparts. For the convenience of the parties and to
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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.
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The foregoing Agreement is hereby accepted and the terms and
conditions thereof hereby agreed to by the undersigned.
Dated as of_____________, 1997
BORON, XxXXXX & ASSOCIATES, INC.
By: /s/ Xxxxxxx X. XxXxxx
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Title: President
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Address: BORON, XxXXXX & ASSOCIATES, INC.
Attention: President
00-00 Xxxxx 000 Xxxxx
Xxxx Xxxx, Xxx Xxxxxx 00000
OPTIONEE:
/s/ Xxxxxx X. Xxxxxxxx
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Optionee's Address:
c/o Boron XxXxxx & Associates, Inc.
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00-00 Xxxxx 000 Xxxxx
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Xxxx Xxxx, XX 00000
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DESIGNATED BENEFICIARY:
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Beneficiary's Address:
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Appendix A
STOCK OPTION EXERCISE NOTICE
Boron, XxXxxx & Associates, Inc.
Attention: Chief Financial Officer
00-00 Xxxxx 000 Xxxxx
Xxxx Xxxx, Xxx Xxxxxx 00000
Dear Sirs:
Pursuant to the terms of my stock option agreement dated ____________ (the
"Agreement") under the Boron, XxXxxx & Associates, Inc 1996 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 Boron,
XxXxxx & Associates, Inc.
[ ] 3. Other (as described in the Agreement (please
describe)) ______________.
Sincerely yours,
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Please Print Name
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Signature
A-1
