EXHIBIT 4.1
CALL TECHNOLOGIES, INC.
AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN,
AND FORMS OF AGREEMENTS USED THEREUNDER
CALL TECHNOLOGIES, INC.
AMENDED AND RESTATED
1998 STOCK INCENTIVE PLAN
1) PURPOSE
The purpose of this Amended and Restated 1998 Stock Incentive Plan
(the "Plan") of Call Technologies, Inc., a Delaware corporation (the
"Company"), is to advance the interests of the Company's stockholders by
enhancing the Company's ability to attract, retain and motivate persons who
make (or are expected to make) important contributions to the Company by
providing such persons with equity ownership opportunities and
performance-based incentives and thereby better aligning the interests of such
persons with those of the Company's stockholders. Except where the context
otherwise requires, the term "Company" shall include any present or future
subsidiary corporations of Call Technologies, Inc. as defined in Section 424(f)
of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the "Code").
2) ELIGIBILITY
Employees of the Company, directors, consultants, affiliates and
advisors (and any individuals who have accepted an offer for employment) are
eligible to be granted options, restricted stock, or other stock-based awards
(each, an "Award") under the Plan provided that Incentive Stock Options shall
be granted only to employees of the Company. Any person who has been granted an
Award under the Plan shall be deemed a "Participant". Participation in the Plan
may be conditioned, in the Company's sole discretion, upon the execution and
delivery by the Participant of an Invention and Non-Disclosure Agreement prior
to any option grant pursuant to the Plan.
3) ADMINISTRATION, DELEGATION
a) ADMINISTRATION BY BOARD OF DIRECTORS. The Plan will be
administered by the Compensation Committee of the Board of Directors
of the Company (the "Board"). The Board shall have authority to grant
Awards and to adopt, amend and repeal such administrative rules,
guidelines and practices relating to the Plan as it shall deem
advisable. The Board may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or any Award in the manner and
to the extent it shall deem expedient to carry the Plan into effect and
it shall be the sole and final judge of such expediency. All decisions
by the Board shall be made in the Board's sole discretion and shall be
final and binding on all persons having or claiming any interest in the
Plan or in any Award. No director or person acting pursuant to the
authority delegated by the Board shall be liable for any action or
determination relating to or under the Plan made in good faith.
b) DELEGATION TO EXECUTIVE OFFICERS. To the extent permitted by
applicable law, the Board may delegate to one or more executive
officers of the Company the power to make Awards and exercise such
other powers under the Plan as the Board may determine, provided that
the Board shall fix the maximum number of shares subject to Awards and
the maximum number of shares for any one Participant to be made by such
executive officers.
c) APPOINTMENT OF COMMITTEES. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to
one or more committees or subcommittees of the
-1-
Board (a "Committee"). If and when the common stock, $0.01 par value
per share, of the Company (the "Common Stock") is registered under the
Securities Exchange Act of 1934 (the "Exchange Act"), the Board shall
appoint one such Committee of not less than two members, each member
of which shall be an "outside director" within the meaning of Section
162(m) of the Code and a "non-employee director" as defined in Rule
16b-3 promulgated under the Exchange Act." All references in the Plan
to the "Board" shall mean the Board or a Committee of the Board or the
executive officer referred to in Section 3(b) to the extent that the
Board's powers or authority under the Plan have been delegated to such
Committee or executive officer.
4) STOCK AVAILABLE FOR AWARDS
a) NUMBER OF SHARES. Subject to adjustment under Section 4(c), Awards
may be made under the Plan for up to 2,345,600 shares of Common Stock.
If any Award expires or is terminated, surrendered or canceled without
having been fully exercised or is forfeited in whole or in part or
results in any Common Stock not being issued, the unused Common Stock
covered by such Award shall again be available for the grant of Awards
under the Plan, subject, however, in the case of Incentive Stock
Options (as hereinafter defined), to any limitation required under the
Code. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
b) PER-PARTICIPANT LIMIT. Subject to adjustment under Section 4(c),
for Awards granted after the Common Stock is registered under the
Exchange Act, the maximum number of shares with respect to which an
Award may be granted to any Participant under the Plan shall be
500,000 per calendar year. The per-participant limit described in this
Section 4(b) shall be construed and applied consistently with Section
162(m) of the Code.
c) ADJUSTMENT TO COMMON STOCK. In the event of any stock split, stock
dividend, recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, liquidation, spin-off or other similar
change in capitalization or event, or any distribution to holders of
Common Stock other than a normal cash dividend, (i) the number and
class of securities available under this Plan, (ii) the number and
class of security and exercise price per share subject to each
outstanding Option, (iii) the repurchase price per security subject to
each outstanding Restricted Stock Award, and (iv) the terms of each
other outstanding stock-based Award shall be appropriately adjusted by
the Company (or substituted Awards may be made, if applicable) to the
extent the Board shall determine, in good faith, that such an
adjustment (or substitution) is necessary and appropriate. If this
Section 4(c) applies and Section 8(e)(1) also applies to any event,
Section 8(e)(1) shall be applicable to such event, and this Section
4(c) shall not be applicable.
5) STOCK OPTIONS
a) GENERAL. The Board may grant options to purchase Common Stock
(each, an "Option") and determine the number of shares of Common Stock
to be covered by each Option, the exercise price of each Option and the
conditions and limitations applicable to the exercise of each Option,
including conditions relating to applicable federal or state securities
laws, as it considers necessary or advisable. An Option which is not
intended to be an Incentive Stock Option (as hereinafter defined) shall
be designated a "Nonstatutory Stock Option".
-2-
b) INCENTIVE STOCK OPTIONS. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an
"Incentive Stock Option") shall only be granted to employees of the
Company and shall be subject to and shall be construed consistently
with the requirements of Section 422 of the Code. The Company shall
have no liability to a Participant, or any other party, if an Option
(or any part thereof) which is intended to be an Incentive Stock Option
is not an Incentive Stock Option.
c) EXERCISE PRICE. The Board shall establish the exercise price at
the time each Option is granted and specify it in the applicable option
agreement.
d) DURATION OF OPTIONS. Each Option shall be exercisable at such
times and subject to such terms and conditions as the Board may
specify in the applicable option agreement, except that, in the case of
an Incentive Stock Option, such Incentive Stock Option shall expire no
later than ten years after the date on which it is granted and, in all
cases, options shall be subject to earlier termination as provided in
the Plan.
e) EXERCISE OF OPTION. Options may be exercised only by delivery to
the Company of a written notice of exercise signed by the proper person
together with payment in full as specified in Section 5(f) for the
number of shares for which the Option is exercised.
f) PAYMENT UPON EXERCISE. Common Stock purchased upon the exercise of
an Option granted under the Plan shall be paid for as follows:
(i) in cash or by check, payable to the order of the Company;
(ii) except as the Board may otherwise provide in an Option Agreement,
delivery of an irrevocable and unconditional undertaking by a creditworthy
broker to deliver promptly to the Company sufficient funds to pay the exercise
price, or delivery by the Participant to the Company of a copy of irrevocable
and unconditional instructions to a creditworthy broker to deliver promptly to
the Company cash or a check sufficient to pay the exercise price;
(iii) to the extent permitted by the Board and explicitly provided in
an Option Agreement (i) by delivery of shares of Common Stock owned by the
Participant valued at their fair market value as determined by the Board in good
faith ("Fair Market Value"), which Common Stock was owned by the Participant at
least six months prior to such delivery, (ii) by delivery of a combination of
cash equal to the par value of the Shares being purchased and a promissory note
of the Participant to the Company creating a binding obligation on the part of
Participant for the balance of the purchase price on terms determined by the
Board, or (iii) by payment of such other lawful consideration as the Board may
determine; or
(iv) any combination of the above permitted forms of payment.
6) RESTRICTED STOCK
a) GRANTS. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to
repurchase all or part of such shares at their issue price or other
stated or formula price (or to require forfeiture of such shares to the
extent payment has not been received) from the recipient in the event
that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or
periods established by the Board for such Award (each, "Restricted
Stock Award").
-3-
b) TERMS AND CONDITIONS. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions
for repurchase (or forfeiture) and the issue price, if any. Any stock
certificates issued in respect of a Restricted Stock Award shall be
registered in the name of the Participant and, unless otherwise
determined by the Board, deposited by the Participant, together with a
stock power endorsed in blank, with the Company (or its designee). At
the expiration of the applicable restriction periods, the Company (or
such designee) shall deliver the certificates no longer subject to such
restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a
Participant to receive amounts due or exercise rights of the
Participant in the event of the Participant's death (the "Designated
Beneficiary"). In the absence of an effective designation by a
Participant, Designated Beneficiary shall mean the Participant's
estate.
7) OTHER STOCK-BASED AWARDS
The Board shall have the right to grant other Awards based upon the
Common Stock having such terms and conditions as the Board may determine,
including the grant of shares based upon certain conditions, the grant of
securities convertible into Common Stock and the grant of stock appreciation
rights.
8) GENERAL PROVISIONS APPLICABLE TO AWARDS
a) TRANSFERABILITY OF AWARDS. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they
are granted, either voluntarily or by operation of law, except by will
or the laws of descent and distribution, and, during the life of the
Participant, shall be exercisable only by the Participant. References
to a Participant, to the extent relevant in the context, shall include
references to authorized transferees.
b) DOCUMENTATION. Each Award under the Plan shall be evidenced by a
written instrument in such form as the Board shall determine. Each
Award may contain terms and conditions in addition to those set forth
in the Plan.
c) BOARD DISCRETION. Except as otherwise provided by the Plan, each
type of Award may be made alone or in addition or in relation to any
other type of Award. The terms of each type of Award need not be
identical, and the Board need not treat Participants uniformly.
d) TERMINATION OF STATUS. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence
or other change in the employment or other status of a Participant and
the extent to which, and the period during which, the Participant, the
Participant's legal representative, conservator, guardian or Designated
Beneficiary may exercise rights under the Award.
e) ACQUISITION EVENTS
(i) CONSEQUENCES OF ACQUISITION EVENTS. Upon the occurrence of an
Acquisition Event (as defined below), each outstanding Option or Award shall be
assumed or an equivalent option or award substituted by the successor
corporation or a parent or subsidiary of the successor corporation, provided
that any such Options substituted for Incentive Stock Options shall satisfy, in
the determination of the Board, the requirements of Section 424(a) of the Code,
unless the successor corporation refuses to assume or substitute
-4-
for the Option or Award, in which case (i) the Participant shall have the right
to exercise the Option in full, including with respect to shares of Common
Stock as to which it would not otherwise be exercisable, (ii) all Restricted
Stock Awards then outstanding shall become free of all restrictions prior to
the consummation of the Acquisition Event; and (iii) any other stock-based
Awards outstanding shall become exercisable, realizable or vested in full, or
shall be free of all conditions or restrictions, as applicable to each such
Award, prior to the consummation of the Acquisition Event. If an Option or
Award is exercisable in lieu of assumption or substitution in the event of an
Acquisition Event, the Board shall notify the Participant in writing or
electronically that the Option or Award shall be fully exercisable for a period
of not less than forty-five (45) days from the date of such notice, and the
Option or Award shall terminate upon the expiration of such period.
Each Option or other Award assumed or substituted pursuant to the
immediately preceding paragraph shall include a provision to the effect that
such Option or Award shall become immediately exercisable (or vested) in full
if, on or prior to the first anniversary of the Acquisition Event, the
Participant terminates his or her employment for Good Reason or is terminated
without Cause by the surviving or acquiring corporation. "Good Reason" shall
mean any significant diminution in the optionee's title, authority, or
responsibilities from and after such Acquisition Event or any reduction in the
annual cash compensation payable to the Participant from and after such
Acquisition Event, or the relocation of the Company's place of business at
which the Participant is principally located to a location that is greater than
50 miles from the current site. "Cause" shall mean any willful misconduct by
the Participant which affects the business reputation of the Company or willful
failure by the Participant to perform his or her material responsibilities to
the Company (including, without limitation, breach by the Participant of any
provision of any employment, consulting, advisory, nondisclosure,
non-competition or other similar agreement between the Participant and the
Company). The Participant shall be considered to have been discharged for
"Cause" if the Company determines, within 30 days after the Participant's
resignation, that discharge for Cause was warranted.
An "Acquisition Event" shall mean: (a) any merger or consolidation
which results in the voting securities of the Company outstanding immediately
prior thereto representing immediately thereafter (either by remaining
outstanding or by being converted into voting securities of the surviving or
acquiring entity) less than 50% of the combined voting power of the voting
securities of the Company or such surviving or acquiring entity outstanding
immediately after such merger or consolidation; (b) any sale of all or
substantially all of the assets of the Company; or (c) the complete liquidation
of the Company.
(ii) ASSUMPTION OF OPTIONS UPON CERTAIN EVENTS. The Board may grant
Awards under the Plan in substitution for stock and stock-based awards held by
employees of another corporation who become employees of the Company as a
result of a merger or consolidation of the employing corporation with the
Company or the acquisition by the Company of property or stock of the employing
corporation. The substitute Awards shall be granted on such terms and
conditions as the Board considers appropriate in the circumstances.
f) WITHHOLDING. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required
by law to be withheld in connection with Awards to such Participant no
later than the date of the event creating the tax liability. The Board
may allow Participants to satisfy such tax obligations in whole or in
part in shares of Common Stock, including shares retained from the
Award creating the tax obligation, valued at their Fair Market Value.
The Company may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to a
Participant.
-5-
g) AMENDMENT OF AWARD. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor
another Award of the same or a different type, changing the date of
exercise or realization, and converting an Incentive Stock Option to a
Nonstatutory Stock Option, provided that the Participant's consent to
such action shall be required unless the Board determines that the
action, taking into account any related action, would not materially
and adversely affect the Participant.
h) CONDITIONS ON DELIVERY OF STOCK. The Company will not be
obligated to deliver any shares of Common Stock pursuant to the Plan or
to remove restrictions from shares previously delivered under the Plan
until (i) all conditions of the Award have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Company's
counsel, all other legal matters in connection with the issuance and
delivery of such shares have been satisfied, including any applicable
securities laws and any applicable stock exchange or stock market rules
and regulations, and (iii) the Participant has executed and delivered
to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable
laws, rules or regulations.
i) ACCELERATION. The Board may at any time provide that any Options
shall become immediately exercisable in full or in part, that any
Restricted Stock Awards shall be free of all restrictions or that any
other stock-based Awards may become exercisable in full or in part or
free of some or all restrictions or conditions, or otherwise realizable
in full or in part, as the case may be.
9) MISCELLANEOUS
a) NO RIGHT TO EMPLOYMENT OR OTHER STATUS. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall
not be construed as giving a Participant the right to continued
employment or any other relationship with the Company. The Company
expressly reserves the right at any time to dismiss or otherwise
terminate its relationship with a Participant free from any liability
or claim under the Plan, except as expressly provided in the applicable
Award.
b) NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have
any rights as a stockholder with respect to any shares of Common Stock
to be distributed with respect to an Award until becoming the record
holder of such shares.
c) EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective
on the date on which it is adopted by the Board but no option granted
under the Plan shall become exercisable unless and until the Plan shall
have been approved by the Company's shareholders. If such shareholder
approval is not obtained within twelve months after the date of the
Board's adoption of the Plan, options previously granted under the Plan
shall not vest and shall terminate and no options shall be granted
thereafter. No Awards shall be granted under the Plan after the
completion of ten years from the earlier of (i) the date on which the
Plan was adopted by the Board or (ii) the date the Plan was approved by
the Company's stockholders, but Awards previously granted may extend
beyond that date.
d) AMENDMENT OF PLAN. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, except that if at any time the
approval of shareholders is required under Section 422 of the Code or
any successor provision with respect to Incentive Stock Options, or
under Rule 16b-3, the Board of Directors may not effect such
modification or amendment without such approval.
-6-
e) GOVERNING LAW. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware, without regard to any applicable
conflicts of law.
Approved and adopted by the Board of Directors
on February 17, 1998.
Amended by the Board of Directors on October 8, 1998.
Amended and Restated by the Board of Directors
on December 10, 1998.
Approved by a majority of the Stockholders
on or about February 11, 1999.
-7-
CALL TECHNOLOGIES, INC.
Incentive Stock Option Agreement
GRANTED UNDER 1998 STOCK INCENTIVE PLAN
1. GRANT OF OPTION.
This agreement evidences the grant by Call Technologies, Inc., a
Delaware corporation (the "Company") on ___________ to _______________, an
employee of the Company (the "Participant"), of an option to purchase, in whole
or in part, on the terms provided herein and in the Company's 1998 Stock
Incentive Plan (the "Plan"), a total of ______ shares of common stock, $0.01
par value per share, of the Company ("Common Stock") (the "Shares") at $_____
per Share. Unless earlier terminated, this option shall expire ten (10) years
from the date hereof (the "Final Exercise Date").
It is intended that the option evidenced by this agreement shall be an
incentive stock option as defined in Section 422 of the Internal Revenue Code
of 1986, as amended and any regulations promulgated thereunder (the "Code").
Except as otherwise indicated by the context, the term "Participant", as used
in this option, shall be deemed to include any person who acquires the right to
exercise this option validly under its terms.
2. VESTING SCHEDULE.
This option will become exercisable ("vest") as to 25% of the original
number of Shares on the first anniversary of the commencement date of the
vesting period (the "Vesting Commencement") and as to an additional 6.25% of
the original number of Shares at the end of each successive full calendar
quarter following the first anniversary of the Vesting Commencement Date until
the fourth anniversary of the Vesting Commencement Date. This option shall
expire upon, and will not be exercisable after, the Final Exercise Date. The
Vesting Commencement Date for this option shall be ___________.
The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent permissible it
shall continue to be exercisable, in whole or in part, with respect to all
shares for which it is vested until the earlier of the Final Exercise Date or
the termination of this option under Section 3 hereof or the Plan.
3. EXERCISE OF OPTION.
(1) FORM OF EXERCISE. Each election to exercise this option
shall be in writing, signed by the Participant, and received by the Company at
its principal office, accompanied by this agreement, and payment in full (i) by
delivery of shares of Common Stock owned by the Participant valued at their
fair market value as determined by the Board in good faith (the "Fair Market
Value"), which Common Stock was owned by the Participant at least six months
prior to such delivery; (ii) by delivery of a combination of cash equal to the
par value of the shares being purchased and a promissory note of the
Participant to the Company creating a binding obligation on the part of the
Participant for the balance of the purchase price on terms determined by the
Board; or (iii) by payment of such other lawful consideration as the Board may
determine.
-1-
The Participant may purchase less than the number of shares covered hereby,
provided that no partial exercise of this option may be for any fractional
share or for fewer than ten whole shares.
(2) CONTINUOUS RELATIONSHIP WITH THE COMPANY REQUIRED. Except
as otherwise provided in this Section 3, this option may not be exercised
unless the Participant, at the time he or she exercises this option, is, and
has been at all times since the date of grant of this option, an employee of,
or consultant or advisor to, the Company or any parent or subsidiary of the
Company as defined in Section 424(e) or (f) of the Code (an "Eligible
Participant").
(3) TERMINATION OF RELATIONSHIP WITH THE COMPANY. If the
Participant ceases to be an Eligible Participant for any reason, then, except
as provided in paragraphs (d) and (e) below, the right to exercise this option
shall terminate three months after such cessation (but in no event after the
Final Exercise Date), PROVIDED THAT this option shall be exercisable only to
the extent that the Participant was entitled to exercise this option on the
date of such cessation. Notwithstanding the foregoing, if the Participant,
prior to the Final Exercise Date, violates the non-competition or
confidentiality provisions of any employment contract, confidentiality and
nondisclosure agreement or other agreement between the Participant and the
Company, the right to exercise this option shall terminate immediately upon
such violation.
(4) EXERCISE PERIOD UPON DEATH OR DISABILITY. If the
Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of
the Code) prior to the Final Exercise Date while he or she is an Eligible
Participant and the Company has not terminated such relationship for "cause" as
specified in paragraph (e) below, this option shall be exercisable, within the
period of one year following the date of death or disability of the Participant
by the Participant, PROVIDED THAT this option shall be exercisable only to the
extent that this option was exercisable by the Participant on the date of his
or her death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.
(5) DISCHARGE FOR CAUSE. If the Participant, prior to the Final
Exercise Date, is discharged by the Company for "cause" (as defined below), the
right to exercise this option shall terminate immediately upon the effective
date of such discharge. "Cause" shall mean willful misconduct by the
Participant or willful failure by the Participant to perform his or her
responsibilities to the Company (including, without limitation, breach by the
Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or other similar agreement between the
Participant and the Company), as determined by the Company, which determination
shall be conclusive. The Participant shall be considered to have been
discharged for "Cause" if the Company determines, within 30 days after the
Participant's resignation, that discharge for cause was warranted.
4. RIGHT OF FIRST REFUSAL.
(a) If the Participant proposes to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively, "transfer") any Shares acquired upon exercise of this option,
then the Participant shall first give written notice of the proposed transfer
(the "Transfer Notice") to the Company. The Transfer Notice shall name the
proposed transferee and state the number of such Shares the Participant
proposes to transfer (the "Offered Shares"), the price per share and all other
material terms and conditions of the transfer.
(b) For 30 days following its receipt of such Transfer Notice, the
Company shall have the option to purchase all (but not less than all) of the
Offered Shares at the price and upon the terms set forth in the Transfer
Notice. In the event the Company elects to purchase all of the Offered Shares,
it shall give written
-2-
notice of such election to the Participant within such 30-day period. Within 10
days after his receipt of such notice, the Participant shall tender to the
Company at its principal offices the certificate or certificates representing
the Offered Shares, duly endorsed in blank by the Participant or with duly
endorsed stock powers attached thereto, all in a form suitable for transfer of
the Offered Shares to the Company. Upon receipt of such certificate or
certificates, the Company shall deliver or mail to the Participant a check in
payment of the purchase price for the Offered Shares; provided THAT if the
terms of payment set forth in the Transfer Notice were other than cash against
delivery, the Company may pay for the Offered Shares on the same terms and
conditions as were set forth in the Transfer Notice.
(c) At and after the time at which the Offered Shares are required to
be delivered to the Company for transfer to the Company pursuant to subsection
(b) above, the Company shall not pay any dividend to the Participant on account
of such Shares or permit the Participant to exercise any of the privileges or
rights of a stockholder with respect to such Offered Shares, but shall, in so
far as permitted by law, treat the Company as the owner of such Offered Shares.
(d) If the Company does not elect to acquire all of the Offered
Shares, the Participant may, within the 30-day period following the expiration
of the option granted to the Company under subsection (b) above, transfer the
Offered Shares to the proposed transferee, PROVIDED THAT such transfer shall
not be on terms and conditions more favorable to the transferee than those
contained in the Transfer Notice. Notwithstanding any of the above, all Offered
Shares transferred pursuant to this Section 4 shall remain subject to the right
of first refusal set forth in this Section 4 and such transferee shall, as a
condition to such transfer, deliver to the Company a written instrument
confirming that such transferee shall be bound by all of the terms and
conditions of this Section 4.
(e) The following transactions shall be exempt from the provisions of
this Section 4:
(1) any transfer of Shares to or for the benefit of any spouse,
parent, child or grandchild of the Participant, or to a trust for their benefit;
(2) any transfer pursuant to an effective registration
statement filed by the Company under the Securities Act of 1933, as amended
(the "Securities Act"); and
(3) any transfer of the Shares pursuant to the sale of all or
substantially all of the business of the Company;
PROVIDED, HOWEVER, that in the case of a transfer pursuant to clause (1) above,
such Shares shall remain subject to the right of first refusal set forth in
this Section 4 and such transferee shall, as a condition to such transfer,
deliver to the Company a written instrument confirming that such transferee
shall be bound by all of the terms and conditions of this Section 4.
(f) The Company may assign its rights to purchase Offered Shares in
any particular transaction under this Section 4 to one or more persons or
entities.
(g) The provisions of this Section 4 shall terminate upon the earlier
of the following events:
(1) the closing of the sale of shares of Common Stock in an
underwritten public offering pursuant to an effective registration statement
filed by the Company under the Securities Act; or
-3-
(2) the sale of all or substantially all of the capital stock,
assets or business of the Company, by merger, consolidation, sale of assets or
otherwise.
(h) The Company shall not be required (a) to transfer on its books
any of the Shares which shall have been sold or transferred in violation of any
of the provisions set forth in this Section 4, or (b) to treat as owner of such
Shares or to pay dividends to any transferee to whom any such Shares shall have
been so sold or transferred.
5. AGREEMENT IN CONNECTION WITH PUBLIC OFFERING.
The Participant agrees, in connection with the initial underwritten
public offering of the Company's securities pursuant to a registration
statement under the Securities Act, (i) not to sell, make short sale of, loan,
grant any options for the purchase of, or otherwise dispose of any shares of
Common Stock held by the Participant (other than those shares included in the
offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company's securities
for a period of 180 days from the effective date of such registration
statement, and (ii) to execute any agreement reflecting clause (i) above as may
be requested by the Company or the managing underwriters at the time of such
offering.
6. WITHHOLDING.
No Shares will be issued pursuant to the exercise of this option
unless and until the Participant pays to the Company, or makes provision
satisfactory to the Company for payment of, any federal, state or local
withholding taxes required by law to be withheld in respect of this option. The
Participant may satisfy such tax obligations in whole or in part in shares of
Common Stock, including shares retained from the Award creating the tax
obligation, valued at their Fair Market Value.
7. NONTRANSFERABILITY OF OPTION.
This option may not be sold, assigned, transferred, pledged or
otherwise encumbered by the Participant, either voluntarily or by operation of
law, except by will or the laws of descent and distribution, and, during the
lifetime of the Participant, this option shall be exercisable only by the
Participant.
8. DISQUALIFYING DISPOSITION.
If the Participant disposes of Shares acquired upon exercise of this
option within two years from the date of grant of the option or one year after
such Shares were acquired pursuant to exercise of this option, the Participant
shall notify the Company in writing of such disposition.
9. PROVISIONS OF THE PLAN.
This option is subject to the provisions of the Plan, a copy of which
is furnished to the Participant with this option.
-4-
IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.
CALL TECHNOLOGIES, INC.
Dated: _________ By: ___________________________
Name: _________________________
Title: ________________________
-5-
PARTICIPANT'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company's 1998 Stock Incentive Plan.
PARTICIPANT:
-------------------------------------------
Address: __________________________________
__________________________________
__________________________________
-6-
CALL TECHNOLOGIES, INC.
Nonstatutory Stock Option Agreement
GRANTED UNDER 1998 STOCK INCENTIVE PLAN
1. GRANT OF OPTION.
This agreement evidences the grant by Call Technologies, Inc., a
Delaware corporation (the "Company") on ________________ to _______________, a
_____________ of the Company (the "Participant"), of an option to purchase, in
whole or in part, on the terms provided herein and in the Company's 1998 Stock
Incentive Plan (the "Plan"), a total of _________ shares of common stock, $0.01
par value per share, of the Company ("Common Stock") (the "Shares") at $______
per Share. Unless earlier terminated, this option shall expire on
_________________ (the "Final Exercise Date").
It is intended that the option evidenced by this agreement shall not
be an incentive stock option as defined in Section 422 of the Internal Revenue
Code of 1986, as amended and any regulations promulgated thereunder (the
"Code"). Except as otherwise indicated by the context, the term "Participant",
as used in this option, shall be deemed to include any person who acquires the
right to exercise this option validly under its terms.
2. VESTING SCHEDULE.
This option will become exercisable ("vest") as to 25% of the original
number of Shares on the first anniversary of the commencement date of the
vesting period (the "Vesting Commencement") and as to an additional 6.25% of
the original number of Shares at the end of each successive full calendar
quarter following the first anniversary of the Vesting Commencement Date until
the fourth anniversary of the Vesting Commencement Date. This option shall
expire upon, and will not be exercisable after, the Final Exercise Date. The
Vesting Commencement Date for this option shall be ___________________.
The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent permissible it
shall continue to be exercisable, in whole or in part, with respect to all
shares for which it is vested until the earlier of the Final Exercise Date or
the termination of this option under Section 3 hereof or the Plan.
3. EXERCISE OF OPTION.
(1) FORM OF EXERCISE. Each election to exercise this option shall be
in writing, signed by the Participant, and received by the Company at its
principal office, accompanied by this agreement, and payment in full (i) by
delivery of shares of Common Stock owned by the Participant valued at their
fair market value as determined by the Board in good faith (the "Fair Market
Value"), which Common Stock was owned by the Participant at least six months
prior to such delivery; (ii) by delivery of a combination of cash equal to the
par value of the shares being purchased and a promissory note of the
Participant to the Company creating a binding obligation on the part of the
Participant for the balance of the purchase price on terms determined by the
Board; or (iii) by payment of such other lawful consideration as the Board may
determine. The Participant may purchase less than the number of shares covered
hereby, provided that no partial exercise of this option may be for any
fractional share or for fewer than ten whole shares.
-1-
(2) CONTINUOUS RELATIONSHIP WITH THE COMPANY REQUIRED. Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Participant, at the time he or she exercises this option, is, and has been
at all times since the date of grant of this option, an employee of, or
consultant or advisor to, the Company or any parent or subsidiary of the
Company as defined in Section 424(e) or (f) of the Code (an "Eligible
Participant").
(3) TERMINATION OF RELATIONSHIP WITH THE COMPANY. If the Participant
ceases to be an Eligible Participant for any reason, then, except as provided
in paragraphs (d) and (e) below, the right to exercise this option shall
terminate three months after such cessation (but in no event after the Final
Exercise Date), PROVIDED THAT this option shall be exercisable only to the
extent that the Participant was entitled to exercise this option on the date of
such cessation. Notwithstanding the foregoing, if the Participant, prior to the
Final Exercise Date, violates the non-competition or confidentiality provisions
of any employment contract, confidentiality and nondisclosure agreement or
other agreement between the Participant and the Company, the right to exercise
this option shall terminate immediately upon such violation.
(4) EXERCISE PERIOD UPON DEATH OR DISABILITY. If the Participant dies
or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior
to the Final Exercise Date while he or she is an Eligible Participant and the
Company has not terminated such relationship for "cause" as specified in
paragraph (e) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant, by the
Participant, PROVIDED THAT this option shall be exercisable only to the extent
that this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.
(5) DISCHARGE FOR CAUSE. If the Participant, prior to the Final
Exercise Date, is discharged by the Company for "cause" (as defined below), the
right to exercise this option shall terminate immediately upon the effective
date of such discharge. "Cause" shall mean willful misconduct by the
Participant or willful failure by the Participant to perform his or her
responsibilities to the Company (including, without limitation, breach by the
Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or other similar agreement between the
Participant and the Company), as determined by the Company, which determination
shall be conclusive. The Participant shall be considered to have been
discharged for "Cause" if the Company determines, within 30 days after the
Participant's resignation, that discharge for cause was warranted.
4. RIGHT OF FIRST REFUSAL.
(1) If the Participant proposes to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively, "transfer") any Shares acquired upon exercise of this option,
then the Participant shall first give written notice of the proposed transfer
(the "Transfer Notice") to the Company. The Transfer Notice shall name the
proposed transferee and state the number of such Shares the Participant
proposes to transfer (the "Offered Shares"), the price per share and all other
material terms and conditions of the transfer.
(2) For 30 days following its receipt of such Transfer Notice, the
Company shall have the option to purchase all (but not less than all) of the
Offered Shares at the price and upon the terms set forth in the Transfer
Notice. In the event the Company elects to purchase all of the Offered Shares,
it shall give written notice of such election to the Participant within such
30-day period. Within 10 days after his receipt of such notice, the Participant
shall tender to the Company at its principal offices the certificate or
certificates representing the Offered Shares, duly endorsed in blank by the
Participant or with duly endorsed stock powers
-2-
attached thereto, all in a form suitable for transfer of the Offered Shares to
the Company. Upon receipt of such certificate or certificates, the Company
shall deliver or mail to the Participant a check in payment of the purchase
price for the Offered Shares; provided THAT if the terms of payment set forth
in the Transfer Notice were other than cash against delivery, the Company may
pay for the Offered Shares on the same terms and conditions as were set forth
in the Transfer Notice.
(3) At and after the time at which the Offered Shares are required to
be delivered to the Company for transfer to the Company pursuant to subsection
(b) above, the Company shall not pay any dividend to the Participant on account
of such Shares or permit the Participant to exercise any of the privileges or
rights of a stockholder with respect to such Offered Shares, but shall, in so
far as permitted by law, treat the Company as the owner of such Offered Shares.
(4) If the Company does not elect to acquire all of the Offered
Shares, the Participant may, within the 30-day period following the expiration
of the option granted to the Company under subsection (b) above, transfer the
Offered Shares to the proposed transferee, PROVIDED THAT such transfer shall
not be on terms and conditions more favorable to the transferee than those
contained in the Transfer Notice. Notwithstanding any of the above, all Offered
Shares transferred pursuant to this Section 4 shall remain subject to the right
of first refusal set forth in this Section 4 and such transferee shall, as a
condition to such transfer, deliver to the Company a written instrument
confirming that such transferee shall be bound by all of the terms and
conditions of this Section 4.
(5) The following transactions shall be exempt from the provisions of
this Section 4:
(1) any transfer of Shares to or for the benefit of any spouse,
parent, child or grandchild of the Participant, or to a trust for their benefit;
(2) any transfer pursuant to an effective registration
statement filed by the Company under the Securities Act of 1933, as amended
(the "Securities Act"); and
(3) any transfer of the Shares pursuant to the sale of all or
substantially all of the business of the Company;
PROVIDED, HOWEVER, that in the case of a transfer pursuant to clause (1) above,
such Shares shall remain subject to the right of first refusal set forth in
this Section 4 and such transferee shall, as a condition to such transfer,
deliver to the Company a written instrument confirming that such transferee
shall be bound by all of the terms and conditions of this Section 4.
(6) The Company may assign its rights to purchase Offered Shares in
any particular transaction under this Section 4 to one or more persons or
entities.
(7) The provisions of this Section 4 shall terminate upon the earlier
of the following events:
(1) the closing of the sale of shares of Common Stock in an
underwritten public offering pursuant to an effective registration statement
filed by the Company under the Securities Act; or
(2) the sale of all or substantially all of the capital stock,
assets or business of the Company, by merger, consolidation, sale of assets or
otherwise.
-3-
(h) The Company shall not be required (a) to transfer on its books
any of the Shares which shall have been sold or transferred in violation of any
of the provisions set forth in this Section 4, or (b) to treat as owner of such
Shares or to pay dividends to any transferee to whom any such Shares shall have
been so sold or transferred.
5. AGREEMENT IN CONNECTION WITH PUBLIC OFFERING.
The Participant agrees, in connection with the initial underwritten
public offering of the Company's securities pursuant to a registration
statement under the Securities Act, (i) not to sell, make short sale of, loan,
grant any options for the purchase of, or otherwise dispose of any shares of
Common Stock held by the Participant (other than those shares included in the
offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company's securities
for a period of 180 days from the effective date of such registration
statement, and (ii) to execute any agreement reflecting clause (i) above as may
be requested by the Company or the managing underwriters at the time of such
offering.
6. WITHHOLDING.
No Shares will be issued pursuant to the exercise of this option
unless and until the Participant pays to the Company, or makes provision
satisfactory to the Company for payment of, any federal, state or local
withholding taxes required by law to be withheld in respect of this option. The
Participant may satisfy such tax obligations in whole or in part in shares of
Common Stock, including shares retained from the Award creating the tax
obligation, valued at their Fair Market Value.
7. NONTRANSFERABILITY OF OPTION.
This option may not be sold, assigned, transferred, pledged or
otherwise encumbered by the Participant, either voluntarily or by operation of
law, except by will or the laws of descent and distribution, and, during the
lifetime of the Participant, this option shall be exercisable only by the
Participant.
8. PROVISIONS OF THE PLAN.
This option is subject to the provisions of the Plan, a copy of which
is furnished to the Participant with this option.
-4-
IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.
CALL TECHNOLOGIES, INC.
Dated: ____________________ By: ____________________________
Name:
Title:
-5-
PARTICIPANT'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company's 1998 Stock Incentive Plan.
PARTICIPANT:
---------------------------------------
Address: ____________________________
____________________________
____________________________
-6-
