1
EXHIBIT 4.2
OBERON SOFTWARE INCORPORATED
STOCK OPTION AGREEMENT (1990 PLAN)
Oberon Software Incorporated, a Massachusetts corporation (the
"Company"), hereby grants to of ________ (the "Grantee"), an option (the
"Option") to purchase _________ shares of the Company' s Common Stock, pursuant
to the Company's 1990 Stock Option Plan (the "Plan"), a copy of which is
attached hereto and is incorporated herein in its entirety by this reference.
The Grantee hereby accepts the Option granted subject to the terms and
provisions set forth in the Plan and the following additional terms and
provisions:
1. The Option is an incentive stock option.
2. The price at which shares of Common Stock may be purchased pursuant
to the Option is _______ per share, both the price and the number of shares
being subject to adjustment only as provided in the Plan.
3. Subject to the provisions of Section 15 of the Plan, the period for
exercising the Option (the "Exercise Period" ) commences on the date hereof (the
"Grant Date" ) and continues thereafter for five (5) years; provided, however,
that the Option may be exercised during the Exercise Period only to the
following extent, decreased in each case by the aggregate number of shares as to
which it has previously been exercised;
(i) immediately upon the Grant Date, the Option may be exercised
for twenty percent (20%) of the total number of shares subject to this Option
Agreement;
(ii) following the expiration of each six-month period after the
Grant Date, the Option may be exercised for an additional ten percent (10%) of
the total number of shares subject to this Option Agreement; and
(iii) following the expiration of four years after the Grant
Date, the Option may be exercised for all of the shares subject to this Option
Agreement.
If the Grantee retires from the employ of the Company during the
Exercise Period, the Option shall be exercisable by him or her only during the
three months following his or her retirement (but in no event after the
expiration of the Exercise Period) and only as to the number of shares, if any,
as to which it was exercisable immediately prior to retirement.
2
If the Grantee ceases to be an officer, employee, director or consultant
of the Company by reason of his or her death during the Exercise Period, the
Option shall be exercisable by either his or her executor or administrator or,
if not so exercised, by the legatees or the distributees of his or her estate,
only during the six months following his or her death (but in no event after the
expiration of the Exercise Period); provided that a legatee or distributee can
exercise the Option only if such legatee or distributee is the participant's
spouse, issue or a trustee or trustees principally for the benefit of such
spouse and/or any such issue. During such six month period, the Option shall be
exercisable as to the total number of shares subject to this Option Agreement
(decreased by the aggregate number of shares as to which it has previously been
exercised).
If the Grantee ceases to be an officer, employee, director or consultant
of the Company by reason of his or her permanent and total disability (as
determined conclusively by the Company) during the Exercise Period, the Option
shall be exercisable by him or her only during the three months following such
cessation (but in no event after the expiration of the Exercise Period) and as
to the total number of shares subject to this Option Agreement (decreased by the
aggregate number of shares as to which it has previously been exercised).
If the Grantee ceases to be an officer, employee, director or consultant
of the Company other than because of his or her retirement, death or permanent
and total disability during the Exercise Period, the Option shall be exercisable
by him or her only during the thirty days following such cessation (but in no
event after the expiration of the Exercise Period) and only as to the number of
shares, if any, as to which it was exercisable immediately prior to such
cessation.
WARNING: THE OPTION EXERCISE PERIOD MAY BE CUT SHORT IN THE EVENT OF CERTAIN
"REORGANIZATIONS" OR OTHER MAJOR CORPORATE EVENTS. SEE SECTION 15 OF THE PLAN.
4. The Option shall not be exercisable unless the Grantee (i) shall have
represented, warranted and agreed, in form and substance satisfactory to the
Company, at the time of exercising the Option, that he or she is acquiring the
shares for his or her own account, for investment and not with a view to or in
connection with any distribution, (ii) shall have agreed to restrictions on
transfer in form and substance satisfactory to the Company and (iii) shall have
agreed to an endorsement which makes appropriate reference to such
representations, warranties, agreements and restrictions on the certificate(s)
representing the shares.
All shares issued upon exercise of the Option will be subject to
applicable restrictions on transfer (including, without limitation, rights of
first refusal) imposed by Section 17 of the Plan, state and federal securities
laws, the Articles of Organization and the By-Laws of the Company as then in
effect, or this Agreement or any other agreement to which the Grantee is a
party. For the purpose of Section 17 of the Plan, a pledge of, or
3
the granting of a security interest in, the shares issued to the Grantee upon
exercise of the Option will be treated as a transfer.
5. The Option may be exercised, subject to such conditions as the
Company's Board of Directors may require in accordance with the Plan, by the
giving of written notice, by hand or by mail, to the Company's Treasurer at its
principal place of business in Cambridge, Massachusetts, of the election to
purchase shares pursuant hereto, which notice shall specify the number of shares
to be so purchased, accompanied by full payment for the shares purchased,
together with any tax or excise due in respect of issue of such shares, in cash
or by check.
6. Notwithstanding anything to the contrary contained herein, no shares
shall be issued to the Grantee upon exercise of the Option until the Company and
the Grantee have made appropriate arrangements for the withholding of applicable
income taxes, if any, attributable to the exercise of the Option with respect to
such shares, and the Company may require the Grantee to make a cash payment to
the Company in the amount of such taxes required to be withheld.
THE OPTION IS NOT TRANSFERABLE BY THE GRANTEE OTHERWISE THAN BY WILL OR
THE LAWS OF DESCENT AND DISTRIBUTION AND, DURING THE LIFETIME OF THE GRANTEE,
MAY BE EXERCISED ONLY BY THE GRANTEE.
WITNESS the execution hereof under seal as of the seventh day of January, 1997.
OBERON SOFTWARE INCORPORATED
By: ,
------------------------------
Xxxxxx X Xxxxxxxx, President
ACCEPTED:
--------------------------------
Grantee
4
[four year vest]
EXHIBIT 4.2
OBERON SOFTWARE INCORPORATED
Incentive Stock Option Agreement
Granted Under 1998 Stock Incentive Plan
1. Grant of Option.
This agreement evidences the grant by Oberon Software Incorporated, a
Massachusetts 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, $.01 par value per share, of the Company ("Common Stock") (the "Shares")
at $___ per Share. For purposes of this option, the "Vesting Commencement Date"
shall mean ________________. Unless earlier terminated, this option shall expire
on _______________ (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 date twelve months after the Vesting Commencement Date
set forth above and as to an additional 6.25% of the original number of Shares
at the end of each successive full three-month period following thereafter until
the fourth anniversary of the Grant Date. This option shall expire upon, and
will not be exercisable after, the Final Exercise Date.
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.
5
3. Exercise of Option.
(a) 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 in the manner
provided in the Plan, including without limitation Section 5(f)(3) of the
Plan following registration of the Common Stock under the Securities
Exchange Act of 1934. 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.
(b) 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, officer or
director 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").
(c) 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.
(d) 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
2
6
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.
(e) 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 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
3
7
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, 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
4
8
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
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
5
9
federal, state or local withholding taxes required by law to be withheld in
respect of this option. Such withholding includes delivery of shares of Common
Stock pursuant to Section 9(e) of the Plan.
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.
6
10
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 (including without
limitation Section 8(c) thereof), a copy of which is furnished to the
Participant with this option.
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.
OBERON SOFTWARE INCORPORATED
Dated: _________________ By:
------------------------------
NAME: Xxxxxx X. Xxxxxxxx
TITLE: President & CEO
7
11
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:
--------------------------
--------------------------
8
