EXHIBIT 10.33
BREAKAWAY SOLUTIONS INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
1. GRANT UNDER 1998 STOCK PLAN.
This option is granted pursuant to and is governed by the Company's
1998 Stock Plan (the "Plan") and, unless the context otherwise
requires, terms used herein shall have the same meaning as in the Plan.
Determinations made in connection with this option pursuant to the Plan
shall be governed by the Plan as it exists on this date.
2. GRANT AS NON-QUALIFIED OPTION; OTHER OPTIONS.
This option shall be treated for federal income tax purposes as a
Non-Qualified Option (rather than an incentive stock option). This
option is in addition to any other options heretofore or hereafter
granted to the Employee by the Company or any Related Corporation (as
defined in the Plan), but a duplicate original of this instrument shall
not effect the grant of another option.
3. VESTING OF OPTION IF EMPLOYMENT CONTINUES.
If the Employee has continued to be employed by the Company or any
Related Corporation on the following dates, the Employee may exercise
this option for the number of shares of Common Stock set opposite the
applicable date: (attached as NOTICE OF GRANT OF STOCK OPTIONS AND
OPTION AGREEMENT). Notwithstanding the foregoing, in accordance with
and subject to the provisions of the Plan, the Committee may, in its
discretion, accelerate the date that any installment of this Option
becomes exercisable. The foregoing rights are cumulative and, while the
Employee continues to be employed by the Company or any Related
Corporation, may be exercised on or before the date which is ten (10)
years from the date this option is granted. All of the foregoing rights
are subject to Sections 4 and 5, as appropriate, if the Employee ceases
to be employed by the Company and all Related Corporations.
OPTION ACCELERATION UPON A CHANGE OF CONTROL
If, within twelve (12) months after a Change of Control, the Company
terminates Employee's employment other than for Cause (as defined in
Section 4 below) or materially reduces the Employee's duties or
responsibilities, then the vesting and excercisability of this option
shall automatically accelerate in full. For purposes of this section 3,
"Change of Control" shall mean the occurrence of any of the following
events:
(i) the approval by shareholders of the Company of a
merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent
(50%) of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation;
(ii) any approval by the shareholders of the Company
of a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company; or
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(iii) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as
amended) becoming the "beneficial owner" (as defined in Rule
13d-3 under said Act), directly or indirectly, or securities
of the Company representing 50% or more of the total voting
power represented by the Company's then outstanding voting
securities; PROVIDED HOWEVER that this section shall not apply
to any person or persons who, either individually or jointly,
on the date of this Agreement beneficially owned securities of
the Company representing 50% or more of the total voting power
represented by the Company's then outstanding voting
securities.
4. TERMINATION OF EMPLOYMENT.
(a) TERMINATION OTHER THAN FOR CAUSE.
If the Employee ceases to be employed by the Company and all
Related Corporations other than by reason of death or
disability as defined in Section 5 or termination for Cause as
defined in Section 4(c), no further installments of this
option shall become exercisable, and this option shall
terminate on the earlier of (i) ninety (90) days after the
date of termination of the Employee's employment, or (ii) the
scheduled expiration date of this option. In such a case, the
Employee's only rights hereunder shall be those which are
properly exercised before the termination of this option.
(b) TERMINATION FOR CAUSE.
If the employment of the Employee is terminated for Cause (as
defined in Section 4(c)), this option shall terminate upon the
Employee's receipt of written notice of such termination and
shall thereafter not be exercisable to any extent whatsoever.
DEFINITION OF CAUSE.
For the purpose of this Agreement, "Cause" means: (1)
Optionee's substantial and continuing failure to perform
Optionee's duties and responsibilities as an employee of the
company other than due to death or disability; (2) Optionee's
disloyalty, gross negligence, willful misconduct, dishonesty
or breach of fiduciary duty to the Company; (3) Optionee's
deliberate disregard of material rules, regulations,
instructions, personnel practices and policies of the Company
(as amended from time to time in the Company's sole
discretion) which results in direct or indirect loss, damage
or injury to the Company; (4) Optionee's material breach of
any agreement not to compete with the Company or solicit its
customers, employees or contractors; or (5) Optionee's
conviction of any crime which constitutes a felony in the
jurisdiction involved.
5. DEATH; DISABILITY.
(a) DEATH.
If the Employee ceases to be employed by the Company and all
Related Corporations by reason of his or her death, this
option may be exercised, to the extent otherwise exercisable
on the date of death, by the estate, personal representative
or beneficiary who has acquired this option by will or by the
laws of descent and distribution, until the earlier of (i) the
specified expiration date of this option or (ii) \one hundred
eighty (180) days from the date of the Employee's death.
(b) DISABILITY.
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If the Employee ceases to be employed by the Company and all
Related Corporations by reason of his or her disability (as
defined in Paragraph 10(B) of the Plan), the Employee shall
have the right to exercise this option on the date of
termination of employment, for the number of shares for which
he or she could have exercised it on that date, until the
earlier of (i) the specified expiration date of this option or
(ii) one hundred eighty (180) days from the date of the
termination of the Employee's employment.
(c) EFFECT OF TERMINATION.
At the expiration of the one hundred eighty (180) day period
provided in paragraph (a) or (b) of this Section 5 or the
scheduled expiration date, whichever is the earlier, this
option shall terminate and the only rights hereunder shall be
those as to which the option was properly exercised before
such termination.
6. PARTIAL EXERCISE.
The Employee may exercise this option in part at any time and
from time to time within the above limits, except that the
Optionee may not exercise this option for a fraction of a
share unless such exercise is with respect to the final
installment of stock subject to this option and cash in lieu
of a fractional share must be paid, in accordance with
Paragraph 13(G) of the Plan, to permit the Employee to
exercise completely such final installment. Any fractional
share with respect to which an installment of this option
cannot be exercised because of the limitation contained in the
preceding sentence shall remain subject to this option and
shall be available for later purchase by the Employee in
accordance with the terms hereof.
7. PAYMENT OF PRICE.
The option price shall be paid in United States dollars in
cash or by check.
8. METHOD OF EXERCISING OPTION.
Subject to the terms and conditions of this Agreement, this
option may be exercised by written notice to the Company at
its principal executive office, or to such transfer agent as
the Company shall designate. Such notice shall state the
election to exercise this option and the number of Option
Shares for which it is being exercised and shall be signed by
the person or persons exercising this option. Such notice
shall be accompanied by payment of the full purchase price of
such shares, and the Company shall deliver a certificate or
certificates representing such shares as soon as practicable
after the notice shall be received. Such certificate or
certificates shall be registered in the name of the person or
persons so exercising this option (or, if this option is
exercised by the Employee and if the Employee requests in the
notice exercising this option, shall be registered in the name
of the Employee and another person jointly, with right of
survivorship). In the event this option is exercised, pursuant
to Section 5 hereof, by any person or persons other than the
Employee, such notice shall be accompanied by appropriate
proof of the right of such person or persons to exercise this
option.
9. OPTION NOT TRANSFERABLE.
This option is not transferable or assignable except by will
or by the laws of descent and distribution. During the
Employee's lifetime only the Employee can exercise this
option.
10. NO OBLIGATION TO EXERCISE OPTION.
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The grant and acceptance of this option imposes no obligation
on the Employee to exercise it.
11. NO OBLIGATION TO CONTINUE EMPLOYMENT.
Neither the Plan, this Agreement, nor the grant of this option
imposes any obligation on the Company or any Related
Corporation to continue the Employee in employment.
12. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.
The Employee shall have no rights as a stockholder with
respect to the Option Shares until the date of issuance of a
stock certificate to the Employee. Except as is expressly
provided in the Plan with respect to certain changes in the
capitalization and stock dividends of the Company, no
adjustment shall be made for dividends or similar rights for
which the record date is before the date such stock
certificate is issued.
13. CAPITAL CHANGES AND BUSINESS SUCCESSIONS.
The Plan contains provisions covering the treatment of options
in a number of contingencies such as stock splits and mergers.
Provisions in the Plan for adjustment with respect to stock
subject to options and the related provisions with respect to
successors to the business of the Company are hereby made
applicable hereunder and are incorporated herein by reference.
14. EARLY DISPOSITION.
The Employee agrees to notify the Company in writing
immediately after the Employee transfers any Option Shares, if
such transfer occurs on or before the later of (a) the date
two years after the Grant Date or (b) the date one year after
the date the Employee acquired such Option Shares. The
Employee also agrees to provide the Company with any
information concerning any such transfer required by the
Company for tax purposes.
15. WITHHOLDING TAXES.
If the Company or any Related Corporation in its discretion
determines that it is obligated to withhold any tax in
connection with the exercise of this option, the vesting or
transfer of Option Shares acquired on the exercise of this
option, or the making of a distribution or other payment with
respect to the Option Shares, the Employee hereby agrees that
the Company or any Related Corporation may withhold from the
Employee's wages or other remuneration the appropriate amount
of tax. At the discretion of the Company or Related
Corporation, the amount required to be withheld may be
withheld in cash from such wages or other remuneration or in
kind from the Common Stock or other property otherwise
deliverable to the Employee on exercise of this option. The
Employee further agrees that, if the Company or any Related
Corporation does not withhold an amount from the Employee's
wages or other remuneration sufficient to satisfy the
withholding obligation of the Company or Related Corporation,
the Employee will make reimbursement on demand, in cash, for
the amount underwithheld.
16. COMPANY'S RIGHT OF FIRST REFUSAL.
(a) EXERCISE OF RIGHT.
If the Employee (or successor and assigns) or his or
her legal representative (the "Transferor") desires
to transfer all or any part of the Option Shares to
any person other than the Company (an "Offeror"), the
Transferor shall: (i) obtain in
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writing an irrevocable and unconditional bona fide
offer (the "Offer") for the purchase thereof from the
Offeror; and (ii) give written notice (the "Option
Notice") to the Company setting forth the
Transferor's desire to transfer such shares, which
Option Notice shall be accompanied by a photocopy of
the Offer and shall set forth at least the name and
address of the Offeror and the price and terms of the
bona fide offer. Upon receipt of the Option Notice,
the Company shall have an assignable option to
purchase any or all of such shares (the "Company
Option Shares") specified in the Option Notice, such
option to be exercisable by giving, within 90 days
after receipt of the Option Notice, a written
counter-notice to the Transferor (the
"Counter-Notice"). If the Company elects to purchase
any or all of such Company Option Shares, it shall be
obligated to purchase, and the Transferor shall be
obligated to sell to the Company, such Company Option
Shares that the Company elects to purchase as set
forth in the Counter-Notice at a per share price
equal to the lesser of (i) the per share price (and
on the same terms) indicated in the Offer; or (ii)
the Fair Market value (as defined in Section 17(b)
and using the date of the Option Notice as the date
of determination of Fair Market Value) of such shares
as determined under Section 17(b), in any case within
30 days of the date of delivery by the Company of the
Counter-Notice. If the Company elects to purchase any
or all of such Company Option Shares, it may, in its
sole discretion, pay the purchase price for such
Company option shares in accordance with the terms of
a promissory note, such terms to be determined solely
by the Company; provided, however, that the payment
term of such promissory note shall not exceed ten
(10) years.
(b) SALE OF OPTION SHARES TO OFFEROR.
The Transferor may, for 60 days after the expiration
of the 90-day period during which the Company may
give the Counter-Notice, sell, pursuant to the terms
of the Offer, any or all of such Company Option
Shares not purchased or agreed to be purchased by the
Company or its assignee; PROVIDED, HOWEVER, that the
Transferor shall not sell such Company Option Shares
to the Offeror if the Offeror is a competitor of the
Company and the Company gives a written notice to the
Transferor, within 90 days of its receipt of the
Option Notice, stating that the Transferor shall not
sell such Company Option Shares to such Offeror; and
PROVIDED, FURTHER, that prior to the sale of such
Company Option Shares to the Offeror, the Offeror
shall execute an agreement with the Company pursuant
to which the Offeror agrees to be subject to the
restrictions set forth in Sections 16, 17 and 18
hereof. If any or all of such Company Option Shares
are not sold pursuant to an Offer within the time
permitted above, the unsold Company Option Shares
shall remain subject to the terms of this Section 16
and any future proposed transfer must again comply
with the provisions set forth herein.
(c) ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.
If there shall be any change in the Common Stock of
the Company through merger, consolidation,
reorganization, recapitalization, stock dividend,
stock split, combination or exchange of shares, or
the like, the restrictions contained in this Section
16 shall apply with equal force to additional and/or
substitute securities, if any, received by the
Employee in exchange for, or by virtue of his or her
ownership of, Option Shares.
(d) FAILURE TO DELIVER COMPANY OPTION SHARES.
If the Transferor fails or refuses to deliver on a
timely basis duly endorsed certificates representing
Company Option Shares to be sold to the Company or
its assignee pursuant to this Section 16, the Company
shall have the right to
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deposit the purchase price for such Company Option
Shares in a special account with any bank or trust
company in the Commonwealth of Massachusetts, giving
notice of such deposit to the Transferor, whereupon
such Company Option Shares shall be deemed to have
been purchased by the Company. All such moneys shall
be held by the bank or trust company for the benefit
of the Transferor. All moneys deposited with the bank
or trust company remaining unclaimed for two years
after the date of deposit shall be repaid by the bank
or trust company to the Company on demand, and the
Transferor shall thereafter look only to the Company
for payment.
(e) EXPIRATION OF COMPANY'S RIGHT OF FIRST REFUSAL.
The first refusal rights of the Company set forth in
this Section 16 shall remain in effect until such
time, if ever, as an underwritten public offering is
made of shares of the Company's Common Stock pursuant
to a registration statement filed under the
Securities Act of 1933 or a successor statute, at
which time this Section 16 and the right of first
refusal set forth herein will automatically expire.
17. COMPANY'S RIGHT OF REPURCHASE.
(a) RIGHT OF REPURCHASE.
The Company shall have the right (the "Repurchase
Right") to repurchase from the holder of any Option
Shares (each a "Holder") any or all of the Option
Shares then owned by such Holder at any time by
giving such Holder a written notice (the "Repurchase
Notice") at least 30 days prior to the date of
repurchase. The Repurchase Notice shall set forth the
number of Option Shares to be repurchased (the
"Repurchase Shares"), the Fair Market Value per share
(determined in accordance with Section 17(b) below as
of the date of the Repurchase Notice) of the
Repurchase Shares and the date (the "Repurchase
Date") on which such Repurchase Shares are to be
repurchased by the Company (such date not to be more
than 120 nor less than 30 days after the date of the
Repurchase Notice). On the Repurchase Date, the
Company shall tender to the Holder an amount equal to
the number of Repurchase Shares multiplied by the
Fair Market Value per share; provided, however, that
the Company may pay the repurchase amount, in its
sole discretion, in accordance with the terms of a
promissory note, such terms to be determined solely
by the Company (provided further that the payment
term of such promissory note shall not exceed ten
(10) years). The Company may assign the Repurchase
Right to one or more persons and may utilize a
promissory note to effect its Repurchase right. Upon
timely exercise of the Repurchase Right in the manner
provided in this Section 17(a), the Holder shall
deliver to the Company the stock certificate or
certificates representing the Repurchase Shares, duly
endorsed and free and clear of any and all liens,
charges and encumbrances.
(b) FAIR MARKET VALUE.
For purposes of this Agreement, the Fair Market Value
of an Option Share shall be determined in good faith
by the Board of Directors of the Company after taking
into account all relevant factors including, without
limitation, the absence of an active trading market
for the shares of Common Stock, the restrictions on
transfer of Option Shares set forth herein and the
valuation attached to other recent issuances of
securities by the Company. The determination by the
Board of Directors of Fair Market value shall be
conclusive and binding.
(c) ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.
If there shall be any change in the Common Stock of
the Company through
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merger, consolidation, reorganization,
recapitalization, stock dividend, stock split,
combination or exchange of shares, or the like, the
restrictions contained in this Section 17 shall apply
with equal force to additional and/or substitute
securities, if any, received by the Employee in
exchange for, or by virtue of his or her ownership
of, Option Shares.
(d) FAILURE TO DELIVER REPURCHASE SHARES.
If the Holder fails or refuses to deliver on a timely
basis duly endorsed certificates representing the
Repurchase Shares to be repurchased by the Company or
its assignee pursuant to this Section 17, the Company
shall have the right to deposit the repurchase price
for such Repurchase Shares in a special account with
any bank or trust company in the Commonwealth of
Massachusetts, giving notice of such deposit to the
Holder, whereupon such Repurchase Shares shall be
deemed to have been purchased by the Company. All
such moneys shall be held by the bank or trust
company for the benefit of the Holder. All moneys
deposited with the bank or trust company remaining
unclaimed for two years after the date of deposit
shall be repaid by the bank or trust company to the
Company on demand, and the Holder shall thereafter
look only to the Company for payment.
(e) EXPIRATION OF COMPANY'S REPURCHASE RIGHT.
The Repurchase Right of the Company set forth in this
Section 17 shall remain in effect until such time, if
ever, as an underwritten public offering is made of
shares of the Company's Common Stock pursuant to a
registration statement filed under the Securities Act
or any successor statute, at which time this Section
17 and the Repurchase Right set forth herein will
automatically terminate.
18. LOCK-UP AGREEMENT.
The Employee agrees that in connection with an underwritten
public offering of Common Stock, upon the request of the
Company or the managing or lead underwriter for such public
offering, this option and the Option Shares may not be sold,
offered for sale or otherwise disposed of without the prior
written consent of the Company or such underwriter, as the
case may be, for at least 180 days after the effectiveness of
the registration statement filed in connection with such
offering, or such longer period of time as the Board of
Directors may determine if all of the Company's directors and
officers agree to be similarly bound. The lock-up agreement
established pursuant to this Section 18 shall have perpetual
duration.
19. PROVISION OF DOCUMENTATION TO EMPLOYEE.
By signing this Agreement the Employee acknowledges receipt of
a copy of this Agreement and a copy of the Plan.
20. MISCELLANEOUS.
(a) NOTICES.
All notices hereunder shall be in writing and shall
be deemed given when sent by certified or registered
mail, postage prepaid, return receipt requested, to
the address set forth below. The addresses for such
notices may be changed from time to time by written
notice given in the manner provided for herein.
(b) ENTIRE AGREEMENT; MODIFICATION.
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This Agreement constitutes the entire agreement
between the parties relative to the subject matter
hereof, and supersedes all proposals, written or
oral, and all other communications between the
parties relating to the subject matter of this
Agreement. This Agreement may be modified, amended or
rescinded only by a written agreement executed by
both parties.
(c) SEVERABILITY.
The invalidity, illegality or unenforceability of any
provision of this Agreement shall in no way affect
the validity, legality or enforceability of any other
provision.
(d) SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective
successors and assigns, subject to the limitations
set forth in Sections 9, 16 and 17 hereof.
(e) GOVERNING LAW.
This Agreement shall be governed by and interpreted
in accordance with the laws of the Commonwealth of
Massachusetts, without giving effect to the
principles of the conflicts of laws thereof.
(f) LEGENDS.
The Company may place a legend or legends on any
stock certificate delivered to the any holder of
Option Shares reflecting the restrictions on transfer
provided in this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company and the Employee have caused this
instrument to be executed as of the date first above written.
Breakaway Solutions Inc.
00 Xxxxx Xxxxx
Xxxxxx, XX 00000
/s/ Xxxxx Xxxxxxxx
Employee Signature
By: /s/ Xxx Xxxxxxx
Print Name of Employee Name:
Title:
Street Address
City State Zip Code
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BREAKAWAY SOLUTIONS, INC.
NOTICE OF GRANT OF STOCK OPTIONS ID: 00-0000000
AND OPTION AGREEMENT 00 Xxxxx Xxxxx
0xx Xxxxx
Xxxxxx, XX 00000
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XXXXX X. XXXXXXXX OPTION NUMBER: 00000252
00 XXXXXXXXX XXXXXX XXXX: 98
XXXXXXXXX, XX 00000 ID: 9996
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Effective 3/19/99 (the "Grant Date"), you (the "Employee") have been granted
a(n) Non-Qualified Stock Option 32,455 shares (the "Option Shares") of common
stock, par value $.0001 per share, of Breakaway Solutions (the "Company"), at
$1.5675 per share.
The total option price of the shares granted is $50,873.21.
Shares in each period will become fully vested on the date shown.
Shares Vest Type Full Vest Expiration
------------- -------------- ------------- -------------
18,546 On Vest Date 3/19/00 3/19/09
13,909 Monthly 12/19/00 3/19/09
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By your signature and the Company's signature below, you and the Company
agree that these options are granted under the governed by the terms and
conditions of the Company's Stock Option Plan as amended and the Option
Agreement, all of which are attached and made a part of this document.
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/s/ Xxx Xxxxxxx 4/1/99
--------------------------------------- -------------------------------------
Breakaway Solutions, Inc. Date
/s/ Xxxxx X. Xxxxxxxx 4/1/99
--------------------------------------- -------------------------------------
Xxxxx X. Xxxxxxxx Date
Date: 4/1/99
Time: 12:04:21 PM
