BroadSoft, Inc. Amended and Restated 2009 Equity Incentive Plan Option Agreement (Incentive Stock Option or Nonstatutory Stock Option)
Exhibit 10.6
BroadSoft, Inc.
Amended and Restated 2009 Equity Incentive Plan
Amended and Restated 2009 Equity Incentive Plan
Option Agreement
(Incentive Stock Option or Nonstatutory Stock Option)
(Incentive Stock Option or Nonstatutory Stock Option)
Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Option Agreement,
BroadSoft, Inc. (the “Company”) has granted you an option under its Amended and Restated 2009
Equity Incentive Plan (the “Plan”) to purchase the number of shares of the Company’s Common Stock
indicated in your Grant Notice at the exercise price indicated in your Grant Notice. Defined terms
not explicitly defined in this Option Agreement but defined in the Plan shall have the same
definitions as in the Plan.
The details of your option are as follows:
1. Vesting. Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.
2. Number of Shares and Exercise Price. The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments.
3. Exercise Restriction for Non-Exempt Employees. In the event that you are an
Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended
(i.e., a “Non-Exempt Employee”), and except as otherwise provided in the Plan, you may not exercise
your option until you have completed at least six (6) months of Continuous Service measured from
the Date of Grant specified in your Grant Notice, notwithstanding any other provision of your
option.
4. Method of Payment. Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any other manner permitted by your Grant Notice, which may include one or more of the
following:
(a) Provided that at the time of exercise the Common Stock is publicly traded, pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the
issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the
receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the
sales proceeds.
(b) Provided that at the time of exercise the Common Stock is publicly traded, by delivery to
the Company (either by actual delivery or attestation) of already-owned shares of Common Stock that
are owned free and clear of any liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise. “Delivery” for these purposes, in the sole
discretion of the Company at the time you exercise your option, shall
1.
include delivery to the Company of your attestation of ownership of such shares of Common
Stock in a form approved by the Company. Notwithstanding the foregoing, you may not exercise your
option by tender to the Company of Common Stock to the extent such tender would violate the
provisions of any law, regulation or agreement restricting the redemption of the Company’s stock.
(c) If the Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to
Section 5(c)(iv) of the Plan, or any successor provision.
5. Whole Shares. You may exercise your option only for whole shares of Common Stock.
6. Securities Law Compliance. Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.
7. Term. You may not exercise your option before the commencement of its term or
after its term expires. The term of your option commences on the Date of Grant and expires,
subject to the provisions of Section 5(h) of the Plan, upon the earliest of the following:
(a) three (3) months after the termination of your Continuous Service for any reason other
than Disability or death, provided that if during any part of such three (3)-month period you may
not exercise your option solely because of the condition set forth in Section 6 above entitled
“Securities Law Compliance,” your option shall not expire under this Section 7(a) until it shall
have been exercisable for an aggregate period of three (3) months after the termination of your
Continuous Service; and if (i) you are a Non-Exempt Employee, (ii) your Continuous Service
terminates within six (6) months after the Date of Grant specified in your Grant Notice, and (iii)
you have vested in a portion of your option at the time of your termination of Continuous Service,
your option shall not expire until the earlier of (x) the later of (A) the date that is seven (7)
months after the Date of Grant specified in your Grant Notice, or (B) the date that is three (3)
months after the termination of your Continuous Service, or (y) the Expiration Date;
(b) twelve (12) months after the termination of your Continuous Service due to your
Disability;
(c) eighteen (18) months after your death if you die either during your Continuous Service or
within three (3) months after your Continuous Service terminates;
(d) the Expiration Date indicated in your Grant Notice; or
(e) the day before the tenth (10th) anniversary of the Date of Grant.
2.
If your option is an Incentive Stock Option, note that, to obtain the federal income tax
advantages associated with an Incentive Stock Option, the Code requires that at all times beginning
on the date of grant of your option and ending on the day three (3) months before the date of your
option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of
your death or Disability. The Company has provided for extended exercisability of your option
under certain circumstances for your benefit but cannot guarantee that your option will necessarily
be treated as an Incentive Stock Option if you continue to provide services to the Company or an
Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise
your option more than three (3) months after the date your employment terminates.
8. Exercise.
(a) You may exercise the vested portion of your option during its term by delivering a Notice
of Exercise (in a form designated by the Company) together with the exercise price to the Secretary
of the Company, or to such other person as the Company may designate, during regular business
hours, together with such additional documents as the Company may then require.
(b) By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of
your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (iii) the disposition of shares of Common Stock
acquired upon such exercise.
(c) If your option is an Incentive Stock Option, by exercising your option you agree that you
will notify the Company in writing within fifteen (15) days after the date of any disposition of
any of the shares of the Common Stock issued upon exercise of your option that occurs within two
(2) years after the date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option.
9. Transferability. Except as otherwise provided in this Section 9, your option is
not transferable, except by will or by the laws of descent and distribution, and is exercisable
during your life only by you.
(a) Certain Trusts. Upon receiving written permission from the Board or its duly authorized
designee, you may transfer your option to a trust if you are considered to be the sole beneficial
owner (determined under Section 671 of the Code and applicable state law) while the option is held
in the trust, provided that you and the trustee enter into transfer and other agreements required
by the Company.
(a) Domestic Relations Orders. Upon receiving written permission from the Board or its duly
authorized designee, and provided that you and the designated transferee enter into transfer and
other agreements required by the Company, you may transfer your option pursuant to a domestic
relations order that contains the information required by the Company to effectuate the transfer.
You are encouraged to discuss the proposed terms of any division of this
3.
option with the Company prior to finalizing the domestic relations order to help ensure the
required information is contained within the domestic relations order. If this option is an
Incentive Stock Option, this option may be deemed to be a Nonstatutory Stock Option as a result of
such transfer.
(b) Beneficiary Designation. Upon receiving written permission from the Board or its duly
authorized designee, you may, by delivering written notice to the Company, in a form provided by or
otherwise satisfactory to the Company, designate a third party who, in the event of your death,
shall thereafter be entitled to exercise this option and receive the Common Stock or other
consideration resulting from such exercise. In the absence of such a designation, your executor or
administrator of your estate shall be entitled to exercise this option and receive, on behalf of
your estate, the Common Stock or other consideration resulting from such exercise.
(c) By exercising your option you agree that you shall not sell, dispose of, transfer, make
any short sale of, grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, any shares of Common Stock or other securities
of the Company held by you, during the one hundred eighty- (180-) day period following the
effective date of a registration statement of the Company filed under the Securities Act or such
longer period as necessary to permit compliance with FINRA Rule 2711 or NYSE Member Rule 472 and
similar rules and regulations (the “Lock-Up Period”); provided, however, that nothing contained in
this section shall prevent the exercise of a repurchase option, if any, in favor of the Company
during the Lock-Up Period. You further agree to execute and deliver such other agreements as may
be reasonably requested by the Company and/or the underwriter(s) that are consistent with the
foregoing or that are necessary to give further effect thereto. To enforce the foregoing covenant,
the Company may impose stop-transfer instructions with respect to your shares of Common Stock until
the end of such period. The underwriters of the Company’s stock are intended third party
beneficiaries of this Section 9(d) and shall have the right, power and authority to enforce the
provisions hereof as though they were a party hereto.
10. Option not a Service Contract. Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.
11. Withholding Obligations.
(a) At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
“cashless exercise” pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with the exercise of your option.
4.
(b) Upon your request and subject to approval by the Company, in its sole discretion, and in
compliance with any applicable legal conditions or restrictions, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or
such lower amount as may be necessary to avoid classification of your option as a liability for
financial accounting purposes). If the date of determination of any tax withholding obligation is
deferred to a date later than the date of exercise of your option, share withholding pursuant to
the preceding sentence shall not be permitted unless you make a proper and timely election under
Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon
such exercise with respect to which such determination is otherwise deferred, to accelerate the
determination of such tax withholding obligation to the date of exercise of your option.
Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from
fully vested shares of Common Stock determined as of the date of exercise of your option that are
otherwise issuable to you upon such exercise. Any adverse consequences to you arising in
connection with such share withholding procedure shall be your sole responsibility.
(c) You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock unless such obligations are satisfied.
12. Tax Consequences. You hereby agree that the Company does not have a duty to
design or administer the Plan or its other compensation programs in a manner that minimizes your
tax liabilities. You shall not make any claim against the Company, or any of its Officers,
Directors, Employees or Affiliates related to tax liabilities arising from your option or your
other compensation. In particular, you acknowledge that this option is exempt from Section 409A of
the Code only if the exercise price per share specified in the Grant Notice is at least equal to
the “fair market value” per share of the Common Stock on the Date of Grant and there is no other
impermissible deferral of compensation associated with the option.
13. Notices. Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
14. Governing Plan Document. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations, which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
15. No Obligation to Notify. The Company shall have no duty or obligation to advise
you as to the time or manner of exercising your option. Furthermore, the Company shall have no
duty or obligation to warn or otherwise advise you of a pending termination or
5.
expiration of the option or a possible period in which the option may not be exercised. The
Company has no duty or obligation to minimize the tax consequences of the option to you.
16. Choice of Law. The interpretation, performance and enforcement of this Option
Agreement shall be governed by the law of the state of Delaware without regard to such state’s
conflicts of laws rules. Subject to the requirements of Section 2(f) of the Plan, Participant
consents to the jurisdiction of the state and federal courts encompassing the then current location
of the Company’s principal office for the resolution of any (a) proceedings brought to enforce the
Company’s or Participant’s obligations to arbitrate under the Plan or (b) proceedings, relating to
matters outside the scope of the arbitration provisions in the Plan.
* * *
This Option Agreement shall be deemed to be signed by the Company and Participant upon the
signing by Participant of the Grant Notice to which it is attached.
6.