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EXHIBIT 99.3
Partial Acceleration
WEBLINE COMMUNICATIONS CORPORATION
Incentive Stock Option Agreement
Granted Under 1997 Stock Incentive Plan
1. Grant of Option.
This agreement evidences the grant by WebLine Communications
Corporation, a Delaware corporation (the "Company") on ___________ (the "Grant
Date") 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 1997 Stock Incentive Plan (the "Plan"), a total of ________shares of
common stock, .001 par value per share, of the Company ("Common Stock") (the
"Shares") at ________per Share. Unless earlier terminated, this option shall
expire at 5:00 p.m., Eastern time, 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 "First Vesting Date") and as to an additional
6.25% of the original number of Shares at the end of each successive full
three-month period following the First Vesting Date until the third anniversary
of the First Vesting 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.
Fifty percent (50%) of the shares that would become exercisable under
this option on each vesting date will immediately vest should the Company be
acquired or merged with another company (except one in which the holders of
capital stock of the Company immediately prior to consummation of such merger or
acquisition continue to hold at least a majority by voting power of the
surviving entity) (an "Acquisition Event"), provided that the Participant is at
the time of the closing of such Acquisition Event an employee of the Company (or
the Participant's employment by the Company has been terminated by the Company
without Cause, as set forth below). The then remaining unvested fifty percent
(50%) of such shares will continue to vest in accordance with the schedule set
forth in the first paragraph of this Section 2; provided, however, that such
remaining unvested fifty percent (50%) shall immediately vest in the event that,
at any time following the earlier of the signing of a letter of intent for an
Acquisition Event or the signing of a definitive agreement relating to such
Acquisition Event (which such letter of intent (or negotiations relating to the
Acquisition Event) or definitive agreement has not been terminated), the
Participant's employment is terminated by the Company without Cause. For
purposes of this paragraph, the Participant's employment shall be deemed to have
been terminated by the Company without Cause if (i) the Participant is
terminated by the Company without Cause or if, (ii) (A) the Participant is
assigned duties which are materially inconsistent with his former role and
position as a member of the senior management of the Company; (B) the
Participant is asked to relocate beyond a 20-mile radius of the Company's
principal business office on the date hereof; or (C) there is a material
reduction in the Participant's base salary or fringe benefits. "Cause" means a
repeated failure of the Participant to perform his assigned tasks for the
Company notwithstanding a written
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notification from the Company setting forth such failure, or the Participant's
conviction of a felony or any crime involving moral turpitude.
The provisions of the preceding paragraph shall not apply to the extent
that the Board of Directors of the Company, based on consultation with the
Company's independent auditors, determines that the acceleration of the vesting
of any options would adversely impact the ability of the Company to account for
an Acquisition Event as a "pooling of interests" for accounting purposes.
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this option shall be
in writing, substantially in the form attached as Exhibit A, signed by the
Participant and received by the Company at its principal office, accompanied by
this agreement, and payment in full in cash or by check, payable to the order of
the Company. (or by one or more of the following forms: (I) by delivery of
shares of Common Stock owned by the Participant for at least six months; (II) by
delivery of a promissory note of the Participant bearing interest at a fixed
rate equal to the prime rate published in the Wall Street Journal as of the date
of exercise, and payable on demand; or (III) by delivery of an irrevocable
undertaking by a broker to deliver promptly to the Company sufficient funds to
pay the exercise price or delivery of irrevocable instructions to a broker to
deliver promptly to the Company cash or a check sufficient to pay the exercise
price) 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 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.
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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 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;
(4) 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.
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(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 federal, state or local withholding taxes
required by law to be withheld in respect of this option.
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.
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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.
WebLine Communications Corporation
Dated: By:
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Name: Xxxxxx X. Xxxxxxx
Title: President & CEO
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 1997 Stock Incentive Plan.
PARTICIPANT:
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Address:
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