Exhibit (d)(2)
MATRIXONE, INC.
Incentive Stock Option Agreement
MatrixOne, Inc., a Delaware corporation (the "Company"), hereby grants as
of the ((Day)) day of ((Month)), ((Year)), to ((Name)) (the "Employee"), an
option to purchase a maximum of ((Shs)) shares (the "Option Shares") of its
Common Stock, $.01 par value ("Common Stock"), at the price of $((Price)) per
share, on the following terms and conditions:
1. Grant Under 1996 Stock Plan. This option is granted pursuant to and is
governed by the Company's 1996 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 Incentive Stock Option; Other Options. This option is
intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). 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:
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The foregoing to the contrary notwithstanding, if the Board of Directors
of the Company approves a proposed "change in control" of the Company (as
defined in the Plan), if such transaction is thereafter consummated and if the
Employee has continued to be employed by the Company on the date of
consummation, the unvested portion of this option shall be accelerated
and the Employee may exercise this option in full; provided, however, that if
such transaction is intended to be accounted for as a "pooling of interests" for
financial accounting purposes, and if any portion of the foregoing acceleration
of this option would preclude accounting for such transaction as a "pooling of
interests" for financial accounting purposes, the vesting of such portion of
this option shall not be accelerated.
Notwithstanding the foregoing, in the event that any exercise of this
option in whole or in part, or any acceleration of the vesting of such option
due to the provisions set forth above relating to a "change in control" of the
Company, would constitute an "excess parachute payment" as defined in Section
280G(b) of the Code, the exercise or the vesting of that portion of the option
(or any acceleration thereof) shall not be permitted or shall not occur, as the
case may be.
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 hereof, as
appropriate, if the Employee ceases to be employed by the Company and all
Related Corporations.
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 (and may no longer be exercised) on
the earlier of (i) sixty (60) days after the 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.
(c) Definition of Cause: "Cause" shall mean conduct involving one or
more of the following: (i) the substantial and continuing failure of the
Employee, after notice thereof, to render services to the Company or Related
Corporation in accordance with the terms or requirements of his or her
employment; (ii) disloyalty, gross negligence, willful misconduct, dishonesty or
breach of fiduciary duty to the Company or Related Corporation; (iii) the
commission of an act of embezzlement or fraud; (iv) deliberate disregard of the
rules or policies of the Company or Related Corporation which results in direct
or indirect loss, damage or injury to the Company or Related Corporation; (v)
the unauthorized disclosure of any trade secret or confidential information of
the Company or Related Corporation; or (vi) the commission of an
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act which constitutes unfair competition with the Company or Related Corporation
or which induces any customer or supplier to breach a contract with the Company
or Related Corporation.
5. Death; Disability.
(a) Death: If the Employee dies while in the employ of the Company or
any Related Corporation, this option may be exercised, to the extent otherwise
exercisable on the date of his or her death, by the Employee's estate, personal
representative or beneficiary to whom this option has been assigned by will or
the laws of descent and distribution, until the earlier of (i) the specified
expiration date of this option or (ii) 180 days from the date of the Employee's
death.
(b) Disability: If the Employee ceases to be employed by the Company
and all Related Corporations by reason of his or her disability (as defined in
the Plan), this option may be exercised, to the extent otherwise exercisable on
the date of the termination of his or her employment, at any time within 180
days after such termination, but not later than the scheduled expiration date of
this option.
(c) Effect of Termination: At the expiration of the 180-day period
provided in paragraph (a) or (b) of this Section 5 or the scheduled expiration
date of this option, whichever is the earlier, this option shall terminate (and
shall no longer be exercisable) 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 Employee 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. (a) The option price shall be paid in the following
manner:
(i) in United States dollars in cash or by check;
(ii) subject to Section 7(b) below, by delivery of shares of the
Company's Common Stock having a fair market value (as
determined by the Board of Directors of the Company or a
committee appointed by the Board of Directors) equal as of the
date of exercise to the cash exercise price of the option;
(iii) by delivery of an assignment satisfactory in form and
substance to the Company of a sufficient amount of the
proceeds from the sale of the
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Option Shares and an instruction to the broker or selling
agent to pay that amount to the Company; or
(iv) by any combination of the foregoing.
(b) Limitations on Payment by Delivery of Common Stock: If the
Employee delivers Common Stock held by the Employee ("Old Stock") to the Company
in full or partial payment of the option price, and the Old Stock so delivered
is subject to restrictions or limitations imposed by agreement between the
Employee and the Company, an equivalent number of Option Shares shall be subject
to all restrictions and limitations applicable to the Old Stock to the extent
that the Employee paid for the Option Shares by delivery of Old Stock, in
addition to any restrictions or limitations imposed by this Agreement.
Notwithstanding the foregoing, the Employee may not pay any part of the exercise
price hereof by transferring Common Stock to the Company unless such Common
Stock has been owned by the Employee free of any substantial risk of forfeiture
for at least six months.
(c) Permitted Payment by Recourse Note: In addition, if this
paragraph is initialed below by the person signing this Agreement on behalf of
the Company, the option price may be paid by delivery of the Employee's
three-year personal recourse promissory note bearing interest payable not less
than annually at the applicable Federal rate, as defined in Section 1274(d) of
the Code.
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(initials)
8. Restrictions on Resale. Option Shares may not be transferred without
the Company's written consent except by will, by the laws of descent and
distribution. Option Shares will be of an illiquid nature and will be deemed to
be "restricted securities" for purposes of the Securities Act of 1933, as
amended (the "Act"). Accordingly, such shares must be sold in compliance with
the registration requirements of such Act or an exemption therefrom.
9. 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 so 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 shall be exercised by the Employee
and if the Employee shall so request 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 shall be exercised, pursuant to
Section 5 hereof, by any person or persons other than the
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Employee, such notice shall be accompanied by appropriate proof of the right of
such person or persons to exercise this option.
10. 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.
11. No Obligation to Exercise Option. The grant and acceptance of this
option imposes no obligation on the Employee to exercise it.
12. 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.
13. 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 of the
Company, no adjustment shall be made for dividends or similar rights for which
the record date is prior to the date such stock certificate is issued.
14. 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.
15. 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 date
of this Agreement 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.
16. 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 making of a Disqualifying Disposition (as
defined in the Plan), 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
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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.
17. 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 17 shall have perpetual duration.
18. 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.
19. 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: 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 Section 10 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 any holder of Option Shares reflecting the restrictions
on transfer provided in this Agreement.
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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.
MATRIXONE, INC.
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((Name))
___________________________________ By: ______________________________
Xxxxxx Xxxxxxx
___________________________________ __________________________________
City State Zip Code Title
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