KNOWLEDGELINK INTERACTIVE, INC.
1998 STOCK INCENTIVE PLAN
STOCK OPTION GRANT AGREEMENT
This Grant Agreement (the "Agreement") is entered into by and between
KnowledgeLink Interactive, Inc., a Delaware corporation (the "Corporation"),
and ____________ ("Grantee"), effective as of ______________ (the "Grant
Date").
In consideration of the premises, mutual covenants and agreements
herein, the Corporation and Grantee agree as follows:
ARTICLE 1
GRANT OF OPTION
SECTION 1.1 GRANT OF OPTION. The Corporation hereby grants to
Grantee, pursuant to the provisions of the KnowledgeLink Interactive, Inc.
1998 Stock Incentive Plan (the "Plan"), a nonqualified stock option to
purchase from the Corporation, at a price of $___________ per share (the
"Exercise Price"), up to ___________ shares of common stock of the
Corporation, par value of $0.0001 per share ("Stock"), subject to the
provisions of this Agreement (the "Option"). The Option shall expire at 5:00
p.m. Eastern Time on the date ten years and one day after the Grant Date (the
"Expiration Date"), unless fully exercised or terminated earlier pursuant to
this Agreement. Unless stated otherwise herein, capitalized terms in this
Agreement shall have the meaning set forth in the Plan.
ARTICLE 2
VESTING
SECTION 2.1 VESTING SCHEDULE. Unless the Option has earlier
terminated pursuant to the provisions of this Agreement, Grantee shall become
vested in the shares subject to the Option pro rata over three years in
accordance with the vesting schedule attached hereto and made a part hereof
(the "Vesting Schedule"); provided, however, that Grantee shall have been in
the continuous employ of the Corporation from the Grant Date through each
vesting date specified on the Vesting Schedule.
SECTION 2.2 ACCELERATION OF VESTING. Unless the Option has earlier
terminated pursuant to the provisions of the Agreement, vesting of the Option
granted to Grantee hereunder shall be accelerated so that the unvested
portion of the Option shall become one hundred percent (100%) vested in
Grantee upon a Change of Control. For purposes of this Agreement, the term
"Change of Control" shall mean (i) the sale of all or substantially all of
the assets of the Corporation, (ii) the sale of more than fifty percent (50%)
of the outstanding capital stock of the Corporation in a non-public sale,
(iii) the dissolution or liquidation of the Corporation, or (iv) any merger,
share exchange, consolidation or other reorganization or business combination
of the Corporation if
immediately after such transaction either (A) persons who were directors of
the Corporation immediately prior to such transaction do not constitute at
least a majority of the directors of the surviving entity, or (B) persons who
hold a majority of the voting capital stock of the surviving entity are not
persons who held a majority of the voting capital stock of the Corporation
immediately prior to such transaction.
ARTICLE 3
EXERCISE OF OPTION
SECTION 3.1 EXERCISABILITY OF OPTION. Pursuant to the terms of the
Agreement, the Option may be exercised at any time, and from time to time,
with respect to the number of shares subject to the Option in which Grantee
is then vested.
SECTION 3.2 SHAREHOLDERS' AGREEMENT. The Administrator in its sole
discretion may require as a condition precedent to the exercise of the Option
granted pursuant to Section 1.1, that Grantee or such other person exercising
the Option be, or shall execute and become, a party to a Shareholders'
Agreement in substantially in the form attached hereto as Exhibit A.
SECTION 3.3 MANNER OF EXERCISE. The Option may be exercised, in
whole or in part, by delivering written notice to the Administrator in such
form as the Administrator may require from time to time; provided, however,
that the Option may not be exercised at any one time as to fewer than one
hundred (100) shares (or such number of shares as to which the Option is then
exercisable if such number of shares then exercisable is less than one
hundred (100). Such notice shall specify the number of shares of Stock
subject to the Option as to which the Option is being exercised, and shall be
accompanied by full payment of the Exercise Price for such shares. Payment of
the Exercise Price shall be made in cash (or cash equivalents acceptable to
the Administrator in the Administrator's discretion). In the Administrator's
sole and absolute discretion, the Administrator may authorize payment of the
Exercise Price to be made, in whole or in part, by such other means as the
Administrator may prescribe. The Option may be exercised only in multiples of
whole shares and no partial shares shall be issued.
If the Stock is registered under Section 12 of the
Securities Exchange Act of 1934, as amended, the Administrator, subject to
such limitations as it may determine, may authorize payment of the exercise
price, in whole or in part, by delivery of a properly executed exercise
notice, together with irrevocable instructions: (i) to a brokerage firm
approved by the Corporation to deliver promptly to the Corporation the
aggregate amount of sale or loan proceeds to pay the exercise price and any
withholding tax obligations that may arise in connection with the exercise,
and (ii) to the Corporation to deliver the certificates for such purchased
shares directly to such brokerage firm.
SECTION 3.4 ISSUANCE OF SHARES AND PAYMENT OF CASH UPON EXERCISE.
Upon exercise of the Option, in whole or in part, in accordance with the
terms of the Agreement and upon payment of the Exercise Price for the shares
of Stock as to which the Option is exercised and delivery of such executed
Shareholders' Agreement as may be required by
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the Administrator pursuant to Section 3.2, the Corporation shall issue to
Grantee or such other person exercising the Option, as the case may be, the
number of shares of Stock so paid for, in the form of fully paid and
nonassessable Stock and shall deliver certificates therefor as soon as
practicable thereafter. The stock certificates for any shares of Stock issued
hereunder shall, unless such shares are registered or an exemption from
registration is available under applicable federal and state law, bear a
legend restricting transferability of such shares and referencing the
Shareholders' Agreement, if applicable.
ARTICLE 4
TERMINATION OF OPTION
SECTION 4.1 TERMINATION, IN GENERAL. The Option granted hereby shall
terminate and be of no force or effect after the Expiration Date set forth in
Section 1.1, unless terminated prior to such time as provided below.
SECTION 4.2 TERMINATION OF EMPLOYMENT FOR REASON OTHER THAN
RETIREMENT, DEATH OR DISABILITY. Unless the Option has earlier terminated
pursuant to the provisions of the Agreement, the Option shall terminate in
its entirety, regardless of whether the Option is vested in whole or in part,
ninety (90) days after the date Grantee is no longer employed by the
Corporation and its Affiliates for any reason other than Grantee's
Retirement, death or Disability. Unless sooner terminated, the Option shall
terminate upon the expiration of such ninety-day period. Notwithstanding the
foregoing, the Option shall terminate in its entirety, regardless of whether
the Option is vested in whole or in part, upon termination of the employment
of the Grantee by the Corporation or an Affiliate for "Cause".
For purposes of this Section 4.2, "Cause" shall mean (i) gross
negligence or willful misconduct or any substantiated act by Grantee
involving dishonesty or bad faith against the Corporation or an Affiliate, or
any act or omission that demonstrates a lack of integrity of Grantee with
respect to the Corporation or an Affiliate; (ii) Grantee engaging in acts or
omissions the likely consequence of which is material injury to the
Corporation's or an Affiliate's business, property or reputation; (iii)
breach or threatened breach by Grantee of any non-competition or
confidentiality agreement entered into between Grantee and the Corporation or
its Affiliate; (iv) chronic use of alcohol, drugs or other similar substances
affecting Grantee's work performance; or (v) Grantee being convicted of, or
pleading guilty or nolo contendere to, or being indicted for a felony or
other crime involving theft, fraud or moral turpitude. The good faith
determination by the Administrator of whether the Grantee's employment was
terminated by the Corporation for "Cause" (as defined in this Section 4.2)
shall be final and binding for all purposes hereunder.
SECTION 4.3 TERMINATION OF EMPLOYMENT BY REASON OF RETIREMENT.
Unless the Option has earlier terminated pursuant to the provisions of the
Agreement, in the event that Grantee ceases, by reason of Retirement, to be
an employee of the Corporation or an Affiliate, the outstanding Option may be
exercised in whole or in part with respect to the shares of Stock as to which
the Option is vested as of the date of Grantee's
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termination of employment at any time within ninety (90) days after such date
of termination, but not later than the end of the stated term of the Option.
Unless sooner terminated, the Option shall terminate upon the expiration of
such ninety-day period.
For purposes of this Agreement, Retirement shall mean termination of
employment on or after age 65 or termination of employment on or after the
attainment of such younger age and satisfaction of such minimum service
requirement, if any, specified by the Corporation's qualified retirement plan
in effect at such time, but excluding any termination for Cause.
SECTION 4.4 UPON GRANTEE'S DEATH. Unless the Option has earlier
terminated pursuant to the provisions of the Agreement, upon Grantee's death
Grantee's executor, personal representative, or the person to whom the Option
shall have been transferred by will or the laws of descent and distribution,
as the case may be, may exercise all or any part of the outstanding Option
with respect to the shares of Stock as to which the Option is vested as of
the Grantee's date of death, provided such exercise occurs within six (6)
months after the date of Grantee's death, but not later than the end of the
stated term of the Option. Unless sooner terminated, the Option shall
terminate upon the expiration of such six-month period.
SECTION 4.5 TERMINATION OF EMPLOYMENT BY REASON OF DISABILITY.
Unless the Option has earlier terminated pursuant to the provisions of the
Agreement, in the event that Grantee ceases, by reason of Disability, to be
an employee of the Corporation or an Affiliate, the outstanding Option may be
exercised in whole or in part with respect to the shares of Stock as to which
the Option is vested as of the date of Grantee's termination of employment
due to Disability at any time within ninety (90) days after the date of such
termination, but not later than the end of the stated term of the Option.
Unless sooner terminated, the Option shall terminate upon the expiration of
such ninety-day period.
For purposes of this Agreement, Disability shall mean the inability
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period
of not less than twelve (12) months. The Administrator may require such proof
of Disability as the Administrator in its sole discretion deems appropriate
and the Administrator's determination as to whether Grantee is Disabled shall
be final and binding on all parties concerned.
ARTICLE 5
DRAG-ALONG RIGHTS
SECTION 5.1 DRAG-ALONG RIGHTS. If at any time any shareholder of the
Corporation or group of shareholders owning a majority or more of the voting
capital stock of the Corporation proposes to enter into any transaction
involving (i) a sale of more than fifty percent (50%) of the outstanding
voting capital stock of the Corporation in a non-public sale or (ii) any
merger or consolidation of the Corporation immediately after which a majority
of the directors of the surviving entity is not comprised of persons
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who were directors of the Corporation immediately prior to such transaction
or after which persons who hold a majority of the common stock of the
surviving entity are not persons who held voting capital stock of the
Corporation immediately prior to such transaction, the Corporation may
require Grantee to participate in such transaction by giving Grantee written
notice thereof at least ten (10) days in advance of the date of the
transaction or the date that tender is required, as the case may be. Upon
receipt of such notice, Grantee shall sell, assign, tender or transfer the
same percentage of the Option to the extent vested as the percentage of the
shares of Common Stock proposed to be sold, assigned, tendered or transferred
by the transferring shareholders collectively, upon the same terms and
conditions applicable to the transferring shareholders and at a price equal
to the difference between the Exercise Price per share under the Option and
the price per share of Common Stock the transferring shareholders will
receive pursuant to the terms of the transaction. The provisions of this
Section 5.1 shall apply in the event of Grantee's death, to Grantee's
executor, personal representative or the person to whom the Option shall have
been transferred by will or the laws of descent and distribution, as though
such person is Grantee.
ARTICLE 6
MISCELLANEOUS
SECTION 6.1 NON-GUARANTEE OF EMPLOYMENT. Nothing in the Plan or the
Agreement shall be construed as a contract of employment between the
Corporation (or an Affiliate) and Grantee, or as a contractual right of
Grantee to continue in the employ of the Corporation or an Affiliate, or as a
limitation of the right of the Corporation or an Affiliate to discharge
Grantee at any time.
SECTION 6.2 NO RIGHTS OF SHAREHOLDER. Grantee shall not have any of
the rights of a shareholder with respect to the shares of Common Stock that
may be issued upon the exercise of the Option until such shares of Common
Stock have been issued to him upon the due exercise of the Option.
SECTION 6.3 NON-QUALIFIED NATURE OF AGREEMENT. This Agreement is
intended to be an agreement concerning a stock option arrangement which does
not qualify under section 422 of the Internal Revenue Code, and this
Agreement shall be so construed.
SECTION 6.4 THE CORPORATION'S RIGHTS. The existence of this Option
shall not affect in any way the right or power of the Corporation or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Corporation's capital structure or
its business, or any merger or consolidation of the Corporation, or any issue
of bonds, debentures, preferred or other stocks with preference ahead of or
convertible into, or otherwise affecting the Stock or the rights thereof, or
the dissolution or liquidation of the Corporation, or any sale or transfer of
all or any part of the Corporation's assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.
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SECTION 6.5 WITHHOLDING OF TAXES. The Corporation or any Affiliate
shall have the right to deduct from any compensation or any other payment of
any kind (including withholding the issuance of shares of Stock) due Grantee
the amount of any federal, state or local taxes required by law to be
withheld as the result of the exercise of the Option. In lieu of such
deduction, the Administrator may require Grantee to make a cash payment to
the Corporation or an Affiliate equal to the amount required to be withheld.
If Grantee does not make such payment when requested, the Corporation may
refuse to issue any Stock certificate under the Plan until arrangements
satisfactory to the Administrator for such payment have been made.
SECTION 6.6 GRANTEE. Whenever the word "Grantee" is used in any
provision of this Agreement under circumstances where the provision should
logically be construed to apply to the estate, personal representative or
beneficiary to whom this Option may be transferred by will or by the laws of
descent and distribution, the word "Grantee" shall be deemed to include such
person.
SECTION 6.7 NONTRANSFERABILITY OF OPTION. The Option shall be
nontransferable otherwise than by will or the laws of descent and
distribution and (ii) during the lifetime of Grantee, the Option may be
exercised only by Grantee or, during the period Grantee is under a legal
disability, by Grantee's guardian or legal representative. Except as provided
above, the Option may not be assigned, transferred, pledged, hypothecated or
disposed of in any way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment or similar process.
SECTION 6.8 NOTICES. All notices and other communications made or
given pursuant to the Agreement shall be in writing and shall be sufficiently
made or given if hand delivered or mailed by certified mail, addressed to
Grantee at the address contained in the records of the Corporation, or
addressed to the Administrator, care of the Corporation for the attention of
its Secretary at its principal office or, if the receiving party consents in
advance, transmitted and received via telecopy or via such other electronic
transmission mechanism as may be available to the parties.
SECTION 6.9 ENTIRE AGREEMENT; MODIFICATION. The Agreement contains
the entire agreement between the parties with respect to the subject matter
contained herein and may not be modified, except as provided in the Plan or
in a written document signed by each of the parties hereto. Any oral or
written agreements, representations, warranties, written inducements, or
other communications made prior to the execution of the Agreement shall be
void and ineffective for all purposes.
SECTION 6.10 CONFORMITY WITH PLAN. This Agreement is intended to
conform in all respects with, and is subject to all applicable provisions of,
the Plan, which is incorporated herein by reference. Inconsistencies between
this Agreement and the Plan shall be resolved in accordance with the terms of
the Plan. In the event of any ambiguity in the Agreement or any matters as to
which the Agreement is silent, the Plan shall govern.
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SECTION 6.11 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland, other than
the conflict of laws principles thereof.
SECTION 6.12 HEADINGS. The headings in the Agreement are for
reference purposes only and shall not affect the meaning or interpretation
of the Agreement.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized officer as of the date first above written.
ATTEST: KNOWLEDGELINK INTERACTIVE, INC.
By:
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The undersigned hereby acknowledges that he/she has carefully read this
Agreement and the Plan and agrees to be bound by all of the provisions set forth
in such documents.
WITNESS: GRANTEE
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Date:
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Enclosure: KnowledgeLink Interactive, Inc. 1998 Stock Incentive Plan
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VESTING SCHEDULE
(__[NAME]_____ _[DATE]____ STOCK OPTION GRANT)
---------------------------------- -------------------------------- --------------------------------
AGGREGATE AGGREGATE AGGREGATE
PERCENTAGE PERCENTAGE PERCENTAGE
VESTING OF VESTED VESTING OF VESTED VESTING OF VESTED
DATE SHARES DATE SHARES DATE SHARES
---------------------------------- -------------------------------- --------------------------------
1/31/98 2.778% 1/31/99 36.111% 1/31/00 69.444%
---------------------------------- -------------------------------- --------------------------------
2/28/98 5.556% 2/28/99 38.889% 2/29/00 72.222%
---------------------------------- -------------------------------- --------------------------------
3/31/98 8.333% 3/31/99 41.667% 3/31/00 75.000%
---------------------------------- -------------------------------- --------------------------------
4/30/98 11.111% 4/30/99 44.444% 4/30/00 77.778%
---------------------------------- -------------------------------- --------------------------------
5/31/98 13.889% 5/31/99 47.222% 5/31/00 80.556%
---------------------------------- -------------------------------- --------------------------------
6/30/98 16.667% 6/30/99 50.000% 6/30/00 83.333%
---------------------------------- -------------------------------- --------------------------------
7/31/98 19.444% 7/31/99 52.778% 7/31/00 86.111%
---------------------------------- -------------------------------- --------------------------------
8/31/98 22.222% 8/31/99 55.556% 8/31/00 88.889%
---------------------------------- -------------------------------- --------------------------------
9/30/98 25.000% 9/30/99 58.333% 9/30/00 91.667%
---------------------------------- -------------------------------- --------------------------------
10/31/98 27.778% 10/31/99 61.111% 10/31/00 94.444%
---------------------------------- -------------------------------- --------------------------------
11/30/98 30.556% 11/30/99 63.889% 11/30/00 97.222%
---------------------------------- -------------------------------- --------------------------------
12/31/98 33.333% 12/31/99 66.667% 12/31/00 100%
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The number of shares subject to the Option in which the Grantee shall be
vested as of a particular vesting date shall be rounded down to the nearest
whole share. However, vesting will be rounded up to the nearest whole share
with respect to the last vesting date reflected on this Vesting Schedule.
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EXERCISE NOTICE
Administrator of 1998 Stock Incentive Plan
c/o Office of the Corporate Secretary
KnowledgeLink Interactive, Inc.
000 Xxxxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
I, ___________________, hereby exercise the Option granted to me on
________________, by KnowledgeLink Interactive, Inc. (the "Company"), subject
to all the terms and provisions thereof and of the KnowledgeLink Interactive,
Inc. 1998 Stock Incentive Plan (the "Plan"), and notify you of my desire to
purchase ____________ shares of Common Stock of the Company at a price of
$___________ per share pursuant to the exercise of said Option. This will
confirm my understanding with respect to the shares to be issued to me by
reason of this exercise of the Option (the shares to be issued pursuant
hereto shall be collectively referred to hereinafter as the "Shares") as
follows:
(a) I am acquiring the Shares for my own account for
investment with no present intention of dividing my interest with others or
of reselling or otherwise disposing of any of the Shares.
(b) The Shares are being issued without registration under
the Securities Act of 1933, as amended (the "Act"), in reliance upon one or
more exemptions contained in the Act, and such reliance is based in part on
the above representation.
(c) The certificates for the Shares to be issued to me will
bear a legend substantially as follows:
"The securities represented by this stock certificate
have not been registered under the Securities Act of 1933 (the "Act")
or applicable state securities laws (the "State Acts"), and shall not
be sold, pledged, hypothecated, donated, or otherwise transferred
(whether or not for consideration) by the holder except upon the
issuance to the Company of a favorable opinion of its counsel and/or
submission to the Company of such other evidence as may be satisfactory
to counsel for the Company, to the effect that any such transfer shall
not be in violation of the Act and the State Acts.
The transfer of any interest in the securities
represented by this certificate is subject to a Shareholders'
Agreement, dated [DATE OF SHAREHOLDERS' AGREEMENT], by and among
KNOWLEDGELINK INTERACTIVE, INC., a Delaware corporation and [NAME OF
OPTIONEE], and no such transfer may be made without compliance with
that Agreement. A copy of that Agreement is available for inspection by
any shareholder of the Corporation at the office of the Corporation
upon appropriate request and without charge."
Appropriate stop transfer instructions will be issued by the issuer to its
transfer agent.
(d) Since the Shares have not been registered under the
Act, they must be held indefinitely until an exemption from the registration
requirements of the Act is available or they are subsequently registered, in
which event the representation in Paragraph (a) hereof shall terminate. As a
condition to any transfer of the shares, I understand that the issuer will
require an opinion of counsel satisfactory to the issuer to the effect that
such transfer does not require registration under the Act or any state
securities law.
(e) The issuer is not obligated to comply with the
registration requirements of the Act or with the requirements for an
exemption under Regulation A under the Act for my benefit.
(f) I am a party to a Shareholders' Agreement with the
Issuer and others, pursuant to which I have agreed to certain restrictions on
the transferability of the Shares and other matters relating thereto.
Total Amount Enclosed: $
---------
Date:
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(Optionee)
Received by KnowledgeLink Interactive,
Inc. on
, 199
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By:
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