EXHIBIT 99.2
OPENSITE TECHNOLOGIES, INC.
Incentive Stock Option Agreement
An Incentive Stock Option ("Option") is hereby granted by OpenSite
Technologies, Inc., a Delaware Corporation ("Company"), to the employee named
below ("Employee"), for and with respect to common stock of the Company, $.01
par value per share ("Common Stock"), subject to the following terms and
conditions:
1. Option. Subject to the provisions set forth herein and terms and
------
conditions of OpenSite Technologies, Inc. Stock Option Plan ("Plan"), the terms
of which are hereby incorporated by reference, and in consideration of the
agreements of the Employee herein provided, the Company hereby grants the
Employee an option intended to be an Incentive Stock Option within the meaning
of Section 422 of the Internal Revenue Code as amended (the "Code") and
regulations issued thereunder to purchase from the Company the number of shares
of Common Stock, at the exercise price per share and on the schedule, all as set
forth below:
2. Exercise Schedule. The Option shall be exercisable according to
-----------------
the following schedule:
Period of Employment Portion of Total Option
Following Date of Which is
Employment Exercisable
---------- -----------
Less than twelve months 0%
After twelve months 25%
After each of the thirteenth
Through the forty-eighth An additional
month following the date 2.083% per month
of hire
After forty-eight months 100%
No fractional shares of Common Stock shall be issued upon the exercise of an
option.
In addition, the Option shall become immediately exercisable in the
event a "change in control transaction" is consumated and each of the following
conditions occur: (i) the Employee does not hold a manager or more senior
position with the Company, and (ii) the option is not assumed by the successor
in the change in control transaction and (iii) the change in control transaction
is not treated, for accounting purposes, as a pooling of interests. In the event
a change in control transaction is consumated and the Employee holds a manager
or more senior position with the Company, then the Option shall become fully or
partially immediately exercisable as determined by the Committee, in its sole
discretion.
A "change in control transaction" shall mean a transaction described
in Section 12(b)(i) or (ii) of the Plan.
-2-
Notwithstanding the foregoing; an initial Public Offering as defined
in Paragraph 8 below shall not constitute a "change in control transaction."
3. Exercise. Written notice of an election to exercise any portion
--------
of the Option, specifying the portion thereof being exercised and the exercise
date, shall be given by the Employee, or his personal representative in the
event of his death, by delivery or by mailing such notice, postage prepaid,
addressed to the Secretary of the Company at the principal executive offices of
the Company at least three business days prior to the exercise date.
At the time of exercise of the Option, payment of the purchase price
must be made in cash, or if the Committee charged with the administration of the
Plan ("Committee") in its discretion agrees to so accept, then by the delivery
to the Company of other Common Stock owned by the Employee, valued at its fair
market value on the date of exercise, or in some combination of cash and such
Common Stock so valued, or in such other manner of payment as determined by the
Committee.
4 Term. The term of the Option will expire on June 2, 2009 unless
----
sooner terminated.
5. Transfer of Option. The Option may be exercised only by the
------------------
Employee during his lifetime and may not be transferred other than by will or
the applicable laws of descent or distribution. The Option shall not otherwise
be transferred, assigned, pledged or hypothecated for any purpose whatsoever and
is not subject, in whole or in part, to execution, attachment, or similar
process. Any attempted assignment, transfer, pledge or hypothecation or other
disposition of the Option other than in accordance with the terms set forth
herein, shall be void and of no effect.
6. Termination of Employment.
-------------------------
a. If the Employee's employment with the Company is terminated for
any reason, other than death or disability, the Option shall expire on the date
of termination of employment; provided that the Board in its sole discretion by
written notice may permit the Employee to exercise the Option during a period
ending on the earlier of 90 days after such termination of employment and the
date the Option expires in accordance with its terms.
b. If employment of the Employee with the Company is terminated due
to his disability or death, the Option shall expire on the earlier of the first
anniversary of such termination of employment or the date the Option expires in
accordance with its terms. During such period, the Option may be exercised with
respect to the same number of shares of Common Stock, in the same manner, and to
the same extent as if the Employee had continued in employment during such
period and the Option shall be cancelled with respect to all remaining shares
of Common Stock; provided that in the event the Employee shall die at a time
when the Option or a portion thereof, is exercisable by him, the Option shall
be exercisable in whole or in part during the applicable period set forth
herein by a legatee or legatees of the Option under the Employee's will, or by
his executors, personal representatives or distributees with respect to the
number of shares of Common Stock which he could have purchased hereunder on
the date of his death and the Option shall be cancelled with respect to all
remaining shares of Common Stock.
7. No Shareholder Rights. Neither the Employee nor any other person
---------------------
entitled to exercise the Option under the terms hereof shall be, or have any of
the rights or privileges of a
-3-
shareholder of the Company in respect of any of the shares of Common Stock
issuable on exercise of the Option, unless and until the purchase price for
such shares shall have been paid in full.
8. Restriction on Transfer of Shares.
---------------------------------
a. Prior to an Initial Public Offering (as defined below), Employee
may not sell, assign, transfer, pledge, create a security interest in, xxxxx x
xxxx, encumber, give or otherwise dispose of any of the shares of Common Stock
in the Company acquired pursuant to this Option including any additional shares
acquired as a result of a recapitalization, stock split, stock dividend, merger
or other similar event (collectively the "Restricted Shares"), except as
permitted below. "Initial Public Offering" shall mean the effectiveness of the
filing of the first registration statement under the Securities Act that covers
the offer and sale by the Company to the public of Common Stock.
b. The Employee is permitted to transfer any or all of his Restricted
Shares only upon compliance with the following terms and conditions:
(i) The Employee may transfer any Restricted Shares to a family
member, a trust established solely for his benefit and/or the benefit of a
family member or an entity solely owned by him and/or a family member; provided,
however, the Restricted Shares must be transferred subject to the provisions of
this Agreement and prior to the transfer of any Restricted Shares the transferee
shall execute an agreement containing substantially similar terms to those
provided in Paragraphs 8 through 12 of this Agreement. For purposes of this
Agreement, "family member" shall mean a spouse, lineal descendant or adopted
child of such Employee;
(ii) The Employee may transfer any or all of his Restricted Shares,
provided that all such shares are first offered for sale as provided in
Paragraph 8(c) of this Agreement and further provided that the Transferee (as
defined below) executes an agreement containing substantially similar terms to
those provided in Paragraphs 8 through 12 of this Agreement prior to the
transfer of such shares to the Transferee.
c. (i) In the event that the Employee has received an offer to
purchase any Restricted Shares which he desires to accept, he shall first offer
in writing to sell such shares to the Company (the "Offer"). Such Offer shall
state the name and address of the intended transferee (the "Transferee"), the
number of shares proposed to be transferred, the purchase price, the terms of
payment and the other terms and conditions of the proposed transfer. The Offer
shall be delivered to the Company in the manner described in this Option.
(ii) The Company shall have the right to purchase all, but not less
than all, of the shares so offered by written notice to the Employee within
thirty days of the mailing or delivery of the Offer (the "Purchase Right") and
thereafter, if the Company exercises the Purchase Right, the sole right of the
Employee shall be to receive the Purchase Price (as defined below) of the shares
pursuant to this Paragraph.
(iii) The purchase price (the "Purchase Price") of each of the
Restricted Shares subject to the Offer shall be the lesser of the (A) price per
share offered by the Transferee or (B) the Value Per Share as determined below.
The Purchase Price shall be paid upon substantially similar terms and conditions
as set forth in the offer. The closing shall be the later of (1) the 90th day
following written notice of the Company's exercise of the Purchase Right or (2)
the
-4-
10th day following the final determination of the Value Per Share as provided
below, if such a determination is necessary.
(iv) The Value Per Share shall be the fair market value of such
shares subject to the Offer. If the Company believes that the Value Per Share
is less than the offered price, it shall notify the Employee in writing of the
Value Per Share as determined by the Company with the notice of the exercise of
the Purchase Right. Such determination by the Company shall be binding unless
the Employee gives the Company written notice within 10 days of the Company's
notice of the exercise of the Purchase Right that he disagrees with the Value
Per Share as determined by the Company. In such event, the Employee and the
Company shall attempt to agree upon the Value Per Share. If the Employee and
the Company are unable to agree upon the Value Per Share during the 20-day
period immediately following the Employee's written notice of disagreement, then
the Employee and the Company shall each, within ten (10) days after the
expiration of such 20-day period, select an appraiser experienced in the
business of evaluating or appraising the market value of stock and give notice
to the other of the appraiser each has selected. The appraisers so selected
(the "Initial Appraisers") shall within 60 days following the notice of
disagreement, appraise the fair market value of such shares. If the difference
between the resulting appraisals is not greater than ten percent (10%), then
the average of the appraisals shall be deemed the Value Per Share for purposes
of determining the Purchase Price above and no further appraisal of the shares
shall be required. Otherwise, the Initial Appraisers shall select an
additional appraiser (the "Additional Appraiser") who shall be experienced in
a manner similar to the Initial Appraisers. If they fail to select such
Additional Appraisers within 10 days, as provided above, then either the
Employee or the Company may apply, after written notice to the other, to any
judge of any designated court of general jurisdiction for the appointment of
such Additional Appraiser. The Additional Appraiser shall then, within 30 days
of appointment, choose from the values determined by the Initial Appraisers
the value that the Additional Appraiser considers closest to the fair market
value of the shares and such value shall be the Value Per Share for purposes
of determining the Purchase Price. The Additional Appraiser shall forthwith
give written notice of his determination to the Company and the Employee.
(v) Each party shall pay the expenses and fees of the Initial
Appraiser selected by him or it, and, if an Additional Appraiser is employed,
the party who selected the Initial Appraiser whose value determination was
rejected by the Additional Appraiser shall pay the expenses and fees of the
Additional Appraiser.
(vi) If either the Company or the Employee shall fail to appoint an
Initial Appraiser within the time period provided in this Agreement and such
failure shall continue for 10 days after written notice, then the Initial
Appraiser appointed by the party which does appoint an Initial Appraiser shall
alone determine the Value Per Share of the shares offered and such appraisal
shall be binding upon the parties.
(vii) If the Company does not exercise its right to purchase all of
the shares so offered, the Employee shall have the right to sell or transfer the
shares offered within 120 days from the date of the Offer, only to the
Transferee described in the Offer and only under the terms and conditions
specified therein and further provided that the Transferee of the shares
executes an agreement containing substantially similar terms as those provided
in Paragraphs 8 through 12 of this Agreement. Thereafter, the shares sold shall
continue to be subject to this Agreement.
-5-
9. Agreement to Sell. Prior to an Initial Public Offering as
-----------------
defined in Paragraph 8 above, if the Company receives written notice that a
majority of the holders of the Common Stock of the Company, a majority of the
holders of the A Preferred Stock of the Company, a majority of the holders of
the B Preferred Stock of the Company and a majority of the holders of the C
Preferred Stock of the Company have agreed to sell all their shares pursuant to
an offer, the Company may send written notice of such offer to the Employee or
Transferee and the Employee and any Transferee agree to sell all their
Restricted Shares of the Company at the same price per share as provided in the
offer. The offer may provide for payment in any combination of cash or
securities in any other entity whether publicly traded or otherwise and may have
provision for installment payments.
The Employee and Transferee hereby irrevocably constitute and appoint
the Chief Executive Officer of the Company, Xxx Xxxx, or his successor with the
power to appoint his substitute, as his true and lawful attorney in fact with
the full power and authority to act in his name, place and xxxxx, to make,
execute and acknowledge, swear to, file, record, deliver and publish any
documents necessary or convenient to effectuate the sale, transfer or assignment
of shares of the Company in accordance with this Paragraph 9.
10. Terms of Closing.
----------------
a. At the time of the closing of any sale of shares of Common
Stock pursuant to this Agreement, the Employee or Transferee or his personal
representative shall deliver the stock certificate for the shares of Common
Stock to be sold, duly endorsed for transfer, with appropriate stock transfer
stamps affixed thereto.
b. Any sale of shares of Common Stock pursuant to this agreement
shall be free and clear of any and all liens, encumbrances, security interest or
interest of any other person.
11. "Market Stand-Off" Agreement. If requested by the Company
----------------------------
upon the recommendation of the Board of Directors of the Company and an
underwriter of Common Stock (or other securities) of the Company, the Employee
shall not sell or otherwise transfer or dispose of any Restricted Shares of the
Company held by him during the one hundred eighty (180) day period following the
effective date of a registration statement of the Company filed under the
Securities Act, provided that:
a. Such agreement shall apply only with respect to an
underwritten Initial Public Offering; and
b. Other Employees selling Common Stock pursuant to such
registration statement and all officers and directors of the Company enter
into similar agreements.
Such agreement shall be in writing in form satisfactory to the Company
and such underwriter. The Company may impose stop-transfer instructions with
respect to the shares subject to the foregoing restriction until the end of said
one hundred eighty (180) day period.
12. Endorsement of Stock Certificates. The following endorsement
---------------------------------
shall be printed on each share of Common Stock subject to this Agreement:
Any sale, assignment, transfer, pledge or other disposition
of this certificate,
-6-
and all rights represented herein is restricted by, and
subject to, an Incentive Stock Option Agreement, as
amended, and in effect as of the date of this grant, a
copy of which is on file with the Secretary of the
Corporation.
13. Binding Effect. This Agreement shall be binding upon the
--------------
Employee and his heirs, distributees, legal representatives, successors,
transferees and permitted assigns.
Any person taking the shares by operation of law or as permitted under this
Agreement shall acquire the shares subject to the terms and provisions of this
Agreement. The parties shall make, execute and deliver any documents necessary
to carry out the terms or provisions of this Agreement.
14. Surrender. In the event the Option shall be exercised in whole,
---------
this Agreement shall be surrendered to the Company for cancellation. In the
event the Option shall be exercised in part, or a change in the number or
designation of the Common Stock shall be made, this Agreement shall be delivered
by the Employee to the Company for the purpose of making appropriate notation
thereon, or of otherwise reflecting, in such manner as the Company shall
determine, the partial exercise or the change in the number or designation of
the Common Stock.
15. Administration. The Option shall be exercised in accordance with
--------------
such administrative regulations as the Committee shall from time to time adopt
to the extent not inconsistent with Section 422 of the Code and regulations
issued thereunder.
16. Miscellaneous Provisions. All notices, including offers and
------------------------
acceptances, shall deemed to have been given if personally delivered or mailed,
by certified or registered mail, to the parties entitled thereto at their
addresses as contained in the records of the Company. This Agreement shall be
governed by the laws of the State of Delaware. The invalidity or
unenforceability of any particular provision of this Agreement shall not affect
the other provisions hereof, and the Agreement shall be construed in all
respects as if such invalid or unenforceable provisions were omitted. No
modification, termination or waiver shall be valid unless in writing and signed
by the party sought to be charged thereunder. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall be one and the same instrument. Facsimile copies of this
Agreement and the signatures of the parties shall constitute original signatures
and be binding. Whenever from the context, it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in either the masculine or feminine or in the neuter
gender shall include the masculine, feminine and neuter genders.
17. Acceptance. This Option is conditioned upon the Employee's
----------
acceptance of the terms hereof as evidenced by the execution of this Agreement
and the return of an executed copy to the Secretary of the Company.
The Option and this Agreement shall be construed, administered and
governed in all respects under and by the laws of the State of Delaware to the
extent not inconsistent with Section 422 of the Code and regulations issued
thereunder.
