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EPOCRATES, INC.
2008 EQUITY INCENTIVE PLAN
OPTION GRANT NOTICE
Epocrates, Inc. (the "Company"), pursuant to its 2008 Equity Incentive Plan (the "Plan"), hereby grants to Optionholder an option to purchase the number of shares of the Company's Common Stock set forth below. This option is subject to all of the terms and conditions as set forth herein and in the Option Agreement, the Plan, and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety.
Optionholder: | ||
Date of Grant: | ||
Vesting Commencement Date: | ||
Number of Shares Subject to Option: | ||
Exercise Price (Per Share): | ||
Total Exercise Price: | ||
Expiration Date: |
Type of Grant(1)(2)
- (1)
- The first shares subject to the option is an Incentive Stock Option. The remaining shares subject to the option is a nonstatutory stock option. In the event shares subject to the option are not vested as part of the Initial Vesting (as such term is defined in Schedule A), the shares subject to the nonstatutory stock option shall revert to and again become available for issuance under the Plan.
- (2)
- An Incentive Stock Option may not be exercised by a net exercise arrangement.
Exercise Schedule: | Same as Vesting Schedule. | |||
Vesting Schedule: | Shares subject to the Option shall vest in accordance with the terms set forth onSchedule A. | |||
Payment: | By one or a combination of the following items (described in the Option Agreement): | |||
ý | By cash or check | |||
ý | Pursuant to a Regulation T Program if the Shares are publicly traded | |||
ý | By delivery of already-owned shares if the Shares are publicly traded | |||
ý | By net exercise, if the Company has established procedures for net exercise(2) |
Additional Terms/Acknowledgements: The undersigned Optionholder acknowledges receipt of, and understands and agrees to, this Option Grant Notice, the Option Agreement, and the Plan. Optionholder further acknowledges that as of the Date of Grant, this Option Grant Notice, the Option Agreement, and the Plan set forth the entire understanding between Optionholder and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements
on that subject with the exception of (i) options previously granted and delivered to Optionholder under the Plan, and (ii) the following agreements only:
OTHER AGREEMENTS: | None | |
EPOCRATES, INC. | OPTIONHOLDER | |||||
By: | ||||||
Signature | Signature | |||||
Title: | Date: | |||||
Date: |
ATTACHMENTS: Option Agreement, 2008 Equity Incentive Plan and Notice of Exercise
SCHEDULE A
OPTIONHOLDER
PERFORMANCE-BASED STOCK OPTION GRANT NOTICE
Shares subject to Performance Based Option | 100% Payout | 125% Payout | ||
---|---|---|---|---|
2009 Bookings | [ ] | [ ] | ||
2009 Revenue | [ ] | [ ] | ||
Modified EBITDA | [ ] | [ ] | ||
Total | [ ] | [ ] |
The Epocrates, Inc. (the "Company") 2009 bookings ("Bookings"), 2009 revenue ("Revenue") and earnings before interests, taxes, depreciation and amortization, as adjusted for certain non-cash items in accordance with the Company's business plan and as determined by the Audit Committee of the Board ("Modified EBITDA") (together, the "Metrics") goals are as set forth below on Table A below:
BOOKINGS | REVENUE | MODIFIED EBITDA | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
% of Plan | 2009 Plan (in 000s) | Payout % | % of Plan | 2009 Plan (in 000s) | Payout % | % of Plan | 2009 Plan (in 000s) | Payout % | |||||||||||||||
£ 75% | 77,471 | 0 | % | £ 90% | 90,910 | 0 | % | £ 70% | 15,688 | 0 | % | ||||||||||||
£ 90% | 92,966 | 75 | % | £ 95% | 95,960 | 75 | % | £ 85% | 19,049 | 75 | % | ||||||||||||
100% | 103,295 | 100 | % | 100% | 101,011 | 100 | % | 100% | 22,411 | 100 | % | ||||||||||||
³ 105% | 108,460 | 125 | % | ³ 105% | 106,062 | 125 | % | ³ 115% | 25,773 | 125 | % |
On the date the 2009 financial results for the Company are available and the Compensation Committee of the Board determines, in its sole discretion, the percentage of plan achieved by the Company for each of the Metrics (the "Payout Determination Date"), the corresponding number of shares ("Milestone Shares") in connection with each of the Metrics prorated in the event performance falls between points on Table A, and rounded to the nearest whole number, will commence vesting. Each of the above Metrics will be assigned equal weight in determining the Milestone Shares. The Milestone Shares shall be subject to vesting at the rate of 1/36th of the Milestone Shares per month commencing on January 1, 2010 (the "Vesting Commencement Date");provided, however, that vesting will cease upon the termination of Optionholder's Continuous Service. For the avoidance of doubt, any shares that would have vested in connection with this vesting schedule between the Vesting Commencement Date and the Payout Determination Date will first vest on the Payout Determination Date. The balance of the shares granted but not included in the Milestone Shares shall revert to and again become available for issuance under the 2008 Equity Incentive Plan. Further, no shares subject to the Option are exercisable until the Payout Determination Date.
For example, in order for Optionholder to achieve vesting of the number of shares specified at the 100% Payout level in the table above, the Company must achieve 100% of plan for Bookings, Revenue and Modified EBITDA, such that [ ] Milestone Shares will commence vesting for each of Bookings, Revenue and Modified EBITDA on the Payout Determination Date. The Milestone Shares shall be subject to continued vesting at the rate of 1/36th of the Milestone Shares per month commencing effective on the Vesting Commencement Date. The balance of the shares not included in the Milestone Shares shall revert to and again become available for issuance under the 2008 Equity Incentive Plan.
In the event, the Company achieves 75% of plan or less for Bookings, 90% of plan or less for Revenue and 70% of plan or less for Modified EBITDA, the Optionholder will not vest any of the shares for any of the Metrics, no shares will vest on the Payout Determination Date and all the Shares shall revert to and again become available for issuance under the 2008 Equity Incentive Plan.
Similarly, in the event the Company achieves 105% of plan or greater for Bookings and Revenue and 115% of plan or greater for Modified EBITDA, the Optionholder will commence vesting as to
125% of [ ] Milestone Shares for each of Bookings, Revenue and Modified EBITDA such that an aggregate of [ ] Milestone Shares will commence vesting on the Payout Determination Date. Such Milestone Shares shall be subject to continued vesting at the rate of 1/36th of the Milestone Shares per month commencing effective on the Vesting Commencement Date.
EPOCRATES, INC. 2008 EQUITY INCENTIVE PLAN OPTION GRANT NOTICE
SCHEDULE A OPTIONHOLDER PERFORMANCE-BASED STOCK OPTION GRANT NOTICE
Table A