Incentive Stock Option Agreement ("Agreement") between VCS
Technologies, Inc., a Delaware Corporation (the "Company"), and the key employee
of the Company identified below in Section 1 (the "Optionee").
1 Summary of the Principal Terms of Grant:
GRANT DATE:
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OPTIONEE:
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NUMBER OF SHARES:
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EXERCISE PRICE:
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2 Purpose of Agreement. The Company, through its Board of Directors (the
"Board"), has determined that in order to attract and retain key personnel for
positions of substantial responsibility, to provide additional incentive to
employees of the Company and to promote the success of the Company's business,
it must offer key employees of the Company a chance to participate financially
in the success of the Company by developing an equity interest in the Company.
As a result, the Company adopted the VCS Technologies, Inc. 1997 Incentive Stock
Option Plan (the "Plan"), the terms and conditions of which are incorporated
herein by this reference. Capitalized terms not otherwise defined in this
Agreement shall have the same meaning as ascribed to them in the Plan. By this
Agreement, the Company and the Optionee desire to establish the terms upon which
the Company is willing to grant to the Optionee, and upon which the Optionee is
willing to accept from the Company an option to purchase shares of common stock
of the Company ("Common Stock").
3 Grant of Incentive Stock Option. Subject to the terms and conditions of this
Agreement and those contained in the Plan, the Company grants to the Optionee
the right and option (the "Option") to purchase from the Company all or any part
of an aggregate number of shares of Common Stock described in Section 1 above
(the Option Shares"). The Option granted hereunder shall be an Incentive Stock
Option, as defined in Section 422 of the Internal Revenue Code and as described
in the Plan.
4 Exercise Price. The price to be paid for the Option Shares (the "Exercise
Price") is as inserted in Section 1 above. The Exercise Price is not less than
the Fair Market Value of the Optioned Shares on the Grant Date, or, in the event
the Optionee, on the Grant Date, owns ten percent (10%) or more of the Common
Stock, as such amount is calculated under Section 422A(b)(6) of the internal
Revenue Code, as amended ("Code"), not less than one hundred and ten percent
(110%) of the Fair Market Value of the Optioned Shares.
5 Vesting of Option. Optionee's right to acquire the Option Shares pursuant to
the exercise of an Option will vest as to twenty-five percent (25%) of the
Option Shares on the first anniversary of this Agreement, and as to the
remaining seventy-five percent (75%) of the Option Shares, in equal monthly
increments over the thirty-six (36) month period after the first anniversary of
this Agreement. As provided in the Plan, the Board may waive the foregoing
vesting provisions in whole or in part at any time based on such factors as the
Board determines in its sole discretion.
6 Exercise of Option and Payment of Exercise Price. Subject to the terms and
conditions of this Agreement and those of the Plan, the Option may be exercised
by completing, signing and delivering to the Company a written notice ("Notice")
in the form attached hereto as Exhibit "A". The notice from Optionee shall be
accompanied by payment of the full Purchase Price of such Option Shares in cash
or by personal, cashier's or certified check.
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7 Termination of Option. Except as otherwise provided herein, the Option, to the
extent not exercised, will terminate upon the first to occur of the following:
(i) the date on which the Optionee ceases to be employed by the Company and
expiration of any applicable post-termination exercise periods provided by the
Plan; (ii) upon the anniversary of ten years from the Grant Date; or (iii) as
otherwise provided in the Plan.
8 Stock Certificates. The Company will deliver a certificate or certificates
representing any shares of Common Stock acquired upon the exercise of an Option
as soon as practicable after receipt of the Notice and payment. The certificates
for such shares will be registered in the name of the Optionee; if Optionee
requests in the Notice, the certificate will be registered in the name of the
Optionee and another person jointly, as joint tenants with right of
survivorship. If the Option is exercised by the legal representative of
Optionee's estate, or by any person or persons who acquires the Option directly
from Optionee as a result of Optionee's death, whether by bequest, inheritance,
or otherwise or pursuant to a qualified domestic relations order, the Notice
will be accompanied by appropriate proof of the right of such person or persons
to exercise the Option.
9 Company's Right of First Purchase. For so long as the Common Stock is not
Publicly Traded, any shares of Common Stock issued upon the exercise of an
Option will be subject to the Company's right of first purchase, all as
described in the Plan.
10 Legends on Share Certificates.
10.1 For so long as the Common Stock is not Publicly Traded, in
addition to any other legends which may be prescribed by law, the following
legend (or substantially the following legend) will appear on each certificate
representing the Common Shares issued upon the exercise of each Option:
"The Securities represented by this Certificate have been
issued and are being held pursuant to the 1997 Incentive Stock
Option Plan of VCS Technologies, Inc., and may only be
transferred, sold or otherwise disposed of pursuant to the
terms thereof."
10.2 For so long as the Common Stock is not Publicy Traded, the
certificates representing the Common shares may, at the absolute discretion of
the Company, be subject to a stop transfer order, and bear the following or
substantially similar legend and such other legends as may be required by the
Company:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or any state securities laws and neither such
securities nor any interest therein may be offered, sold,
pledged, assigned or otherwise transferred unless (1) a
registration statement with respect thereto is effective under
the Act and any applicable state securities laws or (2) the
Company receives an opinion of counsel to the holder of such
securities, which counsel and opinion are reasonably
satisfactory to the Company, that such securities may be
offered, sold, pledged, assigned or transferred in the manner
contemplated without an effective registration statement under
the Act or applicable state securities laws."
11 Taxes. Optionee agrees, no later than the date as of which the value of any
Option granted or shares acquired pursuant to this Agreement first becomes
includible in the gross income of the Optionee for federal income tax purposes,
to pay to the Company, or make arrangements satisfactory to the Company
regarding payment of, any federal, state or local taxes of any kind required by
law to be withheld with respect to the Option or such shares. The obligations of
the Company under this Agreement are conditioned on such payment or
arrangements, and the Company will, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to
Optionee.
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12 Nontransferability of Option. The Option is non-transferable otherwise than
by will or the laws of descent and distribution, or pursuant to a qualified
domestic relations order, and the Option may be exercised during the lifetime of
Optionee only by the Optionee.
13 Optionee Not a Shareholder; No Right to Employment. The Optionee is not, for
any purposes, a shareholder of the Company with respect to any of the Option
Shares until such time as the Option is exercised and the Option Share issued to
the Optionee. The receipt of an Option does not give the optionee any right to
continued employment by the Company for any period, nor will the granting of the
Option or the issuance of shares on exercise thereof give the Company any right
to the continued services of the optionee for any period
14 Disputes or Disagreements. As a condition of the granting of the Option
herein granted, the Optionee agrees, for himself and his personal
representatives, that any disputes or disagreement which may arise under or as a
result of or pursuant to this Agreement shall be determined by the Board in its
sole discretion, and that any interpretation by the Board of the terms of this
Agreement will be final, binding and conclusive.
15 Action Taken In Good Faith. No member of the Board, nor any officer or
employee of the Company acting on behalf of the Board will be personally liable
for any action, determination or interpretation taken or made in good faith with
respect to this Agreement.
16 Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of New York.
17 Binding Effect. This Agreement is binding upon, and will inure to the benefit
of the parties hereto and their respective heirs, personal representatives,
successors and assigns.
IN WITNESS WHEREOF, the Company has caused this Option to be executed by its
duly authorized officer effective as of the Grant Date set forth in Section 1
above.
VCS Technologies, Inc.
By:
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William E. Wheaton, III
President
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EXHIBIT A
IRREVOCABLE NOTICE OF EXERCISE
VCS Technologies, Inc.
456 Glenbrook Road
Stamford, CT 06906
tel: (203) 327-3332
fax: (203) 327-3727
I hereby exercise my option(s), granted by VCS Technologies, Inc. (the
"Company"), to acquire shares of the common stock, $0.001 par value, of the
Company (the "Shares"), in accordance with the terms and conditions of the
Incentive Stock Option Agreement(s) described below and issued pursuant to the
VCS Technologies, Inc., 1997 Incentive Stock Option Plan.
Number of Incentive
Stock Options Number of Nonqualified
Date of Grant Exercised Options Exercised Option Price
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I intend to pay for such shares in the following manner:
/ / Enclosed cash or check in the amount of
$ in full payment for such shares.
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/ / Cashless exercise (also attach Irrevocable Instructions to
Broker and Company)
/ / Other suitable form of payment:
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Dated this day of , 19 .
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OPTIONEE:
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(Signature)
(Print Name)
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