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EXHIBIT 99.3
SAGE ENTERPRISES, INC.
1997 AMENDED STOCK OPTION PLAN
1. PURPOSE
This Plan is intended to encourage ownership of Stock by employees and
consultants of the Company and its Affiliates and to provide additional
incentives for them to promote the success of the Company's business. The Plan
is intended to be an incentive stock option plan within the meaning of Section
422 of the Code but not all Options granted hereunder are required to be
Incentive Options.
2. DEFINITIONS
As used in this Plan the following terms shall have the following meanings:
2.1. "Act" means the Securities Act of 1933, as amended.
2.2. "Affiliate" means a parent or subsidiary corporation of the Company,
as defined in Sections 424(e) and (f), respectively, of the Code.
2.3. "Board" means the Company's Board of Directors.
2.4. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any statute successor thereto, and any regulations issued from time
to time thereunder.
2.5. "Committee" means a committee appointed by the Board, responsible for
the administration of the Plan, as provided in Section 5 of the Plan. For any
period during which no such committee is in existence all authority and
responsibility assigned the Committee under the Plan shall be exercised, if at
all, by the Board.
2.6. "Company" means Sage Enterprises, Inc., a corporation organized under
the laws of the Commonwealth of Massachusetts.
2.7. "Employment Agreement" means an agreement, if any, between the Company
and an Optionee, setting forth, inter alia, conditions and restrictions upon the
transfer of shares of Stock.
2.8. "Fair Market Value" means the value of a share of Stock on any date as
determined by the Committee.
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2.9. "Grant Date" means the date as of which an Option is granted, as
determined under Section 7.
2.10. "Incentive Option" means an Option which by its terms is to be
treated as an "incentive stock option" within the meaning of Section 422 of the
Code.
2.11. "Nonstatutory Option" means any Option that is not an Incentive
Option.
2.12. "Option" means an option to purchase shares of Stock granted under
the Plan.
2.13. "Option Agreement" means an agreement between the Company and an
Optionee, setting forth the terms and conditions of an Option.
2.14. "Option Price" means the price paid by an Optionee for a share of
Stock upon exercise of an Option.
2.15. "Optionee" means a person eligible to receive an Option, as provided
in Section 6, to whom an Option shall have been granted under the Plan.
2.16. "Plan" means this 1997 Stock Option Plan of the Company, as amended
from time to time.
2.17. "Stock" means Common Stock, par value $.01 per share, of the Company.
2.18. "Stock Restriction Agreement" means an agreement between the Company
and the Optionee in such form as the Committee may prescribe in connection with
the grant of any Option, setting forth certain restrictions upon the transfer of
shares of Stock.
2.19. "Ten Percent Owner" means a person who owns, or is deemed within the
meaning of Section 422(b)(6) of the Code to own, stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company (or
any Affiliate). Whether a person is a Ten Percent Owner shall be determined with
respect to each Option based on the facts existing immediately prior to the
Grant Date of such Option.
3. TERM OF THE PLAN
Options may be granted hereunder at any time in the period commencing on
the approval of the Plan by the Board and ending immediately prior to the tenth
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anniversary of the earlier of the adoption of the Plan by the Board or approval
of the Plan by the Company's shareholders. Options granted prior to shareholder
approval of the Plan are hereby expressly conditioned upon such approval, and
shall be void ab initio in the event the shareholders of the Company shall fail
to approve the Plan within twelve (12) months of the Board's approval of the
Plan. Stock options granted by the Board prior to the adoption of the Plan by
the Board are deemed to be granted under the Plan; provided, however, that the
inclusion of such stock options under the Plan is subject to the approval of the
Plan by the shareholders of the Company within twelve (12) months of the Board's
approval of the Plan.
4. STOCK SUBJECT TO THE PLAN
At no time shall the number of shares of Stock then outstanding which are
attributable to the exercise of Options granted under the Plan, plus the number
of shares then issuable upon exercise of outstanding Options granted under the
Plan, exceed 1,758,122 shares, subject, however, to the provisions of Section 17
of the Plan. Shares to be issued upon the exercise of Options granted under the
Plan may be either authorized but unissued shares or shares held by the Company
in its treasury. If any Option expires, terminates, or is canceled for any
reason without having been exercised in full, the shares not purchased
thereunder shall again be available for Options thereafter to be granted.
5. ADMINISTRATION
The Plan shall be administered by the Committee. Subject to the provisions
of the Plan, the Committee shall have complete authority, in its discretion, to
make or to select the manner of making the following determinations with respect
to each Option to be granted by the Company in addition to any other
determinations allowed the Committee under the Plan: (a) the employee or
consultant to receive the Option; (b) whether the Option (if granted to an
employee) will be an Incentive Option or Nonstatutory Option; (c) the time of
granting the Option; (d) the number of shares subject to the Option; (e) the
Option Price; (f) the Option period; (g) the Option exercise date or dates; and
(h) the effect of termination of employment or other association with the
Company and its Affiliates on the subsequent exercisability of the Option. In
making such determinations, the Committee may take into account the nature of
the services rendered by the respective employees and consultants, their present
and potential contributions to the success of the Company and its subsidiaries,
and such other factors as the Committee in its discretion shall deem relevant.
Subject to the provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and provisions of the
respective Option Agreements (which
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need not be identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's determinations
made in good faith on matters referred to in this Plan shall be conclusive.
6. ELIGIBILITY
An Option shall be granted only to an employee, director or consultant of
one or more of the Company or an Affiliate.
7. TIME OF GRANTING OPTIONS
The granting of an Option shall take place at the time specified in the
Option Agreement. Only if expressly so provided in the Option Agreement shall
the Grant Date be the date on which an Option Agreement shall have been duly
executed and delivered by the Company and the Optionee.
8. OPTION PRICE
The Option Price under each Incentive Option shall be not less than 100% of
the Fair Market Value of Stock on the Grant Date, or not less than 110% of the
Fair Market Value of Stock on the Grant Date if the Optionee is a Ten Percent
Owner. The Option Price under each Nonstatutory Option shall not be so limited
solely by reason of this Section 8.
9. OPTION PERIOD
No Incentive Option may be exercised on or after the tenth anniversary of
the Grant Date, or on or after the fifth anniversary of the Grant Date, if the
Optionee is a Ten Percent Owner. The Option period under each Nonstatutory
Option shall not be so limited solely by reason of this Section 9. An Option may
be immediately exercisable or become exercisable in such installments,
cumulative or non-cumulative, as the Committee may determine. In the case of an
Option not otherwise immediately exercisable in full the Committee may
accelerate the exercisability of such Option in whole or in part at any time,
provided the acceleration of the exercisability of any Incentive Option would
not cause the Option to fail to comply with the provisions of Section 422 of the
Code.
10. LIMIT ON INCENTIVE OPTION CHARACTERIZATION
An Incentive Option shall be considered to be an Incentive Option only to
the extent that the number of shares of Stock for which the Option first becomes
exercisable in a calendar year do not have an aggregate Fair Market Value (as of
the date of the grant of the Option) in excess of the "current limit". The
current limit for
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any Optionee for any calendar year shall be $100,000 minus the aggregate Fair
Market Value at the date of grant of the number of shares of Stock available for
purchase for the first time in the same year under each other Incentive Option
previously granted to the Optionee under the Plan, and under each other
incentive stock option previously granted to the Optionee under any other
incentive stock option plan of the Company and its Affiliates, after December
31, 1986. Any shares of Stock which would cause the foregoing limit to be
violated shall be deemed to have been granted under a separate Nonstatutory
Option, otherwise identical in its terms to those of the Incentive Option.
11. EXERCISE OF OPTION
An Option may be exercised by the Optionee giving written notice, in the
manner provided in Section 22, specifying the number of shares with respect to
which the Option is then being exercised. The notice shall be accompanied by
payment in the form of cash, or certified or bank check payable to the order of
the Company in an amount equal to the Option Price of the shares to be purchased
or, if the Committee had so authorized on the grant of any particular Option
hereunder (and subject to such conditions, if any, as the Committee may deem
necessary to avoid adverse accounting effects to the Company) by delivery of
that number of shares of Stock having a Fair Market Value equal to the Option
Price of the shares to be purchased. Receipt by the Company of such notice and
payment shall constitute the exercise of the Option. Within 30 days thereafter,
but subject to the remaining provisions of the Plan, the Company shall deliver
or cause to be delivered to the Optionee or his agent a certificate or
certificates for the number of shares then being purchased. Such shares shall be
fully paid and nonassessable. Nothing herein shall be construed to preclude the
Company from participating in a so-called "cashless exercise", provided the
Optionee or other person exercising the Option and each other party involved in
any such exercise shall comply with such procedures, and enter into such
agreements, of indemnity or otherwise, as the Company shall specify.
12. RESTRICTIONS ON ISSUE OF SHARES
12.1. VIOLATION OF LAW
Notwithstanding any other provision of the Plan, if, at any time, in the
reasonable opinion of the Company the issuance of shares of Stock covered by the
exercise of any Option may constitute a violation of law, then the Company may
delay such issuance and the delivery of a certificate for such shares until (i)
approval shall have been obtained from such governmental agencies, other than
the Securities and Exchange Commission, as may be required under any applicable
law, rule, or regulation; and (ii) in the case where such issuance would
constitute a violation of a
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law administered by or a regulation of the Securities and Exchange Commission,
one of the following conditions shall have been satisfied:
(a) the shares with respect to which such Option has been exercised are at
the time of the issue of such shares effectively registered under the Act; or
(b) the Company shall have received an opinion, in form and substance
satisfactory to the Company, from the Company's legal counsel to the effect that
the sale, transfer, assignment, pledge, encumbrance or other disposition of such
Shares or such beneficial interest, as the case may be does not require
registration under the Act or any applicable State securities laws.
The Company shall make all reasonable efforts to bring about the occurrence
of said events.
12.2. EXECUTION OF STOCK RESTRICTION AGREEMENT; INTERPRETATION
Whenever shares are to be issued pursuant to an Option, the Company shall
be under no obligation to issue such shares until such time, if ever, as person
who exercises such Option, in whole or in part, shall have executed and
delivered to the Company the Stock Restriction Agreement specified by the
Committee in connection with the grant of such Option, if any. In the event of
any conflict between the provisions of this Plan and provisions of a Stock
Restriction Agreement or Employment Agreement, the provisions of the Stock
Restriction Agreement or Employment Agreement shall control, but insofar as
possible the provisions of the Plan and any such Agreement shall be construed so
as to give full force and effect to all such provisions.
12.3. PLACEMENT OF LEGENDS
Each certificate representing shares issued upon the exercise of an Option
will bear restrictive legends which may refer to applicable restrictions under
the Stock Restriction Agreement and Employment Agreement, if any.
13. PURCHASE FOR INVESTMENT; SUBSEQUENT REGISTRATION.
13.1. INVESTMENT REPRESENTATIONS
Unless the shares to be issued upon exercise of an Option granted under the
Plan have been effectively registered under the Act, the Company shall be under
no obligation to issue any shares covered by any Option unless the person who
exercises such Option, in whole or in part, shall give a written representation
to the Company which is satisfactory in form and substance to its counsel and
upon which the
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Company may reasonably rely, that he or she is acquiring the shares issued
pursuant to such exercise of the Option of his or her own account for the
purpose of investment and not with a view to, or for sale in connection with the
distribution of any such shares.
13.2. REGISTRATION
If the Company shall deem it necessary or desirable to register under the
Act or other applicable statutes any shares with respect to which an Option
shall have been granted, or to qualify any such shares for exemption from the
Act or other applicable statutes, then the Company shall take such action at its
own expense. The Company may require from each Option holder or each holder of
shares of Stock acquired pursuant to the Plan, such information in writing for
use in any registration statement, prospectus, preliminary prospectus or
offering circular as is reasonably necessary for such purpose and may require
reasonable indemnity to the Company and its officers and directors from such
holder against all losses, claims, damage and liabilities arising from such use
of the information so furnished and caused by any untrue statement of any
material fact therein or caused by the omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made. In
addition, the Company may require of any such person that he or she agree that,
without the prior written consent of the Company or such managing underwriter,
he or she will not sell, make any short sale of, loan, grant any option for the
purchase of, pledge or otherwise encumber, or otherwise dispose of, any shares
of Stock during the 180 day period commencing on the effective date of the
registration statement relating to such underwritten public offering of
securities.
13.3. PLACEMENT OF LEGENDS, STOP ORDERS, ETC.
Each share of Stock issued pursuant to any Option granted under this Plan
may bear a reference to the investment representation made in accordance with
Section 13.1 in addition to any other applicable restriction under the Plan and
the terms of the Option and to the fact that no registration statement has been
filed with the Securities and Exchange Commission in respect to said Stock. All
certificates for shares of Stock or other securities delivered under the Plan
shall be subject to such stock-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of any stock exchange upon which the Stock is then listed, and any
applicable Federal or state securities law, and the Committee may cause a legend
or legends to be put on any such certificates to make appropriate reference to
such restrictions.
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14. WTHHOLDING; NOTICE OF DISPOSITION OF STOCK PRIOR TO EXPIRATION OF SPECIFIED
HOLDING PERIOD
14.1. TAX WITHHOLDING
Whenever shares are to be issued in satisfaction of an Option granted
hereunder, the Company shall have the right to require the Optionee to remit to
the Company an amount sufficient to satisfy federal, state, local or other
withholding tax requirements if and to the extent required by law (whether so
required to secure for the Company an otherwise available tax deduction or
otherwise) prior to the delivery of any certificate or certificates for such
shares.
14.2. NOTIFICATION OF DISPOSITION
Each person exercising any Incentive Option granted under the Plan shall be
deemed to have covenanted with the Company to report to the Company any
disposition of such shares prior to the expiration of the holding periods
specified by Section 422(a)(1) of the Code and if and to the extent that the
realization of income in such a disposition imposes upon the Company federal,
state, local or other withholding tax requirements or any such withholding is
required to secure for the Company an otherwise available tax deduction, to
remit to the Company an amount in cash sufficient to satisfy those requirements.
15. TERMINATION OF ASSOCIATION WITH THE COMPANY
Unless the Committee shall provide otherwise in the grant of a particular
Option under the Plan, if the Optionee's employment or other association with
the Company is terminated, whether voluntarily or otherwise, the Option shall
immediately cease to be exercisable in any respect. Military or sick leave shall
not be deemed a termination of employment or other association, provided that it
does not exceed the longer of 90 days or the period during which the absent
Optionee's reemployment rights, if any, are guaranteed by statute or by
contract.
16. TRANSFERABILITY OF OPTIONS
Options shall not be transferable, other than by will or the laws of
descent and distribution, and may be exercised during the life of the Optionee
only by the Optionee and except as otherwise provided hereinbelow.
Notwithstanding the foregoing, the Committee may, in its discretion, authorize
all or a portion of the options to be granted to an Optionee to be on terms
which permit transfer by such Optionee to (i) the spouse, former spouse,
children (including stepchildren) or grandchildren of the Optionee ("Immediate
Family Members"), (ii) a trust or trusts for
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the exclusive benefit of such Immediate Family Members, (iii) a partnership in
which such Immediate Family Members are the only partners including family
limited partnerships controlled by the Optionee or (iv) to any other persons or
entities in the discretion of the Committee, provided that (x) the Option
Agreement pursuant to which such Options are granted must be approved by the
Committee, and must expressly provide for transferability in a manner consistent
with this Section 16, and (y) subsequent transfers of transferred options shall
be prohibited except those in accordance with this Section 16 (by will or the
laws of descent and distribution). Following transfer, any such options shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that for purposes of this Section 16
hereof the term "Optionee" shall be deemed to refer to the transferee. The
events of termination of association of Section 15 hereof shall continue to be
applied with respect to the original Optionee, following which the options shall
be exercisable by the transferee only to the extent, and for the periods
specified at Section 15.
17. ADJUSTMENTS FOR CORPORATE TRANSACTIONS
17.1. STOCK DIVIDEND, ETC.
In the event of any stock dividend payable in Stock or any split-up or
contraction in the number of shares of Stock after the date of the Option
Agreement and prior to the exercise in full of the Option, the number of shares
subject to such Option Agreement and the price to be paid for each share subject
to the Option shall be proportionately adjusted.
17.2. STOCK RECLASSIFICATION
In the event of any reclassification or change of outstanding shares of
Stock, shares of stock or other securities equivalent in kind and value to those
shares an Optionee would have received if he or she had held the full number of
shares of Stock subject to the Option immediately prior to such reclassification
or change and had continued to hold those shares (together with all other
shares, stock and securities thereafter issued in respect thereof) to the time
of the exercise of the Option shall thereupon be subject to the Option.
17.3. CONSOLIDATION OR MERGER
If the Company is to be consolidated with or acquired by another entity in
a merger, sale of all or substantially all of the Company's assets or otherwise
(an "Acquisition"), the Committee or the board of directors of any entity
assuming the obligations of the Company hereunder (the "Successor Board"),
shall, as to
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outstanding Options, either (i) make appropriate provision for the continuation
of such Options by substituting on an equitable basis for the shares then
subject to such Options the consideration payable with respect to the
outstanding shares of Common Stock in connection with the Acquisition; or (ii)
upon written notice to the Optionees, provide that all Options must be
exercised, to the extent then exercisable, within a specified number of days of
the date of such notice, at the end of which period the Options shall terminate;
or (iii) terminate all Options in exchange for a cash payment equal to the
excess of the Fair Market Value of the shares subject to such Options (to the
extent then exercisable) over the exercise price thereof.
17.4. DISSOLUTION OR LIQUIDATION
Upon dissolution or liquidation of the Company, the Option shall terminate,
but the Optionee (if at the time in the employ of or otherwise associated with
the Company or any of its Affiliates) shall have the right, immediately prior to
such dissolution or liquidation, to exercise the Option to the extent
exercisable on the date of such dissolution or liquidation.
17.5. RELATED MATTERS
Any adjustment required by this Section 17 shall be determined and made by
the Committee. No fraction of a share shall be purchasable or deliverable upon
exercise, but in the event any adjustment hereunder of the number of shares
covered by the Option shall cause such number to include a fraction of a share,
such number of shares shall be adjusted to the nearest smaller whole number of
shares. In the event of changes in the outstanding Stock by reason of any stock
dividend, split-up, contraction, reclassification, or change of outstanding
shares of Stock of the nature contemplated by this Section 17, the number of
shares of Stock available for the purposes of the Plan as stated in Section 4
shall be correspondingly adjusted.
18. RESERVATION OF STOCK
The Company shall at all times during the term of the Plan and any
outstanding Options granted hereunder reserve or otherwise keep available such
number of shares of Stock as will be sufficient to satisfy the requirements of
the Plan (if then in effect) and such Options and shall pay all fees and
expenses necessarily incurred by the Company in connection therewith.
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19. LIMITATION OF RIGHTS IN STOCK; NO SPECIAL EMPLOYMENT OR OTHER RIGHTS
The Optionee shall not be deemed for any purpose to be a shareholder of the
Company with respect to any of the shares of Stock covered by an Option, except
to the extent that the Option shall have been exercised with respect thereto
and, in addition, a certificate shall have been issued therefor and delivered to
the Optionee or his agent. Any Stock issued pursuant to the Option shall be
subject to all restrictions upon the transfer thereof which may be now or
hereafter imposed by the Certificate of Incorporation, the By-laws of the
Company, the Stock Restriction Agreement and the Employment Agreement. Nothing
contained in the Plan or in any Option Agreement shall confer upon any Optionee
any right with respect to the continuation of his or her employment or other
association with the Company (or any Affiliate), or interfere in any way with
the right of the Company (or any Affiliate), subject to the terms of any
separate employment or consulting agreement or provision of law or corporate
articles or by-laws to the contrary, at any time to terminate such employment or
consulting agreement or to increase or decrease the compensation of the Optionee
from the rate in existence at the time of the grant of an Option.
20. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board nor the submission of the
Plan to the shareholders of the Company shall be construed as creating any
limitations on the power of the Board to adopt such other incentive arrangement
as it may deem desirable, including without limitation, the granting of stock
options other than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.
21. TERMINATION AND AMENDMENT OF THE PLAN
The Board may at any time terminate the Plan or make such modifications of
the Plan as it shall deem advisable. No termination or amendment of the Plan
may, without the consent of the Optionee to whom any Option shall therefore have
been granted, adversely affect the rights of such Optionee under such Option.
22. NOTICES AND OTHER COMMUNICATIONS
Any notice, demand, request or other communication hereunder to any party
shall be deemed to be sufficient if contained in a written instrument delivered
in person or duty sent by first class registered, certified or overnight mail,
postage prepaid, or telecopied with a confirmation copy by regular certified or
overnight mail, addressed or telecopied, as the case may be, (i) if to the
Optionee, at his or her
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residence address last filed with the Company and (ii) if to the Company, at 17
Sellers Street, 2nd Floor, Cambridge, MA 02139, Attention: President,
Telecopier: (617) 621-1578 or to such other address or telecopier number, as the
case may be, as the addressee may have designated by notice to the addresser.
All such notices, requests, demands and other communications shall be deemed to
have been received: (i) in the case of personal delivery, on the date of such
delivery; (ii) in the case of mailing, when received by the addressee; and (iii)
in the case of facsimile transmission, when communicated by facsimile machine
report.
23. GOVERNING LAW
The Plan and all Options and actions taken thereunder shall be governed,
interpreted and enforced in accordance with the laws of the Commonwealth of
Massachusetts, without regard to the conflict of laws principles thereof.
* * * * * *
The following does not form part of this Plan but is included solely for
information purposes:
Date of Board Approval: October 1, 1997
Date of Shareholder Approval: October 1, 1997
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