Exhibit 10.17
THE COUNSELL GROUP, INC.
INCENTIVE STOCK OPTION AGREEMENT
1. GRANT UNDER 1998 STOCK PLAN.
This option is granted pursuant to and is governed by the Company's
1998 Stock Plan (the "Plan") and, unless the context otherwise
requires, terms used herein shall have the same meaning as in the Plan.
Determinations made in connection with this option pursuant to the Plan
shall be governed by the Plan as it exists on this date.
2. GRANT AS INCENTIVE STOCK OPTION; OTHER OPTIONS.
This option is intended to qualify as an incentive stock option under
Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). This option is in addition to any other options heretofore or
hereafter granted to the Employee by the Company or any Related
Corporation (as defined in the Plan), but a duplicate original of this
instrument shall not effect the grant of another option.
3. VESTING OF OPTION IF EMPLOYMENT CONTINUES.
If the Employee has continued to be employed by the Company or any
Related Corporation on the following dates, the Employee may exercise
this option for the number of shares of Common Stock set opposite the
applicable date: (attached as Schedule A.) Notwithstanding the
foregoing, in accordance with and subject to the provisions of the
Plan, the Committee may, in its discretion, accelerate the date that
any installment of this Option becomes exercisable. The foregoing
rights are cumulative and, while the Employee continues to be employed
by the Company or any Related Corporation, may be exercised on or
before the date which is ten (10) years from the date this option is
granted. All of the foregoing rights are subject to Sections 4 and 5,
as appropriate, if the Employee ceases to be employed by the Company
and all Related Corporations.
4. TERMINATION OF EMPLOYMENT.
(a) TERMINATION OTHER THAN FOR CAUSE.
If the Employee ceases to be employed by the Company and all
Related Corporations, other than by reason of death or
disability as defined in
Section 5 or termination for Cause as defined in Section 4(c),
no further installments of this option shall become
exercisable, and this option shall terminate on the earlier of
(i) thirty (30) days after the date of termination of the
Employee's employment, or (ii) the scheduled expiration date
of this option. In such a case, the Employee's only rights
hereunder shall be those which are properly exercised before
the termination of this option.
(b) TERMINATION FOR CAUSE.
If the employment of the Employee is terminated for Cause (as
defined in Section 4(c)), this option shall terminate upon the
Employee's receipt of written notice of such termination and
shall thereafter not be exercisable to any extent whatsoever.
(c) DEFINITION OF CAUSE.
"Cause" shall mean conduct involving one or more of the
following: (i) the substantial and continuing failure of the
Employee, after notice thereof, to render services to the
Company or Related Corporation in accordance with the terms or
requirements of his or her employment; (ii) disloyalty, gross
negligence, willful misconduct, dishonesty or breach of
fiduciary duty to the Company or Related Corporation; (iii)
the commission of an act of embezzlement or fraud; (iv)
deliberate disregard of the rules or policies of the Company
or Related Corporation which results in direct or indirect
loss, damage or injury to the Company or Related Corporation;
(v) the unauthorized disclosure of any trade secret or
confidential information of the Company or Related
Corporation; or (vi) the commission of an act which
constitutes unfair competition with the Company or Related
Corporation or which induces any customer or supplier to
breach a contract with the Company or Related Corporation.
5. DEATH; DISABILITY.
(a) DEATH.
If the Employee ceases to be employed by the Company and all
Related Corporations by reason of his or her death, this
option may be exercised, to the extent otherwise exercisable
on the date of death, by the estate, personal representative
or beneficiary who has acquired this option by will or by the
laws of descent and distribution, until the earlier of (i) the
specified expiration date of this option or (ii) thirty (30)
days from the date of the Employee's death.
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(b) DISABILITY.
If the Employee ceases to be employed by the Company and all
Related Corporations by reason of his or her disability (as
defined in Paragraph 10(B) of the Plan), the Employee shall
have the right to exercise this option on the date of
termination of employment, for the number of shares for which
he or she could have exercised it on that date, until the
earlier of (i) the specified expiration date of this option or
(ii) thirty (30) days from the date of the termination of the
Employee's employment.
(c) EFFECT OF TERMINATION.
At the expiration of the thirty (30) day period provided in
paragraph (a) or (b) of this Section 5 or the scheduled
expiration date, whichever is the earlier, this option shall
terminate and the only rights hereunder shall be those as to
which the option was properly exercised before such
termination.
6. PARTIAL EXERCISE.
The Employee may exercise this option in part at any time and from time
to time within the above limits, except that the Employee may not
exercise this option for a fraction of a share unless such exercise is
with respect to the final installment of stock subject to this option
and cash in lieu of a fractional share must be paid, in accordance with
Paragraph 13(G) of the Plan, to permit the Employee to exercise
completely such final installment. Any fractional share with respect to
which an installment of this option cannot be exercised because of the
limitation contained in the preceding sentence shall remain subject to
this option and shall be available for later purchase by the Employee
in accordance with the terms hereof.
7. PAYMENT OF PRICE.
The option price shall be paid in United States dollars in cash or by
check.
8. METHOD OF EXERCISING OPTION.
Subject to the terms and conditions of this Agreement, this option may
be exercised by written notice to the Company at its principal
executive office, or to such transfer agent as the Company shall
designate. Such notice shall state the election to exercise this option
and the number of Option Shares for which it is being exercised and
shall be signed by the person or persons exercising this option. Such
notice shall be accompanied by payment of the full purchase price of
such shares, and the Company shall deliver a certificate or
certificates
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representing such shares as soon as practicable after the notice shall
be received. Such certificate or certificates shall be registered in
the name of the person or persons so exercising this option (or, if
this option is exercised by the Employee and if the Employee requests
in the notice exercising this option, shall be registered in the name
of the Employee and another person jointly, with right of
survivorship). In the event this option is exercised, pursuant to
Section 5 hereof, by any person or persons other than the Employee,
such notice shall be accompanied by appropriate proof of the right of
such person or persons to exercise this option.
9. OPTION NOT TRANSFERABLE.
This option is not transferable or assignable except by will or by the
laws of descent and distribution. During the Employee's lifetime only
the Employee can exercise this option.
10. NO OBLIGATION TO EXERCISE OPTION.
The grant and acceptance of this option imposes no obligation on the
Employee to exercise it.
11. NO OBLIGATION TO CONTINUE EMPLOYMENT.
Neither the Plan, this Agreement, nor the grant of this option imposes
any obligation on the Company or any Related Corporation to continue
the Employee in employment.
12. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.
The Employee shall have no rights as a stockholder with respect to the
Option Shares until the date of issuance of a stock certificate to the
Employee. Except as is expressly provided in the Plan with respect to
certain changes in the capitalization and stock dividends of the
Company, no adjustment shall be made for dividends or similar rights
for which the record date is before the date such stock certificate is
issued.
13. CAPITAL CHANGES AND BUSINESS SUCCESSIONS.
The Plan contains provisions covering the treatment of options in a
number of contingencies such as stock splits and mergers. Provisions in
the Plan for adjustment with respect to stock subject to options and
the related provisions with respect to successors to the business of
the Company are hereby made applicable hereunder and are incorporated
herein by reference.
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14. EARLY DISPOSITION.
The Employee agrees to notify the Company in writing immediately after
the Employee transfers any Option Shares, if such transfer occurs on or
before the later of (a) the date two years after the Grant Date or (b)
the date one year after the date the Employee acquired such Option
Shares. The Employee also agrees to provide the Company with any
information concerning any such transfer required by the Company for
tax purposes.
15. WITHHOLDING TAXES.
If the Company or any Related Corporation in its discretion determines
that it is obligated to withhold any tax in connection with the
exercise of this option, the making of a Disqualifying Disposition (as
defined in Paragraph 18 of the Plan), the vesting or transfer of Option
Shares acquired on the exercise of this option, or the making of a
distribution or other payment with respect to the Option Shares, the
Employee hereby agrees that the Company or any Related Corporation may
withhold from the Employee's wages or other remuneration the
appropriate amount of tax. At the discretion of the Company or Related
Corporation, the amount required to be withheld may be withheld in cash
from such wages or other remuneration or in kind from the Common Stock
or other property otherwise deliverable to the Employee on exercise of
this option. The Employee further agrees that, if the Company or any
Related Corporation does not withhold an amount from the Employee's
wages or other remuneration sufficient to satisfy the withholding
obligation of the Company or Related Corporation, the Employee will
make reimbursement on demand, in cash, for the amount underwithheld.
16. COMPANY'S RIGHT OF FIRST REFUSAL.
(a) EXERCISE OF RIGHT.
If the Employee (or successor and assigns) or his or her legal
representative (the "Transferor") desires to transfer all or
any part of the Option Shares to any person other than the
Company (an "Offeror"), the Transferor shall: (i) obtain in
writing an irrevocable and unconditional bona fide offer (the
"Offer") for the purchase thereof from the Offeror; and (ii)
give written notice (the "Option Notice") to the Company
setting forth the Transferor's desire to transfer such shares,
which Option Notice shall be accompanied by a photocopy of the
Offer and shall set forth at least the name and address of the
Offeror and the price and terms of the bona fide offer. Upon
receipt of the Option Notice, the Company shall have an
assignable option to purchase any or all of such shares (the
"Company Option Shams") specified in the Option Notice,
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such option to be exercisable by giving, within 90 days after
receipt of the Option Notice, a written counter-notice to the
Transferor (the "Counter-Notice"). If the Company elects to
purchase any or all of such Company Option Shares, it shall be
obligated to purchase, and the Transferor shall be obligated
to sell to the Company, such Company Option Shares that the
Company elects to purchase as set forth in the Counter-Notice
at a per share price equal to the lesser of (i) the per share
price (and on the same terms) indicated in the Offer; or (ii)
the Fair Market Value (as defined in Section 17(b) and using
the date of the Option Notice as the date of determination of
Fair Market Value) of such shares as determined under Section
17(b), in any case within 30 days of the date of delivery by
the Company of the Counter-Notice. If the Company elects to
purchase any or all of such Company Option Shares, it may, in
its sole discretion, pay the purchase price for such Company
Option Shares in accordance with the terms of a promissory
note, such terms to be determined solely by the Company;
provided, however that the payment term of such promissory
note shall not exceed ten (10) years.
(b) SALE OF OPTION SHARES TO OFFEROR.
The Transferor may, for 60 days after the expiration of the
90-day period during which the Company may give the
Counter-Notice, sell, pursuant to the terms of the Offer, any
or all of such Company Option Shares not purchased or agreed
to be purchased by the Company or its assignee; PROVIDED,
HOWEVER, that the Transferor shall not sell such Company
Option Shares to the Offeror if the Offeror is a competitor
of; the Company and the Company gives a written notice to the
Transferor, within 90 days of its receipt of the Option
Notice, stating that the Transferor shall not sell such
Company Option Shares to such Offeror; and PROVIDED, FURTHER,
that prior to the sale of such Company Option Shares to the
Offeror, the Offeror shall execute an agreement with the
Company pursuant to which the Offeror agrees to be subject to
the restrictions set forth in Sections 16, 17, 18 and 20
hereof. If any or all of such Company Option Shares are not
sold pursuant to an Offer within the time permitted above, the
unsold Company Option Shares shall remain subject to the terms
of this Section 16 and any future proposed transfer must again
comply with the provisions set forth herein.
(c) ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.
If there shall be any change in the Common Stock of the
Company through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, combination or
exchange of shares, or the like, the
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restrictions contained in this Section 16 shall apply with
equal force to additional and/or substitute securities, if
any, received by the Employee in exchange for, or by virtue of
his or her ownership of, Option Shares.
(d) FAILURE TO DELIVER COMPANY OPTION SHARES.
If the Transferor fails or refuses to deliver on a timely
basis duly endorsed certificates representing Company Option
Shares to be sold to the Company or its assignee pursuant to
this Section 16, the Company shall have the right to deposit
the purchase price for such Company Option Shares in a special
account with any bank or trust company in the Commonwealth of
Massachusetts, giving notice of such deposit to the
Transferor, whereupon such Company Option Shares shall be
deemed to have been purchased by the Company. All such moneys
shall be held by the bank or trust company for the benefit of
the Transferor. All moneys deposited with the bank or trust
company remaining unclaimed for two years after the date of
deposit shall be repaid by the bank or trust company to the
Company on demand, and the Transferor shall thereafter look
only to the Company for payment.
(e) EXPIRATION OF COMPANY'S RIGHT OF FIRST REFUSAL.
The first refusal rights of the Company set forth in this
Section 16 shall remain in effect until such time, if ever, as
an underwritten public offering is made of shares of the
Company's Common Stock pursuant to a registration statement
filed under the Securities Act of 1933 or a successor statute,
at which time this Section 16 and the right of first refusal
set forth herein will automatically expire.
17. COMPANY'S RIGHT OF REPURCHASE.
(a) RIGHT OF REPURCHASE.
The Company shall have the right (the "Repurchase Right") to
repurchase from the holder of any Option Shares (each a
"Holder") any or all of the Option Shares then owned by such
Holder at any time by giving such Holder a written notice (the
"Repurchase Notice") at least 30 days prior to the date of
repurchase. The Repurchase Notice shall set forth the number
of Option Shares to be repurchased (the "Repurchase Shares"),
the Fair Market Value per share (determined in accordance with
Section 17(b) below as of the date of the Repurchase Notice)
of the Repurchase Shares and the date (the "Repurchase Date")
on which such Repurchase Shares are to be repurchased by the
Company (such date not to be more than 120 nor less than 30
days after the date of the
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Repurchase Notice). On the Repurchase Date, the Company shall
tender to the Holder an amount equal to the number of
Repurchase Shares multiplied by the Fair Market Value per
share; provided, however, that the Company may pay the
repurchase amount, in its sole discretion, in accordance with
the terms of a promissory note, such terms to be determined
solely by the Company (provided further that the payment term
of such promissory note shall not exceed ten (10) years). The
Company may assign the Repurchase Right to one or more persons
and may utilize a promissory note to effect its Repurchase
Right. Upon timely exercise of the Repurchase Right in the
manner provided in this Section 17(a), the Holder shall
deliver to the Company the stock certificate or certificates
representing the Repurchase Shares, duly endorsed and free and
clear of any and all liens, charges and encumbrances.
(b) FAIR MARKET VALUE.
For purposes of this Agreement, the Fair Market Value of an
Option Share shall be determined in good faith by the Board of
Directors of the Company after taking into account all
relevant factors including, without limitation, the absence of
an active trading market for the shares of Common Stock, the
restrictions on transfer of Option Shares set forth herein and
the valuation attached to other recent issuances of securities
by the Company. The determination by the Board of Directors of
Fair Market Value shall be conclusive and binding.
(c) ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.
If there shall be any change in the Common Stock of the
Company through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, combination or
exchange of shares, or the like, the restrictions contained in
this Section 17 shall apply with equal force to additional
and/or substitute securities, if any, received by the Employee
in exchange for, or by virtue of his or her ownership of,
Option Shares.
(d) FAILURE TO DELIVER REPURCHASE SHARES.
If the Holder fails or refuses to deliver on a timely basis
duly endorsed certificates representing the Repurchase Shares
to be repurchased by the Company or its assignee pursuant to
this Section 17, the Company shall have the right to deposit
the repurchase price for such Repurchase Shares in a special
account with any bank or trust company in the Commonwealth of
Massachusetts, giving notice of such deposit to the Holder,
whereupon such Repurchase Shares shall be deemed to have
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been purchased by the Company. All such moneys shall be held
by the bank or trust company for the benefit of the Holder.
All moneys deposited with the bank or trust company remaining
unclaimed for two years after the date of deposit shall be
repaid by the bank or trust company to the Company on demand,
and the Holder shall thereafter look only to the Company for
payment.
(e) EXPIRATION OF COMPANY'S REPURCHASE RIGHT.
The Repurchase Right of the Company set forth in this Section
17 shall remain in effect until such time, if ever, as an
underwritten public offering is made of shares of the
Company's Common Stock pursuant to a registration statement
filed under the Securities Act or any successor statute, at
which time this Section 17 and the Repurchase Right set forth
herein will automatically terminate.
18. LOCK-UP AGREEMENT.
The Employee agrees that in connection with an underwritten public
offering of Common Stock, upon the request of the Company or the
managing or lead underwriter for such public offering, this option and
the Option Shares may not be sold, offered for sale or otherwise
disposed of without the prior written consent of the Company or such
underwriter, as the case may be, for at least 180 days after the
effectiveness of the registration statement filed in connection with
such offering, or such longer period of time as the Board of Directors
may determine if all of the Company's directors and officers agree to
be similarly bound. The lock-up agreement established pursuant to this
Section 18 shall have perpetual duration.
19. PROVISION OF DOCUMENTATION TO EMPLOYEE.
By signing this Agreement the Employee acknowledges receipt of a copy
of this Agreement and a copy of the Plan.
20. MISCELLANEOUS.
(a) NOTICES.
All notices hereunder shall be in writing and shall be deemed
given when sent by certified or registered mail, postage
prepaid, return receipt requested, to the address set forth
below. The addresses for such notices may be changed from time
to time by written notice given in the manner provided for
herein.
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(b) ENTIRE AGREEMENT; MODIFICATION.
This Agreement constitutes the entire agreement between the
parties relative to the subject matter hereof, and supersedes
all proposals, written or oral, and all other communications
between the parties relating to the subject matter of this
Agreement. This Agreement may be modified, amended or
rescinded only by a written agreement executed by both
parties.
(c) SEVERABILITY.
The invalidity, illegality or unenforceability of any
provision of this Agreement shall in no way affect the
validity, legality or enforceability of any other provision.
(d) SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and
assigns, subject to the limitations set forth in Sections 9,
16, 17, and 20 hereof.
(e) GOVERNING LAW.
This Agreement shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Massachusetts,
without giving effect to the principles of the conflicts of
laws thereof.
(f) LEGENDS.
The Company may place a legend or legends on any stock
certificate delivered to the any holder of Option Shares
reflecting the restrictions on transfer provided in this
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the Company and the Employee have caused this
instrument to be executed as of the date first above written.
The Counsel Group, Inc.
Exchange Place
53 State Street
Boston, MA 02109
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Employee
- ------------------------ By: ---------------------------
Print Name of Employee Name:
Title:
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Street Address
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City State Zip Code
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Schedule A
The Counsell Group, Inc., a Delaware corporation (the "Company"), hereby grants
as of July 1, 1998 (the "Grant Date") to KEVIN COMERFORD (the "Employee"), an
option to purchase a maximum of 30,000 shares (the "Option Shares") of its
Common Stock, par value $.001 per share ("Common Stock"), at the price of $1.63
per share, on the following terms and conditions:
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7/1/1999 7500 Shares
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7/1/2000 7500 Shares
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7/1/2001 7500 Shares
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7/1/2002 7500 Shares
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_______________________________________________________________________________
THE COUNSELL GROUP
NOTICE OF GRANT OF STOCK OPTIONS ID: 04-3285165
AND OPTION AGREEMENT 50 Rowes Wharf
6th Floor
Boston, MA 02110
_______________________________________________________________________________
KEVIN T. COMERFORD OPTION NUMBER: 00000105
36 WINDSOR LANE PLAN: 98
NORTH ANDOVER, MA 01845 ID: 1137
_______________________________________________________________________________
Effective 7/1/98, you have been granted a(n) Incentive Stock Option to buy
30,000 shares of The Counsell Group (the Company) stock at $1.6300 per share.
The total option price of the shares granted is $48,900.00
Shares in each period will become fully vested on the date shown.
Shares Vest Type Full Vest Expiration
---------- ------------ --------- ----------
7,500 On Vest Date 7/1/99 7/1/08
7,500 On Vest Date 7/1/00 7/1/08
7,500 On Vest Date 7/1/01 7/1/08
7,500 On Vest Date 7/1/02 7/1/08
_______________________________________________________________________________
By your signature and the Company's signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company's Stock Option Plan as amended and the Option Agreement, all of
which are attached and made a part of this document.
_______________________________________________________________________________
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The Counsell Group Date
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Kevin T. Comerford Date
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