Exhibit 10.7
EXPLANATORY NOTE
The Inference Corporation 1998 New Hire Stock Option Plan and Private
Placement Plan are comprised of individual stock option agreements entered into
between Inference Corporation and individual option holders (each an "Option
Agreement"). Each Option Agreement is entered into in the form provided below,
which is identical except for terms relating to the number of shares of Common
Stock granted thereunder, the exercise price at which such options are granted,
the applicable vesting schedule and the applicable expiration date. A list of
those individuals who have entered into an Option Agreement under the 1998 New
Hire Stock Option Plan or the Private Placement Stock Option Plan is made in an
Annex attached at the end of the form of the Option Agreement provided below.
FORM OF OPTION AGREEMENT
THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE BEEN ACQUIRED FOR INVESTMENT
FOR THE HOLDER'S OWN ACCOUNT AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION
WITH ANY DISTRIBUTION OF THE SECURITIES. THE SECURITIES HAVE NOT BEEN REGISTERED
OR QUALIFIED, AS APPLICABLE, UNDER THE SECURITIES ACT OF 1933 ("ACT") OR UNDER
ANY APPLICABLE STATE SECURITIES LAWS OR ANY APPLICABLE FOREIGN LAW ("BLUE SKY
LAWS"). AN OFFER TO SELL OR TRANSFER OR THE SALE OR TRANSFER OF THESE SECURITIES
IS UNLAWFUL UNLESS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
PERMIT, AS APPLICABLE, UNDER THE ACT OR APPLICABLE BLUE SKY LAWS OR UNLESS AN
EXEMPTION FROM REGISTRATION AND/OR QUALIFICATION UNDER THE ACT AND APPLICABLE
BLUE SKY LAWS IS AVAILABLE AND AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE COMPANY IS PROVIDED TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION OR
QUALIFICATION IS NOT REQUIRED UNDER THE ACT AND APPLICABLE BLUE SKY LAWS.
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is entered into as of Legal_Date
("Option Grant Date") by and between Inference Corporation, a Delaware
corporation ("Company"), and ((First_Name)) ((Last_Name)) ("Optionee").
Pursuant to action of the Board of Directors of the Company ("Board") taken at a
meeting held on ((Legal_Date)) the Board granted Optionee options ("Options") to
purchase the Company's Class A Common Stock, $0.01 par value ("Common Stock") as
evidenced by this Agreement and upon the terms and conditions hereof. These
options are not intended to qualify as incentive stock options within the
meaning of Section 422(b) of the Internal Revenue Code of 1986, as amended (the
"Code").
In consideration of the foregoing and of the mutual covenants set forth herein
and other good and valuable consideration, the parties hereto agree as set forth
below.
1. Grant of Options. The Company hereby grants to Optionee the right to
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purchase all or any part of an aggregate of ((Shares_)) shares of the Common
Stock, at a price of ((Price)) per share, with adjustments provided for herein
("Exercise Price").
2. Vesting of Options. Except as provided below, the Options granted
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pursuant to this Agreement shall be exercisable at the Exercise Price as to the
specified number of shares (Optioned Shares) on and after the "Start" dates and
on or before the "Termination" date as set forth on Exhibit A which is attached
hereto and incorporated herein by this reference. When the Options (or portions
thereof) become exercisable, the Options (or such portions) shall be considered
"vested."
3. Exercise of Options.
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(a) In order to exercise an Option, Optionee shall deliver a written
notice of exercise to the Company at its principal business office, which notice
shall specify the number of shares to be purchased and shall be accompanied by
payment in cash or check made payable to the order of the Company in the full
amount of the Exercise Price of the shares to be purchased.
(b) In lieu of paying the total purchase price by cash or check,
Optionee shall have the right to pay all or any portion of the total purchase
price with shares of Common Stock of the Company held by Optionee for at least
six months. The amount of the purchase price deemed paid in this manner shall be
the fair market value as of the date of exercise of the shares surrendered, as
determined by the Board of Directors of the Company in its sole discretion,
exercised in good faith. If Optionee elects to pay all or any portion of the
total purchase price in this manner, he shall accompany his notice of exercise
with the stock certificates he desires to surrender, duly endorsed for transfer
to the Company.
(c) Optionee acknowledges that, if Common Stock is used to pay the
Exercise Price of the Options, Optionee has been advised to consult with a
competent tax advisor regarding the applicable tax consequences prior to
utilizing such shares to exercise an Option.
4. Termination of Options.
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(a) Termination Date. Except as provided below, this Agreement and
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the then unexercised Options, whether vested or unvested, granted herein shall
terminate as of the date which is ten years from the date of this Agreement
("Option Termination Date").
(b) Termination of Employment Other Than by Death or Disability. In
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the event that the employment of an Optionee with the Company is terminated for
any reason, with or without cause, other than death or permanent and total
disability, any installments under the Option which have not vested as of the
date the Optionee's employment is terminated ("Employment Termination Date")
shall expire and become unexercisable as of the Employment Termination Date.
All vested Options as of the
Employment Termination Date shall remain exercisable for a period not to exceed
the earlier of (i) the Option Termination Date or (ii) three (3) months
following the Employment Termination Date.
(c) Death or Disability of Optionee While Employed. In the event that
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the employment of an Optionee with the Company is terminated by reason of death
or permanent and total disability, any unexercised vested Options granted
hereunder to such Optionee shall expire and become unexercisable as of the
earlier of:
(i) The Option Termination Date; or
(ii) The first anniversary of the Employment Termination Date of
such Optionee by reason of his or her death or permanent and total
disability. Any such vested Options of a deceased Optionee may be
exercised prior to their expiration only by the person or persons to whom
the Optionee's Option rights pass by will or by laws of descent and
distribution. Any installments under such a deceased or disabled
Optionee's Option that have not vested as of his or her Employment
Termination Date due to death or permanent and total disability shall
expire and become unexercisable as of said termination date. For purposes
of this Agreement, the term "permanent and total disability" shall be
defined under Section 22(e)(3) of the Code.
(d) Extensions. Notwithstanding the provisions covering the
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exercisability of Options following termination of employment, as described in
Sections 4(b) and (c), respectively, the Board may, in its sole discretion, with
the consent of the Optionee or the Optionee's estate (in the case of the death
of Optionee), extend the period of time during which vested Options shall remain
exercisable, provided that in no event shall such extension go beyond the Option
Termination Date.
5. Representations and Warranties. Optionee represents and warrants to
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the Company that Optionee is acquiring these Options and the underlying shares
of Common Stock to be issued upon exercise of these Options for Optionee's own
account and not with a view to or for sale in connection with any distribution
of these Options or the shares of Common Stock which may be acquired upon
exercise of these Options. As a condition to the exercise of any portion of
these Options, the Company may require Optionee to make any representations and
warranties to the Company as may, in the judgment of counsel to the Company, be
required under applicable laws, rules or regulations, including but not limited
to a representation and warranty that the shares of Common Stock are being
acquired only for investment and without present intention to sell or distribute
such shares if, in the opinion of counsel for the Company, such a representation
is required under the Securities Act of 1933, as amended ("Securities Act"), or
any applicable foreign, state securities laws, or any rule or regulation of any
governmental agency ("Blue Sky Laws"). The exercise of the Options and the
issuance of shares of Common Stock shall be conditioned upon satisfaction of
appropriate exemptions from the registration and/or qualification requirements
of the Securities Act and applicable Blue Sky Laws. The inability to satisfy the
requirements of such exemptions shall relieve the Company of its obligation to
issue the Common Stock and shall relieve the Company of any liability with
respect to the nonissuance of the Common Stock upon exercise of the Options.
6. Adjustments Upon Changes In Capitalization. If the outstanding shares
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of Common Stock of the Company are increased, decreased, changed into or
exchanged for a different number or kind of shares of the Company through
recapitalization, reclassification, stock dividend, stock split, or reverse
stock split, an appropriate and proportionate adjustment shall be made in the
number or kind of shares of Common Stock subject to the Options granted by this
Agreement and in the per share Exercise Price thereof.
7. Sale or Reorganization.
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(a) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company goes out of existence or
becomes a subsidiary of another corporation (other than any reorganization,
merger or consolidation effected to change the Company's state of
incorporation), or upon a sale of all or substantially all the property or
more than eighty percent (80%) of the then outstanding stock of the Company
to another corporation, an Option shall become immediately exercisable with
respect to the full number of shares subject to that Option during the
period commencing as of the date an agreement providing for such
transaction is executed and ending as of the earlier of:
(i) The applicable expiration date for such Option as provided
for in Section 4 hereof; or
(ii) The date on which the disposition of assets or stock
contemplated by any such agreement is consummated.
(b) Upon the consummation of any transaction specified in Section
7(a) hereof, any unexercised Options issued hereunder (or any unexercised
portion thereof) shall terminate and cease to be effective, unless
provision is made in connection with such transaction for assumption of
Options previously granted or the substitution for such Options of new
options covering the securities of a successor corporation or an affiliate
thereof, with appropriate adjustments as to the number and kind of
securities and prices.
8. No Stockholder Rights. This Agreement shall not entitle Optionee to
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any voting rights or other rights as a stockholder of the Company, or to any
other rights whatsoever except the rights herein expressed, and no cash dividend
paid out of earnings or surplus or interest shall be payable or accrued in
respect of the Options granted herein or the interest represented hereby or the
shares which may be purchased hereunder until and unless and only to the extent
that the Options represented by this Agreement shall be exercised. No
adjustments shall be made for dividends or other rights for which the record
date is prior to the date of issuance of a certificate representing the shares
of Common Stock acquired upon exercise of the Options.
9. Options Not Transferable. Except as provided in Section 4(c), the
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Options granted herein may be exercised only during the lifetime of the Optionee
and only by the Optionee. Optionee's rights and interests under this Agreement
and in and to the Options
may not be sold, pledged, hypothecated, assigned, encumbered, gifted or
otherwise transferred in any manner, either voluntarily or involuntarily by
operation of law, whether by will or the laws of descent or distribution.
10. No Enlargement of Employee Rights.
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(a) Nothing in this Agreement shall be construed to create any
contract of employment between Optionee and the Company, any subsidiary of the
Company, or parent of the Company (each a "Participating Company") or confer
upon Optionee any right to continue in the employ of the Participating Company.
The Participating Company shall have the right to deal with Optionee as an
employee of the Participating Company in the same manner as if this Agreement
did not exist (including without limitation Optionee's hiring, discharge,
compensation and conditions of employment). Unless otherwise expressly set
forth in a separate employment agreement between the Participating Company and
Optionee, the employment of Optionee by the Participating Company is at will,
and the Company may terminate Optionee's employment by the Company at any time
for any reason, with or without cause.
(b) Any disputes as to whether and when there has been a termination
of Optionee's employment, the reason (if any) for such termination, and/or the
consequences thereof shall be determined by the Board in its sole discretion,
and the determination thereof shall be final and binding.
11. Withholding of Taxes. Optionee authorizes the Company to withhold, in
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accordance with any applicable law, from any compensation payable to Optionee
any taxes required to be withheld by federal, state, local or foreign law as a
result of the grant of the Options or the issuance of Common Stock pursuant to
the exercise of the Options.
12. Governing Law. This Agreement shall be governed by, interpreted
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under, and construed and enforced in accordance with the laws of the State of
California applicable to agreements made and to be performed wholly within the
State of California. In the event a judicial proceeding is necessary, the sole
forum for resolving disputes arising under or relating to this Agreement shall
be the Municipal and Superior Courts for the County of Marin, California, or the
federal district court encompassing said county and all related appellate
courts, and the parties hereby consent to the jurisdiction of such courts, and
that venue shall be in Marin County, California.
13. Entire Agreement. The terms of this Agreement are intended by the
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parties as a final expression of their agreement with respect to such terms as
are included in this Agreement and may not be contradicted by evidence of any
prior or contemporaneous agreement. The parties further intend that this
Agreement constitutes the complete and exclusive statement of its terms and that
no extrinsic evidence may be introduced in any judicial proceeding involving
this Agreement.
14. Modifications, Amendments, Waivers, and Extensions. This Agreement
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may not be modified, changed or supplemented, nor may any obligations hereunder
be waived or extensions of time for performance granted, except by written
instrument signed by the party to be charged or by its agent duly authorized in
writing or as otherwise expressly permitted herein. No waiver of any breach of
any agreement or
provision herein contained shall be deemed a waiver of any preceding or
succeeding breach thereof or of any other agreement or provision herein
contained. No extension of time for performance of any obligations or acts shall
be deemed an extension of the time for performance of any other obligations or
acts.
15. Legends on Stock Certificates. Unless an appropriate registration
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statement is filed pursuant to the Securities Act with respect to the shares of
Common Stock issuable under this Agreement, each certificate representing such
Common Stock shall be endorsed with the following legend or its equivalent:
"The securities represented by this Certificate have been acquired for
investment for the holder's own account and not with a view to or for
sale in connection with any distribution of the securities. The
securities have not been registered or qualified, as applicable, under
the Securities Act of 1933 ("Act") or under any applicable state
securities laws or any applicable foreign law ("Blue Sky Laws"). An
offer to sell or transfer or the sale or transfer of these securities
is unlawful unless made pursuant to an effective registration
statement or permit, as applicable, under the Act or applicable Blue
Sky Laws or unless an exemption from registration and/or qualification
under the Act and applicable Blue Sky Laws is available and an opinion
of counsel reasonably satisfactory to the Company is provided to the
Company to the effect that such registration or qualification is not
required under the Act and applicable Blue Sky Laws."
In addition to the foregoing legend, each certificate representing shares
of Common Stock acquired upon exercise of an Option shall be endorsed with all
legends, if any, required by applicable securities or other laws to be placed on
the certificate.
16. Necessary Acts. The Optionee agrees to perform all acts and execute
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and deliver any documents that may be reasonably necessary to carry out the
provisions of this Agreement, including but not limited to all acts and
documents related to compliance with any securities laws.
17. Counterparts. For convenience, this Agreement may be executed in any
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number of identical counterparts, each of which shall be deemed a complete
original in itself and may be introduced in evidence or used for any other
purpose without the production of any other counterparts.
18. Invalid Provisions. In the event that any provision of this Agreement
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is found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and
effect to the same extent as though the invalid and unenforceable provision was
not contained herein.
19. Successors and Assigns. This Agreement and the provisions hereof
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shall be binding upon each of the parties, their successors and permitted
assigns.
IN WITNESS WHEREOF, the Company and the Optionee have executed this Agreement as
of the date first written above.
INFERENCE CORPORATION OPTIONEE
By: _________________________ ________________________
Xxxx X. Xxxx Signature
Vice President and Chief Financial Officer
________________________
Printed Name
Address:
________________________
________________________
________________________
________________________
Exhibit A
Notice of Grant of Stock Options
and Option Agreement
((First_Name)) ((Last_Name)) Xxxxx Number: ((Number))
((Address_1)) ((Address_2)) Social Security # ((Social))
((City)), ((State)) ((Zip))
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On ((Legal_Date)), you were granted Shares options of the Company's Class A
Common Stock at ((Price)) per share.
The total option price of the shares is ((Total Price)).
These stock options began vesting on ((Legal_Date)) and will become fully vested
on the date shown below.
Options Full Vest Vest type Expiration
------- --------- --------- ----------
((Vest_1)) ((Vest_Date_1)) ((Vest_Type_1)) ((Expire_Date_1))
((Vest_2)) ((Vest_Date_2)) ((Vest_Type_2)) ((Expire_Date_2))
List of Option Holders under the 1998 New Hire Stock Option Plan
Xxxxxxxxx, Xxxxxxxx
Xxxxx, Xxxxxx
Xxxxxx, Xxxxxxx
Xxxx, Xxxxx
Xxxxxx, Xxxxxxxx
Xxxxxx, Xxxxx
Xxxxx, Xxxxxxx
Xxxxxx, Xxxxxx
Xxxxx, Xxxx
Xxxxxxxx, Xxxxx
Xxxxxx, Xxxxxxxx
Xxxxxx, Xxxxxx
Xxxxx, Xxx
Xxxxxx, Xxxxxxx
Xxxx, Xxxx
Xxxx, Xxxxxx
Xxxxxx, Xxxxxxx
Xxxxxx, Xxxxxxxx
Xxxxx, Xxxxx
Xx, Xxxxxxxxx
Xxxxxx, Xxxxxxxx
Xxxx, Xxxxx
Xxxxx, Xxxx
Xxxxxx, Xxxx
Xxxxxx, Xxxxxxx
Xxxxxxx, Xxx
Xxxxxxx, Xxxxxxx
Xxxx, Xxxxxxxx
Xxxxxx, Xxxxxxxx
Xxxxxxx, Xxxxx
Xxxxxxxxx, Xxxxxxx
Xxxxxx, Xxxxxx
Xxxxxx, Xxxx
List of Option Holders under the Private Placement Stock Option Plan
Xxxxxxxx, Xxxx
Xxxxx, Xxxxx
Xxxxxxx, Xx
Xxxxx, Xxxxxxx
Xxxxxxx, Xxx
Xxxxxxx, Xxxxx Xxxxx
Burdairon, Xxxxxxxx
Xxxxxxx, Xxxxx
Xxxxxxxx, Xxxxx
Xxxxxxxxxx, Xxxxx
Xxxxxxx, Xxxxxxx
Xxxxxxx, Xxxx
Xxxxx, Xxxxxx
Xxxxxx, Xxxxxxxx
Xxxxxx, Xxxxxxx
Xxxxxxx, Xxxxx
Xxxxx, Xxx
Xxxxxxxx, Xxxx
Xxxxxx, Xxxx
Xxxxxxx, Xxxxxx
Xxxxx, Xxxxxxxxxxx
Xxxxxxxx, Xxxxxxxx
Xxxxx, Xxxxxx
Xxxxxxx, Xxxxxx
Xxxxx, Xxx
Xxxx, Xxxx
Xxxxxxxx, Xxxx
Xxxxxx, Xxxxxx
Xxxxxx, Xxxxxxxxx
Xxxxxxxxxxx, Xxxxx
Xxxxxxx, Xxxxx
X'Xxxxxx, Xxxx
Xxxxxxxx, Xxxxxxx
Xxxxxxx, Xxxxxx
Xxxxxxx, Xxxxx
Xxxx, Xxxxxxx
Xxxxx, Xxxxxxxxxx
Xxxxxxx, Xxxxx
Xxxxxx, Xxxx
Xxxx, Xxxxxxx
Xxxxxxxx, Xxxxx
