Exhibit 99.2
STOCK OPTION AGREEMENT - TERMS AND CONDITIONS
2000 STOCK INCENTIVE PLAN
SPRINGBANK NETWORKS, INC.
(INCLUDES EARLY EXERCISE PROVISION)
I. TERMS AND CONDITIONS
1. Vesting. Your option vests during your Service on the dates
specified in the first page of this Stock Option Agreement. Vesting will cease
if your Service terminates for any reason.
2. Service; Leaves of Absence. Your Service shall cease when you
cease to be actively employed by, or a consultant or adviser to, the Company (or
any subsidiary) as determined in the sole discretion of the Board. For purposes
of your option, your Service does not terminate when you go on a bona fide leave
of absence, that was approved by the Company in writing, if the terms of the
leave provide for continued service crediting, or when continued service
crediting is required by applicable law. However, for purposes of determining
whether your option is entitled to ISO status, your Service will be treated as
terminating ninety (90) days after you went on leave, unless your right to
return to active work is guaranteed by law or by a contract. Your Service
terminates in any event when the approved leave ends, unless you immediately
return to active work. The Company determines which leaves count toward Service,
and when your Service terminates for all purposes under the Plan.
3. Term of Option. Your option expires on the day before the 10th
anniversary of the Grant Date, and will expire earlier if your Service
terminates as follows:
(a) Regular Termination. If your Service terminates for any
reason except death or Disability, then your option will expire at the close of
business at Company headquarters thirty (30) days after your termination date.
(b) Cause. If your Service terminates for cause, your option
will expire immediately.
(c) Death. If you die while in Service, then your option will
expire at the close of business at Company headquarters on the date twelve (12)
months after the date of death. During that twelve (12) month period, your
estate or heirs may exercise the vested portion of your option.
(d) Disability. If your Service terminates because of your
Disability, then your option will expire at the close of business at Company
headquarters on the date twelve
(12) months after your termination date. Disability shall have the meaning set
forth in section 22(e)(3) of the Code.
4. Exercise of Option.
(a) Legal Restrictions. The Company will not permit you to
exercise your option if the issuance of Common Stock at that time would violate
any law or regulation. You represent and agree that the Common Stock to be
acquired upon exercising your option will be acquired for investment, and not
with a view to the sale or distribution thereof. If the sale of Common Stock
under the Plan is not registered under the Securities Act but an exemption is
available which requires an investment representation or other representation,
you shall represent and agree at the time of exercise to make such
representations as are deemed necessary or appropriate by the Company and its
counsel.
(b) Method of Exercise. To exercise your option, you must
complete and file the Company's "Notice of Exercise" form at the address given
on the form, together with full payment. The Notice of Exercise will be
effective when it is received by the Company. If someone else wants to exercise
your option after your death, that person must prove to the Company's
satisfaction that he or she is entitled to do so.
(c) Form of Payment. When you submit a Notice of Exercise, you
must include payment of the aggregate Exercise Price for the Common Stock you
are purchasing. Payment may be made in one (or a combination) of the following
forms.
. Your personal check, a cashier's check or a money order.
. Full recourse promissory note.
. To the extent that a public market for Common Stock exists as
determined by the Company, by delivery (on a form approved by the
Company) of an irrevocable direction to a securities broker to
sell Common Stock and to deliver all or part of the sale proceeds
to the Company in payment of the aggregate Exercise Price.
(d) Withholding Taxes. You will not be allowed to exercise your
option unless you make acceptable arrangements to pay any withholding or other
taxes that may be due as a result of the option exercise or the sale of Common
Stock acquired upon exercise of your option.
5. Exercise of Option Before Vesting ("Early Exercise"). You may
exercise your option before it is fully vested. Common Stock received upon the
exercise of the unvested portion of your option shall be subject to the
Company's right of repurchase, which right of repurchase shall lapse at the rate
of the option would have vested had there been no exercise. The Company's right
of repurchase shall terminate ninety (90) days after the later of (a) your
Service termination or (b) your date of exercise.
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The certificates for the Common Stock subject to the Company's right
of repurchase shall be deposited in escrow with the Secretary of the Company to
be held in accordance with the provisions of this paragraph. Each deposited
certificate shall be accompanied by a duly executed Assignment Separate from
Certificate in the form attached. The deposited certificates, shall remain in
escrow until such time or times as the certificates are to be released or
otherwise surrendered for cancellation as discussed below. Upon delivery of the
certificates to the Company, you shall be issued an instrument of deposit
acknowledging the number of shares of Common Stock delivered in escrow to the
Secretary of the Company.
All regular cash dividends on the Common Stock (or other securities at
the time held in escrow) shall be paid directly to you and shall not be held in
escrow. However, in the event of any stock dividend, stock split,
recapitalization or other change affecting the Company's outstanding Common
Stock as a class effected without receipt of consideration or in the event of a
stock split, a stock dividend or a similar change in the Company Stock, any new,
substituted or additional securities or other property which is by reason of
such transaction distributed with respect to the Common Stock shall be
immediately delivered to the Secretary of the Company to be held in escrow
hereunder, but only to the extent the Common Stock is at the time subject to the
escrow requirements hereof.
The Common Stock held in escrow hereunder shall be subject to the
following terms and conditions relating to their release from escrow or their
surrender to the Company for repurchase and cancellation:
. As your interest in the Common Stock vests, the certificates for
such vested Common Stock shall be released from escrow and
delivered to you, at your request, in accordance with the
following schedule:
- The initial release of any vested Common Stock (or other
vested assets and securities) from escrow shall be effected
within thirty (30) days following the expiration of the
initial twelve (12) month period measured from the Vesting
Start Date.
- Subsequent releases of any vested Common Stock from escrow
shall be effected at annual intervals thereafter, with the
first such annual release to occur twenty-four (24) months
after the Vesting Start Date.
- Upon termination of your Service, any escrowed Common Stock
in which you are at the time vested shall be promptly
released from escrow.
. Should the Company exercise its right of repurchase with respect
to any unvested Common Stock held at the time in escrow
hereunder, then the escrowed certificates for such unvested
Common Stock shall, concurrently with the payment of the purchase
price for such Common Stock, be
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surrendered to the Company for cancellation, and you shall have
no further rights with respect to such Common Stock.
. Should the Company elect not to exercise its right of repurchase
with respect to any Common Stock held at the time in escrow
hereunder, then the escrowed certificates for such Common Stock
shall be surrendered to you.
6. Resale Restrictions/Market Stand-Off. In connection with any
underwritten public offering by the Company of its equity securities pursuant to
an effective registration statement filed under the Securities Act, including
the Company's initial public offering, you shall not sell, make any short sale
of, loan, hypothecate, pledge, grant any option for the purchase of, or
otherwise dispose or transfer for value or agree to engage, in any of the
foregoing transactions with respect to any Common Stock without the prior
written consent of the Company or its underwriters, for such period of time
after the effective date of such registration statement as may be requested by
the Company or such underwriters (not to exceed one hundred eighty (180) days).
To enforce the provisions of this paragraph, the Company may impose stop-
transfer instructions with respect to the Common Stock until the end of the
applicable stand-off period. You may not sell any Common Stock at a time when
applicable laws, regulations or Company or underwriter trading policies prohibit
a sale.
7. Right of First Refusal. If you propose to sell, pledge or
otherwise transfer to a third party any Common Stock acquired under this Stock
Option Agreement, or any interest in such Common Stock, the Company shall have
the "Right of First Refusal" with respect to all (and not less than all) of such
Common Stock. If you desire to transfer Common Stock acquired under this Stock
Option Agreement, you must give a written "Transfer Notice" to the Company
describing fully the proposed transfer, including the number of shares proposed
to be transferred, the proposed transfer price and the name and address of the
proposed transferee. The Transfer Notice shall be signed both by you and by the
proposed new transferee and must constitute a binding commitment of both parties
to the transfer of the Common Stock. The Company shall have the right to
purchase all, and not less than all, of the Common Stock on the terms of the
proposal described in the Transfer Notice (subject, however, to any change in
such terms permitted in the next paragraph) by delivery of a notice of exercise
of the Right of First Refusal within thirty (30) days after the date when the
Transfer Notice was received by the Company.
If the Company fails to exercise its Right of First Refusal before or
within thirty (30) days after the date when it received the Transfer Notice, you
may, not later than ninety (90) days following receipt of the Transfer Notice by
the Company, conclude a transfer of the Common Stock subject to the Transfer
Notice on the terms and conditions described in the Transfer Notice. Any
proposed transfer on terms and conditions different from those described in the
Transfer Notice, as well as any subsequent proposed transfer by you, shall again
be subject to the Right of First Refusal and shall require compliance with the
procedure described in the paragraph above. If the Company exercises its Right
of First Refusal, the parties shall consummate the sale of the Common Stock on
the terms set forth in the Transfer Notice within
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sixty (60) days after the date when the Company received the Transfer Notice (or
within such longer period as may have been specified in the Transfer Notice);
provided, however, that if the Transfer Notice provided that payment for the
Common Stock was to be made in a form other than lawful money paid at the time
of transfer, the Company shall have the option of paying for the Common Stock
with lawful money equal to the present value of the consideration described in
the Transfer Notice.
The Company's Right of First Refusal shall inure to the benefit of its
successors and, assigns, shall be freely assignable in whole or in part and
shall be binding upon any transferee of the Common Stock. The Company's Right
of First Refusal shall terminate if the Company's common stock is listed on an
established stock exchange or is quoted regularly on the Nasdaq Stock Market.
8. Transfer of Option. Prior to your death, only you may exercise
your option. You cannot transfer or assign your option. For instance, you may
not sell your option or use it as security for a loan. If you attempt to do any
of these things, your option will immediately become invalid. You may, however,
dispose of your option in your will. Regardless of any marital property
settlement agreement, the Company is not obligated to honor a notice of exercise
from your spouse or former spouse, nor is the Company obligated to recognize
such individual's interest in your option in any other way.
9. No Retention Rights. Your option does not give you the right to
be retained by the Company (or any subsidiaries) in any capacity. The Company
reserves the right to terminate your Service at any time and for any reason.
10. Stockholder Rights. You, or your estate or heirs, have no rights
as a shareholder of the Company until a certificate for your Common Stock has
been issued. No adjustments are made for dividends or other rights if the
applicable record date occurs before your stock certificate is issued, except as
described in the Plan.
11. Adjustments to Common Stock. In the event of a stock split, a
stock dividend or a similar change in the Company's Common Stock, the number of
shares covered by your option and the exercise price per share may be adjusted
pursuant to the Plan. Your option shall be subject to the terms of the
agreement of merger, liquidation or reorganization in the event the Company is
subject to such corporate activity.
12. Legends. All certificates representing the Common Stock issued
upon exercise of your option shall, where applicable, have endorsed thereon the
following legends:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN
COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY
AND THE INITIAL HOLDER HEREOF. SUCH AGREEMENT PROVIDES FOR CERTAIN
TRANSFER RESTRICTIONS,
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INCLUDING RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE
SECURITIES AND RIGHTS OF REPURCHASE. THE SECRETARY OF THE COMPANY WILL
UPON WRITTEN REQUEST XXXXXXX A COPY OF SUCH AGREEMENT TO THE HOLDER
HEREOF WITHOUT CHARGE."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY
IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF
FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND
QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS ARE NOT
REQUIRED."
13. Applicable Law. This Agreement will be interpreted and enforced
under the laws of the State of California.
14. Incorporation of Plan by Reference. The text of the Plan is
incorporated in this Agreement by reference. Certain capitalized terms used in
this Agreement are defined in the Plan.
This Agreement and the Plan constitute the entire understanding
between you and the Company regarding your option. Any prior agreements,
commitments or negotiations concerning your option are superseded.
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