EXHIBIT 10.44
NON-QUALIFIED STOCK OPTION AGREEMENT
GRANTED UNDER GRANTED UNDER 1999 STOCK INCENTIVE PLAN
1. Grant of Option.
This agreement evidences the grant by Switchboard Incorporated, a
Delaware corporation (the "Company"), on DECEMBER 10, 2003 (the "Grant Date") to
XXXXXXX X. XXXXXXX, a member of the Company's Board of Directors (the
"Participant"), of an option to purchase, in whole or in part, on the terms
provided herein and in the Company's 1999 Stock Incentive Plan (the "Plan"), a
total of 40,000 shares (the "Shares") of common stock, $0.01 par value per
share, of the Company ("Common Stock") at $6.25 per Share. Unless earlier
terminated, this option shall expire on DECEMBER 9, 2013 (the "Final Exercise
Date").
This option is not intended to be an incentive stock option as defined
in Section 422 of the Internal Revenue Code of 1986, as amended and any
regulations promulgated thereunder (the "Code"). Except as otherwise indicated
by the context, the term "Participant", as used in this option, shall be deemed
to include any person who acquires the right to exercise this option validly
under its terms.
2. Vesting Schedule.
(a) This option will become exercisable ("vest") as to 25% of the
original number of Shares on December 10, 2004 and as to an additional 25% of
the original number of Shares at the end of each successive one-year period
following December 10, 2004 until December 10, 2007.
The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent permissible it shall
continue to be exercisable, in whole or in part, with respect to all shares for
which it is vested until the earlier of the Final Exercise Date or the
termination of this option under Section 3 hereof or the Plan.
(b) Notwithstanding anything to the contrary in this option or in the
Plan, this option will vest as to 100% of the then-unvested shares upon the
occurrence of a Change of Control (as defined herein).
For the purposes of this option, a change in control ("Change in
Control") of the Company shall be deemed to occur if and only if (a) any person
or entity (other than the Company, ePresence Inc., any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, or
any corporation owned directly or indirectly by the stockholders of the Company
is substantially the same proportion as their
ownership of stock of the Company) is or becomes the "beneficial owner" (as
defined in Rule 13d- 3 under the Securities and Exchange of 1934, as amended),
directly or indirectly, of securities of the Company representing more than 50%
of the combined voting power of the Company's then outstanding voting securities
(b) a merger or consolidation of the Company following which the voting
securities of the Company outstanding immediately prior thereto do not continue
to represent more than 50% of the combined voting power of the voting securities
of the Company or the entity outstanding immediately after such merger or
consolidation, (c) a sale of all or substantially all of the assets of the
Company or (d) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this option shall be in
writing, signed by the Participant, and received by the Company at its principal
office, accompanied by this agreement, and payment in full in the manner
provided in the Plan. The Participant may purchase less than the number of
shares covered hereby, provided that no partial exercise of this option may be
for any fractional share or for fewer than ten whole shares.
(b) Early Exercise Alternative. Notwithstanding the exercisability
schedule set forth in Section 2, the Participant may elect to exercise this
option as to the unvested shares (in addition to the vested shares) if
simultaneously with such exercise the Participant enters into a Stock
Restriction agreement with the Company in the form attached hereto as Exhibit A
(the "Stock Restriction Agreement"). The Stock Restriction Agreement provides
that the unvested shares shall be subject to a right of repurchase (the
"Purchase Option") in favor of the Company at the $6.25 exercise price (as
adjusted pursuant to the terms hereof) in the event that the Participant ceases
to be employed by the Company.
(c) Continuous Relationship with the Company Required. Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Participant, at the time he or she exercises this option, is, and has been
at all times since the Grant Date, an employee, officer or director of, or
consultant or advisor to, the Company or any parent or subsidiary of the Company
as defined in Section 424(e) or (f) of the Code (an "Eligible Participant").
(d) Termination of Relationship with the Company. If the Participant
ceases to be an Eligible Participant for any reason, then, except as provided in
paragraphs (e) and (f) below, the right to exercise this option shall terminate
90 days after such cessation (but in no event after the Final Exercise Date),
provided, that, this option shall
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be exercisable only to the extent that the Participant was entitled to exercise
this option on the date of such cessation. Notwithstanding the foregoing, if the
Participant, prior to the Final Exercise Date, violates the non-competition or
confidentiality provisions of the Plan or any employment contract,
confidentiality and nondisclosure agreement or other agreement between the
Participant and the Company, the right to exercise this option shall terminate
immediately upon such violation.
(e) Exercise Period Upon Death or Disability. If the Participant dies
or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior
to the Final Exercise Date while he or she is an Eligible Participant, or if the
Participant dies within three (3) months after he or she ceases to be an
Eligible Participant and the Company has not terminated such relationship for
"cause" as specified in paragraph (f) below, this option shall become
exercisable, within the period of one (1) year following the date of death or
disability of the Participant by the Participant or by the person(s) to whom
this option is transferred by will or the laws of descent and distribution,
provided that, this option shall be exercisable only to the extent that this
option was exercisable by the Participant on the date of his or her death or
disability. Except as otherwise indicated by the context, the term
"Participant", as used in this option, shall be deemed to include the estate of
the Participant or any person who acquires the right to exercise this option by
bequest or inheritance or otherwise by reason of the death of the Participant.
(f) Discharge for Cause. If the Participant, prior to the Final
Exercise Date, is discharged by the Company for "cause" (as defined below), the
right to exercise this option shall terminate immediately upon the effective
date of such discharge. "Cause" shall mean, with respect to any Participant who
has entered into an employment or consulting agreement with the Company, a
material breach of such agreement by the Participant, or if such agreement
provides for termination for cause, the definition of "cause" set forth in such
agreement. With respect to any other Participant, "cause" shall mean (i)
conviction or pleading guilty (including a plea of nolo contendere) with respect
to the commission of a felony, (ii) acts of dishonesty or moral turpitude which
are materially detrimental to the Company and/or its affiliates as determined in
good faith by the Board, (iii) failure of the Participant to obey the reasonable
and lawful orders of the Board or the chief executive officer of the Company
after written demand that the Participant do so, (iv) gross negligence by the
Participant in the performance of, or wilful disregard by the Participant of,
the Participant's obligations to the Company, or (v) the breach by the
Participant of any of the Participant's obligations of confidentiality with
respect to the Company. The Participant shall be considered to have been
discharged for "cause" if the Company determines, within 30 days after the
Participant's resignation, that discharge for cause was warranted.
4. Withholding.
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No Shares will be issued pursuant to the exercise of this option unless
and until the Participant pays to the Company, or makes provision satisfactory
to the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option. If the Participant
chooses a Sell-to-cover exercise, then the total tax withholding cannot exceed
the Company's minimum statutory withholding (based on minimum statutory
withholding rates for federal and state tax purposes, including payroll taxes,
that are applicable to such supplemental taxable income).
5. Nontransferability of Option.
This option may not be sold, assigned, transferred, pledged or
otherwise encumbered by the Participant, either voluntarily or by operation of
law, except by will or the laws of descent and distribution, and, during the
lifetime of the Participant, this option shall be exercisable only by the
Participant.
6. Disqualifying Disposition.
If the Participant disposes of Shares acquired upon exercise of this
option within two years from the Grant Date or one year after such Shares were
acquired pursuant to exercise of this option, the Participant shall notify the
Company in writing of such disposition.
7. Provisions of the Plan.
This option is subject to the provisions of the Plan. A copy of the
prospectus for the Plan is furnished to the Participant with this option.
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IN WITNESS HEREOF, the Company has caused this option to be executed under its
corporate seal by its duly authorized officer. This option shall take effect as
a sealed instrument.
SWITCHBOARD INCORPORATED
Date of Grant: By: /s/ Xxxxxx X. Xxxxxxx
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DECEMBER 10, 2003 Name: Xxxxxx X. Xxxxxxx
Title: Vice President and CFO
PARTICIPANT'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Prospectus for the Company's 1999 Stock Incentive Plan.
PARTICIPANT:
Dated: 12/10/2003 /s/ Xxxxxxx Xxxxxxx
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Print Name: Xxxxxxx Xxxxxxx
Address
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