EXHIBIT 10.2.1
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT OF 1933 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 IS NOT REQUIRED.
PEOPLESUPPORT, INC.
1998 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
(Monthly Vesting Over Four Years with One-Year Cliff)
INCENTIVE STOCK OPTION This Option is intended to be an incentive stock option
under section 422 of the Internal Revenue Code and will
be interpreted accordingly.
VESTING Your right to exercise this Option shall commence
twelve months after the Vesting Start Date, as shown on
the cover sheet, and shall vest on a monthly basis
thereafter until fully vested on the fourth anniversary
of the Vesting Start Date, provided your employment
with the Company and its Subsidiaries has not been
terminated prior thereto. The number of Shares which
may be purchased under this Option by you at the
Exercise Price shall be equal to the difference between
(i) the product (rounded to the nearest integer) of the
number of full months of your continuous status as an
Employee of the Company (including all days of any
approved leaves of absence) from the Vesting Start Date
times the number of Shares covered by this Option times
0.0208333, minus (ii) the number of Shares purchased
pursuant to this Option prior to such exercise. The
resulting number of Shares will be rounded to the
nearest whole number. No additional Shares will vest
after your employment by the Company and its
Subsidiaries has terminated for any reason.
TERM Your Option will expire no later than the close of
business at Company headquarters on the day before the
tenth anniversary (fifth anniversary for a 10% owner)
of the Date of Grant, as shown on the cover sheet. (It
will expire earlier if your employment by the Company
and its Subsidiaries terminates, as described below.)
REGULAR TERMINATION If your employment with the Company and its
Subsidiaries terminates for any reason except Cause,
death or Disability, your Option will expire at the
close of business at Company headquarters on the 30th
day after your termination date.
CAUSE If your employment with the Company and its
Subsidiaries is terminated for Cause, your Option shall
immediately expire.
"Cause" means: (1) conviction of a felony involving
moral turpitude; (2) commission of any act of criminal
fraud, misappropriation of funds or embezzlement in
connection with your employment by the Company or a
Subsidiary; or (3) material breach of any provision of
any employment agreement between you and the Company or
a Subsidiary.
DEATH If your employment with the Company and its
Subsidiaries terminates because of your death, your
Option will expire at the close of business at Company
headquarters on the date six months after the date of
death. During that six-month period, your estate or
heirs may exercise the vested portion of your Option.
DISABILITY If your employment with the Company and its Subsidiaries
terminates because of your Disability, your Option will
expire at the close of business at Company headquarters on
the date six months after your termination date. (However,
if your Disability is not expected to result in death or
last for a continuous period of at least 12 months, your
Option will be eligible for ISO tax treatment only if it is
exercised within three months following the termination of
your employment with the Company and its Subsidiaries.)
"Disability" means that you are unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment.
LEAVES OF ABSENCE For purposes of this Option, your employment 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.
The Company determines which leaves count for this purpose,
and when your employment terminates for all purposes under
the Plan.
NOTICE OF EXERCISE When you wish to exercise this Option, you must notify the
Company by filing the proper "Notice of Exercise" form at
the address given on the form. Your Notice must specify how
many Shares you wish to purchase. Your Notice must also
specify how your Shares should be registered (for example,
in your name only or in your and your spouse's names as
community property or as joint tenants with right of
survivorship). The Notice will be effective when it is
received by the Company. If someone else wants to exercise
this Option after your death, that person must prove to the
Company's satisfaction that he or she is entitled to do so.
FORM OF PAYMENT When you submit your Notice of Exercise, you must include
payment of the Exercise Price for the Shares 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.
- Shares which have already been owned by you for more
than twelve months and which are surrendered to the
Company. The value of the Shares, determined as of the
effective date of the option exercise, will be applied
to the Exercise Price.
- To the extent that a public market for the Shares exists
as determined by the Company, by delivery (on a form
prescribed by the Committee) of an irrevocable direction
to a securities broker to sell Shares and to deliver all
or part of the sale proceeds to the Company in payment
of the aggregate Exercise Price.
WITHHOLDING TAXES You agree to make any arrangements required by the Company
to pay any withholding or other taxes that may be due as a
result of the Option exercise or the sale of Shares acquired
upon exercise of this Option.
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RESTRICTIONS ON EXERCISE By signing this Agreement, you agree not to
AND RESALE exercise this Option or sell any Shares acquired
upon exercise of this Option at a time when
applicable laws, regulations or Company or
underwriter trading policies prohibit exercise or
sale. In connection with any underwritten public
offering by the Company of its equity securities
pursuant to an effective registration statement
filed under the 1933 Act, including the Company's
initial public offering, you shall not exercise
this Option nor 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 shares
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. In order to enforce the provisions
of this paragraph, the Company may impose
stop-transfer instructions with respect to the
shares until the end of the applicable stand-off
period. Such limitation on exercise shall not
alter the vesting schedule set forth in this
Agreement other than to limit the periods during
which this Option shall be exercisable.
If the sale of Shares under the Plan is not
registered under the Securities Act of 1933, but
an exemption is available which requires an
investment or other representation, you shall
represent and agree at the time of exercise that
the Shares being acquired upon exercise of this
Option are being acquired for investment, and not
with a view to the sale or distribution thereof,
and shall make such other representations as are
deemed necessary or appropriate by the Company and
its counsel.
THE COMPANY'S RIGHT OF In the event that you propose to sell, pledge or
FIRST REFUSAL otherwise transfer to a third party any Shares
acquired under this Agreement, or any interest in
such Shares, the Company shall have the "Right of
First Refusal" with respect to all (and not less
than all) of such Shares. If you desire to
transfer Shares acquired under this 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 transferee and must constitute a
binding commitment of both parties to the transfer
of the Shares. The Company shall have the right to
purchase all, and not less than all, of the Shares
on the terms 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 30 days after the date when the Transfer
Notice was received by the Company. The Company's
rights under this Subsection shall be freely
assignable, in whole or in part.
If the Company fails to exercise its Right of
First Refusal within 30 days after the date when
it received the Transfer Notice, you may, not
later than 90 days following receipt of the
transfer of the Shares 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 Shares on the terms set
forth in the Transfer Notice within 60 days after
the date the Company received the Transfer Notice
(or within such longer period as may have been
specified in the Transfer Notice); provided,
however, that in the event the Transfer Notice
provided that payment for the Shares 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 Shares 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 and
shall be binding upon any transferee of the
Shares.
The Company's Right of First Refusal shall
terminate in the event that Stock is
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listed or traded on an established stock exchange.
TRANSFER OF OPTION Prior to your death, only you may exercise this Option.
You cannot transfer or assign this Option. For instance,
you may not sell this Option or use it as security for a
loan. If you attempt to do any of these things, this
Option will immediately become invalid. You may, however,
dispose of this 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.
RETENTION RIGHTS This Agreement does not give you the right to be retained
by the Company (or any Subsidiaries) in any capacity. The
Company (or Subsidiary) reserves the right to terminate
your employment at any time and for any reason.
SHAREHOLDER RIGHTS You, or your estate or heirs, have no rights as a
shareholder of the Company until a certificate for the
Shares acquired upon exercise of this Option 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.
ADJUSTMENTS In the event of a stock split, a stock dividend, a
subdivision of the outstanding stock, a combination or
consolidation of an the outstanding stock into a lesser
number of shares, a recapitalization, reclassification or
a similar change in the Company Stock, the number of
Shares covered by this 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.
LEGENDS All certificates representing the Shares issued upon
exercise of this Option shall, where applicable, have
endorsed thereon the following legends:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO CERTAIN RESTRICTIONS ON TRANSFER, INCLUDING RIGHTS
OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE
SHARES, SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY
AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN
INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED
UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY
THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS
CERTIFICATE.
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 IS NOT REQUIRED.
APPLICABLE LAW This Agreement will be interpreted and enforced under the
laws of the State of California (without regard to their
choice of law provisions).
THE PLAN AND OTHER The text of the Plan is incorporated in this Agreement by
AGREEMENTS 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 this
Option. Any prior agreements, commitments or negotiations
concerning this Option are superseded.
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By signing the cover sheet of this Agreement, you agree to all of the terms and
conditions described above and in the Plan.
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NOTICE OF EXERCISE OF STOCK OPTION
PeopleSupport, Inc.
Attn: Chief Financial Officer
Re: Exercise of Stock Option to Purchase Shares of Company Stock
Ladies and Gentlemen:
Pursuant to the Stock Option Agreement dated ___________________ (the
"Stock Option Agreement"), between PeopleSupport, Inc., a Delaware corporation
(the "Company"), and the undersigned, I hereby elect to purchase ___________
shares of the common stock of the Company (the "Shares"), at the price of
$________ per Share. My check in the amount of $_____________ is enclosed.
The undersigned understands there may be tax consequences as a result of
the purchase or disposition of the Shares. The undersigned represents that
he/she has received and reviewed the Plan's federal income tax information and
consulted with any tax consultants he/she deems advisable in connection with the
purchase or disposition of the Shares and the undersigned is not relying on the
Company for any tax advice.
The undersigned acknowledges that he/she has received, read and understood
the Stock Option Agreement and agrees to abide by and be bound by their terms
and conditions. The undersigned represents that the Shares are being acquired
solely for its own account and not as a nominee for any other party, or for
investment, and that the undersigned purchaser will not offer, sell or otherwise
dispose of any such Shares except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any state securities
laws.
Dated: _______________
__________________________________
(Signature)
__________________________________
(Please Print Name)
Social Security No. ______________
__________________________________
__________________________________
__________________________________
(Full Address)
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