Exhibit 10.9
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Synapse Group, Inc.
Incentive Stock Option Agreement
Granted Under 2000 Stock Incentive Plan
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1. Grant of Option.
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This agreement evidences the grant by Synapse Group, Inc., a Delaware
corporation (the "Company"), on [__________], 200[__] (the "Grant Date") to
[___________], an employee of the Company (the "Participant"), of an option to
purchase, in whole or in part, on the terms provided herein and in the Company's
2000 Stock Incentive Plan (the "Plan"), a total of [__________] shares (the
"Shares") of the Company's Class B Common Stock, $0.001 par value per share (the
"Common Stock") at $[____] per Share. Unless earlier terminated, this option
shall expire on [__________] (the "Final Exercise Date").
It is intended that the option evidenced by this agreement shall 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.
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This option will become exercisable ("vest") as to 25% of the original
number of Shares on the first anniversary of the Grant Date and as to an
additional 25% of the original number of Shares on the second, third and fourth
anniversaries of the Grant Date.
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.
3. Exercise of Option.
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(a) Form of Exercise. Each election to exercise this option shall be in
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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./1/ 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) 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
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/1/ If the Board would like the Participant to be eligible to make payment
using a note (as provided in Section 5(f)(4) of the Plan) and not have the use
of a note cause this option to lose its ISO status, the right to pay with a note
must be included in this ISO agreement at the date of grant and should be listed
here. Furthermore, allowing additional forms of payment after the option has
been granted, in certain cases, may cause a new measurement date for accounting
purposes, resulting in a charge to earnings.
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").
(c) Termination of Relationship with the Company. If the Participant
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ceases to be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
three months after such cessation (but in no event after the Final Exercise
Date), provided that this option shall be exercisable only to the extent that
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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 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 written notice to the Participant from
the Company describing such violation.
(d) Exercise Period Upon Death or Disability. If the Participant dies or
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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 and the
Company has not terminated such relationship for "cause" as specified in
paragraph (e) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant by the
Participant, provided that this option shall be exercisable only to the extent
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that this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.
(e) Discharge for Cause. If the Participant, prior to the Final Exercise
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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 willful misconduct by the Participant or willful
failure by the Participant to perform his or her responsibilities to the Company
(including, without limitation, breach by the Participant of any provision of
any employment, consulting, advisory, nondisclosure, non-competition or other
similar agreement between the Participant and the Company), as determined by the
Company, which determination shall be conclusive. 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. Right of First Refusal.
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(a) If the Participant proposes to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively, "transfer") any Shares acquired upon exercise of this option,
then the Participant shall first give written notice of the proposed transfer
(the "Transfer Notice") to the Company. The Transfer Notice shall name the
proposed transferee and state the number of such Shares the Participant proposes
to transfer (the "Offered Shares"), the price per share and all other material
terms and conditions of the transfer.
(b) For 30 days following its receipt of such Transfer Notice, the Company
shall have the option to purchase all (but not less than all) of the Offered
Shares at the price and upon the terms set forth in the Transfer Notice. In the
event the Company elects to purchase all of the
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Offered Shares, it shall give written notice of such election to the Participant
within such 30-day period. The closing of the sale shall take place within one
hundred and twenty (120) days after exercise of the option under this Section.
If the terms of payment set forth in the Transfer Notice were other than cash
against delivery, the Company may pay for the Offered Shares on the same terms
and conditions as were set forth in the Transfer Notice. Any delay in making
such payment shall not invalidate the Company's exercise of its option to
purchase the Offered Shares.
(c) If the Company does not elect to acquire all of the Offered Shares,
the Participant may, within the 60-day period following the expiration of the
option granted to the Company under subsection (b) above, transfer the Offered
Shares to the proposed transferee, provided that such transfer shall not be on
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terms and conditions more favorable to the transferee than those contained in
the Transfer Notice. Notwithstanding any of the above, all Offered Shares
transferred pursuant to this Section 4 shall remain subject to the right of
first refusal set forth in this Section 4 and such transferee shall, as a
condition to such transfer, deliver to the Company a written instrument
confirming that such transferee shall be bound by all of the terms and
conditions of this Section 4.
(d) After the time at which the Offered Shares are required to be
delivered to the Company for transfer to the Company pursuant to subsection (b)
above, the Company shall not pay any dividend to the Participant on account of
such Offered Shares or permit the Participant to exercise any of the privileges
or rights of a stockholder with respect to such Offered Shares, but shall, in so
far as permitted by law, treat the Company as the owner of such Offered Shares.
(e) The following transactions shall be exempt from the provisions of this
Section 4:
(1) any transfer of Shares to or for the benefit of any spouse, child
or grandchild of the Participant, or to a trust for their benefit;
(2) any transfer pursuant to an effective registration statement
filed by the Company under the Securities Act of 1933, as amended (the
"Securities Act"); and
(3) the sale of all or substantially all of the shares of capital
stock of the Company (including pursuant to a merger or consolidation);
provided, however, that in the case of a transfer pursuant to clause (1) above,
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such Shares shall remain subject to the right of first refusal set forth in this
Section 4 and such transferee shall, as a condition to such transfer, deliver to
the Company a written instrument confirming that such transferee shall be bound
by all of the terms and conditions of this Section 4.
(f) The Company may assign its rights to purchase Offered Shares in any
particular transaction under this Section 4 to one or more persons or entities.
(g) The provisions of this Section 4 shall terminate upon the earlier of
the following events:
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(1) the closing of the sale of shares of Common Stock in an
underwritten public offering pursuant to an effective registration statement
filed by the Company under the Securities Act; or
(2) the sale of all or substantially all of the capital stock, assets
or business of the Company, by merger, consolidation, sale of assets or
otherwise (other than a merger or consolidation in which all or substantially
all of the individuals and entities who were beneficial owners of the Common
Stock immediately prior to such transaction beneficially own, directly or
indirectly, more than 60% of the outstanding securities entitled to vote
generally in the election of directors of the resulting, surviving or acquiring
corporation in such transaction).
(h) The Company shall not be required (1) to transfer on its books
any of the Shares which shall have been sold or transferred in violation of any
of the provisions set forth in this Section 4, or (2) to treat as owner of such
Shares or to pay dividends to any transferee to whom any such Shares shall have
been so sold or transferred.
5. Agreement in Connection with Public Offering.
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The Participant agrees, in connection with the initial underwritten public
offering of the Company's securities pursuant to a registration statement under
the Securities Act, (a) not to sell, make short sale of, loan, grant any options
for the purchase of, or otherwise dispose of any shares of Common Stock held by
the Participant (other than those shares included in the offering) without the
prior written consent of the Company or the underwriters managing such initial
underwritten public offering of the Company's securities for a period of 180
days from the effective date of such registration statement, and (b) to execute
any agreement reflecting clause (a) above as may be requested by the Company or
the managing underwriters at the time of such offering.
6. 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.
7. Nontransferability of Option.
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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.
8. Disqualifying Disposition.
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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.
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9. Provisions of the Plan.
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This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this option.
IN WITNESS WHEREOF, 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.
Synapse Group, Inc.
By: _____________________________
_____________________________
[Name and Title]
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PARTICIPANT'S ACCEPTANCE
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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 Company's 2000 Stock Incentive Plan.
PARTICIPANT:
_____________________________
Address: ___________________
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