Exhibit 10.66
EPRESENCE, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
1. Grant of Options. ePresence, Inc. , a Massachusetts corporation (the
"Company"), hereby grants to Xxxxxxx X. Xxxxx (the "Optionee"), an option,
pursuant to the Company's 2001 Stock Incentive Plan (the "Plan"), to
purchase an aggregate of 120,000 shares of Common Stock ("Common Stock") of
the Company at a price of $1.97 per share, purchasable as set forth in and
subject to the terms and conditions of this option and the Plan. The date
of grant of this option is February 7, 2003. Except where the context
otherwise requires, the term "Company" shall include the parent and all
present and future subsidiaries of the Company as defined in Sections
424(e) and 424(f) of the Internal Revenue Code of 1986, as amended or
replaced from time to time (the "Code").
2. Non-Qualified Stock Option. This option is not intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
3. Exercise of Option and Provisions for Termination.
a. Vesting Schedule. 20,000 shares will vest immediately, the remaining
option shall vest and become exercisable on the first day of each
month over 10 months, commencing on March 1, 2003, at the rate of
10,000 shares per month. Except as otherwise provided in this
Agreement, this option may be exercised prior to the tenth anniversary
of the date of grant (hereinafter the "Expiration Date") . This option
may not be exercised at any time on or after the Expiration Date. The
right of exercise shall be cumulative so that if the option is not
exercised to the maximum extent permissible during any exercise
period, it shall be exercisable, in whole or in part, with respect to
all shares not so purchased at any time prior to the Expiration Date
or the earlier termination of this option.
b. Change in Control. Upon the occurrence of a Change in Control, as
defined in the February 4, 1997 Employment Agreement, as last amended
as of October 15, 2001, between the Company and the Employee (the
"Employment Agreement"), this option shall become vested and
exercisable as to 100% of the number of shares covered hereby that
would not otherwise then be vested and exercisable as provided for in
Section 8(b) of the Employment Agreement.
c. Certain Events. The vesting of this option shall also be subject to
continuation in accordance with the provisions of Section 5 of the
Employment Agreement.
d. Exercise Procedure. Subject to the conditions set forth in this
Agreement, this option shall be exercised by the Optionee's delivery
of written notice of exercise to the Treasurer of the Company,
specifying the number of shares to be purchased and the purchase price
to be paid therefore and accompanied by payment in full in accordance
with Section 4.
e. Continuous Employment Required. Except as otherwise provided in this
Section 3, this option may not be exercised unless Optionee, at the
time he exercises this option, is, and has been at all times since the
date of grant of this option, an employee of the Company. For all
purposes of this option, (i) "employment" shall be defined in
accordance with the provisions of Section 1.421-7(h) of the Income Tax
Regulations or any successor regulations, and (ii) if this option
shall be assumed or a new option substituted therefore in a
transaction to which Section 424(a) of the Code applies, employment by
such assuming or substituting corporation (hereinafter called the
"Successor Corporation") shall be considered for all purposes of this
option to be employment by the Company.
f. Exercise Period Upon Termination of Employment. If the Optionee ceases
to be employed by the Company for any reason, then, except as provided
in paragraphs (g) and (h) below, the right to exercise this option
shall terminate three months after the later of cessation of
employment or cessation of vesting (but in no event after the
Expiration Date), provided that this option shall be exercisable only
to the extent that the Optionee was entitled to exercise this option
on the date of such cessation. The Company's obligation to deliver
shares upon the exercise of this option shall be subject to the
satisfaction of all applicable federal, state and local income and
employment tax withholding requirements, arising by reason of this
option being treated as a non-statutory option or otherwise.
g. Exercise Period Upon Death or Disability. If the Optionee dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code)
prior to the Expiration Date while he is an employee of the Company,
or if the Optionee dies within three months after the Optionee ceases
to be an employee of the Company (other than as a result of a
discharge for "cause" as specified in paragraph (h) below), this
option shall become exercisable within the period of one year
following the date of death or disability of the Optionee (but in no
event after the Expiration Date), by the Optionee
2
or by the person to whom this option is transferred by will or the
laws of descent and distribution. Notwithstanding the immediately
preceding sentence, if the Optionee dies or becomes disabled during a
vesting continuation period under Paragraph 3 (c) above and prior to
the Expiration Date, this option shall become exercisable within the
period of one year following the cessation of such vesting (but in no
event after the Expiration Date) as to only such options that become
exercisable by the Optionee during such vesting continuation period,
by the Optionee or by the person to whom this option is transferred by
will or the laws of descent and distribution. This option shall be
exercisable only to the extent that this option was exercisable by the
Optionee on the date of his cessation of employment and/or cessation
of vesting, as the case may be. Except as otherwise indicated by the
context, the term "Optionee", as used in this option, shall be deemed
to include the estate of the Optionee or any person who acquires the
right to exercise this option by bequest or inheritance or otherwise
by reason of the death of the Optionee.
h. Exercise Period Upon Discharge for Cause. If the Optionee, prior to
the Expiration Date, ceases his employment with the Company because he
is discharged for "cause" (as defined in Section 5 (b) (1) and 5 (b)
(2) of the Employment Agreement), the right to exercise this option
shall terminate 30 days after such cessation of employment.
4. Payment of Purchase Price.
a. Method of Payment. Payment of the purchase price for shares purchased
upon exercise of this option shall be made by delivery of cash or
check in the amount equal to the exercise price of such options or,
with the prior consent of the Company (which may be withheld in its
sole discretion), by (A) delivery of shares of Common Stock owned by
the Optionee for at least six months, valued at their fair market
value, as determined in (b) below, (B) delivery of a promissory note
of the Optionee to the Company on terms determined by the Compensation
Committee of the Company's Board of Directors (the "Compensation
Committee"), (C) delivery of an irrevocable undertaking by a broker to
deliver promptly to the Company sufficient funds to pay the exercise
price or delivery of irrevocable instructions to a broker to deliver
promptly to the Company cash or a check sufficient to pay the exercise
price, (D) payment of such other lawful consideration as the
Compensation Committee may determine, or (E) any combination of the
foregoing.
b. Valuation of Shares or Other Non-Cash Consideration Tendered in
Payment of Purchase Price. For the purposes hereof, the fair market
value of any share of the Company's Common Stock or other non-cash
consideration which may be delivered to the Company in exercise of
this
3
option shall be determined in good faith or in the manner determined
by the Compensation Committee from time to time.
c. Delivery of Shares Tendered in Payment of Purchase Price. If the
Optionee exercises options by delivery of shares of Common stock of
the Company, the certificate or certificates representing the shares
of Common Stock of the Company to be delivered shall be duly executed
in blank by the Optionee or shall be accompanied by a stock power duly
executed in blank suitable for purposes of transferring such shares to
the Company. Fractional shares of Common Stock of the Company will not
be accepted in payment of the purchase price of shares acquired upon
exercise of this option.
d. Restrictions on Use of Option Stock. Notwithstanding the foregoing, no
shares of Common Stock of the Company may be tendered in payment of
the purchase price of shares purchased upon exercise of this option if
the shares to be so tendered were acquired within six months before
the date of such tender through the exercise of this option or any
other stock option or restricted stock agreement.
5. Delivery of Shares; Compliance with Securities Laws, etc. The Company will
not be obligated to deliver any shares of Common Stock or to remove
restriction from shares previously delivered (i) until all conditions of
the option have been satisfied or removed, (ii) until, in the opinion of
Company's counsel, all applicable federal and state laws and regulations
have been complied with, (iii) if the outstanding Common Stock is at the
time listed on any stock exchange, until the shares to be delivered have
been listed or authorized to be listed on such exchange upon official
notice of notice of issuance, and (iv) until all other legal matters in
connection with the issuance and delivery of such shares have been approved
by the Company's counsel.
6. Non-transferability of Option. This option is personal and no rights
granted hereunder may be transferred, assigned, pledged or hypothecated in
any way (whether by operation of law or otherwise) nor shall any such
rights be subject to execution, attachment or similar process, except that
this option may be transferred (i) by will or the laws of descent and
distribution, or (ii) pursuant to a qualified domestic relations order as
defined in Section 414(p) of the Code. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of this option or of such
rights contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon this option or such rights, this option
and such rights shall, at the election of the Company, become null and
void.
7. No Special Employment or Similar Rights. Nothing contained in this option
shall be construed or deemed by any person under any circumstances to bind
the
4
Company to continue the employment or other relationship of Optionee with
the Company for the period within which this option may be exercised.
8. Rights as a Shareholder. The Optionee shall have no rights as a shareholder
with respect to any shares which may be purchased by exercise of this
option (including, without limitation, any rights to receive dividends or
non-cash distributions with respect to such shares) unless and until a
certificate representing such shares is duly issued and delivered to the
Optionee. No adjustment shall be made for dividends or other rights for
which the record date is prior to the date such stock certificate is
issued.
9. Adjustment Provisions. In the event that the Compensation Committee, in its
sole discretion, determines that any stock dividend, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation,
split-up, spin-off, combination or other similar transaction affects the
Common Stock such that an adjustment is required in order to preserve the
benefits or potential benefits intended to be made available under the
Plan, then the Compensation Committee shall equitably adjust either or both
(i) the number and kind of shares subject to this option, and (ii) the
award, exercise or conversion price with respect to the foregoing, and if
considered appropriate, the Compensation Committee may make provision for a
cash payment with respect to this option, provided that the number of
shares subject to this option shall always be a whole number.
10. Mergers, Consolidation, Distributions, Liquidations, etc. Subject to the
provisions of Section 3(b) above, in the event of a consolidation, merger
or other reorganization in which all of the outstanding shares of Common
Stock are exchanged for securities, cash or other property of any other
corporation or business entity (an "Acquisition") or in the event of a
liquidation of the Company, the Board of Directors of the Company, or the
board of directors of any corporation assuming the obligations of the
Company, may, in its discretion, take any one or more of the following
actions as to this option: (i) provide that this option shall be assumed,
or a substantially equivalent option shall be substituted by the acquiring
or succeeding corporation (or an affiliate thereof) on such terms as the
Board determines to be appropriate, (ii) upon written notice to the
Optionee, provide that if unexercised, this option will terminate
immediately prior to the consummation of such transaction unless exercised
by the Optionee within a specific period following the date of such notice,
(iii) in the event of an Acquisition under the terms of which holders of
the Common Stock of the Company will receive upon consummation thereof a
cash payment for each share surrendered in the Acquisition (the
"Acquisition Price"), make or provide for a cash payment to the Optionee
equal to the difference between (A) the Acquisition Price times the number
of shares of Common Stock subject to outstanding options (to the extent
then exercisable at prices not in excess of the Acquisition Price) and (B)
the aggregate exercise price of all such outstanding options in exchange
for the termination of such options, and (iv) provide that all or part of
this option shall
5
become exercisable or realizable in full prior to the effective date of
such Acquisition.
11. Withholding Taxes. The Company's obligation to deliver shares upon the
exercise of this option shall be subject to the Optionee's satisfaction to
all applicable federal, state and local income and employment tax
withholding requirements. The Optionee shall pay to the Company, or make
provision satisfactory to the Compensation Committee for payment of, any
taxes required by law to be withheld in respect of options under the Plan
no later than the date of the event creating the tax liability. In the
Compensation Committee's discretion, and subject to such conditions as the
Compensation Committee may establish, such tax obligations may be paid in
whole or in part in shares of Common Stock, including shares retained from
the option creating the tax obligation, valued at their fair market value.
The Company may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to the Optionee.
12. Miscellaneous.
a. If any terms of this Option Agreement are contrary to or otherwise
conflict with the terms of the Employment Agreement, the terms of the
Employment Agreement shall control.
b. All notices under this option shall be mailed or delivered by hand to
the parties at their respective addresses set forth beneath their
names below or at such other address as may be designated in writing
by either of the parties to one another.
c. This option shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts.
EPRESENCE, INC.
BY: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxxx
Senior Vice President and
Chief Financial Officer
6
