EXHIBIT 4(b)
4FRONT SOFTWARE INTERNATIONAL, INC.
STOCK OPTION AGREEMENT
-----------------------------------
AGREEMENT made as of the ___ day of ______________
199__, by and between 4Front Software International, Inc., a Delaware
corporation (the "Company"), and ___________________ (the "Optionee").
W I T N E S S E T H
WHEREAS, pursuant to the 4Front Software International, Inc.
1996 Equity Incentive Plan (the "Plan"), the Company desires to grant to the
Optionee and the Optionee desires to accept an option to purchase shares of
common stock, no par value, of the Company (the "Common Stock") upon the
terms and conditions set forth in this agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1 GRANT. The Company hereby grants to the Optionee an option
to purchase _____ shares of Common Stock at a purchase price per share
equal to $5.75, which price was in excess of the fair market value of the
Common Stock on the date hereof. "Fair Market Value" shall have such meaning
as set forth in Section 20 of the Plan. This option is intended to be treated
as an option which does not qualify as an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. RESTRICTIONS ON EXERCISABILITY. Except as specifically
provided otherwise herein, the option will become exercisable in accordance
with the following schedule based upon the period of the Optionee's
continuous service as an employee of the Company following the date hereof:
Period Incremental Cumulative
of Percentage of Percentage of
Continuous Option Option
SERVICE EXERCISABLE EXERCISABLE
------------------ -------------- ------------
Less than 6 months 0% 0%
6 months 33% 33%
18 months 33% 66%
30 or more months 34% 100%
No shares of Common Stock may be purchased hereunder unless the Optionee shall
have remained an employee of the Company for at least six months from the date
hereof. Unless sooner terminated, the option will expire if and to the extent it
is not exercised within ten years from the date hereof.
3. EXERCISE. The option may be exercised in whole or in part in
accordance with the above schedule by delivering to the Secretary of the
Company (a) a written notice specifying the number of shares to be purchased,
and (b) payment in full of the exercise price, together with the amount, if
any, deemed necessary by the Company to enable it to satisfy any income tax
withholding obligations with respect to the exercise (unless other
arrangements acceptable to the Company are made for the satisfaction of such
withholding obligations). The exercise price shall be payable
in cash or by bank or certified check. The Company may (in its sole and absolute
discretion) permit all or part of the exercise price to be paid with
previously-owned shares of Common Stock, or in installments (together with
interest) evidenced by the Optionee's secured promissory note.
4. RIGHTS AS STOCKHOLDER. No shares of Common Stock shall be sold
or delivered hereunder until full payment for such shares has been made
(or, to the extent payable in installments, provided for). The Optionee shall
have no rights as a stockholder with respect to any shares covered by the
option until a stock certificate for such shares is issued to the Optionee.
Except as otherwise provided herein, no adjustment shall be made for
dividends or distributions of other rights for which the record date is prior
to the date such stock certificate is issued.
5. NONTRANSFERABILITY. The option is not assignable or
transferable except upon the Optionee's death to a beneficiary designated by
the Optionee or, if no designated beneficiary shall survive the Optionee,
pursuant to the Optionee's will and/or the laws of descent and distribution.
During an Optionee's lifetime, the option may be exercised only by the
Optionee or the Optionee's guardian or legal representative.
6. TERMINATION OF SERVICE OR DEATH. (a) If the Optionee is
terminated for any reason except death or disability, then the Optionee may
exercise such Optionee's options, only to the extent that such options would
have been exercisable upon the termination date of Optionee's employment, no
later than thirty (30) days after such termination date, but in any event, no
later than the expiration date of the options.
(b) If the Optionee is terminated because of death or
disability, then the Optionee's options may be exercised, only to the
extent that such options would have been exercisable by Optionee on the
termination date of Optionee's employment, and must be exercised by Optionee
(or Optionee's legal representative or authorized assignee) no later than one
hundred eighty (180) days after such termination date, but in any event no
later than the expiration date of the options.
7. SECURITIES LAWS COMPLIANCE REQUIRED. Notwithstanding
anything herein to the contrary, if the shares of Common Stock issuable
upon exercise of options granted under the Plan have not been registered
under the Securities Act of 1933, as amended, the Board of Directors may
condition the exercisability of the option upon compliance with applicable
federal and state securities laws.
8. CHANGE IN CONTROL; CAPITAL CHANGES. The
existence of outstanding options shall not affect in any way the right or
power of the Company or its stockholders to make or authorize all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any other
corporate act or proceeding, whether of a similar character or otherwise.
If the Company shall effect a subdivision or consolidation of
shares or other capital readjustment, the payment of a stock dividend, or
other increase or reduction of the number of shares of its Common Stock
outstanding, without receiving compensation therefor in money, services or
property, then (i) the number, class, and per share price of shares subject
to outstanding options hereunder shall be appropriately adjusted in such a
manner as to entitle an Optionee to receive upon exercise thereof (and, if
relevant, for the same aggregate cash consideration), the same total number
and class of shares as such Optionee would have received had such Optionee
exercised such option in full immediately prior to such event; and (ii) the
number and class of shares with respect to which options may be granted under
the Plan shall be adjusted by substituting for the total number of shares of
Common Stock then reserved that number and class of shares of stock that
would have been received by the owner of an equal number of outstanding
shares of Common Stock as the result of the event requiring the adjustment.
After a merger of one or more corporations into the Company, or
after a consolidation of the Company and one more corporations in which the
Company shall be the surviving corporation, each holder of an outstanding
option shall, at no additional cost, be entitled to receive upon exercise of
such option (subject to any required action by stockholders of the Company)
in lieu of the number of shares as to which such option shall then be so
exercisable, the number and class of shares of stock or other securities to
which such holder would have been entitled pursuant to the terms of the
agreement of merger or consolidation if, immediately prior to such merger or
consolidation, such holder had been the holder of record of a number of
shares of Common Stock equal to the number of shares as to which such option
shall be so exercised.
If the Company is merged into or consolidated with another
corporation under circumstances where the Company is not the surviving
corporation, or if the Company is liquidated, or sells or otherwise disposes
of substantially all its assets to another corporation while unexercised
options remain outstanding under the Plan, (i) subject to the provisions of
clause (ii) below, after the effective date of such merger, consolidation or
sale, as the case may be, each holder of an outstanding option shall be
entitled to receive upon exercise of such option in lieu of shares of Common
Stock, shares of such stock or other securities, cash or property as the
holders of shares of Common Stock received pursuant to the terms of the
merger, consolidation or sale; or (ii) all outstanding options may be
canceled by the Board as of the effective date of any such merger,
consolidation, liquidation or sale provided that: (x) notice of such
cancellation shall be given to each holder of an option, and (y) each holder
of an option shall have the right to exercise such option to the extent that
the same is then exercisable or, if the Board shall have accelerated the time
for exercise of all unexercised and unexpired options, in full during the
30-day period preceding the effective date of such merger, consolidation,
liquidation or sale.
Except as expressly provided above, the issue by the Company of
shares of stock of any class, securities convertible into shares of stock
of any class, for cash, property or services, either upon direct sale or upon
the exercise of rights or warrants to subscribe therefor, or upon conversion
of shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares then subject to
outstanding options.
9. NO RIGHTS TO CONTINUE SERVICE. Nothing in this agreement
shall give the Optionee any right to continue in the service of the
Company, or interfere in any way with the right of the Company to terminate
the service of the Optionee.
10. PROVISIONS OF PLAN. The provisions of the Plan shall
govern if and to the extent that there are inconsistencies between those
provisions and the provisions hereof. The Optionee acknowledges receipt of a
copy of the Plan prior to the execution of this agreement.
11. ADMINISTRATION. The Board of Directors of the Company will
have full power and authority to interpret and apply the provisions of this
agreement and act on behalf of the Company in connection with this agreement,
and the decision of the Board of Directors of the Company as to any matter
arising under this agreement shall be binding and conclusive as to all
persons.
12. MISCELLANEOUS.
(a) This agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and
permitted assigns.
(b) This agreement shall be governed by and construed in
accordance with the laws of the State of Colorado. This agreement
constitutes the entire agreement between the parties with respect to the
subject matter hereof and may not be modified except by written instrument
executed by the parties.
IN WITNESS WHEREOF, this agreement has been executed as of
the date first above written.
4FRONT SOFTWARE INTERNATIONAL, INC.
By:
---------------------------------
Optionee
