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EXHIBIT 4.1
INTERSYSTEMS, INC.
INCENTIVE STOCK OPTION AGREEMENT
INTERSYSTEMS, INC., a Delaware corporation (the "Company"), has granted
to _____________ (the "Optionee"), an option (the "Option") to purchase a total
of [_____] shares (the "Shares") of the Company's common stock ("Common Stock"),
at the price determined as provided herein, and in all respects subject to the
terms, definitions and provisions of the 1997 Stock Option Plan (the "Plan")
adopted by the Company, which is incorporated herein by reference. The terms
defined in the Plan shall have the same defined meanings herein.
1. NATURE OF THE OPTION. This Option is intended to qualify as an Incentive
Stock Option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
2. EXERCISE PRICE. The exercise price is $____ for each share of Common Stock
subject to this Option, which price is not less than 100% of the fair market
value (110% of the fair market value if the Optionee owns more than 10% of the
Common Stock of the Company) per Share of the Common Stock on the date of grant.
3. EXERCISE OF OPTION. Subject to shareholder approval in accordance with the
terms of the Plan, this Option shall be exercisable during its term in
accordance with the provisions of Section 9 of the Plan as follows:
(a) Right to Exercise.
(i) This option shall be exercisable as follows:
(a) [vesting schedule]
(ii) This Option may not be exercised for a fraction of a
share.
(iii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the
Option is governed by Section 9 of the Plan.
(b) Method of Exercise. This Option shall be exercisable by written
notice which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect
to such shares of Common Stock as may be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee and
shall be delivered
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in person or by certified mail to the Secretary of the Company. The written
notice shall be accompanied by payment of the exercise price. No Shares will be
issued pursuant to the exercise of an Option unless such issuance and such
exercise shall comply with all relevant provisions of law and the requirements
of any stock exchange upon which the Shares may then be listed.
3A. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable pursuant to
the exercise of this Option have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), at the time this Option is exercised,
Optionee shall, concurrently with the exercise of all or any portion of this
Option, deliver to the Company his Investment Representation Statement in the
form attached hereto as Exhibit A.
4. METHOD OF PAYMENT. Payment of the exercise price shall be by cash, check or
shares of Common Stock having a fair market value on the date of surrender equal
to the aggregate exercise price of the Shares as to which the Option shall be
exercised, or any combination of such payment methods.
5. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the issuance of
such Shares upon such exercise or the method of payment of consideration for
such shares would constitute a violation of any applicable federal or state
securities or other law or regulation, including any rule under Part 207 of
Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by
the Federal Reserve Board. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
6. TERMINATION OF STATUS AS AN EMPLOYEE. If Optionee ceases to serve as an
Employee, he may, but only within thirty (30) days after the date he ceased to
be an Employee of the Company, exercise this Option to the extent that he was
entitled to exercise it at the date of such termination. To the extent that he
was not entitled to exercise this Option at the date of such termination, or if
he does not exercise this Option within the time specified herein, the Option
shall terminate.
7. DISABILITY OF OPTIONEE. Notwithstanding the provisions of Section 6 above, if
Optionee is unable to continue his employment with the Company as a result of
his total and permanent disability (as defined in Section 105(d)(4) of the
Code), he may, but only within twelve (12) months from the date of termination
of employment, exercise his Option to the extent he was entitled to exercise it
at the date of such termination, or if he does not exercise such Option (which
he was entitled to exercise) within the time specified herein, the Option shall
terminate.
8. DEATH OF OPTIONEE. In the event of the death of Optionee:
(a) during the term of this Option and while an Employee of the Company
and having been in Continuous Status as an Employee since the date of grant of
the Option, the Option may be
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exercised, at any time within twelve (12) months following the date of death, by
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
would have accrued had Optionee continued living one (1) month after the date of
death; or
(b) within thirty (30) days (or such other period of time not exceeding
three (3) months as is determined by the Board) after the termination of
Optionee's Continuous Status as an Employee, the Option may be exercised, at any
time within three (3) months following the date of death, by Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that had accrued at
the date of termination.
9. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by . The terms of this Option
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Optionee.
10. TERM OF OPTION. This Option may not be exercised more than ________ years
from the date of grant of this Option, and may be exercised during such term
only in accordance with the Plan and the terms of this Option.
11. EARLY DISPOSITION OF STOCK. Optionee understands that if he disposes of any
Shares received under this Option within two (2) years after the date of this
Agreement or within one (1) year after such Shares were transferred to him, he
will be treated for federal income tax purposes as having received ordinary
income at the time of such disposition in an amount equal to the excess of the
fair market value of the Shares at the time such Shares were delivered to him
over the price paid for the Shares. Optionee hereby agrees to notify the Company
in writing within thirty (30) days after the date of any such disposition.
Optionee understands that if he disposes of such Shares at any time after the
expiration of such two-year and one-year holding periods, any gain on such sale
will be taxed at capital gain rates.
DATE OF GRANT: __________________, 199__
INTERSYSTEMS, INC.,
a Delaware corporation
By____________________________
Name:
Title:
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Optionee acknowledges receipt of a copy of the Plan, a copy of which is
annexed hereto, and represents that he is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Board upon any questions arising
under the Plan.
Dated: _________, 199__
________________________________
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EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
PURCHASER:
COMPANY: INTERSYSTEMS, INC.
SECURITY: COMMON STOCK
DATE:
In connection with the purchase of the above-listed
Securities, I, the Purchaser, represent to the Seller and to the Company the
following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the securities. I am
purchasing these securities for my own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933 ("Securities Act").
(b) I understand that the Securities have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of my
investment intent as expressed herein. In this connection, I understand that, in
the view of the Securities and Exchange Commission ("SEC"), the statutory basis
for such exemption may be unavailable if my representation was predicated solely
upon a present intention to hold these Securities for the minimum capital gains
period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period of
one year or any other fixed period in the future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. Moreover, I understand
that the Company is under no obligation to register the Securities. In addition,
I understand that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel for
the Company.
(d) I am familiar with the provisions of Rule 144, promulgated
under the Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions, including, among other things: (1)
the
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availability of certain public information about the Company; (2) the resale
occurring not less than two years after the party has purchased, and made full
payment within the meaning of Rule 144, for the securities to be sold; and, in
the case of an affiliate, or of a non-affiliate who has held the securities less
than three years, (3) the sale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934) and the amount of
securities being sold during any three-month period not exceeding the specified
limitations stated in Rule 144, if applicable.
(e) I further understand that at the time I wish to sell the
Securities there may be no public market upon which to make such a sale, and
that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, I would be precluded from selling the Securities under Rule 144 even
if the two-year minimum holding period is satisfied.
(f) I further understand that in the event all of the
applicable requirements of Rule 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rule 144 is
not exclusive, the Staff of the SEC has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to rule 144 will have a substantial burden
of proof in establishing that an exemption from registration is available for
such offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.
(g) I understand that the certificate evidencing the
Securities will be imprinted with a legend noting the above restrictions on
sale.
Date: , 19
Signature of Purchaser:
__________________________
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