SAGE, INC. SECOND AMENDED AND RESTATED 1997 STOCK PLAN STOCK OPTION AGREEMENT
Exhibit
(a)(1)(I)(xviii)
SAGE,
INC.
SECOND
AMENDED AND RESTATED 1997 STOCK PLAN
1. Grant
of Option.
Sage,
Inc., a California corporation (the “Company”),
hereby grants to _________________ (“Optionee”),
an
option (the “Option”)
to
purchase a total number of shares of Common Stock (the “Shares”)
set
forth in the Notice of Stock Option Grant, at the exercise price per share
set
forth in the Notice of Stock Option Grant (the “Exercise
Price”)
subject to the terms, definitions and provisions of the Sage, Inc. Second
Amended and Restated 1997 Stock Plan (the “Plan”)
adopted by the Company, which is incorporated herein by reference. Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Option.
If
designated an Incentive Stock Option, this Option is intended to qualify as
an
Incentive Stock Option as defined in Section 422 of the Code.
2. Exercise
of Option.
This
Option shall be exercisable during its Term in accordance with the Vesting
Schedule set out in the Notice of Stock Option Grant and with the
provisions of Section 9 of the Plan as follows:
(a) Right
to Exercise.
(i) This
Option may not be exercised for a fraction of a share and no partial exercise
of
the Option may be for less than 100 Shares.
(ii) In
the
event of Optionee’s death, disability or other termination of employment, the
exercisability of the Option is governed by Sections 5, 6 and 7 below,
subject to the limitation contained in Section 2(a)(i).
(iii) In
no
event may this Option be exercised after the date of expiration of the Term
of
this Option as set forth in the Notice of Stock Option Grant.
(b) Method
of Exercise.
This
Option shall be exercisable by execution and delivery of the Exercise Notice
and
Restricted Stock Purchase Agreement attached hereto as Exhibit A
(the
“Exercise
Agreement”)
or of
any other form of written notice approved for such purpose by the Company 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 Optionee and shall be delivered
in
person or by certified mail to the Secretary of the Company. The written notice
shall be accompanied by payment of the Exercise Price. This Option shall be
deemed to be exercised upon receipt by the Company of such written notice
accompanied by 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 applicable law and
the requirements of any stock exchange upon which the Shares may then be listed.
Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to Optionee on the date on which the Option is exercised with
respect to such Shares.
3. Method
of Payment.
Payment
of the Exercise Price shall be by any of the following, or a combination
thereof, at the election of Optionee:
(a) cash;
(b) check;
(c) surrender
of other shares of Common Stock of the Company which (i) in the case of
Shares acquired pursuant to the exercise of a Company option, have been owned
by
Optionee for more than six months on the date of surrender, and (ii) have a
Fair Market Value on the date of surrender equal to the Exercise Price of the
Shares as to which the Option is being exercised; or
(d) if
there
is a public market for the Shares and they are registered under the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”),
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds required to pay the Exercise Price.
4. Restrictions
on Exercise.
This
Option may not be exercised until such time as the Plan has been approved by
the
shareholders of the Company, or 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 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.
5. Termination
of Relationship.
In the
event of termination of Optionee’s Continuous Status as an Employee or
Consultant, Optionee may, to the extent otherwise so entitled at the date of
such termination (the “Termination
Date”),
exercise this Option during the period of ninety days from the Termination
date
(“the Termination Period”). To the extent that Optionee was not entitled to
exercise this Option at such Termination Date, or if Optionee does not exercise
this Option within the Termination Period, the Option shall
terminate.
6. Disability
of Optionee.
(a) Notwithstanding
the provisions of Section 5 above, in the event of termination of
Optionee’s Continuous Status as an Employee or Consultant as a result of
Optionee’s total and permanent disability (as defined in Section 22(e)(3)
of the Code), Optionee may, but only within twelve months from the Termination
Date (but in no event later than the Expiration Date set forth in the Notice
of
Stock Option Grant), exercise this Option to the extent Optionee was entitled
to
exercise it as of such Termination Date. To the extent that Optionee was not
entitled to exercise the Option as of the Termination Date, or if Optionee
does
not exercise such Option (to the extent so entitled) within the time specified
in this Section 6(a), the Option shall terminate.
-2-
(b) Notwithstanding
the provisions of Section 5 above, in the event of termination of
Optionee’s consulting relationship or Continuous Status as an Employee as a
result of disability not constituting a total and permanent disability (as
set
forth in Section 22(e)(3) of the Code), Optionee may, but only within six
months from the Termination Date (but in no event later than the Expiration
Date
set forth in the Notice of Stock Option Grant), exercise the Option to the
extent Optionee was entitled to exercise it as of such-Termination Date;
provided, however, that if this is an Incentive Stock Option and Optionee fails
to exercise this Incentive Stock Option within three months from the Termination
Date, this Option will cease to qualify as an Incentive Stock Option (as defined
in Section 422 of the Code) and Optionee will be treated for federal income
tax purposes as having received ordinary income at the time of such exercise
in
an amount generally measured by the difference between the Exercise Price for
the Shares and the Fair Market Value of the Shares on the date of exercise.
To
the extent that Optionee was not entitled to exercise the Option at the
Termination Date, or if Optionee does not exercise such Option to the extent
so
entitled within the time specified in this Section 6(b), the Option shall
terminate.
7. Death
of Optionee.
In the
event of the death of Optionee (a) during the Term of this Option and while
an Employee or Consultant of the Company and having been in Continuous Status
as
an Employee or Consultant since the date of grant of the Option, or
(b) within 30 days after Optionee’s Termination Date, the Option may be
exercised at any time within six months following the date of death (but in
no
event later than the Expiration Date set forth in the Notice of Stock Option
Grant), 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 Termination Date.
8. 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 him or her. The terms of this Option shall be binding upon
the
executors, administrators, heirs, successors and assigns of
Optionee.
9. Term
of Option.
This
Option may be exercised only within the Term set forth in the Notice of Stock
Option Grant, subject to the limitations set forth in Section 7 of the
Plan.
10. Tax
Consequences.
Set
forth below is a brief summary as of the date of this Option of certain of
the
federal and California tax consequences of exercise of this Option and
disposition of the Shares under the laws in effect as of the Date of Grant.
THIS
SUMMARY IS NECESSARILY INCOMPLETE, and AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING
THIS
OPTION OR DISPOSING OF THE SHARES.
(a) Exercise
of Incentive Stock Option.
If this
Option qualifies as an Incentive Stock Option, there will be no regular federal
or California income tax liability upon the exercise of the Option, although
the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price will be treated as an adjustment to the alternative
minimum tax for federal tax purposes and may subject Optionee to the alternative
minimum tax in the year of exercise.
-3-
(b) Exercise
of Nonstatutory Stock Option.
If this
Option does not qualify as an Incentive Stock Option, there may be a regular
federal income tax liability and a California income tax liability upon the
exercise of the Option. Optionee will be treated as having received compensation
income (taxable at ordinary income tax rates) equal to the excess, if any,
of
the Fair Market Value of the Shares on the date of exercise over the Exercise
Price. If Optionee is an employee, the Company will be required to withhold
from
Optionee’s compensation or collect from Optionee and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise,
(c) Disposition
of Shares.
In the
case of a Nonstatutory Stock Option, if Shares are held for at least one year,
any gain realized on disposition of the Shares will be treated as long-term
capital gain for federal and California income tax purposes. In the case of
an
Incentive Stock Option, if Shares transferred pursuant to the Option are held
for at least one year after exercise and are disposed of at least two years
after the Date of Grant, any gain realized on disposition of the Shares will
also be treated as long-term capital gain for federal and California income
tax
purposes. In either case, the long-term capital gain will be taxed for federal
income tax and alternative minimum tax purposes at a maximum rate of 28% if
the
Shares are held more than one year but less than 18 months after exercise and
at
20% if the Shares are held more than 18 months after exercise. If Shares
purchased under an Incentive Stock Option are disposed of within one year after
exercise or within two years after the Date of Grant, any gain realized on
such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the difference between the Exercise Price and the lesser
of (i) the Fair Market Value of the Shares on the date of exercise, or
(ii) the sale price of the Shares.
(d) Notice
of Disqualifying Disposition of Incentive Stock Option
Shares.
If the
Option granted to Optionee herein is an Incentive Stock Option, and if Optionee
sells or otherwise disposes of any of the Shares acquired pursuant to the
Incentive Stock Option on or before the later of (i) the date two years
after the Date of Grant, or (ii) the date one year after the date of
exercise, Optionee shall immediately notify the Company in writing of such
disposition. Optionee acknowledges and agrees that he or she may be subject
to
income tax withholding by the Company on the compensation income recognized
by
Optionee from the early disposition by payment in cash or out of the current
earnings paid to Optionee.
11. Withholding
Tax Obligations.
Optionee understands that, upon exercising a Nonstatutory Stock Option, he
or
she will recognize income for tax purposes in an amount equal to the excess
of
the then Fair Market Value of the Shares over the Exercise Price. However,
the
timing of this income recognition may be deferred for up to six months if
Optionee is subject to Section 16 of the Exchange Act. If Optionee is an
employee, the Company will be required to withhold from Optionee’s compensation,
or collect from Optionee and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income. Additionally, Optionee may
at
some point be required to satisfy tax withholding obligations with respect
to
the disqualifying disposition of an Incentive Stock Option, Optionee shall
satisfy his or her tax withholding obligation arising upon the exercise of
this
Option by one or some combination of the following methods: (a) by cash
payment, (b) out of Optionee’s current compensation, (c) if permitted
by the Administrator, in its discretion, by surrendering to the Company Shares
which (i) in the case of Shares previously acquired from the Company, have
been owned by Optionee for more than six months on the date of surrender, and
(ii) have a Fair Market Value on the date of surrender equal to or greater
than Optionee’s marginal tax rate times the ordinary income recognized, or
(d) by electing to have the Company withhold from the Shares to be issued
upon exercise of the Option that number of Shares having a Fair Market Value
equal to the amount required to be withheld. For this purpose, the Fair Market
Value of the Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined (the “Tax
Date”).
-4-
If
Optionee is subject to Section 16 of the Exchange Act (an “Insider”),
any
surrender of previously owned Shares to satisfy tax withholding obligations
arising upon exercise of this Option must comply with the applicable provisions
of Rule 16b-3 promulgated under the Exchange Act (“Rule 16b-3”)
All
elections by Optionee to have Shares withheld to satisfy tax withholding
obligations shall be made in writing in a form acceptable to the Administrator
and shall be subject to the following restrictions:
(a) the
election must be made on or prior to the applicable Tax Date;
(b) once
made, the election shall be irrevocable as to the particular Shares of the
Option as to which the election is made; and
(c) all
elections shall be subject to the consent or disapproval of the
Administrator.
12. Market
Standoff Agreement.
In
connection with the initial public offering of the Company’s securities and upon
request of the Company or the underwriters managing such underwritten offering
of the Company’s securities, Optionee hereby agrees not to sell, make any short
sale of, loan, grant any option for the purchase of, or otherwise dispose of
any
Shares (other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such period
of time (not to exceed 180 days) from the effective date of such registration
as
may be requested by the Company or such managing underwriters and to execute
an
agreement reflecting the foregoing as may be requested by the underwriters
at
the time of the initial public offering.
13. Agreement
to Arbitrate.
Optionee and the Company recognize that differences may arise between them
during or following Optionee’s employment or consulting relationship with the
Company, and that those differences may or may not be related to the grant
of
options herein or to Optionee’s employment or consulting relationship. Optionee
understands and agrees that by entering into this Option Agreement, Optionee
anticipates the benefits of a speedy, impartial dispute-resolution procedure
of
any such differences. As used in this Section 13 and its subsections, the
“Company”
shall
also refer to all benefit plans, the benefit plans’ sponsors, fiduciaries,
administrators, affiliates, and all successors and assigns of any of
them.
-5-
(a) Arbitrable
Claims.
ALL
DISPUTES BETWEEN OPTIONEE (AND HIS OR HER SUCCESSORS AND ASSIGNS) AND THE
COMPANY (AND ITS AFFILIATES, SHAREHOLDERS, DIRECTORS, OFFICERS AND ASSIGNS)
RELATING IN ANY MANNER WHATSOEVER TO OPTIONEE’S EMPLOYMENT OR CONSULTING
RELATIONSHIP WITH THE COMPANY, OR TERMINATION OF THAT RELATIONSHIP, INCLUDING
WITHOUT LIMITATION ALL DISPUTES ARISING UNDER THIS AGREEMENT OR ANY SIMILAR
STOCK PURCHASE OR OPTION AGREEMENT (“ARBITRABLE
CLAIMS”)
SHALL
BE RESOLVED BY ARBITRATION. Arbitrable Claims shall include, but are not limited
to, contract (express or implied) and tort claims of all kinds, as well as
all
claims based on any federal, state, or local law, statute, or regulation
(including but not limited to claims alleging unlawful harassment or
discrimination in violation of Title VII and/or Title IX of the U.S.
Code, of the Age Discrimination in Employment Act, of the Americans with
Disabilities Act, of state statute, or otherwise), excepting only claims under
applicable workers’ compensation law and unemployment insurance claims.
Arbitration shall be final and binding upon the parties and shall be the
exclusive remedy for all Arbitrable Claims. Except as provided in the following
sentences of this Section 13(a), the Arbitrator (as defined below) shall
decide whether a claim is an Arbitrable Claim. Notwithstanding anything herein
to the contrary, however, the Company may enforce in court, without prior resort
to arbitration, any claim concerning actual or threatened unfair competition
and/or the actual or threatened use and/or unauthorized disclosure of
confidential or proprietary information of the Company. The court shall
determine whether a claim concerns actual or threatened unfair competition
and/or the actual or threatened use and/or unauthorized disclosure of
confidential or proprietary information of the Company.
THE
PARTIES HEREBY WAIVE ANY RIGHTS THAT THEY MAY HAVE TO TRIAL BY JURY IN REGARD
TO
ARBITRABLE CLAIMS.
(b) Arbitration
Procedure.
(i) American
Arbitration Association Rules: Initiation of Arbitration: Location of
Arbitration.
Arbitration of Arbitrable Claims shall be in accordance with the Employment
Dispute Resolution Rules of the American Arbitration Association (“AAA
Employment Rules”),
except as provided otherwise in this Option Agreement. Arbitration shall be
initiated by providing written notice to the other party with a statement of
the
claim(s) asserted, the facts upon which the claim(s) are based, and the remedy
sought. This notice shall be provided to the other party within six months
of
the acts or omissions complained of. Any claim not initiated within this
limitations period shall be null and void, and the Company and Optionee waive
all rights under statutes of limitation of different duration. The arbitration
shall take place in San Jose, California.
(ii) Selection
of Arbitrator.
All
disputes involving Arbitrable Claims shall be decided by a single arbitrator
(the “Arbitrator”),
who
shall be selected as follows. The American Arbitration Association
(“AAA”)
shall
give each party a list of eleven arbitrators drawn from its panel of employment
arbitrators. Each party may strike all names on the list it deems unacceptable.
If only one common name remains on the lists of all parties, that individual
shall be designated as the Arbitrator. If more than one common name remains
on
the lists of all parties, the parties shall strike names alternately until
only
one remains. If no common name remains on the lists of all parties, the AAA
shall furnish an additional list or lists until an Arbitrator is selected.
Notwithstanding any other provision herein to the contrary, if a party strikes
all eleven names on each of the first and the second lists provided by the
AAA,
such party shall be deemed to have stricken such names in bad faith, and all
twenty-two names on the lists shall be deemed acceptable to such party, and
the
other party shall select the Arbitrator.
-6-
(iii) Conduct
of the Arbitration.
(A) Discovery.
To help
prepare for the arbitration, Optionee and the Company shall be entitled, at
their own expense, to learn about the facts of a claim before the arbitration
begins. Each party shall have the right to take the deposition of one individual
and any expert witness designated by another party. Each party also shall have
the right to make requests for production of documents to any party. Additional
discovery may be had only where the Arbitrator so orders, upon a showing of
substantial need. At least thirty days before the arbitration, the parties
must
exchange lists of witnesses, including any expert witnesses, and copies of
all
exhibits intended to be used at the arbitration.
(B) Authority.
The
Arbitrator shall have jurisdiction to hear and rule on pre-hearing disputes
and
is authorized to hold pre-hearing conferences by telephone or in person as
the
Arbitrator deems necessary. The Arbitrator shall have the authority to entertain
a motion to dismiss and/or a motion for summary judgment by any party and shall
apply the standards governing such motions under the Federal Rules of Civil
Procedure, The Arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the state in which the claim arose, or federal
law,
or both, as applicable to the claim(s) asserted. The Arbitrator shall have
the
authority to award equitable relief, damages, costs and fees as provided by
the
law for the particular claim(s) asserted. The arbitrator shall not have the
power to award remedies or relief that a California court could not have
awarded. The Federal Rules of Evidence shall apply. The burden of proof shall
be
allocated as provided by applicable law. The Arbitrator, and not any federal,
state, or local court or agency, shall have exclusive authority to resolve
any
dispute relating to the interpretation, applicability, enforceability or
formation of this Option Agreement, including but not limited to any claim
that
all or any part of this Option Agreement is void or voidable and any assertion
that a dispute between Optionee and the Company is not an Arbitrable Claim.
The
arbitration shall be final and binding upon the parties.
(C) Costs.
Either
party, at its expense, may arrange for and pay the cost of a court reporter
to
provide a stenographic record of the proceedings. If the Arbitrator orders
a
stenographic record, the parties shall split the cost. Except as otherwise
provided in this Section, Optionee and the Company shall equally share the
fees
and costs of the arbitration and the Arbitrator.
(c) Confidentiality.
All
proceedings and documents prepared in connection with any Arbitrable Claim
shall
be confidential and, unless otherwise required by law, the subject matter
thereof shall not be disclosed to any person other than the parties to the
proceeding, their counsel, witnesses and experts, the Arbitrator, and, if
involved, the court and court staff. All documents filed with the Arbitrator
or
with a court shall be filed under seal. The parties shall stipulate to all
arbitration and court orders necessary to effectuate fully the provisions of
this subparagraph concerning confidentiality.
-7-
(d) Enforceabilitv.
Either
party may bring an action in any Court of competent jurisdiction to compel
arbitration under this Option Agreement and to enforce an arbitration award.
Except as provided above, neither party shall initiate or prosecute any lawsuit
or administrative action in any way related to any Arbitrable Claim. The Federal
Arbitration Act shall govern the interpretation and enforcement of this
Section 13.
[Signature
Page Follows]
-8-
This
Option Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one
document.
|
Sage,
Inc.
|
||
|
By:
|
||
|
(Print
name and title)
|
||
OPTIONEE
ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE OPTION HEREOF
IS EARNED ONLY BY CONTINUING EMPLOYMENT OR CONSULTANCY AT THE WILL OF THE
COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR
ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY’S STOCK PLAN WHICH IS INCORPORATED
HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO
CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE
IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S
EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee
acknowledges receipt of a copy of the Plan and represents that he or she is
familiar with the terms and provisions thereof, and hereby accepts this Option
subject to all of the terms and provisions thereof. Optionee has reviewed the
Plan and this Option in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option and fully understands all
provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator
upon
any questions arising under the Plan or this Option.
|
Dated:
|
|||
|
Optionee
|
|||
-9-