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EXHIBIT 4.7
FORM FOR ISO UNDER E-SYNC NETWORKS,
INC.'S 1999 LONG-TERM INCENTIVE PLAN
NONTRANSFERABLE INCENTIVE STOCK OPTION
AGREEMENT dated as of ,
between E-SYNC NETWORKS, INC., a
Delaware corporation (the "Company"),
and (the "Optionee",
which term as used herein shall be
deemed to include any successor to the
Optionee by will or by the laws of
descent and distribution, unless the
context shall otherwise require).
Pursuant to the Company's 1999 Long-Term Incentive Plan (as so amended, the
"Plan"), the Company, acting through the Compensation Committee of its Board of
Directors (the "Committee"), approved the issuance to the Optionee, effective as
of the date set forth above, of an incentive stock option to purchase up to an
aggregate of [# OF SHARES] shares of Common Stock, $.01 par value, of the
Company (the "Common Stock"), at the price (the "Option Price") of [not less
than 100% of the fair market value of a share of Common Stock on the date of
grant (110%, in the case of a 10% stockholder)] [PRICE] per share, upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual premises and undertakings
hereinafter set forth, the parties hereto agree as follows:
1. OPTION; OPTION PRICE. On behalf of the Company, the Committee hereby
grants to the Optionee the option (the "Option") to purchase, subject to the
terms and conditions of this Agreement and the Plan (which are incorporated by
reference herein and which in all cases shall control in the event of any
conflict with the terms, definitions and provisions of this Agreement), [# OF
SHARES] shares of Common Stock of the Company at an exercise price per share
equal to the Option Price, which Option is intended to qualify for federal
income tax purposes as an "incentive stock option" within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"). A copy of the
Plan as in effect on the date hereof has been supplied to the Optionee, and the
Optionee hereby acknowledges receipt thereof.
2. TERM. The term (the "Option Term") of the Option shall commence on the
date of this Agreement [fifth anniversary, in the case of a 10% stockholder],
unless such Option shall theretofore have been terminated in accordance with the
terms hereof or of the Plan.
3. TIME OF EXERCISE. (a) Unless accelerated in the discretion of the
Committee or as otherwise provided herein, the Option shall become exercisable
as to the total number of shares of Common Stock subject to the Option as same
may be limited in accordance with Exhibit A hereto, for the periods specified in
Exhibit A hereto. Subject to the provisions of Sections 5 and 8 hereof, shares
as to which the Option becomes exercisable pursuant to the foregoing provision
may be purchased at any time thereafter prior to the expiration or termination
of the Option.
(b) Anything contained in this Agreement to the contrary notwithstanding,
the Option shall not be exercisable to the extent that the aggregate Fair Market
Value (as defined in the Plan) on the date hereof of all stock with respect to
which incentive stock options are exercisable for the first time by the Optionee
during any calendar year (under the Plan and all other plans of each other
corporation which qualifies as a "subsidiary corporation" of the Company under
Section 424(f) of the Code (any of the aforementioned, a "Participating
Company")) exceeds $100,000.
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4. TERMINATION OF OPTION. (a) The unexercised portion of the Option
(which portion was otherwise exercisable) shall automatically terminate and
shall become null and void and be of no further force or effect upon the first
to occur of the following:
(i) the expiration of the Option Term;
(ii) the expiration of three months from the date that the Optionee
ceases to be an employee of a Participating Company (other than as a result
of a Total Disability (as defined in subparagraph (iii) below), a
Resignation (as defined in subparagraph (iv) below) or a Termination For
Cause (as defined in subparagraph (iv) below)); provided, however, that if
the Optionee shall die during such three-month period, the time of
termination of the unexercised portion of the Option shall be determined in
accordance with subparagraph (iii) below;
(iii) the expiration of 12 months from the date that the Optionee
ceases to be an employee of a Participating Company as a result of the
Optionee's complete and permanent inability to perform all of his or her
duties under the terms of his or her employment with any Participating
Company, as determined by the Committee upon the basis of such evidence,
including independent medical reports and data, as the Committee deems
appropriate or necessary (a "Total Disability");
(iv) immediately if the Optionee ceases to be employed by any
Participating Company if such termination is a voluntary termination by the
Optionee (a "Resignation") or a termination for cause or is otherwise
attributable to a breach by the Optionee of an employment, noncompetition
or other similar agreement with a Participating Company (any such
termination, determined in accordance with paragraph (b) below, a
"Termination For Cause"); provided, however, a retirement in accordance
with the terms and conditions of a retirement plan adopted by a
Participating Company shall not be deemed to be a Resignation;
(v) except to the extent permitted by Section 14(a) of the Plan, the
date on which the Option or any part thereof or right or privilege relating
thereto is transferred (otherwise than by will or the laws of descent and
distribution), assigned, pledged, hypothecated, attached or otherwise
disposed of by the Optionee.
(b) Any unexercised portion of the Option which was not exercisable on the
date the Optionee ceases to be employed by any Participating Company shall
terminate at midnight on the date on which such employment ceases.
(c) The Board of Directors of the Company shall have the power to determine
what constitutes a Termination For Cause, and the date upon which such
Termination For Cause occurs. Any such determination shall be final, conclusive
and binding upon the Optionee.
(d) Anything contained herein to the contrary notwithstanding, the Option
shall not be affected by any change of duties or position of the Optionee
(including a transfer to or from any Participating Company), so long as the
Optionee continues to be an officer or employee of a Participating Company.
5. PROCEDURE FOR EXERCISE. (a) The Option may be exercised, from time to
time, in whole or in part (but for the purchase of whole shares only), by
delivery of a written notice (the "Notice") from the Optionee to the Secretary
of the Company, which Notice shall:
(i) state that the Optionee elects to exercise the Option;
(ii) state the number of shares of Common Stock with respect to which
the Option is being exercised (the "Optioned Shares");
(iii) state the method of payment for the Optioned Shares pursuant to
Section 5(b) hereof;
(iv) state the date upon which the Optionee desires to consummate the
purchase of the Optioned Shares (which date must be prior to the
termination of such Option and no later than 30 days from the delivery of
such Notice);
(v) include any representations of the Optionee required under Section
8(b) hereof; and
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(vi) if the Option shall be exercised pursuant to Section 10 hereof by
any person other than the Optionee, include evidence to the satisfaction of
the Committee of the right of such person to exercise the Option.
(b) Payment of the Option Price for the Optioned Shares shall be made (i)
in cash or by personal or certified check, (ii) by delivery of stock
certificates (in negotiable form) representing shares of Common Stock that have
been owned of record by the Optionee for at least six months prior to the date
of exercise and that have a Fair Market Value on the date of exercise equal to
the product of (A) the number of Optioned Shares which are being purchased
pursuant to the exercise of such Option, multiplied by (B) the applicable Option
Price, (iii) a combination of either of the methods set forth in clauses (i) and
(ii) above, (iv)(A) by arrangements which are acceptable to the Committee and as
permitted by applicable law whereby the Optionee relinquishes a portion of the
Option, or (B) in compliance with any other cashless exercise program authorized
by the Committee for use in connection with the Plan at the time of such
exercise, or (v) in such other consideration as shall be acceptable to the
Committee. For the purpose of the preceding clause (iv)(A), the fair market
value of the portion of the Option that is relinquished shall be the Fair Market
Value at the time of exercise of the number of Optioned Shares subject to the
portion of the Option that is relinquished less the aggregate exercise prices
specified in the Option with respect to such Optioned Shares.
(c) The Company shall issue a stock certificate in the name of the Optionee
(or such other person exercising the Option in accordance with the provisions of
Section 10 hereof) for the Optioned Shares as soon as practicable after receipt
of the Notice and payment of the aggregate Option Price for such shares.
6. NO RIGHTS AS A STOCKHOLDER. The Optionee shall not have any privileges
of a stockholder of the Company with respect to any Optioned Shares until the
date of issuance of a stock certificate pursuant to Section 5(c) hereof.
7. ADJUSTMENTS. If the outstanding shares of Common Stock of the Company
are increased, decreased, or exchanged for a different number or kind of shares
or other securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of Common Stock or other
securities, through merger, consolidation, sale of all of substantially all of
the property of the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other distribution with
respect to such shares of Common Stock or other securities, then, to the extent
permitted by the Company, an appropriate and proportionate adjustment shall be
made in (i) the number and kind of shares or other securities subject to the
Option and (ii) the price for each share or other unit of any other securities
subject to the Option without change in the aggregate purchase price or value as
to which such Option remains exercisable or subject to restrictions. Any
adjustment under this Section 7 shall be made by the Company's Board of
Directors, whose determination as to what adjustments shall be made and the
extent thereof will be final, binding and conclusive. No fractional interests
will be issued under the Plan resulting from any such adjustment.
8. ADDITIONAL PROVISIONS RELATED TO EXERCISE. (a) The Option shall be
exercisable only on such date or dates and during such period and for such
number of shares of Common Stock as are set forth in this Agreement.
(b) To exercise the Option, the Optionee shall follow the procedures set
forth in Section 5 hereof. Unless at the time of exercise of the Option there
shall be, in the opinion of counsel for the Company, a valid and effective
registration statement under the Securities Act of 1933 (the "'33 Act") and
appropriate qualification and registration under applicable state securities
laws relating to the Optioned Shares being acquired pursuant to the Option, the
Optionee shall be required, upon exercise of the Option, to give to the Company
a written representation, in a form reasonably satisfactory to the Company, that
he or she is acquiring the Optioned Shares for his or her own account for
investment and not with a view to, or for sale in connection with, the resale or
distribution of any such shares. The Optionee shall be further required to agree
that he or she will not sell or transfer any Optioned Shares acquired pursuant
to exercise of the Option until he or she requests and receives an opinion of
the Company's counsel to the effect that such proposed sale or transfer will not
result in a violation of the '33 Act or any applicable state securities law, or
a registration statement covering the sale or transfer of the shares has been
declared effective by the Securities and Exchange Commission or appropriate
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state governmental authority, or he or she obtains a no-action letter from the
Securities and Exchange Commission or appropriate state governmental authority
with respect to the proposed transfer.
(c) Stock certificates representing shares of Common Stock acquired upon
the exercise of the Option that have not been registered under the Securities
Act shall bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER
SUCH ACT OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE COMPANY THAT SUCH SALE, OFFER FOR SALE, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION DOES NOT VIOLATE THE PROVISIONS OF SUCH ACT OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT.
9. NO EVIDENCE OF EMPLOYMENT OR SERVICE. Nothing contained in the Plan or
this Agreement shall confer upon the Optionee any right to continue in the
employ of a Participating Company or interfere in any way with the right of a
Participating Company (subject to the terms of any separate agreement to the
contrary) to terminate the Optionee's employment or to increase or decrease the
Optionee's compensation at any time.
10. RESTRICTION ON TRANSFER. The Option may not be transferred, pledged,
assigned, hypothecated or otherwise disposed of in any way by the Optionee,
except by will or by the laws of descent and distribution or as may otherwise be
required by law, and may be exercised during the lifetime of the Optionee only
by the Optionee. If the Optionee dies, the Option shall thereafter be
exercisable, during the period specified in Section 4(a)(ii) hereof, by his or
her executors or administrators to the full extent to which the Option was
exercisable by the Optionee at the time of his or her death. The Option shall
not be subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of the Option
contrary to the provisions hereof, and the levy of any execution, attachment or
similar process upon the Option, shall be null and void and without effect.
11. DISQUALIFYING DISPOSITIONS; TAXES. (a) If Optioned Shares are
disposed of within two years following the date of this Agreement or one year
following the issuance thereof to the Optionee (a "Disqualifying Disposition"),
the Optionee shall, immediately prior to such Disqualifying Disposition, notify
the Company in writing of the date and terms of such Disqualifying Disposition
and provide such other information regarding the Disqualifying Disposition as
the Company may reasonably require.
(b) At the time of a Disqualifying Disposition, the Optionee shall remit to
the Company in cash the amount of any applicable Federal, state and local
withholding taxes and employment taxes.
12. NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if (i) personally
delivered, (ii) sent by nationally-recognized overnight courier or (iii) sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
If to the Optionee, to the address set forth on the signature page
hereto; and
If to the Company, to:
E-Sync Networks, Inc.
00 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Secretary;
or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered, if
personally delivered, (ii) on the first Business Day (as hereinafter defined)
after dispatch, if sent by nationally-recognized overnight courier and (iii) on
the third Business Day following the date on which the piece of mail containing
such communication is posted, if sent by mail. As used herein, "Business Day'
means
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a day that is not a Saturday, Sunday or a day on which banking institutions in
the city to which the notice or communication is to be sent are not required to
be open.
13. NO WAIVER. No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or condition,
whether of like or different nature.
14. OPTIONEE UNDERTAKING. The Optionee hereby agrees to take whatever
additional actions and execute whatever additional documents the Company may in
its reasonable judgment deem necessary or advisable in order to carry out or
effect one or more of the obligations or restrictions imposed on the Optionee
pursuant to the express provisions of this Agreement.
15. MODIFICATION OF RIGHTS. The rights of the Optionee are subject to
modification and termination in certain events as provided in this Agreement and
the Plan.
16. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware applicable to contracts made
and to be wholly performed therein.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
18. ENTIRE AGREEMENT. This Agreement and the Plan constitute the entire
agreement between the parties with respect to the subject matter hereof, and
supersede all previously written or oral negotiations, commitments,
representations and agreements with respect thereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Nontransferable
Incentive Stock Option Agreement as of the date first written above.
E-SYNC NETWORKS, INC.
By:
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Name:
Title:
OPTIONEE:
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Name:
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Address:
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EXHIBIT A
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