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Exhibit 4.4
SYSTEMSOFT CORPORATION
AMENDED AND RESTATED NON-QUALIFIED STOCK OPTION AGREEMENT
This Amended and Restated Non-Qualified Stock Option Agreement dated as of
February 20, 1998 (the "AGREEMENT") by and between SystemSoft Corporation, a
Delaware corporation (the "COMPANY"), with a principal place of business in
Natick, Massachusetts, and Xxxxxxx X. Xxxxxxx (the "OPTIONEE"):
WITNESSETH:
WHEREAS, the Board of Directors of the Company authorized the grant of a
stock option upon certain terms and conditions set forth in that certain
Non-Qualified Stock Option Agreement dated as of November 25, 1997; and
WHEREAS, the Company and the Optionee desire to amend and restate the terms
and conditions thereof as set forth in this Amended and Restated Non-Qualified
Stock Option Agreement.
NOW, THEREFORE, in consideration of these premises and the mutual covenants
and agreements herein contained, the Company and the Optionee agree as follows:
1. GRANT; OPTION EXERCISE PRICE. The Company hereby grants to the Optionee,
and the Optionee hereby accepts, the right and option (hereinafter called the
"OPTION") to purchase all or any part of an aggregate of 500,000 shares of the
Company's Common Stock, $.01 par value (the "COMMON STOCK"), at a price of
$6.5625 per share (the "OPTION PRICE"), which represents the fair market value
of the stock on the date of grant, on the terms and conditions herein set forth.
2. TERM AND EXERCISABILITY OF OPTION. If the Optionee has continued to be
employed by the Company on the following dates, the Optionee may exercise this
option for the number of shares set forth opposite the applicable date:
November 25, 1998 125,000 shares
On the 25th day of each up to an additional 31,250 shares (until all
February, May, August and 500,000 shares subject to this Agreement and
November are fully exercisable)
beginning February, 1999
except that, on and after the Board of Directors of the Company or a committee
thereof which is authorized to do so determines that the following conditions
have been met for a fiscal quarter occurring after the date hereof, 31,250
shares (up to an aggregate of 125,000 shares) subject to this Option which would
have otherwise become exercisable in the fourth year hereunder shall become
immediately exercisable as follows:
(a) beginning in the first quarter of fiscal 1999, revenue and earnings
growth must be progressing at a reasonable growth rate, based upon the Company's
expectations of achieving approximately $49,000,000 in fiscal 1999, with
quarterly revenue and earnings targets as set by the fiscal 1999 management
plan, and
(b) the Board of Directors of the Company (or a committee thereof which is
authorized to do so) has determined that you are: building a world class sales
organization with commensurate results; executing effective team building
strategies and results; establishing and driving organizational skills
throughout the Company;
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driving new products into new markets; building an infrastructure to support the
Company's next growth phase and supporting that with an efficient, optimized
organization.
In the event that the Board of Directors of the Company or a committee
thereof which is authorized to do so determines that for any given quarter these
conditions are not achieved, then the options for that quarter would vest
according to the normal four year vesting schedule.
The foregoing rights are cumulative and, while the Optionee continues to be
employed by the Company, may be exercised up to and including the date which is
ten (10) years from the date this option is granted. All of the foregoing rights
are subject to Sections 3 and 4, as appropriate, if the Optionee's employment is
terminated or if the Optionee dies or becomes disabled while in the employ of
the Company.
3. TERMINATION OF EMPLOYMENT. If the Optionee ceases to be employed by the
Company and any subsidiary of the Company, other than by reason of death or
disability as defined in Section 4 hereof, no further installments of this
Option shall become exercisable, and this Option shall terminate (and may no
longer be exercised) after the passage of 90 days from the Optionee's last day
of employment, but in no event later than the scheduled expiration date. In such
a case, the Optionee's only rights hereunder shall be those which are properly
exercised before termination of this Option.
4. DEATH; DISABILITY.
(a) DEATH. If the Optionee dies while in the employ of the Company or
any Related Corporation, this Option may be exercised in whole or in part, to
the extent otherwise exercisable on the date of her death, by the Optionee's
estate, personal representative or beneficiary to whom this Option has been
assigned pursuant to Section 6, at any time or times during the period of twelve
months following the Optionee's date of death, but not later than the scheduled
expiration date.
(b) DISABILITY. If the Optionee ceases to be employed by the Company
and all Related Corporations by reason of her disability (as defined in Section
22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code")), the
Optionee shall have the right at any time or times during the period of twelve
months following termination of Optionee's employment to exercise the Option in
whole or in part with respect to shares under the Option not purchased prior to
termination of Optionee's employment, in the same manner and to the same extent
that the Optionee could have exercised the Option at the date of termination of
the Optionee's employment, but not later than the scheduled expiration date.
(c) EFFECT OF TERMINATION. At the expiration of the twelve-month
period provided in paragraph (a) or (b) of this Section 4 or the scheduled
expiration date, whichever is the earlier, this Option shall terminate (and
shall no longer be exercisable) and the only rights hereunder shall be those as
to which the Option was properly exercised before such termination.
5. METHOD OF EXERCISE; PAYMENT OF PRICE. To the extent that the right to
purchase shares of Common Stock has accrued hereunder, this Option may be
exercised from time to time by delivering to the Company written notice of the
number of shares with respect to which the Option is being exercised accompanied
by full payment of the Option Price for such shares (i) in United States dollars
in cash or by check, (ii) through delivery of shares of Common Stock of the
Company having fair market value equal as of the date of the exercise to the
cash exercise price of the Option, (iii) by delivery to the Company of
irrevocable instructions to a broker to (a) either sell the shares subject to
the option being exercised or hold such shares as collateral for a margin loan
and (b) promptly deliver to the Company the amount of the sale or loan proceeds
required to pay the exercise price. Unless the Company otherwise consents, an
option exercise notice may be delivered to the Company not more often than once
in any twelve-month period.
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6. OPTION NOT TRANSFERABLE. The Option is not assignable or transferable by
the Optionee, except by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order, and is exercisable during the
lifetime of the Optionee only by the Optionee.
7. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE. The Optionee shall have no
rights as a stockholder with respect to any shares covered by the Option until
the Optionee becomes the holder of record of such shares. Except as is expressly
provided herein with respect to certain changes in the capitalization of the
Company, no adjustment shall be made for dividends or similar rights for which
the record date is prior to the date on which the Optionee becomes the holder of
record of such shares.
8. NO OBLIGATION TO CONTINUE EMPLOYMENT. Nothing contained in this
Agreement shall be construed or deemed by any person under any circumstances to
bind the Company or any of its affiliates to continue the employment of the
Optionee for any vesting period described herein, nor shall this Agreement be
construed to create any duty of the Company or any of its affiliates or any of
its other shareholders to the Optionee, or any duty of the Optionee to the
Company or any of its other shareholders, comparable to the duties which
partners or joint venturers may owe each other.
9. RESTRICTIONS ON TRANSFER; LEGEND. Shares of Common Stock received by the
Optionee upon exercise of this Option will be of an illiquid nature and will be
deemed to be "restricted securities" for purposes of the Securities Act of 1933,
as amended (the "Securities Act"). Accordingly, such shares shall have a legend
placed thereon and must be sold in compliance with the registration requirements
of the Securities Act or an exemption therefrom.
10. WITHHOLDING TAXES. The Optionee hereby agrees that the Company may
withhold from the Optionee's wages or other remuneration the appropriate amount
of federal, state and local taxes attributable to the Optionee's exercise of any
portion of this Option. At the Company's discretion, the amount required to be
withheld may be withheld in cash from such wages or other remuneration, or in
kind from the Common Stock otherwise deliverable to the Optionee on exercise of
this option. The Optionee further agrees that, if the Company does not withhold
an amount from the Optionee's wages or other remuneration sufficient to satisfy
the Company's withholding obligation, the Optionee will reimburse the Company on
demand, in cash, for the amount underwithheld under applicable tax laws.
11. ADJUSTMENTS. Upon the occurrence of any of the following events, the
Optionee's rights shall be adjusted as hereinafter provided:
(a) STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Common Stock shall
be subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of this option shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
(b) CONSOLIDATIONS OR MERGERS. If the Company is to be consolidated with or
acquired by another entity in a merger, sale of all or substantially all of the
Company's assets or otherwise (an "ACQUISITION"), the committee or the board of
directors of any entity assuming the obligations of the Company hereunder (the
"SUCCESSOR BOARD"), shall either (i) make appropriate provision for the
continuation of this Option by substituting on an equitable basis for the shares
then subject to such Options either (a) the consideration payable with respect
to the outstanding shares of Common Stock in connection with the Acquisition,
(b) shares of stock of the surviving or successor corporation or (c) such other
securities as the Successor Board deems appropriate, the fair market value of
which shall not materially exceed the fair market value of the shares of Common
Stock subject to this Option immediately preceding the Acquisition; or (ii) upon
written notice to the Optionee, provide that this Option must be exercised, to
the extent then exercisable or to be exercisable as a result of the Acquisition,
within a specified number of days of the date of such notice, at the end of
which period this Option shall terminate; or (iii) terminate
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this Option in exchange for a cash payment equal to the excess of the fair
market value of the shares subject to this Option (to the extent then
exercisable or to be exercisable as a result of the Acquisition) over the
exercise price thereof.
(c) RECAPITALIZATION OR REORGANIZATION. In the event of a recapitalization
or reorganization of the Company (other than a transaction described in
subparagraph (b) above) pursuant to which securities of the Company or of
another corporation are issued with respect to the outstanding shares of Common
Stock, the Optionee upon exercising this Option shall be entitled to receive for
the purchase price paid upon such exercise the securities she would have
received if she had exercised this option prior to such recapitalization or
reorganization.
(d) DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution or
liquidation of the Company, this Option will terminate immediately prior to the
consummation of such proposed action.
12. LOCK-UP AGREEMENT. The Optionee agrees that in connection with an
underwritten public offering of Common Stock, upon the request of the Company or
the managing or lead underwriter for such public offering, this Option and the
shares of Common Stock issued upon exercise hereof may not be sold, offered for
sale or otherwise disposed of without the prior written consent of the Company
or such underwriter, as the case may be, for at least 180 days after the
effectiveness of the registration statement filed in connection with such
offering, or such longer period of time as the Board of Directors may determine
if all of the Company's directors and officers agree to be or are similarly
bound. The lock-up agreement established pursuant to this Section 12 shall have
perpetual duration.
13. GENERAL PROVISIONS.
(a) AMENDMENT; WAIVERS. This Agreement contains the full and complete
understanding and agreement of the parties hereto as to the subject matter
hereof, and supersedes all proposals, written or oral, and all other
communications between the parties relating to the grant of options or the
acceleration of vesting of any such options including, without limitation, those
provisions set forth in that certain offer letter dated November 4, 1997. This
Agreement may not be modified or amended, nor may any provision hereof be
waived, except by a further written agreement duly signed by each of the
parties. The waiver by either of the parties hereto of any provision hereof in
any instance shall not operate as a waiver of any other provision hereof or in
any other instance.
(b) BINDING EFFECT. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, representatives, successors and assigns.
(c) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of laws thereof.
(d) CONSTRUCTION. The titles of the Sections of this Agreement are included
for convenience only and shall not be construed as modifying or affecting their
provisions.
(e) NOTICES. Any notice in connection with this Agreement shall be deemed
to have been properly delivered if it is in writing and is delivered in hand or
sent by mail to the party addressed as follows, unless another address has been
substituted by notice so given:
To the Optionee: To the address as set forth on the signature page hereof.
To the Company: SystemSoft Corporation
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
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IN WITNESS WHEREOF, the Company and the Optionee have caused this Agreement
to be executed as of the 20th day of February, 1998.
SYSTEMSOFT CORPORATION
By: /s/ Xxxx X. Xxxxxxxxxxx
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Title: Chief Financial Officer
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Address:
00 Xxxxxxxxx Xxxxx
Xxxxxxx, XX
