Exhibit 10.23.1

 

NON-QUALIFIED STOCK OPTION AGREEMENT
under the
PARAGON SOLUTIONS, INC.
2001 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

 

Optionee: [Name]

 

Number Shares Subject to Option:  [Number]

 

Exercise Price per Share:  $[Number]

 

Date of Grant:  September       , 2001

 

1.                                       Grant of Option.  Paragon Solutions,
Inc. (the “Company”) hereby grants to the Optionee named above (the “Optionee”),
under the Paragon Solutions, Inc. 2001 Non-Employee Directors Stock Option Plan
(the “Plan”), a Non-Qualified Stock Option to purchase, on the terms and
conditions set forth in this agreement (this “Option Agreement”), the number of
shares indicated above of the Company’s $0.001 par value common stock (the
“Stock”), at the exercise price per share set forth above (the “Option”). 
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned such terms in the Plan.

 

2.                                       Vesting of Option.  The Option is
exercisable in full as of the date of the grant.

 

3.                                       Period of Option and Limitations on
Right to Exercise.  The Option will, to the extent not previously exercised,
lapse under the earliest of the following circumstances; provided, however, that
the Committee may, prior to the lapse of the Option under the circumstances
described in paragraphs (b), (c) and (d) below, provide in writing that the
Option will extend until a later date:

 

(a)                                  The Option shall lapse as of 5:00 p.m.,
Eastern Time, on September 1, 2004 (the “Expiration Date”).

 

(b)                                 The Option shall lapse on the date of the
Optionee’s termination of service for any reason other than the Optionee’s death
or Disability.

 

(c)                                  If the Optionee’s employment terminates by
reason of Disability, the Option shall lapse one year after the date of the
Optionee’s termination of employment.

 

(d)                                 If the Optionee dies while employed or
during the one-year period described in subsection (c) above and before the
Option otherwise lapses, the Option shall lapse one year after the date of the
Optionee’s death.  Upon the Optionee’s death, the Option may be exercised by the
Optionee’s beneficiary.

 

If the Optionee or his beneficiary exercises an Option after termination of
service, the Option may be exercised only with respect to the shares that were
otherwise vested on the Optionee’s termination of service (including vesting by
acceleration in accordance with Article 13 of the Plan).

 

4.                                       Exercise of Option.  The Option shall
be exercised by written notice directed to the Secretary of the Company at the
principal executive offices of the Company, in substantially the form attached
hereto as Exhibit A, or such other form as the Committee may approve.  If the
person exercising the Option is not the Optionee, such person shall also deliver
with the notice of exercise appropriate proof of his or her right to exercise
the Option.  Unless the exercise is a broker-assisted “cashless exercise” as
described below, such written notice shall be accompanied by full payment in
cash, shares of Stock previously acquired by the Optionee (which shares may be
delivered by attestation or actual delivery of one or more certificates), or any
combination thereof, for the number of shares specified in such written notice;
provided, however, that if shares of Stock are used to pay the exercise price,
such shares must have been held by the Optionee for at least six months.  The
Fair Market Value of the surrendered Stock

 

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as of the last trading day immediately prior to the exercise date shall be used
in valuing Stock used in payment of the exercise price.  To the extent permitted
under Regulation T of the Federal Reserve Board, and subject to applicable
securities laws, the Option may be exercised through a broker in a so-called
“cashless exercise” whereby the broker sells the Option shares and delivers cash
sales proceeds to the Company in payment of the exercise price.  In such case,
the date of exercise shall be deemed to be the date on which notice of exercise
is received by the Company and the exercise price shall be delivered to the
Company on the settlement date.

 

Subject to the terms of this Option Agreement, the Option may be exercised at
any time and without regard to any other option held by the Optionee to purchase
stock of the Company.  No fractional shares of Stock shall be issued upon
exercise of the Option.

 

5.                                       Lock-Up Period.  Optionee hereby agrees
that, if so requested by the Company or any representative of the underwriters
(the “Managing Underwriter”) in connection with any registration of the offering
of any securities of the Company under the 1933 Act, Optionee shall not sell or
otherwise transfer any Option Shares or other securities of the Company during
the 180-day period (or such other period as may be requested in writing by the
Managing Underwriter and agreed to in writing by the Company) (the “Market
Standoff Period”) following the effective date of a registration statement of
the Company filed under the 1933 Act.  Such restriction shall apply only to the
first registration statement of the Company to become effective under the 1933
Act that includes securities to be sold on behalf of the Company to the public
in an underwritten public offering under the 1933 Act.  The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.

 

6.                                       Withholding.  The Company has the
authority and the right to deduct or withhold, or require the Optionee to remit
to the Company, an amount sufficient to satisfy federal, state, and local taxes
(including the Optionee’s FICA obligation) required by law to be withheld with
respect to any taxable event arising as a result of the exercise of the Option. 
Such withholding requirement may be satisfied, in whole or in part, at the
election of the Company, by withholding from the Option shares of Stock having a
Fair Market Value on the date of withholding equal to the minimum amount (and
not any greater amount) required to be withheld for tax purposes, all in
accordance with such procedures as the Committee establishes.

 

7.                                       Limitation of Rights.  The Option does
not confer to the Optionee or the Optionee’s personal representative any rights
of a shareholder of the Company unless and until shares of Stock are in fact
issued to such person in connection with the exercise of the Option.  Nothing in
this Option Agreement shall interfere with or limit in any way the right of the
Company or any Parent or Subsidiary to terminate the Optionee’s service at any
time, nor confer upon the Optionee any right to continue in the service of the
Company or any Parent or Subsidiary.

 

8.                                       Stock Reserve.  The Company shall at
all times during the term of this Option Agreement reserve and keep available
such number of shares of Stock as will be sufficient to satisfy the requirements
of this Option Agreement.

 

9.                                       Optionee’s Covenant.  Optionee hereby
agrees to use his or her best efforts to provide services to the Company in a
workmanlike manner and to promote the Company’s interests.  In the event the
Option Shares have not been registered under the 1933 Act at the time the Option
is exercised, Optionee shall, if required by the Company, concurrently with the
exercise of all or any portion of the Option, deliver to the Company his or her
Investment Representation Statement in the form attached hereto as Exhibit B.

 

10.                                 Restrictions on Transfer and Pledge.  The
Option may not be pledged, encumbered, or hypothecated to or in favor of any
party other than the Company or a Parent or Subsidiary, or be subject to any
lien, obligation, or liability of the Optionee to any other party other than the
Company or a Parent or Subsidiary.  The Option is not assignable or transferable
by the Optionee other than by will or the laws of descent and distribution or
pursuant to a domestic relations order that would satisfy Section 414(p)(1)(A)
of the Code; provided, however, that the Committee may (but need not) permit
other transfers where the

 

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Committee concludes that such transferability (i) does not result in accelerated
taxation and (ii) is otherwise appropriate and desirable, taking into account 
any factors deemed relevant, including without limitation, state or federal tax
or securities laws applicable to transferable options.  The Option may be
exercised during the lifetime of the Optionee only by the Optionee or any
permitted transferee.

 

11.                                 Restrictions on Issuance of Shares.  If at
any time the Board shall determine in its discretion, that listing, registration
or qualification of the shares of Stock covered by the Option upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition to the exercise of the Option, the Option may not be exercised in
whole or in part unless and until such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Board.

 

12.                                 Right of First Refusal.  Except as provided
in Section 12(g) below, before any Option Shares held by Optionee or any
transferee (either, a “Holder”) may be sold or otherwise transferred (including
transfer by gift or operation of law), the Company or its assignee(s) shall have
a right of first refusal to purchase the Option Shares on the terms and
conditions set forth in this Section (the “Right of First Refusal”).

 

(a)                                  Notice of Proposed Transfer.  The Holder of
the Option Shares shall deliver to the Company a written notice (the “Notice”)
stating (i) the Holder’s bona fide intention to sell or otherwise transfer such
Option Shares, (ii) the name of each proposed purchaser or other transferee
(each a “Proposed Transferee”), (iii) the number of Option Shares to be
transferred to each Proposed Transferee, and (iv) the bona fide cash price or
other consideration for which the Holder proposes to transfer the Option Shares
(the “Offered Price”), and the Holder shall offer the Option Shares at the
Offered Price to the Company or its assignee(s).

 

(b)                                 Exercise of Right of First Refusal.  At any
time within thirty (30) days after receipt of the Notice, the Company and/or its
assignee(s) may, by giving written notice to the Holder (the “Repurchase
Notice”), elect to purchase all, but not less than all, of the Option Shares
proposed to be transferred to any one or more Proposed Transferees, at the
purchase price determine in accordance with subsection (c) below.

 

(c)                                  Purchase Price.  The purchase price
(“Purchase Price”) for the Option Shares purchased by the Company or its
assignee(s) under this Section shall be the Offered Price.  If the Offered Price
includes consideration other than cash, the cash equivalent value of the
non-cash consideration shall be determined by the Board of Directors of the
Company in good faith.

 

(d)                                 Payment.  Payment of the Purchase Price
shall be made, at the option of the Company or its assignee(s), in cash (by
check), by cancellation of all or a portion of any outstanding indebtedness of
the Holder to the Company (or, in the case of repurchase by an assignee, to the
assignee), or by any combination thereof, within 30 days after receipt of the
later of the Notice, in the manner and at the times set forth therein.

 

(e)                                  Holder’s Right to Transfer.  If all of the
Option Shares proposed in the Notice to be transferred to a given Proposed
Transferee are not purchased by the Company and/or its assignee(s) as provided
in this Section, then the Holder may sell or otherwise transfer such Option
Shares to that Proposed Transferee at the Offered Price or at a higher price;
provided that such sale or other transfer is consummated within 120 days after
the date of the Notice, that any such sale or other transfer is effected in
accordance with any applicable securities laws, and that the Proposed Transferee
agrees in writing that the provisions of this Section shall continue to apply to
the Option Shares in the hands of such Proposed Transferee.  If the Option
Shares described in the Notice are not transferred to the Proposed Transferee
within such period, a new Notice shall be given to the Company, and the Company
and/or its assignees shall again be offered the Right of First Refusal before
any Option Shares held by the Holder may be sold or otherwise transferred.

 

(f)                                    Exception for Permitted Transfers. 
Notwithstanding the foregoing, the Right of First Refusal shall not apply to any
transfer of any or all of the Option Shares during Optionee’s lifetime,

 

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or on Optionee’s death by will or the laws of descent and distribution, to
Optionee’s spouse, lineal descendants or antecedents, parents, or siblings, or
to trusts for the benefit of such persons (“Permitted Transferees”); provided
that (i) the transferring Optionee shall give the Corporate Secretary of the
Company at least 10 days’ prior written notice before effecting such transfer,
(ii) the transferee shall receive and hold the Option Shares so transferred
subject to the provisions of this Right of First Refusal and shall furnish the
Company with a written agreement to be bound by and comply with this Right of
First Refusal, if so requested by the Company, and (iii) there shall be no
further transfer of such Option Shares except in accordance with the terms of
this Right of First Refusal, and such transferee shall be treated as a “Holder”
for purposes of this Agreement.

 

(g)                                 Termination of Right of First Refusal.  The
Right of First Refusal shall terminate as to any Option Shares upon an initial
Public Offering of the Company’s Stock.

 

13.                                 Plan Controls.  The terms contained in the
Plan are incorporated into and made a part of this Option Agreement and this
Option Agreement shall be governed by and construed in accordance with the
Plan.  In the event of any actual or alleged conflict between the provisions of
the Plan and the provisions of this Option Agreement, the provisions of the Plan
shall be controlling and determinative.

 

14.                                 Successors.  This Option Agreement shall be
binding upon any successor of the Company, in accordance with the terms of this
Option Agreement and the Plan.

 

15.                                 Severability.  If any one or more of the
provisions contained in this Option Agreement are invalid, illegal or
unenforceable, the other provisions of this Option Agreement will be construed
and enforced as if the invalid, illegal or unenforceable provision had never
been included.

 

16.                                 Notice.  Notices and communications under
this Option Agreement must be in writing and either personally delivered or sent
by registered or certified United States mail, return receipt requested, postage
prepaid.  Notices to the Company must be addressed to:

 

Paragon Solutions, Inc.
3625 Brookside Parkway
Suite 300
Alpharetta, Georgia 30022
Attn: Philip Jacobs, Secretary

 

or any other address designated by the Company in a written notice to the
Optionee.  Notices to the Optionee will be directed to the address of the
Optionee then currently on file with the Company, or at any other address given
by the Optionee in a written notice to the Company.

 

17.                                 Tax Consequences.  Set forth below is a
brief summary as of the Date of Grant of some of the federal tax consequences of
exercise of the Option and disposition of the Option Shares.  THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. 
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING
OF THE OPTION SHARES.

 

(a)                                  Exercise of Non-Qualified Stock Option. 
Upon exercise of a non-qualified stock option, Optionee normally 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 Option Shares on
the date of exercise over the Exercise Price.  The Company will be required to
withhold from Optionee’s compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Option Shares if such withholding amounts are not
delivered at the time of exercise.

 

(b)                                 Disposition of Shares.  In the case of a
non-qualified stock option, any gain realized on disposition of the Option
Shares will be treated as capital gain, which may be long-term or short-term
depending on the period that the Option Shares were held.

 

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IN WITNESS WHEREOF, Paragon Solutions, Inc., acting by and through its duly
authorized officers, has caused this Option Agreement to be executed, and the
Optionee has executed this Option Agreement, all as of the day and year first
above written.

 

 

PARAGON SOLUTIONS, INC.

 

 

 

 

By:

 

 

 

Name:
Title:

 

 

 

 

 

 

 

 

OPTIONEE:

 

 

 

 

 

 

 

 

[Name]

 

 

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