Exhibit 10.1

 

OPSWARE INC.

 

2000 INCENTIVE STOCK PLAN

 

STOCK OPTION AGREEMENT

 

Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Option Agreement.

 

I.

 

NOTICE OF STOCK OPTION GRANT

 

 

 

 

 

«First»«Middle» «Last»

 

 

 

 

 

«Street»

 

 

 

 

 

«City», «State» «Zip»

 

You have been granted an option to purchase Common Stock of the Company, subject
to the terms and conditions of the Plan and this Option Agreement, as follows:

 

Grant Number

 

«Number»

 

 

 

Date of Grant

 

«Vest_Start»

 

 

 

Vesting Commencement Date

 

«Vest_Start»

 

 

 

Exercise Price per Share

 

«Price»

 

 

 

Total Number of Shares Granted

 

«Shares»

 

 

 

Total Exercise Price

 

«Total_Price»

 

 

 

Type of Option:

 

«ISONQ» - «Type»

 

 

 

Term/Expiration Date:

 

«Expires»

 

Vesting Schedule:

 

This Option may be exercised, in whole or in part, in accordance with the
following schedule:  [Vesting Schedule]

 

Notwithstanding the foregoing, if Optionee’s status as a Service Provider with
the Company or successor corporation terminates involuntarily (i) for any reason
other than Cause (as defined below) at any time within twenty-four (24) months
following a Change of Control (as defined below), or (ii) due to a work force
reduction or job elimination (a “RIF”) (as determined by the Administrator in
its sole and absolute discretion), the Option shall be deemed to have vested as
to 1/48 of the Shares subject to the

 

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Option each month after the Vesting Commencement Date.  In such an event, this
Option shall remain exercisable in accordance with the Plan and this Option
Agreement.

 

For purposes of this Option Agreement, “Cause” shall mean: (i) the Optionee’s
repeated failure, in the reasonable judgment of the Board or Optionee’s manager
or supervisor, to perform Optionee’s assigned duties or responsibilities as an
employee, director or consultant as directed or assigned by the Board or
Optionee’s manager or supervisor from time to time, after written notice thereof
from the Board or Optionee’s manager or supervisor to the Optionee setting forth
in reasonable detail the respects in which the Company believes the Optionee has
not performed such duties or responsibilities; (ii) the Optionee personally
engaging in knowing and intentional illegal conduct which is seriously injurious
to the Company or its affiliates; or (iii) the Optionee being convicted of a
felony, or committing an act of dishonesty or fraud against, or the
misappropriation of material property belonging to, the Company or its
affiliates.

 

For purposes of this Agreement, “Change of Control” means the occurrence of any
of the following events: (i) Any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined
in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting power
represented by the Company’s then outstanding voting securities; or (ii) The
consummation of the sale or disposition by the Company of all or substantially
all of the Company’s assets; or (iii) The consummation of a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or its parent) at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving
entity or its parent outstanding immediately after such merger or consolidation;
or (iv) A change in the composition of the Board, as a result of which fewer
than a majority of the Directors are Incumbent Directors.  “Incumbent Directors”
shall mean Directors who either (A) are Directors of the Company as of the date
hereof, or (B) are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of those Directors whose election or
nomination was not in connection with any transaction described in subsections
(i), (ii) or (iii) or in connection with an actual or threatened proxy contest
relating to the election of directors of the Company.

 

Termination Period:

 

Except as provided below, this Option may be exercised for three (3) months
after Optionee ceases to be a Service Provider.  If Optionee’s status as a
Service Provider with the Company or a successor corporation terminates
(i) involuntarily for other than Cause at any time within twenty-four (24)
months following a Change of Control, (ii) involuntarily due to a RIF, (iii) due
to Optionee’s death, or (iv) due to Optionee’s Disability, then this Option may
be exercised for twelve (12) months following such termination.  In no event
shall this Option be exercised later than the Term/Expiration Date as provided
above.  Optionee understands that except for terminations due to Optionee’s
death or Disability, an Incentive Stock Option converts into a Nonstatutory
Stock Option three (3) months and one (1) day after termination of employment.

 

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II.            AGREEMENT

 

A.            Grant of Option.

 

The Administrator hereby grants to the Optionee named in the Notice of Grant
attached as Part I of this Agreement (the “Optionee”) an option (the “Option”)
to purchase the number of Shares, as set forth in the Notice of Grant, at the
exercise price per share set forth in the Notice of Grant (the “Exercise
Price”), subject to the terms and conditions of the Plan, which is incorporated
herein by reference.  Subject to Section 15(c) of the Plan, in the event of a
conflict between the terms and conditions of the Plan and the terms and
conditions of this Option Agreement, the terms and conditions of the Plan shall
prevail.

 

If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this
Option is intended to qualify as an Incentive Stock Option under Section 422 of
the Code. However, if this Option is intended to be an Incentive Stock Option,
to the extent that it exceeds the $100,000 rule of Code Section 422(d) it shall
be treated as a Nonstatutory Stock Option (“NSO”).

 

B.            Exercise of Option.

 

(A)           RIGHT TO EXERCISE.  THIS OPTION IS EXERCISABLE DURING ITS TERM IN
ACCORDANCE WITH THE VESTING SCHEDULE SET OUT IN THE NOTICE OF GRANT AND THE
APPLICABLE PROVISIONS OF THE PLAN AND THIS OPTION AGREEMENT.

 

(B)           METHOD OF EXERCISE.  THIS OPTION IS EXERCISABLE BY DELIVERY OF AN
EXERCISE NOTICE, IN THE FORM AND MANNER SPECIFIED BY THE ADMINISTRATOR (THE
“EXERCISE NOTICE”) AS DETERMINED BY THE ADMINISTRATOR, THE EXERCISE NOTICE SHALL
STATE THE ELECTION TO EXERCISE THE OPTION, THE NUMBER OF SHARES IN RESPECT OF
WHICH THE OPTION IS BEING EXERCISED (THE “EXERCISED SHARES”), AND SUCH OTHER
REPRESENTATIONS AND AGREEMENTS AS MAY BE REQUIRED BY THE COMPANY PURSUANT TO THE
PROVISIONS OF THE PLAN.  THE EXERCISE NOTICE SHALL BE COMPLETED BY THE OPTIONEE
AND DELIVERED TO THE COMPANY IN THE MANNER SPECIFIED BY THE ADMINISTRATOR.  THE
EXERCISE NOTICE SHALL BE ACCOMPANIED BY PAYMENT OF THE AGGREGATE EXERCISE PRICE
AS TO ALL EXERCISED SHARES.  THIS OPTION SHALL BE DEEMED TO BE EXERCISED UPON
RECEIPT BY THE COMPANY OF SUCH PROPERLY COMPLETED EXERCISE NOTICE ACCOMPANIED BY
SUCH AGGREGATE EXERCISE PRICE.

 

No Shares shall be issued pursuant to the exercise of this Option unless such
issuance and exercise complies with Applicable Laws.  Assuming such compliance,
for income tax purposes the Exercised Shares shall be considered transferred to
the Optionee on the date the Option is exercised with respect to such Exercised
Shares.

 

C.            Method of Payment.

 

Payment of the aggregate Exercise Price shall be by any of the following, or a
combination thereof, at the election of the Optionee:

 

1.           CASH; OR

 

2.           CHECK; OR

 

3.           CONSIDERATION RECEIVED BY THE COMPANY UNDER A CASHLESS EXERCISE
PROGRAM IMPLEMENTED BY THE COMPANY IN CONNECTION WITH THE PLAN; OR

 

4.           TO THE EXTENT PERMITTED BY THE ADMINISTRATOR, SURRENDER OF OTHER
SHARES WHICH (I) IN THE CASE OF SHARES ACQUIRED UPON EXERCISE OF AN OPTION, HAVE
BEEN OWNED BY THE OPTIONEE FOR MORE

 

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THAN SIX (6) MONTHS ON THE DATE OF SURRENDER, AND (II) HAVE A FAIR MARKET VALUE
ON THE DATE OF SURRENDER EQUAL TO THE AGGREGATE EXERCISE PRICE OF THE EXERCISED
SHARES; OR

 

5.           TO THE EXTENT PERMITTED BY THE ADMINISTRATOR, DELIVERY OF A
PROPERLY EXECUTED EXERCISE NOTICE TOGETHER WITH SUCH OTHER DOCUMENTATION AS THE
ADMINISTRATOR AND THE BROKER, IF APPLICABLE, SHALL REQUIRE TO EFFECT AN EXERCISE
OF THE OPTION AND DELIVERY TO THE COMPANY OF THE SALE PROCEEDS REQUIRED TO PAY
THE EXERCISE PRICE.

 

D.            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 Optionee.  The terms of the Plan and this Option Agreement
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Optionee.

 

E.             Term of Option.

 

This Option may be exercised only within the term set out in the Notice of
Grant, and may be exercised during such term only in accordance with the Plan
and the terms of this Option Agreement.

 

F.             Tax Obligations.

 

THE TAX CONSEQUENCES RELATING TO THIS OPTION ARE SET FORTH IN THE PROSPECTUS
RELATING TO THE PLAN PREVIOUSLY PROVIDED TO YOU, WHICH MAY ALSO BE FOUND ON THE
COMPANY’S INTRANET SITE.  THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

 

1.           WITHHOLDING TAXES.  OPTIONEE AGREES TO MAKE APPROPRIATE
ARRANGEMENTS WITH THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR
RETAINING OPTIONEE) FOR THE SATISFACTION OF ALL FEDERAL, STATE, AND LOCAL INCOME
AND EMPLOYMENT TAX WITHHOLDING REQUIREMENTS APPLICABLE TO THE OPTION EXERCISE. 
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE COMPANY MAY REFUSE TO HONOR THE
EXERCISE AND REFUSE TO DELIVER SHARES IF SUCH WITHHOLDING AMOUNTS ARE NOT
DELIVERED AT THE TIME OF EXERCISE.

 

2.           NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES.  IF THE OPTION
GRANTED TO OPTIONEE HEREIN IS AN ISO, AND IF OPTIONEE SELLS OR OTHERWISE
DISPOSES OF ANY OF THE SHARES ACQUIRED PURSUANT TO THE ISO ON OR BEFORE THE
LATER OF (1) THE DATE TWO YEARS AFTER THE DATE OF GRANT, OR (2) THE DATE ONE
YEAR AFTER THE DATE OF EXERCISE, THE OPTIONEE SHALL IMMEDIATELY NOTIFY THE
COMPANY IN WRITING OF SUCH DISPOSITION.  OPTIONEE AGREES THAT OPTIONEE MAY BE
SUBJECT TO INCOME TAX WITHHOLDING BY THE COMPANY ON THE COMPENSATION INCOME
RECOGNIZED BY THE OPTIONEE.

 

G.            Entire Agreement; Governing Law.

 

The Plan is incorporated herein by reference.  The Plan and this Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee’s interest except by
means of a writing signed by the Company and Optionee.  This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.

 

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H.            NO GUARANTEE OF CONTINUED SERVICE.

 

OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT
THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED
AN OPTION OR PURCHASING SHARES HEREUNDER).  OPTIONEE FURTHER ACKNOWLEDGES AND
AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE
VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED
PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD,
FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE
COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT
ANY TIME, WITH OR WITHOUT CAUSE.

 

By accepting this Option, the Optionee and the Company both agree that this
Option is granted under and governed by all of the terms and conditions of the
Notice of Stock Option Grant, the Plan and this Option Agreement.  The
Optionee’s acceptance of this Option confirms that he or she has carefully read
and understands the Notice of Stock Option Grant, the Plan and the Option
Agreement and that the Optionee has had an opportunity to obtain the advice of
counsel before accepting this Option.  By accepting this Option, the Optionee
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator regarding any questions relating to the
Plan, Notice of Stock Option Grant or this Option Agreement.  The Optionee also
agrees to notify the Company in writing if your address as shown above changes.

 

 

OPSWARE INC.

 

By:

 

 

 

 

 

 

 

 

Jordan J. Breslow

 

General Counsel

 

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