Exhibit 10.35

 

Network Engines, Inc.

 

Incentive Stock Option Agreement
Granted Under 2009 Incentive Plan

 

1.             GRANT OF OPTION.

 

This agreement evidences the grant by Network Engines, Inc., a Delaware
corporation (the “Company”), on           , 20     (the “Grant Date”)
to                  , an employee of the Company (the “Participant”), of an
option to purchase, in whole or in part, on the terms provided herein and in the
Company’s 2009 Incentive Plan (the “Plan”), a total of                    shares
(the “Shares”) of common stock, $0.01 par value per share, of the Company
(“Common Stock”) at $           per Share. Unless earlier terminated, this
option shall expire at 5:00 p.m., Eastern time, on                (the “Final
Exercise Date”).

 

It is intended that the option evidenced by this agreement shall be an incentive
stock option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the “Code”).  Except as
otherwise indicated by the context, the term “Participant”, as used in this
option, shall be deemed to include any person who acquires the right to exercise
this option validly under its terms.

 

2.             Vesting Schedule.

 

This option will become exercisable (“vest”) as to [25% of the original number
of Shares on the first anniversary of the employment start date and as to an
additional 6.25% of the original number of Shares at the end of each successive
three-month period following the first anniversary of the employment start date
until the fourth anniversary of the employment start date] [6.25% of the
original number of Shares at the end of each successive three-month period
following the Grant Date until the fourth anniversary of the Grant Date].  This
option shall expire upon, and will not be exercisable after, the Final Exercise
Date.

 

The right of exercise shall be cumulative so that to the extent the option is
not exercised in any period to the maximum extent permissible it shall continue
to be exercisable, in whole or in part, with respect to all Shares for which it
is vested until the earlier of the Final Exercise Date or the termination of
this option under Section 3 hereof or the Plan.

 

3.             Exercise of Option.

 

(a)           Form of Exercise.  Each election to exercise this option shall be
delivered in the manner or in the form directed by the Company, and accompanied
by payment in full in the manner provided in the Plan.  The Participant may
purchase less than the number of shares covered hereby, provided that no partial
exercise of this option may be for any fractional share.

 

(b)           Continuous Relationship with the Company Required.  Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Participant, at the time he or she exercises this option, is, and has been
at all times since the Grant Date, an employee or officer of, or consultant or
advisor to, the Company or any parent or subsidiary of the Company as defined in
Section 424(e) or (f) of the Code (an “Eligible Participant”).

 

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(c)           Termination of Relationship with the Company.  If the Participant
ceases to be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
three months after such cessation or such other period of time as may be
determined by the Board (but in no event after the Final Exercise Date),
provided that this option shall be exercisable only to the extent that the
Participant was entitled to exercise this option on the date of such cessation. 
Notwithstanding the foregoing, if the Participant, prior to the Final Exercise
Date, violates the non-competition or confidentiality provisions of any
employment contract, confidentiality and nondisclosure agreement or other
agreement between the Participant and the Company, the right to exercise this
option shall terminate immediately upon written notice to the Participant from
the Company describing such violation.

 

(d)           Exercise Period Upon Death or Disability.  If the Participant dies
or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior
to the Final Exercise Date while he or she is an Eligible Participant and the
Company has not terminated such relationship for “cause” as specified in
paragraph (e) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant, by the
Participant (or in the case of death by an authorized transferee), provided that
this option shall be exercisable only to the extent that this option was
exercisable by the Participant on the date of his or her death or disability,
and further provided that this option shall not be exercisable after the Final
Exercise Date.

 

(e)           Termination for Cause.  If, prior to the Final Exercise Date, the
Participant’s employment is terminated by the Company for Cause (as defined
below), the right to exercise this option shall terminate immediately upon the
effective date of such termination of employment.  If the Participant is party
to an employment or severance agreement with the Company that contains a
definition of “cause” for termination of employment, “Cause” shall have the
meaning ascribed to such term in such agreement.  Otherwise, “Cause” shall mean
willful misconduct by the Participant or willful failure by the Participant to
perform his or her responsibilities to the Company (including, without
limitation, breach by the Participant of any provision of any employment,
consulting, advisory, nondisclosure, non-competition or other similar agreement
between the Participant and the Company), as determined by the Company, which
determination shall be conclusive.  The Participant’s employment shall be
considered to have been terminated for Cause if the Company determines, within
30 days after the Participant’s resignation, that termination for Cause was
warranted.

 

4.             Tax Matters.

 

(a)           Withholding.  No Shares will be issued pursuant to the exercise of
this option unless and until the Participant pays to the Company, or makes
provision satisfactory to the Company for payment of, any federal, state or
local withholding taxes required by law to be withheld in respect of this
option.

 

(b)           Disqualifying Disposition.  If the Participant disposes of Shares
acquired upon exercise of this option within two years from the Grant Date or
one year after such Shares were acquired pursuant to exercise of this option,
the Participant shall notify the Company in writing of such disposition.

 

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5.             Transfer Restrictions.

 

This option may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the Participant.

 

6.             Provisions of the Plan.

 

This option is subject to the provisions of the Plan (including the provisions
relating to amendments to the Plan), a copy of which is furnished to the
Participant with this option.

 

IN WITNESS WHEREOF, the Company has caused this option to be executed under its
corporate seal by its duly authorized officer.  This option shall take effect as
a sealed instrument.

 

 

 

Network Engines, Inc.

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

 

Title:

 

 

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PARTICIPANT’S ACCEPTANCE

 

The undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof.  The undersigned hereby acknowledges receipt of a copy of
the Company’s 2009 Incentive Plan.

 

 

PARTICIPANT:

 

 

 

 

 

 

 

Address:

 

 

 

 

 

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