Exhibit 10.1

 

ENTRUST, INC.

 

Officer

Non-Statutory Stock Option Agreement

 

Granted Under the Amended and Restated 1996 Stock Incentive Plan

 

1. Grant of Option.

 

This agreement evidences the grant by Entrust, Inc., a Maryland corporation (the
“Company”), on «Date» to «Name» 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 Amended and Restated 1996 Stock Incentive Plan (the “Plan”), a
total of «Shares» shares of common stock, $0.01 par value, of the Company
(“Common Stock”) (the “Shares”) at «Price»per Share. Unless earlier terminated,
this option shall expire on the seventh anniversary of the date of grant (the
“Final Exercise Date”). It is intended that the option evidenced by this
agreement shall not be an incentive stock option as defined in Section 422 of
the United States 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.

 

(a) Regular Vesting. This option will become exercisable as to 25% of the
original number of Shares on the date of the grant of the option (the “Grant
Date”) and as to an additional 1/36th of the remaining number of Shares on that
day of the month for each of the next 36 months thereafter. This option shall
expire upon, and will not be exercisable after, the Final Exercise Date.

 

(b) Cumulative Exercise. The right of exercise shall be cumulative so that if
the option is not exercised 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 which were not so purchased, at any time prior to the Final Exercise
Date or the earlier termination of this option.

 

(c) Accelerated vesting. Upon the occurrence of an Acquisition Event (as defined
herein), then the vesting schedule of this option shall be accelerated so that
all of the number of shares which would otherwise have first become exercisable
on any vesting date scheduled to occur on or after the date of such Acquisition
Event shall become vested immediately prior to such Acquisition Event. An
“Acquisition Event” shall mean: (a) any 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 or acquiring entity) less than
60% of the combined voting power of the voting securities of the Company or such
surviving or acquiring entity outstanding immediately after such merger or
consolidation; (b) any sale of all or substantially all of the assets of the
Company; (c) the complete liquidation of the Company; or (d) the acquisition of
“beneficial ownership” (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934 (the “Exchange Act”) of securities of the Company representing 60%
or more of the combined voting power of the Company’s then outstanding
securities (other than through an acquisition of securities directly from the
Company) by any “person,” as such term is used in Sections 13(d) and 14(d) of
the Exchange Act other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any corporation
owned directly or indirectly by the stockholders of the Company in substantially
the same proportion as their ownership of stock of the Company.

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3. Exercise of Option.

 

(a) Form of Exercise. Each election to exercise this option shall be in writing,
signed by the Participant, and received by the Company at its principal office,
accompanied by this agreement, and payment in full as provided in Sections
5(f)(1), 5(f)(2) and 5(f)(3)(i) of 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 or for fewer than ten whole shares.

 

(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 date of grant of this option, an employee, officer or
director 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”).

 

(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 (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 (but in no event after the Final
Exercise Date), by the Participant, 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.

 

(e) Discharge for Cause. If the Participant, prior to the Final Exercise Date,
is discharged by the Company for “cause” (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of such
discharge. “Cause” shall mean willful misconduct by the Participant or willful
failure to perform his or her responsibilities in the best interests of 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 shall be considered to have been discharged for “cause” if the
Company determines, within 30 days after the Participant’s resignation, that
discharge for cause was warranted.

 

4. 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.

 

5. Nontransferability of Option.

 

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.

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6. Provisions of the Plan.

 

This option is subject to the provisions of 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.

 

Entrust, Inc.

/s/ F. William Conner

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F. William Conner

President and CEO

 

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 Amended and Restated 1996 Stock Incentive Plan.

 

PARTICIPANT:

 

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Signature

 

 

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Print Name

Address:

 

 

 

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