Exhibit 10.1


 





 


Stock Option Grant Certificate


 


«FirstName» «LastName» has been awarded «Number_of_Options» Stock Options


	
  Grant
  Date: «Grant_Date»

  	
   

  	
  Expiration
  Date: 10 years from grant date

  
	
  Option Exercise Price: $«Exercise_Price»

  	
   

  	
  Type of
  Option: «Option_Type»
  Stock Option

  



Exercisable Date:                       «Percent» of the Options
are exercisable on «Date».  An
Additional «Percent» of the Options become exercisable
each month thereafter until they are fully exercisable.


 


Phase Forward Incorporated


 


Your selection for this Phase Forward stock
option award further recognizes how important your contributions are to the
success of the Company.  On behalf of
Phase Forward’s Board of Directors and the Company’s leadership team,
congratulations.


 


	
   

  	
   

  	
   

  
	
   

  	
  <name>

  	
   

  
	
   

  	
  Chief
  Executive Officer

  	
   

  



 


This stock option grant
is made under the Amended and Restated 1997 Stock Option Plan and is subject to
the terms and conditions on the back of this Certificate.


 





















 


Stock Option Grant Certificate – Additional Terms


 


1. Grant of Option.  The Board of Directors of Phase Forward
Incorporated (the “Corporation”) has granted to the individual named on the
front of this Certificate (the “Optionholder”) an option (the “Option”) to
purchase, at the exercise price listed on the front of this Certificate, the
number of shares listed on the front of this Certificate (the “Shares”) of the
Corporation’s Common Stock, $.01 par value (the “Common Stock”), pursuant to
the Corporation’s Amended and Restated 1997 Stock Option Plan (the “Plan”),
which is provided with this Certificate.


 


2.
Type of Option. The type of option will be designated on the front of
this Certificate.  An “Incentive Stock
Option” designation means that it is intended that
the Option be to the maximum extent possible an “incentive stock option” within
the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”).  A “Non-Qualified
Stock Option” designation means that it is not intended that the Option
qualify as an Incentive Stock Option.


 


3.
Option Period and Termination. The Option expires ten years from the
date of grant. The Optionholder should take special note that the Option may be
terminated early by certain events, as provided in Section 13 of the Plan,
including termination of employment or other relationship with the Corporation,
disability or death.


 


4.
Vesting of Right to Exercise. The right to exercise the Option shall
vest in accordance with the schedule set forth on the front of this
Certificate, for so long as the Optionholder remains an employee, Director,
consultant, adviser, independent contractor or other service provider, with
reference to the Optionholder’s relationship to the Corporation at the time of
grant.  Notwithstanding the schedule specified
on the front of this Certificate, upon a Change of Control (as defined in Section 14(c) of
the Plan), then an additional twenty-five percent (25%) of the Option shall
immediately vest and become exercisable.


 


5.
Method of Exercise. The Option may be exercised from time to time with
respect to all or any part of the Shares as to which it is exercisable at the
time.  No fractional Shares may be
purchased except in combination with a fraction or fractions under another
presently exercisable option or options granted under the Plan, and then only
to the extent that such combination equals a full Share.  To exercise the Option, the Optionholder (or
other person exercising the Option) must deliver to the Corporation the
following:


 


(i) a completed and signed notice of exercise, in a
form reasonably acceptable to the Corporation, stating the number of Shares to
be purchased.  If the Option is being
exercised by a person other than the Optionholder, the notice of exercise must
be accompanied by proof of the right of such person to exercise the Option and
such other pertinent information as the Corporation deems necessary;


 


(ii) two (2) signed Stock Restriction
Agreements, the form of which has been provided with this Certificate (the “Stock
Restriction Agreement”).  The Shares
purchased pursuant to exercise of the Option shall be subject to the terms of
such Stock Restriction Agreement. 
(Compliance with the obligations under this clause (ii) will not be
required after closing of the first underwritten public offering by the
Corporation under the Securities Act of 1933 of any of its equity securities
for its own account for cash, or if the Shares are subject to the terms of a
previously executed and delivered Stock Restriction Agreement); and


 


(iii) payment in full of the exercise price for
the Shares being purchased (A) in cash or by certified check, bank draft
or money order made payable to the order of the Corporation, (B) by
delivery of shares of Common Stock having a fair market value (as determined by
the Board in good faith in its reasonable discretion) on the date of exercise
equal to the exercise price, (C) by a combination of cash and Common
Stock, or (D) if previously approved by the Board, by a combination of
cash, Common Stock and a promissory note in accordance with the terms of the
Plan; provided, however, that payment of the exercise price by
delivery of shares of Common Stock of the Corporation already owned by the
Optionholder may be made only if such payment does not result in a charge to
earnings for financial accounting purposes as determined by the Board (unless
otherwise permitted by the Board).  In
addition, the exercise of an Option shall be subject to satisfaction of all
conditions the Board may impose on the exercise of such Option or the Plan, and
any such exercise shall be effective only after all such conditions have been
satisfied.


 


6.
No Rights as Stockholder. The Optionholder (or any other person entitled
to exercise the Option) shall not be entitled to any rights as a stockholder of
the Corporation with respect to any Shares covered by the Option until such
Shares shall have been registered on the stock transfer books of the
Corporation in the name of the Optionholder (or such other person).


 


7.
Notice of Premature Disposition. In the case of an Incentive Stock
Option, if, within two years from the date of grant or within one year after
the transfer of Shares to the Optionholder upon exercise of the Option, the
Optionholder makes a disposition (as defined in Section 424(c) of the
Code) of any Shares, the Optionholder shall notify the Secretary of the
Corporation within 10 days after such disposition.


 


8.
Compliance with Laws, Regulations and Rules. The Plan, this Certificate,
the Option and the obligation of the Corporation to sell and deliver the Shares
upon exercise of the Option are and shall be subject to (a) all applicable
laws, government regulations and rules and (b) all applicable
regulations and rules adopted by the Board in accordance with the
Plan.  If at any time the Board
determines in its discretion that the listing, registration or qualification,
on any securities exchange or under any federal or state law, of the Shares
deliverable upon exercise of the Option, or the consent or approval of any
regulatory body, or compliance with any law, rule or regulation, is
necessary or desirable as a condition of, or in connection with, the delivery
or purchase of Shares, then exercise of the Option shall not be effective
unless such listing, registration, qualification, consent, approval or
compliance shall have been effected or obtained free of any conditions not
acceptable to the Board.


 


9.
Legend on Certificates. Each certificate representing the Shares shall
bear restrictive legends referring to the restrictions on transfer and
repurchase rights of the Corporation contained in the Stock Restriction
Agreement and the restrictions on transfer imposed by the Securities Act of
1933, as amended, and any applicable exemption therefrom pursuant to which the
Shares may be issued.


 


10.
No Employment Rights. Nothing in the Plan, the Option or this
Certificate confers upon the Optionholder any right to continued employment or
any other business relationship with the Corporation or interferes with the
right of the Corporation to terminate the Optionholder’s employment or any such
relationship.


 


11.
Taxes. In the case of an “Incentive Stock Option”, as a condition
of issuance of Shares under this Option, the Optionholder agrees that, if at
the time the Option is exercised the Board determines that under applicable law
and regulations the Corporation could be liable for the withholding of any
federal or state tax with respect to a disposition of the Shares received upon
exercise, the Board may require the Optionholder to give, or to agree to give,
such security as the Board deems adequate to meet the potential liability of
the Corporation for the withholding of tax, and to augment such security from
time to time in any amount reasonably deemed necessary by the Board to preserve
the adequacy of such security.  In the
case of a “Non-Qualified Stock Option”, as a condition to the issuance
of Shares under this Option, the Corporation shall have the right to require
the Optionholder to remit to the Corporation an amount sufficient to satisfy
any federal, state or local withholding tax requirements or make other
arrangements satisfactory to the Corporation with regard to such taxes, as
provided in the Plan.


 


12.
Definition. As used in this Certificate, the term “Corporation” shall
include any subsidiary or parent of the Corporation as defined in Sections 424(e) and
(f) of the Code.


 


13.
Amendments. The Board may at any time or times amend the Plan or the
Option for the purpose of satisfying the requirements of any changes in
applicable laws or regulations or for any other purpose which at the time may
be permitted by law. No termination or amendment of the Plan or amendment of
the Option shall, without the Optionholder’s consent, adversely affect the
Optionholder’s rights under the Option.


 


14.
No Transfer.  Neither this
Certificate nor any of the rights granted hereby are transferable or
assignable, except by will or the laws of descent and distribution.  During the lifetime of the Optionholder, only
the Optionholder may exercise this Option.


 


15.
Consistency with Plan. If there is any inconsistency between the provisions
of this Certificate and the provisions of the Plan, the latter shall control.