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


 





















 


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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