Document:

Exhibit 4.9

 

FIRSTSENSE SOFTWARE, INC.

1997 STOCK INCENTIVE PLAN

 

1.                                       Purpose

 

The purpose of this 1997 Stock incentive Plan (the “Plan”)
of FirstSense Software, Inc., a Delaware corporation (the “Company”), is
to advance the interests of the Company’s stockholders by enhancing the Company’s
ability to attract, retain and motivate persons who make (or are expected to
make) important contributions to the Company by providing such persons with
equity ownership opportunities and performance-based incentives and thereby
better aligning the interest of such persons with those of the Company’s
stockholders.  Except where the context
otherwise requires, the term “Company” shall include any present or future
subsidiary corporations of FirstSense Software, Inc., as defined in Section 424(f) of
the Internal Revenue Code of 1986, as amended, and any regulations promulgated
thereunder (the “Code”).

 

2.                                       Eligibility

 

All of the Company’s employees, officers, directors,
consultants and advisors are eligible to be granted options, restricted stock,
or other stock-based awards (each, an “Award”) under the Plan.  Any person who has been granted an Award
under the Plan shall be deemed a “Participant.”

 

3.                                       Administration,
Delegation

 

(a)                                  Administration
by Board of Directors.  The Plan will
be administered by the Board of Directors of the Company (the “Board”).  The Board shall have authority to grant
Awards and to adopt, amend and repeal such administrative rules, guidelines and
practices relating to the Plan as it shall deem advisable.  The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem expedient to carry the Plan into effect and it
shall be the sole and final judge of such expediency.  All decisions by the Board shall be made in
the Board’s sole discretion and shall be final and binding on all persons
having or claiming any interest in the Plan or in any Award.  No director or person acting pursuant to the
authority delegated by the board shall be liable for any action or
determination relating to or under the Plan made in good faith.

 

(b)                                 Delegation
to Executive Officers.  To the extent
permitted by applicable law, the Board may delegate to one or more executive
officers of the Company the power to make Awards and exercise such other powers
under the Plan as the Board may determine, provided that the Board shall fix
the maximum number of hares subject to Awards and the maximum number of shares
for any one Participant to be made by such executive officers.

 

(c)                                  Appointment
of Committees.  To the extent
permitted by applicable law, the Board may delegate any or all of its powers
under the Plan to one or more

 

 

Committees or subcommittees of the Board (a “Committee”).  If and when the common stock, $0.01 par value
per share, of the Company (the “Common Stock”) is registered under the
Securities Exchange Act of 1934 (the “Exchange Act”), the Board shall appoint
one such Committee of not less than two members, each member of which shall be
an “outside director” within the meaning of Section 162(m) of the Code and
a “non-employee director” as defined in Rule 16b-3 promulgated under
the Exchange Act.  All references in the
Plan to the “Board” shall mean the Board or a Committee of the Board or the
executive officer referred to in Section 3(b) to the extent that the
Board’s powers or authority under the Plan have been delegated to such
Committee or executive officer.

 

4.                                       Stock
Available for Awards

 

(a)                                  Number
of Shares.  Subject to adjustment
under Section (b), Awards may be made under the Plan for up to 1,000,000
shares of Common Stock.  If any Award
expires or is terminated, surrendered or canceled without having been fully
exercised or is forfeited in whole or in part or results in any Common Stock
not being issued, the unused Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan, subject, however, in the case
of Incentive Stock Options (as hereinafter defined), to any limitation required
under the Code.  Shares issued under the
Plan may consist in whole or in part of authorized but unissued shares or
treasury shares.

 

(b)                                 Per-Participant
Limit.  Subject to adjustment under Section 4(c),
for Awards granted after the Common Stock is registered under the Exchange Act,
the maximum number of shares with respect to which an Award may be granted to
any Participant under the plan shall be 500,000 per calendar year.  The per-participant limit described in this Section 4(b) shall
be construed and applied consistently with Section 162(m) of the Code.

 

(c)                                  Adjustment
to Common Stock.  In the event of any
stock split, stock dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off or other
similar change in capitalization or event, or any distribution to holders of
Common Stock other than a normal cash dividend, (i) the number and class
of securities available under this Plan, (ii) the number and class of
security and exercise price per share subject to each outstanding Option, (iii) the
repurchase price per security subject to each outstanding Restricted Stock
Award, and (iv) the terms of each other outstanding stock-based Award
shall be appropriately adjusted by the Company (or substituted Awards may be
made, if applicable) to the extent the Board shall determine, in good faith,
that such an adjustment (or substitution) is necessary and appropriate.  If this Section 4(c) applies and Section 8(e)(1) also
applies to any event, Section 8(e)(1) shall be applicable to such
event, and this Section 4(c) shall not be applicable.

 

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5.                                       Stock
Options

 

(a)                                  General.  The Board may grant options to purchase
Common Stock (each, an “Option”) and determine the number of shares of Common
Stock to b covered by each Option, the exercise price of each Option and the
conditions and limitations applicable to the exercise of each Option, including
conditions relating to applicable federal or state securities laws, as it considers
necessary or advisable.  An Option which
is not intended to be an Incentive Stock Option (as hereinafter defined) shall
be designated a “Nonstatutory Stock Option.”

 

(b)                                 Incentive
Stock Options.  An Option that the
Board intends to be an “incentive stock option” as defined in Section 422
of the Code (an “Incentive Stock Option”) shall only be granted to employees of
the Company and shall be subject to and shall be construed consistently with
the requirements of Section 422 of the Code.  The Company shall have no liability to a
Participant, or any other party, if an Option (or any part thereof) which is
intended to be an Incentive Stock Option is not an Incentive Stock Option.

 

(c)                                  Exercise
Price.  The Board shall establish the
exercise price at the time each Option is granted and specify it in the
applicable option agreement.

 

(d)                                 Duration
of Options.  Each Option shall be
exercisable at such times and subject to such terms and conditions as the Board
may specify in the applicable option agreement.

 

(e)                                  Exercise
of Option.  Options may be exercised
only by delivery to the Company of a written notice of exercise signed by the
proper person together with payment in full as specified in Section 5(f) for
the number of shares for which the Option is exercised.

 

(f)                                    Payment
Upon Exercise.  Common Stock
purchased upon the exercise of an Option granted under the Plan shall be paid
for as follows:

 

(1)                                  in
cash or by check, payable to the order of the Company;

 

(2)                                  except
as the Board may otherwise provide in an Option Agreement, delivery of an
irrevocable and unconditional undertaking by a creditworthy broker to deliver
promptly to the Company sufficient funds to pay the exercise price, or delivery
by the Participant to the Company of a copy of irrevocable and unconditional
instructions to a creditworthy broker to deliver promptly to the Company cash
or a check sufficient to pay the exercise price;

 

(3)                                  to
the extent permitted by the Board and explicitly provided in an Option
Agreement (i) by delivery of shares of Common Stock owned by the Participant
valued at their fair market value as determined by the Board in good faith (“Fair
Market Value”), which Common Stock was owned by the Participant at least six
months prior to

 

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such delivery, (ii) by deliver of a promissory note of the
Participant to the Company on terms determined by the Board, or (iii) by
payment of such other lawful consideration as the Board may determine; or

 

(4)                                  any
combination of the above permitted forms of payment.

 

6.                                       Restricted
Stock

 

(a)                                  Grants.  The board may grant Awards entitling
recipients to acquire shares of Common Stock, subject to the right of the
Company to repurchase all or part of such shares at their issue price or other
stated or formula price (or to require forfeiture of such shares if issued at
no cost) from the recipient in the event that conditions specified by the Board
in the applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award (each, “Restricted
Stock Award”).

 

(b)                                 Terms
and Conditions.  The board shall
determine the terms and conditions of any such Restricted Stock Award,
including the conditions for repurchase (or forfeiture) and the issue price, if
any.  Any stock certificates issued in
respect of a Restricted Stock Award shall be registered in the name of the
Participant and, unless otherwise determined by the Board, deposited by the
participant, together with a stock power endorsed in blank, with the Company
(or its designee).  At the expiration of
the applicable restriction periods, the Company (or such designee) shall
deliver the certificates no longer subject to such restrictions to the
Participant or if the Participant has died, to the beneficiary designated, in a
manner determined by the board, by a Participant to receive amounts due or
exercise rights of the Participant in the event of the Participant’s death (the
“Designated Beneficiary”).  In the
absence of an effective designation by a Participant, Designated Beneficiary
shall mean the Participant’s estate.

 

7.                                       Other
Stock-Based Awards

 

The Board shall have the right to grant other Awards
based upon the Common Stock having such terms and conditions as the Board may
determine, including the grant of shares based upon certain conditions, the
grant of securities convertible into Common Stock and the grant of stock
appreciation rights.

 

8.                                       General
Provision Applicable to Awards

 

(a)                                  Transferability
of Awards.  Except as the Board may
otherwise determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the participant. 
References to a Participant, to the extent relevant in the context,
shall include references to authorized transferees.

 

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(b)                                 Documentation.  Each Award under the Plan shall be evidenced
by a written instrument in such form as the Board shall determine.  Each Award may contain terms and conditions
in addition to those set forth in the Plan.

 

(c)                                  Board
Discretion.  Except as otherwise
provided by the Plan, each type of Award may be made alone or in addition or in
relation to any other type of Award.  The
terms of each type of Award need not be identical, and the Board need not treat
Participants uniformly.

 

(d)                                 Termination
of Status.  The board shall determine
the effect on an Award of the disability, death, retirement, authorized leave
of absence or other change in the employment or other status of a Participant
and the extent to which, and the period during which, the Participant, the
Participant’s legal representative, conservator, guardian or Designated
Beneficiary may exercise rights under the Award.

 

(e)                                  Acquisition
Events

 

(1)                                  Consequences
of Acquisition Events.  Upon the
occurrence of an Acquisition Event (as defined below), or the execution by the
Company of any agreement with respect to an Acquisition Event, the Board shall
take any one or more of the following actions with respect to then outstanding
Awards:  (i) provide that
outstanding options shall be assumed, or equivalent Options shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), provided that any such Options substituted for Incentive Stock
Options shall satisfy, in the determination of the Board, the requirements of Section 424(a) of
the Code; (ii) upon written notice to the Participants, provided that all
then unexercised Options will become exercisable in full as of a specified time
(the “Acceleration Time”) prior to the Acquisition Event and will terminate immediately
prior to the consummation of such Acquisition Event, except to the extent
exercised by the Participants between the Acceleration Time and the
consummation of such Acquisition Event; (iii) in the event of an
Acquisition Event under the terms of which holders of Common Stock will receive
upon consummation thereof a cash payment for each share of Common Stock
surrendered pursuant to such Acquisition Event (the “Acquisition Price”),
provide that all outstanding  Options
shall terminate upon consummation of such Acquisition Event and each
Participant shall receive, in exchange therefor, a cash payment equal to the
amount (if any) by which (A) the Acquisition Price multiplied by the
number of shares of Common Stock subject to such outstanding Options (whether
or not then exercisable), exceeds (B) the aggregate exercise price of such
Options; (iv) provide that all Restricted Stock Awards then outstanding
shall become free of all restrictions prior to the consummation of the
Acquisition Event; and (v) provide that any other stock-based Awards
outstanding (A) shall become exercisable, realizable or vested in full, or
shall be free of all conditions or restrictions, as applicable to each such
Award, prior to the consummation of the Acquisition Event, or (B), if
applicable, shall be assumed, or equivalent Awards shall be substituted, by the
acquiring or succeeding corporation (or an affiliate thereof).

 

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An “Acquisition Event” shall mean:  (a) any merger or consolidation which
results in the voting securities of the Company outstanding immediately prior
thereto representing immediately thereafter (either by remaining outstanding or
by being converted into voting securities of the surviving or acquiring entity)
less than 50% 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; or (c) the complete liquidation of the Company.

 

(2)                                  Assumption
of Options Upon Certain Events.  The
Board may grant Awards under the Plan in substitution for stock and stock-based
awards held by employees of another corporation who become employees of the
Company as a result of a merger or consolidation of the employing corporation
with the Company or the acquisition by the Company of property or stock of the
employing corporation.  The Substitute
Awards shall be granted on such terms and conditions as the Board considers
appropriate in the circumstances.

 

(f)                                    Withholding.  Each Participant shall pay to the Company, or
make provision satisfactory to the Board for payment of, any taxes required by
law to be withheld in connection with Awards to such Participant no later than
the date of the event creating the tax liability.  The Board may allow Participants to satisfy
such tax obligations in whole or in part in shares of Common Stock, including
shares retained from the Award creating the tax obligation, valued at their Fair
Market Value.  The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of
any kind otherwise due to a participant.

 

(g)                                 Amendment
of Awards.  The Board may amend,
modify or terminate any outstanding Award, including but not limited to,
substituting therefor another Award of the same or a different type, changing
the date of exercise or realization, and converting an Incentive Stock Option
to a Nonstatutory Stock Option, provided that the Participant’s consent to such
action shall be required unless the Board determines that the action, taking
into account any related action, would not materially and adversely affect the
Participant.

 

(h)                                 Conditions
on Delivery of Stock.  The Company
will not be obligated to deliver any shares of Common Stock pursuant to the
Plan or to remove restrictions from shares previously delivered under the Plan
until (i) all conditions of the Award have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Company’s counsel,
all other legal matters in connection with the issuance and delivery of such
shares have been satisfied, including any applicable securities laws and any
applicable stock exchange or stock market rules and regulations, and (iii) the
Participant has executed and delivered to the Company such representations or
agreements as the Company may consider appropriate to satisfy the requirements
of any applicable laws, rules or regulations.

 

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(i)                                     Acceleration.  The Board may at any time provide that any
Options shall become immediately exercisable in full or in part, that any
Restricted Stock Awards shall be free of all restrictions or that any other
stock-based Awards may become exercisable in full or in part or free of some or
all restrictions or conditions, or otherwise realizable in full or in part, as
the case may be.

 

9.                                       Miscellaneous

 

(a)                                  No
Right To Employment or Other Status. 
No person shall have any claim or right to be granted an Award, and the
grant of an Award shall not be construed as giving a Participant the right to
continued employment or any other relationship with the Company.  The Company expressly reserves the right at
any time to dismiss or otherwise terminate its relationship with a Participant
free from any liability or claim under the Plan, except as expressly provided
in the applicable Award.

 

(b)                                 No
Rights As Stockholder.  Subject to
the provisions of the applicable Award, no Participant or Designated
Beneficiary shall have any rights as a stockholder with respect to any shares
of Common Stock to be distributed with respect to an Award until becoming the
record holder of such shares.

 

(c)                                  Effective
Date and Term of Plan.  The Plan
shall become effective on the date on which it is adopted by the Board, but no
Award granted to a Participant designated as subject to Section 162(m) by
the board shall become exercisable, vested or realizable, as applicable to such
Award, unless and until the Plan has been approved by the Company’s
stockholders.  No Awards shall be granted
under the Plan after the completion of ten years from the earlier of (i) the
date on which the Plan adopted by the Board or (ii) the date the Plan was
approved by the Company’s stockholders, but Awards previously granted may
extend beyond that date.

 

(d)                                 Amendment
of the Plan.  The Board may amend,
suspend or terminate the Plan or any portion thereof at any time, provided that
no Award granted to a Participant designated as subject to Section 162(m)
by the Board after the date of such amendment shall become exercisable,
realizable or vested, as applicable to such Award (to the extent that such
amendment to the Plan was required to grant such Award to a particular
Participant), unless and until such amendment shall have been approved by the
Company’s stockholders.

 

(e)                                  Stockholder
Approval.  For purposes of this Plan,
stockholder approval shall mean approval by a vote of the stockholders in
accordance with the requirements of Section 162(m) of the code.

 

(f)                                    Governing
Law.  The provisions of the Plan and
all Awards made hereunder shall be governed by and interpreted in accordance
with the laws of the State of Delaware, without regard to any applicable
conflicts of law.

 

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FIRSTSENSE SOFTWARE, INC.

 

Incentive Stock Option Agreement

Granted Under 1997 Stock Incentive Plan

 

1.                                       Grant
of Option.

 

This agreement (the “Agreement”) evidences the grant
by FirstSense Software, Inc., a Delaware corporation (the “Company”) on                                
(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 1997 Stock
Incentive Plan (the “Plan”), a total of 0,000 shares of
common stock, $0.01 par value per share, of the Company (“Common Stock”) (the “Shares”)
at $.         
per Share.  Unless earlier terminated,
this option shall expire 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 (N/A) and as to
an additional 2.0833% of the original number of Shares at the end of each
successive full month thereafter until (N/A).  This option shall expire upon, and will not
be exercisable after (N/A) (the “Final
Exercise Date”).  With the issuance of
any subsequent grant and upon the completion of the initial vesting period (one
year from the date of grant of your first Incentive Stock Option), any
subsequent grant will then vest its Shares at 2.0833% of the original number of
Shares at the end of each successive full month from the date the subsequent
grant was issued.  In the event the
subsequent grant is issued prior to the completion of the initial vesting
period, the grant will accumulate eligible shares for vesting at the completion
of the initial vesting period at a rate of 2.0833% of the original number of
Shares and vest those accumulated shares at the completion of the initial
vesting period.  Therefore, the original
number of Shares (0,000) for this subsequent grant
will accumulate and/or vest an additional 2.0833% of the original number of
Shares at the end of each successive full month until                                .  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 in writing, signed by the Participant, and received by the
Company at its principal office, accompanied by this agreement and 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 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 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, and further provided
that this option shall not be exercisable after the Final Exercise Date.

 

(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. 
For the purposes of this Agreement, “cause” shall mean the discharge
resulting from a determination by a vote of the board of Directors of the
Company that the Participant

 

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(i)                                     Has
been convicted of a felony involving dishonesty, fraud, theft or embezzlement
or any other felony,

 

(ii)                                  Has
failed or refused, in any material respect, to follow reasonable written
policies or directives established by the Board of Directors, which failure or
refusal continues for 21 days following written notice thereof to the
Participant,

 

(iii)                               Has willfully and persistently
failed to attend to material duties or obligations imposed on him under this
Agreement, which failure continues for 21 days following notice thereof to the
Participant, or

 

(iv)                              Has
performed or failed to act, which if he were prosecuted and convicted would
constitute a crime or offense involving money or property of the Company (in
either case in an amount or at a value in excess of $10,000), or which would
constitute a felony in the jurisdiction involved.

 

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.                                       Right
of First Refusal.

 

(a)                                  If
the Participant proposes to sell, assign, transfer, pledge, hypothecate or
otherwise dispose of, by operation of law or otherwise (collectively, “transfer”)
any Shares acquired upon exercise of this option, then the Participant shall first
give written notice of the proposed transfer (the “Transfer Notice”) to the
Company.  The Transfer Notice shall name
the proposed transferee and state the number of such Shares the participant
proposes to transfer (the “Offered Shares”), the price per share and all other
material terms and conditions of the transfer.

 

(b)                                 For
30 days following its receipt of such Transfer Notice, the Company shall have
the option to purchase all (but not less than all) of the Offered Shares at the
price and upon the terms set forth in the Transfer Notice.  In the event the Company elects to purchase
all of the Offered Shares, it shall give written notice of such election to the
Participant within such 30-day period. 
Within 10 days after his receipt of such notice, the Participant shall
tender to the Company at its principal offices the certificate or certificates
representing the offered Shares, duly endorsed in blank by the Participant or
with duly endorsed stock powers attached thereto, all in a form suitable for
transfer of the Offered Shares to the Company. 
Upon receipt of such a certificate or certificates, the Company shall
deliver or mail to the Participant a check in payment of the purchase price for
the Offered Shares; provided  that if the terms of payment set
forth in the Transfer Notice were other than cash against delivery, the Company
may pay for the Offered Shares on the same terms and conditions as were set
forth in the Transfer Notice.

 

(c)                                  At
and after the time at which the Offered Shares are required to be delivered to
the Company for transfer to the Company pursuant to subsection (b) above,

 

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the Company shall not pay any dividend to the Participant on account of
such Shares or permit the Participant to exercise any of the privileges or
rights of a stockholder with respect to such Offered Shares, but shall, in so
far as permitted by law, treat the Company as the owner of such Offered Shares.

 

(d)                                 If
the Company does not elect to acquire all of the Offered Shares, the
Participant may, within the 30-day period following the expiration of the
option granted to the Company under subsection (b) above, transfer
the Offered Shares to the proposed transferee, provided  that such
transfer shall not be on terms and conditions more favorable to the transferee than
those contained in the Transfer Notice.  Notwithstanding
any of the above, all Offered Shares transferred pursuant to this Section 4
shall remain subject to the right of first refusal set forth in this Section 4
and such transferee shall, as a condition to such transfer, deliver to the
Company a written instrument confirming that such transferee shall be bound by
all of the terms and conditions of this Section 4.

 

(e)                                  The
following transactions shall be exempt from the provisions of this Section:

 

(1)                                            Any
transfer of Shares to or for the benefit of any spouse, child or grandchild of
the Participant, or to a trust for their benefit;

 

(2)                                            any
transfer pursuant to an effective registration statement filed by the Company
under the Securities Act of 1933, as amended (the “Securities Act”); and

 

(3)                                            any
transfer of the Shares pursuant to the sale of all or substantially all of the
business of the Company; provided, however, that in the case of a
transfer pursuant to clause (1) above, such Shares shall remain subject to
the right of first refusal set forth in this Section 4 and such transferee
shall, as a condition to such transfer, deliver to the Company a written
instrument confirming that such transferee shall be bound by all of the terms
and conditions of this Section 4.

 

(f)                                    The
Company may assign its rights to purchase Offered Shares in any particular
transaction under this Section 4 to one or more persons or entities.

 

(g)                                 The
provisions of this Section 4 shall terminate upon the earlier of the
following events:

 

(1)                                            the
closing of the sale of shares of Common Stock in an underwritten public
offering pursuant to an effective registration statement filed by the Company
under the Securities Act; or

 

(2)                                            the
sale of all or substantially all of the capital stock, assets or business of
the Company, by merger, consolidation, sale of assets or otherwise.

 

(h)                                 The
Company shall not be required (a) to transfer on its books any of the
Shares which shall have been sold or transferred in violation of any of the
provisions set

 

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forth in this Section 4, or (b) to treat as owner of such Shares
or to pay dividends to any transferee to whom any such Shares shall have been
so sold or transferred.

 

5.                                       Agreement
in Connection with Public Offering.

 

The Participant agrees, in connection with the initial
underwritten public offering of the Company’s securities pursuant to a
registration statement under the Securities Act, (i) not to sell, make
short sale of, loan, grant any options for the purchase of, or otherwise
dispose of any shares of Common Stock held by the Participant (other than those
shares included in the offering) without the prior written consent of the
Company or the underwriters managing such initial underwritten public offering
of the Company’s securities for a period of 180 days from the effective date of
such registration statement, and (ii) to execute any agreement reflecting
clause (i) above as may be requested by the Company or the managing
underwriters at the time of such offering.

 

6.                                       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.

 

7.                                       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.

 

8.                                       Disqualifying
Disposition.

 

If the Participant disposes of Shares acquired upon
exercise of this option within two years from the date of grant of the option
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.

 

9.                                       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.

 

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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.

 

	
   

  	
  FIRST SENSE
  SOFTWARE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Cary L. Johnson

  
	
   

  	
   

  	
  President and
  CEO

  
						

 

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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 1997 Stock Incentive
Plan.

 

	
   

  	
  PARTICIPANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:EXHIBIT 4.10

 
CONCORD COMMUNICATIONS, INC.
 
2000 NON-EXECUTIVE EMPLOYEE EQUITY INCENTIVE PLAN
 
1.             INTRODUCTION AND PURPOSE
 
(a) The purpose of this 2000 Non-Executive Employee Equity Incentive Plan (the “2000 Plan” or the “Plan”) is to provide a means by which selected Employees of Concord Communications, Inc. (the “Company”) and its Affiliates, may be given an opportunity to benefit from increases in value of the stock of the Company through the granting of (i) Nonstatutory Stock Options, (ii) Stock Bonuses, (iii) Restricted Stock, (iv) Stock Appreciation Rights, and (v) other awards based upon the Company’s Common Stock on such terms and conditions as the Board may determine.
 
(b) The Company, by means of the Plan, seeks to retain the services of persons who are non-executive employees of the Company and its Affiliates, to secure and retain the services of new Employees and to provide incentives for such persons to exert maximum efforts for the success of the Company. The Company may not grant Stock Awards to Officers and Directors of the Company pursuant to the Plan.
 
(c) The Company intends that the Stock Awards issued under the Plan shall, in the discretion of the Board or any Committee to which responsibility for administration of the Plan has been delegated pursuant to subsection 3(c) hereof, be either (i) Nonstatutory Stock Options granted pursuant to Section 5 hereof, (ii) Stock Bonuses or rights to purchase restricted stock granted pursuant to Section 6 hereof, (iii) Stock Appreciation Rights granted pursuant to Section 7 hereof or (iv) other stock based awards granted pursuant to Section 8 hereof.
 
2.             DEFINITIONS AND RULES OF INTERPRETATION
 
(a) DEFINITIONS.
 
For the purposes of the Plan, in addition to the definitions set forth above, the following terms shall have the respective meanings set forth below, unless something in the subject matter or context is inconsistent therewith:
 
(i)            “AFFILIATE” means any parent corporation or subsidiary corporation, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f) respectively, of the Code.
 
(ii)           “BOARD” means the Board of Directors of the Company.
 
(iii)          “CODE” means the Internal Revenue Code of 1986, as amended.
 
(iv)          “COMMITTEE” means the Committee appointed by the Board in accordance with subsection 3(c) of the Plan.
 
(v)           “COMPANY” means Concord Communications, Inc.
 
(vi)          “COMPANY COMMON STOCK” means shares of the common stock of the Company, par value $.01 per share.

 

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(vii)         “CONCURRENT STOCK APPRECIATION RIGHT” or “CONCURRENT RIGHT” means a right granted pursuant to subsection 7(b) hereof.
 
(viii)        “CONTINUOUS STATUS AS AN EMPLOYEE” means the employment or relationship as an Employee, is not interrupted or terminated by the Company or any Affiliate. The Committee, in its sole discretion, may determine whether Continuous Status as an Employee shall be considered interrupted in the case of any leave of absence approved by the Committee, including sick leave, military leave, or any other personal leave.
 
(ix)           “DIRECTOR” means a member of the Board.
 
(x)            “DISABILITY” means total and permanent disability as defined in Section 22(e)(3) of the Code.
 
(xi)           “EMPLOYEE” means any person, (excluding Officers and Directors) employed by the Company or any Affiliate of the Company.
 
(xii)          “EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended.
 
(xiii)         “FAIR MARKET VALUE” means the price per share on the date of grant as determined by the Board based upon any reasonable valuation method, or if publicly-traded, as reported either (a) by a nationally recognized stock exchange, (b) by the National Association of Securities Dealers Automated Quotation System, Inc. (“NASDAQ”).
 
(xiv)        “INDEPENDENT STOCK APPRECIATION RIGHT” or “INDEPENDENT RIGHT” means a right granted under subsection 7(b) hereof.
 
(xv)         “NONSTATUTORY STOCK OPTION” means an Option not intended to qualify as an Incentive Stock Option under Section 422(b) of the Internal Revenue Code of 1986, as amended.
 
(xvi)        “OFFICER” means a person who is an officer of the Company within the meaning of the interpretations of the National Association of Securities Dealers, Inc. (“NASD”) or under the NASD Marketplace Rules.
 
(xvii)       “OPTION” means a stock option granted pursuant to the Plan.
 
(xviii)      “OPTION AGREEMENT” means a written agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan.
 
(xix)         “OPTIONEE” means an Employee who holds an outstanding Option.
 
(xx)          “PLAN” or “2000 PLAN” means this 2000 Non-Executive Employee Equity Incentive Plan, as the same may be amended from time to time.
 
(xxi)         “RESTRICTED STOCK” means an award of common stock that is subject to such restrictions on transferability and other restrictions, if any, as the Committee may impose at the date of grant or thereafter, which restrictions may lapse separately or in combination at such times, under such circumstances, including, without limitation a specific period of employment or the satisfaction of pre-established performance goals, in such installments, or otherwise, as the compensation committee may determine.

 

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(xxii)        “SECURITIES ACT” means the Securities Act of 1933, as amended.
 
(xxiiii)      “STOCK APPRECIATION RIGHT” means any of the various types of rights which may be granted under Section 7 hereof.
 
(xxiv)       “STOCK AWARD” means any right granted under the Plan, including any Option, any Stock Bonus, any right to purchase Restricted Stock, and any Stock Appreciation Right.
 
(xxv)        “STOCK AWARD AGREEMENT” means a written agreement between the Company and a holder of a Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan.
 
(xxvi)       “STOCK BONUS” means any stock bonus of the type which may be granted under Section 6 hereof.
 
(xxvii)      “SUBSIDIARY” shall mean any corporation, if the corporation and/or one or more Subsidiaries owns at least fifty percent (50%) of the total combined voting power of all classes of outstanding stock in such corporation.
 
(xxviii)     “TANDEM STOCK APPRECIATION RIGHT” or “TANDEM RIGHT” means a right granted under subsection 7(b) hereof.
 
The foregoing terms are not the exclusive definitions as used in the Plan and reference is made to other capitalized terms defined in the context of their first use herein.
 
(b) RULES OF INTERPRETATION.
 
(i)            The headings and subheadings used herein or in any Option or other instrument evidencing a Stock Award are solely for convenience of reference and shall not constitute a part of the Plan or such document or affect the meaning, construction or effect of any provision thereof.
 
(ii)           All definitions set forth herein shall apply to the singular as well as the plural form of such defined term, and all references to the masculine gender shall include reference to the feminine or neuter gender and vice versa, as the context may require.
 
(iii)          Reference to “including” means including without limiting the generality of any description preceding such term.
 
(iv)          Unless otherwise expressly stipulated, any reference in the Plan to any statute, act, regulation or specific provision thereof shall also extend to any amendment, restatement or other modification to such statute, act, regulation or specific provision thereof or any successor statute, act, regulation or provision of similar import.
 
(v)           Unless otherwise expressly provided, any reference in the Plan to any specific provision of any statute or act shall include any regulations promulgated thereunder from time to time and interpretations thereof as may be applicable to the Plan.
 
3.             ADMINISTRATION
 
(a) The Plan shall be administered by the Committee.

 

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(b) The Committee shall have the power, subject to, and within the limitations of, the express provisions of the Plan:
 
(i)            To determine from time to time which of the persons eligible under the Plan shall be granted Stock Awards; when and how Stock Awards shall be granted; whether a Stock Award will be a Nonstatutory Stock Option, a Stock Bonus, a right to purchase Restricted Stock, a Stock Appreciation Right, another stock-based award or a combination of the foregoing; the provisions of each Stock Award granted (which need not be identical), including the time or times when a person shall be permitted to receive stock pursuant to a Stock Award; whether a person shall be permitted to receive stock upon exercise of an Independent Stock Appreciation Right; and the number of shares with respect to which Stock Awards shall be granted to each such person.
 
(ii)           To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Committee, in the exercise of this power, may correct any defect, omission or inconsistency in any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Stock Award Agreement fully effective.
 
(iii)          To provide for such special terms as it may consider necessary or appropriate to assure the viability of awards granted to Employees performing services outside the United States by accommodating differences in local law, tax policy or custom and to approve such supplements to, or amendments, restatements or alternative versions of the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect for any other purposes; provided that, no such supplements, amendments, restatements or alternative versions shall increase the share limitations contained in Section 4 hereof.
 
(iv)          Generally, to exercise such powers and to perform such acts as the Committee deems necessary or expedient to promote the best interests of the Company and which are not in conflict with the provisions of the Plan. Notwithstanding any other provisions of this Section 3, no Stock Awards may be granted to any Officer or Director.
 
(c) Administration of the Plan shall be delegated to a committee appointed by the Board (the “Committee”). The Committee shall have, in connection with the administration of the Plan, the powers set forth in the Plan; subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may at any time revest in the Board the administration of the Plan. Notwithstanding anything in this Section 3 to the contrary, at any time the Board or Committee may delegate to a committee of one or more officers of the Company the authority to grant Stock Awards to eligible persons.
 
(d) The Board shall have the authority to correct any defect, omission or inconsistency in the Plan and to amend the Plan as provided in Section 17. The Board shall have the authority to appoint the Committee and to fill any vacancy created by reason of the death, resignation or removal of any member thereof by appointing an eligible successor.
 
4.             SHARES SUBJECT TO THE PLAN.
 
The number of shares of Company Common Stock that may be issued pursuant to Stock Awards under the Plan shall be determined by the Board; provided, however, such amount shall not exceed that number of shares permitted under the Exchange Act, Securities Act or any applicable rule of the NASDAQ. If any Stock Award shall for any reason expire or otherwise terminate without having been

 

4

 

exercised in full, the Company Common Stock not purchased shall again become available for issuance under the Plan. Notwithstanding the foregoing, shares of Company Common Stock subject to Stock Appreciation Rights exercised in accordance with Section 7 hereof shall not be available for subsequent issuance under the Plan.
 
5.             OPTION PROVISIONS
 
Each Option Agreement shall be in such form and shall contain such terms and conditions as the Committee shall deem appropriate. The provisions of separate Options need not be identical, but each Option Agreement shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions except as otherwise specifically provided elsewhere in the Plan.
 
(a) TERM. No Option shall be exercisable after the expiration of ten (10) years from the date it was granted.
 
(b) PRICE. The exercise price of each Stock Option shall be set by the Committee at the time each Option is granted, but in no event shall any exercise price be less than the par value of the Company Common Stock.
 
(c) PAYMENT FOR STOCK. Stock purchased on exercise of an Option must be paid in cash or by certified check (acceptable to the Company in accordance with guidelines established for this purpose), bank draft or money order payable to the order of the Company, by delivery of a full recourse promissory note of the Optionee to the Company on terms determined by the Committee, or by such other method as may be determined by the Committee, including broker assisted same day sales. In the case of payment made by a promissory note, interest shall be payable at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest.
 
(d) TRANSFERABILITY. A Stock Option may be transferred upon such terms and conditions as are set forth in the Option Agreement, as the Committee shall determine in its sole discretion, including (without limitation) pursuant to a “domestic relations order” or to family members, or to trusts or other entities maintained for the benefit of family members. Notwithstanding the foregoing, the person to whom an Option is granted may, by delivering written notice to the Company in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionee, shall thereafter be entitled to exercise the Option.
 
(e) VESTING. The total number of shares of stock subject to an Option may, but need not, be allotted in periodic installments (which may, but need not, be equal). The Option Agreement may provide that from time to time during each of such installment periods, the Option may become exercisable (“vest”) with respect to some or all of the shares allotted to that period, and may be exercised with respect to some or all of the shares allotted to such period and/or any prior period as to which the Option became vested but was not fully exercised. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (e.g., Change in Control, performance or other criteria) as the Committee may deem appropriate. During the remainder of the term of the Option (if its term extends beyond the end of the installment periods), the Option may be exercised from time to time with respect to any shares then remaining subject to the Option. The provisions of this subsection 5(e) are subject to any Option provisions governing the minimum number of shares as to which an Option may be exercised.
 
(f) TERMINATION OF EMPLOYMENT. In the event an Optionee’s Continuous Status as an Employee terminates (other than upon the Optionee’s death, or Disability), the Optionee may exercise

 

5

 

his or her Option, but only within such period of time ending on the earlier of (i) 90 days after termination of the Optionee’s Continuous Status as an Employee or such longer or shorter period of time specified in the Option Agreement, or (ii) the expiration of the Option’s term, and only to the extent that the Optionee was entitled to exercise it at the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement).
 
If, at the date of termination, the Optionee is not entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan.
 
An Optionee’s Option Agreement may also provide that if the exercise of the Option following the termination of the Optionee’s Continuous Status as an Employee, (other than upon the Optionee’s death or disability) would be prohibited at any time solely because the issuance of shares would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of the term of the Option set forth in the first paragraph of this subsection 5(f), or (ii) the expiration of a period of three (3) months after the termination of the Optionee’s Continuous Status as an Employee, during which the exercise of the Option would not be in violation of such registration requirements.
 
Notwithstanding the preceding, in the event the Company terminates an Optionee’s employment with the Company for cause (as determined by the Company), the Option shall terminate on the date of termination and the shares covered by such Option shall revert to and again become available for issuance under the Plan.
 
As used herein, “cause” shall mean (x) any material breach by the Optionee of any agreement to which the Optionee and the Company are both parties, (y) any act or omission to act by the Optionee which may have a material and adverse effect on the Company’s business or on the Optionee’s ability to perform services for the Company, including, without limitation, the commission of any crime (other than ordinary traffic violations), or (z) any material misconduct or material neglect of duties by the Optionee in connection with the business or affairs of the Company or any affiliate of the Company.
 
(g) DISABILITY OF OPTIONEE. In the event an Optionee’s Continuous Status as an Employee terminates as a result of the Optionee’s Disability, the Optionee may exercise his or her Option, but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period of time as specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, at the date of termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan. The number of shares subject to an Option which may be purchased under this Section 5(g) shall be that number which would be vested on the first anniversary of the Optionee’s termination on account of Disability, unless an applicable Option Agreement specifies otherwise.
 
(h) DEATH OF OPTIONEE. In the event of a death of an Optionee during, or within a period specified in the Option Agreement after the termination of, the Optionee’s Continuous Status as an Employee, the Option may be exercised by the Optionee’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance, or by a person designated to exercise the option upon the Optionee’s death pursuant to subsection 5(d) hereof, but only within the period ending on the earlier of: (i) the date twelve (12) months following the date of death (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of such Option as set forth in the Option Agreement.

 

6

 

If, at the time of death, the Optionee was not entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the Option as determined on the date of death (i.e., no acceleration) shall revert to and again become available under the Plan. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan.
 
(i) EARLY EXERCISE. The Option may, but need not, include a provision whereby the Optionee may elect at any time while an Employee, to exercise the Option as to any part or all of the shares subject to the Option prior to the full vesting of the Option; provided, however, any unvested shares shall be subject to a repurchase right in the Company at the Exercise Price in the event of the Optionee’s termination and any such repurchase right shall comply with California law for employees who are California residents.
 
6.             TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.
 
Each Stock Bonus or Restricted Stock award agreement shall be in such form and shall contain such terms and conditions as the Committee shall deem appropriate. The terms and conditions of Stock Bonus or Restricted Stock award agreements may change from time to time, and the terms and conditions of separate agreements need not be identical, but each Stock Bonus or Restricted Stock award agreement shall include (through incorporation of provisions herein by reference in the agreement or otherwise) the substance of each of the following provisions as appropriate:
 
(a) PURCHASE PRICE. The purchase price under each Restricted Stock award agreement shall be such amount as the Committee shall determine and designate in such agreement. Notwithstanding the foregoing, the Committee may determine that eligible participants in the Plan may be granted a Stock Award pursuant to a Stock Bonus agreement in consideration for past services actually rendered to the Company for its benefit.
 
(b) TRANSFERABILITY. Except as otherwise provided elsewhere in the Plan, no rights under a Stock Bonus or Restricted Stock award agreement shall be assignable by any participant under the Plan, either voluntarily or by operation of law, except by will or by the laws of descent and distribution, and shall be exercisable during the lifetime of the person to whom the rights are granted only by such person. The person to whom the Stock Award is granted may, by delivering written notice to the Company in a form satisfactory to the Company, designate a third party who, in the event of the death of such person, shall thereafter be entitled to exercise the rights held by such person under the Stock Bonus or Restricted Stock award agreement.
 
(c) PAYMENT FOR STOCK. The purchase price determined under subsection 6(a) hereof must be paid in cash or by certified check (acceptable to the Company in accordance with guidelines established for this purpose), bank draft or money order payable to the order of the Company, or by delivery of a full recourse promissory note of the Employee to the Company on terms determined by the Committee, or by such other method as may be determined by the Committee. In the case of payment made by a promissory note, interest shall be payable at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest.
 
(d) VESTING. Shares of Company Common Stock sold or awarded under the Plan may, but need not, be subject to a repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Committee.

 

7

 

(e) TERMINATION OF EMPLOYMENT. In the event an Optionee’s Continuous Status as an Employee terminates, the Company may repurchase or otherwise reacquire any or all of the shares of Company Common Stock held by that person which have not vested as of the date of termination under the terms of the Stock Bonus or Restricted Stock purchase agreement between the Company and such person.
 
7.             STOCK APPRECIATION RIGHTS
 
(a) The Committee shall have full power and authority, exercisable in its sole discretion, to grant Stock Appreciation Rights to Employees of the Company or its Affiliates under the Plan under such terms and conditions as it shall determine. Each such right shall entitle the holder to a distribution based on the appreciation in the Fair Market Value per share of a designated amount of Company Common Stock.
 
(b) The three types of Stock Appreciation Rights authorized for issuance under the Plan are: Tandem Stock Appreciation Rights, Concurrent Stock Appreciation Rights and Independent Stock Appreciation Rights.
 
8.             OTHER STOCK-BASED AWARDS.
 
The Committee shall have the right to grant other Awards based upon Company Common Stock having such terms and conditions as the Committee may determine, including the grant of shares based upon certain conditions and the grant of securities convertible into Company Common Stock.
 
9.             TAX WITHHOLDING.
 
The Company shall have the right to deduct from any settlement of an award made under the Plan, including the delivery or vesting of shares of Company Common Stock, up to the minimum amount necessary to cover withholding of any federal, state or local taxes required by law, or to take such other action as may be necessary to satisfy any such withholding obligations. The Committee may, in its discretion and subject to such rules as it may adopt, permit participants to use shares of Company Common Stock to satisfy the minimum required tax withholding (with prior approval of the Committee if Shares are owned less than six months) and such Shares shall be valued at the Fair Market Value as of the settlement date of the applicable award.
 
10.           CANCELLATION AND RE-GRANT OF OPTIONS.
 
The Board or the Committee shall have the authority to effect, at any time and from time to time, with the consent of the affected holders of Options and/or Stock Appreciation Rights, the repricing of any outstanding Options and/or Stock Appreciation Rights under the Plan and the grant in substitution therefore of new Options and/or Stock Appreciation Rights under the Plan covering the same or different numbers of shares of Company Common Stock. Notwithstanding the foregoing, the Committee may grant an Option and/or Stock Appreciation Right with an exercise price lower than that set forth above if such Option and/or Stock Appreciation Right is granted as part of a transaction to which Section 424(a) of the Code applies.
 
11.           COVENANTS OF THE COMPANY.
 
(a) During the terms of the Stock Awards, the Company shall keep available at all times the number of shares of Company Common Stock required to satisfy such Stock Awards, but in any event, not more than the number of shares of Company Common Stock authorized under the Plan.

 

8

 

(b) The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to issue and sell shares of Company Common Stock under the Stock Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act either the Plan, any Stock Award or any stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Company Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Company Common Stock under such Stock Awards unless and until such authority is obtained.
 
12.           USE OF PROCEEDS FROM STOCK.
 
Proceeds from the sale of Company Common Stock pursuant to Stock Awards shall constitute general funds of the Company.
 
13.           MISCELLANEOUS.
 
(a) The Committee shall have the power to accelerate the time at which a Stock Award may first be exercised or the time during which a Stock Award or any part thereof will vest, notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it will vest.
 
(b) Neither an Optionee nor any person to whom an Option is transferred under subsection 5(d) hereof shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Company Common Stock subject to such Option unless and until such person has satisfied all requirements for exercise of the Option pursuant to its terms.
 
(c) Nothing in the Plan or any instrument executed or Stock Award granted pursuant thereto shall confer upon any Employee or Optionee any right to continue in the employ of the Company or any Affiliate or shall affect the right of the Company or any Affiliate to terminate the employment or relationship of any Employee or Optionee, with or without cause.
 
(d) The Committee shall be authorized to establish procedures pursuant to which Optionees may elect to defer the gain realized upon exercise of an Option, or such gain derived from other Stock Awards granted under the Plan.
 
(e) The Company will not be obligated to deliver any shares of Company Common Stock pursuant to the Plan or to remove restrictions from such shares previously delivered under the Plan (a) until all conditions of the Option or award have been satisfied or removed, (b) until, in the opinion of the Company’s counsel, all applicable federal and state laws and regulations have been complied with, (c) if the outstanding Company Common Stock is at the time listed on any stock exchange or The Nasdaq National Market, until the shares to be delivered have been listed or authorized to be listed on such exchange or market upon official notice of notice of issuance, and (d) until all other legal matters in connection with the issuance and delivery of stock has been approved by the Company’s counsel.
 
(f) If the sale of shares of Company common stock has not been registered under the Securities Act, the Company may require, as a condition to exercise of the award, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of the Securities Act; including the representation or warranty of the person exercising the Option that the Shares of Company Common Stock are being purchased only for investment and without any present intention to sell or

 

9

 

distribute such shares.
 
(g) If an Option is exercised by the Optionee’s legal representative or transferee, the Company will be under no obligation to deliver Company Common Stock pursuant to such exercise until the Company is satisfied as to the authority of such representative.
 
14.           EFFECT OF CHANGE IN STOCK SUBJECT TO THE PLAN.
 
In the event there is any change in the shares of Common Stock of the Company through the declaration of stock dividends or through recapitalizations resulting in stock subdivisions or combinations or exchanges of shares or otherwise, the number of shares available for Options, the exercise price of outstanding Options, and the number of shares subject to any Option shall be appropriately adjusted by the Board.
 
15.           CHANGE IN CONTROL.
 
Notwithstanding any other provision of the Plan to the contrary, in the event of a Change of Control as determined solely by the Board:
 
(a) Stock Awards outstanding as of the date such Change of Control is determined to have occurred shall become exercisable to the extent provided for in each Optionee’s Award agreement.
 
(b) In connection with or following a Change of Control, neither the Committee nor the Board may impose additional conditions upon exercise or otherwise amend or restrict an Option, SAR, share of Restricted Stock, Deferred Stock Award or Performance Award, or amend the terms of the Plan in any manner adverse to the holder thereof, without the written consent of such holder.
 
(c) Notwithstanding the foregoing, if any right granted pursuant to this Section 15 would make a Change of Control transaction ineligible for pooling of interests accounting under applicable accounting principles that but for this Section 15 would otherwise be eligible for such accounting treatment, the Committee shall have the authority to substitute Stock for the cash which would otherwise be payable pursuant to this Section 15 having a fair market value equal to such cash.
 
16.           GRANT OF OPTIONS IN CONNECTION WITH CERTAIN ACQUISITIONS.
 
The Board may grant Options under the Plan in substitution for stock options granted under plans of other employers, if such grant occurs by reason of a corporate merger, consolidation, separation, reorganization, or liquidation to which the Company is a party, or by reason of the acquisition of property or stock of another corporation by the Company. Options granted under the provisions of this Section 16 may be granted at a price less than the Fair Market Value of the Common Stock on the date such Option is granted, so long as the ratio of the Option price to the Fair Market Value of the Common Stock is no more favorable to the Optionee than the ratio of the Option price to the Fair Market Value of the stock subject to the old option immediately before such substitution. Except as otherwise specifically provided in the agreement setting forth the terms and conditions of such Option, the provisions of this Plan shall govern any Options granted under this Section 16. Nothing in this Section 16 shall be deemed to authorize the grant of Options under the Plan for a number of shares in excess of the number determined under Section 4, nor to limit in any way the authority of the Board to grant substituted Options in connection with such transactions other than under the Plan.

 

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17.           AMENDMENT OF THE PLAN AND STOCK AWARDS
 
(a) It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide Optionees with the maximum benefits provided or to be provided under the provision of the Code and the regulations promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or Options granted under it into compliance therewith.
 
(b) Rights and obligations under any Stock Award granted before amendment of the Plan shall not be altered or impaired by any amendment of the Plan unless (i) the Company requests the consent of the persons to whom the Stock Award was granted and (ii) such person consents in writing.
 
(c) The Committee at any time, and from time to time, may amend the terms of any one or more Stock Awards; provided, however, that the rights and obligations under any Stock Award shall not be altered or impaired by any such amendment unless (i) the Company requests the consent of the person to whom the Stock Award was granted and (ii) such person consents in writing.
 
18.           TERMINATION OR SUSPENSION OF THE PLAN.
 
(a) The Board may suspend or terminate the Plan at any time. No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
 
(b) Rights and obligations under any Stock Award granted while the Plan is in effect shall not be impaired by suspension or termination of the Plan, except with consent of the person to whom the Stock Award was granted.
 
19.           GOVERNING LAW.
 
The provisions of the Plan and all Stock Awards made hereunder shall be governed by and interpreted in accordance with the internal laws of the Commonwealth of Massachusetts without regard to any applicable conflicts of law principles.

 

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