Document:

Exhibit

10.2

 

 

	

  Notice of Grant of Stock Options

  and Option Agreement

  	

   

  	

  META

  Group, Inc.
ID:  06-0971675

  208 Harbor Drive

  Stamford, CT 06912

  

 

 

Effective 7/31/2002, you have been granted a(n) Incentive Stock Option

to buy 160,000 shares of META Group, Inc. (the Company) stock at $2.5000 per

share.

 

The total option price of the shares granted is $400,000.

 

Shares in each period will become exercisable on the date shown.

 

	

  Shares

  	

   

  	

  Vest Type

  	

   

  	

  Full Vest

  	

   

  	

  Expiration

  	

   

  
	

  40,000

  	

   

  	

  On Vest Date

  	

   

  	

  7/31/2003

  	

   

  	

  731/2012

  	

   

  
	

  40,000

  	

   

  	

  On Vest Date

  	

   

  	

  7/31/2004

  	

   

  	

  7/31/2012

  	

   

  
	

  40,000

  	

   

  	

  On Vest Date

  	

   

  	

  7/31/2005

  	

   

  	

  7/31/2012

  	

   

  
	

  40,000

  	

   

  	

  On Vest Date

  	

   

  	

  7/31/2006

  	

   

  	

  7/31/2012

  	

   

  

 

By your signature and the Company’s signature below, you and the

Company agree that these options are granted under and governed by the terms

and conditions of the Company’s Stock Option Plan as amended and the Option

Agreement, all of which are attached and made a part of this document.

 

	

   /s/ John A. Piontkowski

  	

   

  	

  7/31/02

  	

   

  
	

  META Group, Inc.

  	

  Date

  
	

   

  	

   

  
	

   

  	

   

  
	

   /s/ Alfred J. Amoroso

  	

   

  	

  8/1/02

  	

   

  
	

  Name:  Alfred

  J. Amoroso

  	

  Date

  

 

 

1

 

	

  Notice of Grant of Stock Options

  and Incentive Stock Option Agreement

  	

   

  	

  META Group, Inc.

  

 

 

META Group, Inc., a Delaware Corporation (the

“Company”), hereby grants as of July 31, 2002 to you (the “Employee”), an

option to purchase shares (the “Option Shares”) of its Common Stock, $.01 par

value (“Common Stock”), at the price of $2.50 per share.  The quantity of Option Shares granted and vesting schedule is

defined on the cover page, hereof.  The

Option Shares are granted on the following terms and conditions:

 

1.                                      Grant

Under Second Amended and Restated 1995 Stock Plan.  This option is granted pursuant to and is

governed by the Company’s Second Amended and Restated 1995 Stock Plan (the

“Plan”) and, unless the context otherwise requires, terms used herein shall

have the same meaning as in the Plan. 

Determinations made in connection with this option pursuant to the Plan

shall be governed by the Plan as it exists on this date.

 

2.                                      Grant as

Incentive Stock Option; Other Options.  This option is intended to qualify as an

incentive stock option under Section 422 of the Internal Revenue Code of

1986, as amended (the “Code”).  This

option is in addition to any other options heretofore or hereafter granted to

the Employee by the Company or any Related Corporation (as defined in the

Plan), but a duplicate original of this instrument shall not effect the grant

of another option.

 

3.                                      Vesting

of Option if Employment Continues; Acceleration on Certain Events.

 

(a)  Subject to

Sections 3(b) and 3(c), if the Employee has continued to be employed by the

Company or any Related Corporation through the dates listed under the column

entitled “Full Vest” on the cover page hereof, the Employee may exercise this

option for the number of shares of Common Stock set opposite the applicable

date.

 

(b) In addition to the foregoing, but subject to

Section 4, if, on or prior to July 31, 2003, the Employee’s employment with the

Company and all Related Corporations is terminated (x) without Cause (as

defined below) or (y) by the Employee for Good Reason (as defined

below), and, in each case, the Employee executes a separation agreement

reasonably satisfactory to the Company and the Employee which shall include a

nondisparagement clause and a comprehensive release of claims (the “Separation

Agreement”) and the Separation Agreement has become irrevocable, then,

this option shall become exercisable for an additional number of Option Shares,

if any, equal to 50% of the total number of Option Shares with respect to which

this option is not yet exercisable at the time of termination of such

employment.

 

(c) In addition to the foregoing, but subject to

Section 4, (i) if, after July 31, 2003 but prior to the expiration of this

option, the Employee’s employment with the Company and all Related Corporations

is terminated (x) without Cause or (y) by the Employee for

 

2

 

Good Reason, and, in each case, the Employee executes the

Separation Agreement and the Separation Agreement has become irrevocable, or

(ii) immediately prior to a Change of Control (as defined below) consummated

after July 31, 2003 but prior to the expiration of this option, then,

only upon the first of (i) or (ii) to occur, this option shall become

exercisable for an additional number of Option Shares, if any, equal to 50% of

the total number of Option Shares with respect to which this option is not yet

exercisable at the time of termination of such employment or immediately prior

to such Change of Control, as the case may be; provided, however,

that in the event that the acceleration set forth in this Section 3(c) occurs

due to a Change of Control under subsection (ii) above and Employee’s

employment with the Company and all Related Corporations is terminated without

Cause or by the Employee for Good Reason within the three months following the

Change of Control and the Employee executes the Separation Agreement and

the Separation Agreement has become irrevocable, this option shall then become

exercisable for an additional number of Option Shares, if any, equal to 25% of

the total number of Option Shares with respect to which this option was not yet

exercisable immediately prior to the Change of Control (for avoidance of doubt, the effect of

this proviso shall be to give Employee 75% of his unvested options in such

instance).

 

(d)                                 Notwithstanding

the foregoing, in accordance with and subject to the provisions of the Plan,

the Committee may, in its discretion, further accelerate the date that any

installment of this Option becomes exercisable.  The foregoing rights are cumulative and (subject to Sections 4 or

5 hereof if the Employee ceases to be employed by the Company and all Related

Corporations) may be exercised on or before the date which is ten years from

the date this option is granted.

 

(e)                                  “Change

of Control” shall mean:  the

consummation of (i) the sale of the Company by merger in which the shareholders

of the Company in their capacity as such no longer own a majority of the

outstanding equity securities of the Company (or its successor); (ii) any sale

of all or substantially all of the assets or capital stock of the Company

(other than in a spin-off or similar transaction) or (iii) any other acquisition

of the business of the Company, as determined by the Board in its sole

discretion.

 

4.                                      Termination

of Employment.

 

(a)                                  Termination

Other Than for Cause:  If

the Employee ceases to be employed by the Company and all Related Corporations,

other than by reason of death or disability as defined in Section 5 or

termination for Cause as defined in Section 4(c), no further installments of

this option shall become exercisable, and this option shall terminate (and may

no longer be exercised) after the passage of 90 days from the Employee’s last

day of employment, but in no event later than the scheduled expiration

date.  In such a case, the Employee’s

only rights hereunder shall be those which are properly exercised before the

termination of this option.

 

3

 

(b)                                  Termination

for Cause or Breach:  Notwithstanding

the provisions of Sections 3 or 4, if the employment of the Employee is

terminated for Cause (as defined in Section 4(c)) or Employee breaches his

obligations under the Employment Agreement between the Company and the Employee

dated as of July 31, 2002 (the “Employment Agreement”), the Separation

Agreement or the Noncompetition Agreement (as defined in the Employment

Agreement), this option shall terminate upon the Employee’s receipt of written

notice of such termination or breach and shall thereafter not be exercisable to

any extent whatsoever.

 

(c)                                  Definition

of Cause:  Any one or more of

the following events or conditions shall constitute “Cause”: (i) the substantial,

continuing and knowing failure of Employee to render services to the Company or

any Related Corporation in accordance with the terms or requirements of his

employment; (ii)  gross negligence, willful misconduct, or breach of

fiduciary duty to the Company or any Related Corporation, or disloyalty or

dishonesty (which disloyalty or dishonesty results in direct or indirect

material loss, damage or injury to the Company or any Related Corporation);

(iii) the commission of an act of embezzlement or fraud;

(iv) deliberate disregard of the rules or policies of the Company or any

Related Corporation that results in direct or indirect material loss, damage or

injury to the Company or any Related Corporation; (v) the unauthorized

disclosure of any trade secret or confidential information of the Company or

any Related Corporation; (vi) the commission of an act which constitutes

unfair competition with the Company or any Related Corporation or which induces

any customer or supplier to breach a contract with the Company or any Related

Corporation; or (vii) material breach of the Employment Agreement or the

Noncompetition Agreement. 

Notwithstanding the foregoing, Cause shall not occur pursuant to clauses

(i), (iv) and (vii) (but as to (vii) only with respect to material breaches of

the Employment Agreement) unless Employee fails, within 30 days after receipt

of written notice from the Company specifying the event or condition giving

rise to Cause, to cure such event or condition, if capable of cure.

 

(d)                                  “Good

Reason” shall mean a termination by Employee of the Employment

Agreement and his employment with the Company after he gives written notice to

the Company within thirty (30) days following the date on which he learns of

the occurrence, without his prior written consent, of any of the following

events during the Term (as such term is defined in the Employment Agreement),

which notice specifies the nature of such event, and the Company fails to cure

such event within thirty (30) days following receipt of such notice from

Employee:  (a) the failure of the Company to

continue Employee in the position of Chief Executive Officer, except

where such failure is for Cause or due

 

4

 

to Employee’s Disability or death;

(b) a material diminution in the nature or scope of Employee’s

responsibilities, duties or authority; provided, however, that the assignment

to others of the duties or responsibilities of Employee while Employee is out

of work due to a Disability, leave of absence or vacation, shall not constitute

such a diminution; (c) any reduction in Employee’s Base Salary (as

defined in the Employment Agreement); (d) a breach by the Company of any of its

material obligations to Employee under the Employment Agreement; or (e) the

relocation of the Company’s principal office to a location more than 50 miles

from Stamford, Connecticut, unless such location is 50 miles or less from

Employee’s residence after the Relocation (as defined in the Employment

Agreement).

 

5.                                      Death;

Disability.

 

(a) 

Death:  If the Employee dies while in the employ of

the Company or any Related Corporation, the Employee’s estate, personal

representative or beneficiary to whom this option has been assigned pursuant to

Section 9 hereof may exercise this option, to the extent this option is

otherwise exercisable on the date of the Employee’s death, at any time within

one year after the date of death, but not later than the scheduled expiration

date.

 

(b)  Disability:  If the Employee ceases to be employed by the

Company and all Related Corporations by reason of his disability (as defined in

the Plan), this option may be exercised, to the extent otherwise exercisable on

the date of the termination of his employment, at any time within 180 days

after such termination, but not later than the scheduled expiration date.

 

5

 

(c)                                  Effect

of Termination:  At the

expiration of the 180-day period provided in paragraph (a) or (b) of this

Section 5 or the scheduled expiration date, whichever is the earlier, this

option shall terminate (and shall no longer be exercisable) and the only rights

hereunder shall be those as to which the option was properly exercised before

such termination.

 

6.                                      Partial

Exercise.  This option may be exercised

in part at any time and from time to time within the above limits, except that

this option may not be exercised for a fraction of a share unless such exercise

is with respect to the final installment of stock subject to this option and

cash in lieu of a fractional share must be paid, in accordance with Paragraph

13(G) of the Plan, to permit the Employee to exercise completely such final

installment.  Any fractional share with

respect to which an installment of this option cannot be exercised because of

the limitation contained in the preceding sentence shall remain subject to this

option and shall be available for later purchase by the Employee in accordance

with the terms hereof.

 

7.                                      Payment

of Price.  (a) The

option price shall be paid in the following manner:

 

(i)   in cash or by check;

 

(ii)   subject to paragraph 7(b) below, by

delivery of shares of the Company’s Common Stock having a fair market value (as

determined by the Committee) equal as of the date of exercise to the option

price;

 

(iii)  by delivery of an assignment satisfactory in

form  and

substance to the Company of a sufficient amount of the proceeds from the sale

of the Option Shares and an instruction to the broker or selling agent to pay

that amount to the Company; or

 

(iv)   by any combination of the foregoing.

 

6

 

(b)                                  Limitations

on Payment by Delivery of Common Stock:  If the Employee delivers Common Stock held

by the Employee (“Old Stock”) to the Company in full or partial payment of the

option price, and the Old Stock so delivered is subject to restrictions or

limitations imposed by agreement between the Employee and the Company, an

equivalent number of Option Shares shall be subject to all restrictions and

limitations applicable to the Old Stock to the extent that the Employee paid

for the Option Shares by delivery of Old Stock, in addition to any restrictions

or limitations imposed by this Agreement. 

Notwithstanding the foregoing, the Employee may not pay any part of the

exercise price hereof by transferring Common Stock to the Company unless such

Common Stock has been owned by the Employee free of any substantial risk of

forfeiture for at least six months.

 

(c)                                  Permitted

Payment by Recourse Note: 

In addition, if this paragraph is initialed below by the person signing

this Agreement on behalf of the Company, the option price may be paid by

delivery of the Employee’s three-year personal recourse promissory note bearing

interest payable not less than annually at the applicable Federal rate, as

defined in Section 1274(d) of the Code.

 

	

   

  	

   

  	

   

  
	

   

  	

  (initials)

  

 

8.                                      Method of

Exercising Option.  Subject

to the terms and conditions of this Agreement, this option may be exercised by

written notice to the Company at its principal executive office, or to such

transfer agent as the Company shall designate. 

Such notice shall state the election to exercise this option and the

number of Option Shares for which it is being exercised and shall be signed by

the person or persons so exercising this option.  Such notice shall be accompanied by payment of the full purchase

price of such shares, and the Company shall deliver a certificate or

certificates representing such shares as soon as practicable after the notice

is received.  Such certificate or

certificates shall be registered in the name of the person or persons so

exercising this option (or, if this option shall be exercised by the Employee

and if the Employee shall so request in the notice exercising this option,

shall be registered in the name of the Employee and another person jointly,

with right of survivorship).  In the

event this option is exercised, pursuant to Section 5 hereof, by any

person or persons other than the Employee, such notice shall be accompanied by

appropriate proof of the right of such person or persons to exercise this

option.

 

9.                                      Option

Not Transferable.  This

option is not transferable or assignable except by will or by the laws of

descent and distribution.  During the

Employee’s lifetime, only the Employee may exercise this option.

 

7

 

10.                               No

Obligation to Exercise Option. 

The grant and acceptance of this option imposes no obligation on the

Employee to exercise it.

 

11.                               No

Obligation to Continue Employment. 

Neither the Plan, this Agreement, nor the grant of this option

imposes any obligation on the Company or any Related Corporation to continue

the Employee in employment.

 

12.                               No Rights

as Stockholder until Exercise. 

The Employee shall have no rights as a stockholder with respect to

the Option Shares until such time as the Employee has exercised this option by

delivering a notice of exercise and has paid in full the purchase price for the

shares so exercised in accordance with Section 8.  Except as is expressly provided in the Plan

with respect to certain changes in the capitalization of the Company, no

adjustment shall be made for dividends or similar rights for which the record

date is prior to such date of exercise.

 

13.                               Capital

Changes and Business Successions. 

The Plan contains provisions covering the treatment of options in a

number of contingencies such as stock splits and mergers.  Provisions in the Plan for adjustment with

respect to stock subject to options and the related provisions with respect to

successors to the business of the Company are hereby made applicable hereunder

and are incorporated herein by reference.

 

14.                               Early

Disposition.  The

Employee agrees to notify the Company in writing immediately after the Employee

transfers any Option Shares, if such transfer occurs on or before the later of

(a) the date two years after the date of this Agreement or (b) the

date one year after the date the Employee acquired such Option Shares.  The Employee also agrees to provide the

Company with any information concerning any such transfer required by the

Company for tax purposes.

 

15.                               Withholding

Taxes.  If the Company or any

Related Corporation in its discretion determines that it is obligated to

withhold any tax in connection with the exercise of this option, or in

connection with the transfer of, or the lapse of restrictions on, any Common

Stock or other property acquired pursuant to this option, the Employee hereby

agrees that the Company or any Related Corporation may withhold from the

Employee’s wages or other remuneration the appropriate amount of tax; provided,

however, that prior to any such withholding the Employee shall be given

an opportunity to make alternate arrangements for the provision of such tax

amounts to the Company.  At the

discretion of the Company or Related Corporation, the amount required to be

withheld may be withheld in cash from such

 

8

 

wages or other remuneration or in kind from the Common Stock or other

property otherwise deliverable to the Employee on exercise of this option.  The Employee further agrees that, if the

Company or any Related Corporation does not withhold an amount from the

Employee’s wages or other remuneration sufficient to satisfy the withholding

obligation of the Company or Related Corporation, the Employee shall make

reimbursement on demand, in cash, for the amount underwithheld.

 

16.                               Lock-up

Agreement.  The Employee

agrees that in connection with an underwritten public offering of Common Stock,

upon the request of the Company or the principal underwriter managing such

public offering, this Option and the Option Shares may not be sold, offered for

sale or otherwise disposed of without the prior written consent of the Company

or such underwriter, as the case may be, for at least 270 days after the

effectiveness of the Registration Statement filed in connection with such

offering, or such longer period of time as the Board of Directors may determine

if all of the Company’s directors and officers agree to be similarly bound.  The lock-up agreement established pursuant

to this paragraph 16 shall have perpetual duration.

 

17.                               Arbitration.

 Any dispute, controversy, or claim

arising out of, in connection with, or relating to the performance of this

Agreement or its termination shall be settled by arbitration in the State of

Connecticut, pursuant to the rules then pertaining of the American Arbitration

Association.  Any award shall be final,

binding and conclusive upon the parties and a judgment rendered thereon may be

entered in any court having jurisdiction thereof.

 

18.                               Provision

of

Documentation

to

Employee.  By signing this Agreement the Employee

acknowledges receipt of a copy of this Agreement and a copy of the Plan.

 

19.                               Miscellaneous.

 

(a)  Notices:  All

notices hereunder shall be in writing and shall be deemed given when sent by

certified or registered mail, postage prepaid, return receipt requested, to the

address set forth below.  The addresses

for such notices may be changed from time to time by written notice given in

the manner provided for herein.

 

9

 

(b)  Entire

Agreement; Modification:  This

Agreement constitutes the entire agreement between the parties relative to the

subject matter hereof, and supersedes all proposals, written or oral, and all

other communications between the parties relating to the subject matter of this

Agreement.  This Agreement may be

modified, amended or rescinded only by a written agreement executed by both

parties.

 

(c)  Severability:  The invalidity, illegality

or unenforceability of any provision of this Agreement shall in no way affect

the validity, legality or enforceability of any other provision.

 

(d)  Successors and

Assigns: This Agreement shall be binding upon and inure

to the benefit of the parties hereto and their respective successors and

assigns, subject to the limitations set forth in Section 9 hereof.

 

(e)  Governing Law:  This Agreement shall be governed by and

interpreted in accordance with the laws of the State of Delaware,

without giving effect to the principles of the conflicts of laws thereof.

 

10Exhibit

10.3

 

	

  Notice of Grant of Stock Options

  and Non-Qualified Stock Option Agreement

  	

   

  	

  META Group, Inc.

  

 

 

Effective 7/31/2002, you have been granted a Non-Qualified Stock Option

to buy 340,000 shares of META Group, Inc. (the Company) stock at $2.5000 per

share.

 

The total option price of the shares granted is $850,000.00.

 

Shares in each period will become exercisable on the date shown.

 

	

  Shares

  	

   

  	

  Vest Type

  	

   

  	

  Full Vest

  	

   

  	

  Expiration

  	

   

  
	

  85,000

  	

   

  	

  On Vest Date

  	

   

  	

  July 31, 2003

  	

   

  	

  July 31, 2012

  	

   

  
	

  85,000

  	

   

  	

  On Vest Date

  	

   

  	

  July 31, 2004

  	

   

  	

  July 31, 2012

  	

   

  
	

  85,000

  	

   

  	

  On Vest Date

  	

   

  	

  July 31, 2005

  	

   

  	

  July 31, 2012

  	

   

  
	

  85,000

  	

   

  	

  On Vest Date

  	

   

  	

  July 31, 2006

  	

   

  	

  July 31, 2012

  	

   

  

 

By your signature and the Company’s signature below, you and the

Company agree that these options are granted under and governed by the terms

and conditions of the Company’s Stock Plan as amended and the Option Agreement,

all of which are attached and made a part of this document.

 

	

    /s/

  John A. Piontkowski

  	

   

  	

  7/31/02

  	

   

  
	

  META Group, Inc.

  	

  Date

  
	

   

  	

   

  
	

   

  	

   

  
	

    /s/

  Alfred J. Amoroso

  	

   

  	

  8/1/02

  	

   

  
	

  Name:  Alfred

  J. Amoroso

  	

  Date

  

 

1

 

META Group, Inc., a Delaware Corporation (the

“Company”), hereby grants as of July 31, 2002 to you (the “Optionee”), an

option to purchase shares (the “Option Shares”) of its Common Stock, $.01 par

value (“Common Stock”), at the price of $2.50 per share.  The quantity of Option Shares granted and vesting schedule is

defined on the cover page, hereof.  The

Option Shares are granted on the following terms and conditions:

 

1.                                      Grant

Under Second Amended and Restated 1995 Stock Plan.  This option is granted pursuant to and is

governed by the Company’s Second Amended and Restated 1995 Stock Plan (the

“Plan”) and, unless the context otherwise requires, terms used herein shall

have the same meaning as in the Plan. 

Determinations made in connection with this option pursuant to the Plan

shall be governed by the Plan as it exists on this date.

 

2.                                      Grant as

Non-Qualified Option; Other Options.  This option shall be treated for federal income tax purposes as a

Non-Qualified Option (rather than an incentive stock option). This option is in

addition to any other options heretofore or hereafter granted to the Optionee

by the Company or any Related Corporation (as defined in the Plan), but a

duplicate original of this instrument shall not effect the grant of another

option.

 

3.                                      Vesting

of Option if Business Relationship Continues.

 

(a)  Subject to

Sections 3(b) and 3(c), if the Optionee continues to serve the Company or any

Related Corporation in the capacity of an employee, officer, director or

consultant (such service is described herein as maintaining or being involved

in a “Business Relationship with the Company”) through the dates listed under

the column entitled “Full Vest” on the cover page hereof, the Optionee may

exercise this option for the number of shares of Common Stock set opposite the

applicable date.

 

(b)  In

addition to the foregoing, but subject to Section 4, if, on or prior to July

31, 2003, the Optionee’s Business Relationship with the Company and all Related

Corporations is terminated (x) without Cause (as defined below) or (y)

by the Optionee for Good Reason (as defined below), and, in each case,

the Optionee executes a separation agreement reasonably satisfactory to the

Company and the Optionee which shall include a nondisparagement clause and a

comprehensive release of claims (the “Separation Agreement”) and the Separation

Agreement has become irrevocable, then, this option shall become

exercisable for an additional number of Option Shares, if any, equal to 50% of

the total number of Option Shares with respect to which this option is not yet

exercisable at the time of termination of such Business Relationship with the

Company.

 

2

 

(c)  In

addition to the foregoing, but subject to Section 4, (i) if, after July 31,

2003 but prior to the expiration of this option, the Optionee’s Business

Relationship with the Company and all Related Corporations is terminated (x)

without Cause or (y) by the Optionee for Good Reason, and, in

each case, the Optionee executes the Separation Agreement and the Separation

Agreement has become irrevocable, or (ii) immediately prior to a Change

of Control (as defined below) consummated after July 31, 2003 but prior to the

expiration of this option, then, only upon the first of (i) or (ii) to

occur, this option shall become exercisable for an additional number of Option

Shares, if any, equal to 50% of the total number of Option Shares with respect

to which this option is not yet exercisable at the time of termination of such

Business Relationship with the Company or immediately prior to such Change of

Control, as the case may be; provided, however, that in the event

that the acceleration set forth in this Section 3(c) occurs due to a Change of

Control under subsection (ii) above and Optionee’s Business Relationship

with the Company and all Related Corporations is terminated without Cause or by

the Optionee for Good Reason within the three months following the Change of

Control and the Optionee executes the Separation Agreement and the

Separation Agreement has become irrevocable, this option shall then become

exercisable for an additional number of Option Shares, if any, equal to 25% of

the total number of Option Shares with respect to which this option was not yet

exercisable immediately prior to the Change of Control (for avoidance of doubt, the effect of

this proviso shall be to give Optionee 75% of his unvested options in such

instance).

 

(d) 

Notwithstanding the foregoing, in accordance with and subject to the

provisions of the Plan, the Committee may, in its discretion, further

accelerate the date that any installment of this Option becomes exercisable.  The foregoing rights are cumulative and

(subject to Sections 4 or 5 hereof if the Optionee ceases to maintain a

Business Relationship or be involved with the Company and all Related

Corporations) may be exercised up to and including the date that is ten years

from the date this option is granted.

 

(e)  “Change of

Control” shall mean:  the consummation

of (i) the sale of the Company by merger in which the shareholders of the

Company in their capacity as such no longer own a majority of the outstanding

equity securities of the Company (or its successor); (ii) any sale of all or

substantially all of the assets or capital stock of the Company (other than in

a spin-off or similar transaction) or (iii) any other acquisition of the

business of the Company, as determined by the Board in its sole discretion.

 

4.                                      Termination

of Business Relationship.

 

(a)                                  Termination

Other  than  for  Cause:  If the Optionee’s Business Relationship with the Company and all

Related Corporations is terminated, other than by reason of death, disability

or dissolution as defined in Section 5 or termination for Cause

 

3

 

as defined in Section 4(c), no further installments of this option

shall become exercisable, and this option shall terminate (and may no longer be

exercised) after the passage of 90 days from the date the Business Relationship

ceases, but in no event later than the scheduled expiration date.  In such a case, the Optionee’s only rights

hereunder shall be those that are properly exercised before the termination of

this option.

 

(b)                                  Termination

for Cause or Breach:  Notwithstanding

the provisions of Sections 3 or 4, if the Optionee’s Business Relationship with

the Company is terminated for Cause (as defined in Section 4(c)) or

Optionee breaches his obligations under the Employment Agreement between the

Company and Optionee dated as of July 31, 2002 (the “Employment Agreement”),

the Separation Agreement or the Noncompetition Agreement (as defined in the

Employment Agreement), this option shall terminate upon the Optionee’s receipt

of written notice of such termination or breach and shall thereafter not be

exercisable to any extent whatsoever.

 

(c)                                  Definition

of Cause: Any one or more of the following events or conditions

shall constitute “Cause”: (i) the substantial, continuing and knowing failure

of Optionee to render services to the Company or any Related Corporation in

accordance with the terms or requirements of Optionee’s Business Relationship

with the Company; (ii)  gross negligence,

willful misconduct, or breach of fiduciary duty to the Company or any Related

Corporation, or disloyalty or dishonesty (which disloyalty or dishonesty

results in direct or indirect material loss, damage or injury to the Company or

any Related Corporation); (iii) the commission of an act of embezzlement or

fraud; (iv) deliberate disregard of the rules or policies of the Company or any

Related Corporation that results in direct or indirect material loss, damage or

injury to the Company or any Related Corporation; (v) the unauthorized disclosure

of any trade secret or confidential information of the Company or any Related

Corporation; (vi) the commission of an act which constitutes unfair competition

with the Company or any Related Corporation or which induces any customer or

supplier to breach a contract with the Company or any Related Corporation; or

(vii) material breach of the Employment Agreement or the Noncompetition

Agreement.  Notwithstanding the

foregoing, Cause shall not occur pursuant to clauses (i), (iv) and (vii) (but

as to (vii) only with respect to material breaches of the Employment Agreement)

unless Optionee fails, within 30 days after receipt of written notice from the

Company specifying the event or condition giving rise to Cause, to cure such

event or condition, if capable of cure.

 

(d)                                  “Good

Reason” shall mean a termination by Optionee of the Employment

Agreement and his Business Relationship with the Company after he gives written

notice to the Company within thirty (30) days following the date on which he

learns of the occurrence, without his prior written consent, of any of the

following events during the Term (as defined in the Employment Agreement),

which notice specifies the nature of such event, and the Company fails to cure

such event within thirty (30) days

 

4

 

following receipt of such notice from Optionee:  (a) the failure of the Company to continue

Optionee in the position of Chief Executive Officer, except where such failure

is for Cause or due to Optionee’s Disability or death; (b) a material

diminution in the nature or scope of Optionee’s responsibilities, duties or

authority; provided, however, that the assignment to others of the duties or

responsibilities of Optionee while Optionee is out of work due to a Disability,

leave of absence or vacation, shall not constitute such a diminution; (c) any

reduction in Optionee’s Base Salary (as defined in the Employment Agreement;

(d) a breach by the Company of any of its material obligations to Optionee

under the Employment Agreement; or (e) the relocation of the Company’s

principal office to a location more than 50 miles from Stamford, Connecticut,

unless such location is 50 miles or less from Optionee’s residence after the

Relocation (as defined in the Employment Agreement).

 

5.                                      Death;

Disability; Dissolution.

 

(a)                                  Death:  If the Optionee dies while involved in a

Business Relationship with the Company, the Optionee’s estate, personal

representative or beneficiary to whom this option has been assigned pursuant to

Section 9 hereof may exercise this option, to the extent this option is

otherwise exercisable on the date of the Optionee’s death, at any time within

180 days after the date of death, but not later than the scheduled expiration

date.

 

(b)                                  Disability:  If the Optionee’s Business Relationship with

the Company is terminated by reason of his disability (as defined in the Plan),

this option may be exercised, to the extent otherwise exercisable on the date

the Business Relationship was terminated, at any time within 180 days

after such termination, but not later than the scheduled expiration date.

 

(c)                                  Effect of

Termination:  At the

expiration of such 180-day period provided in paragraph (a) or (b) of this

Section 5 or the scheduled expiration date, whichever is the earlier, this

option shall terminate (and shall no longer be exercisable) and the only rights

hereunder shall be those as to which the option was properly exercised before

such termination.

 

6.                                      Partial

Exercise.  This option

may be exercised in part at any time and from time to time within the above

limits, except that this option may not be exercised for a fraction of a share

unless such exercise is with respect to the final installment of stock subject

to this option and cash in lieu of a fractional share must be paid, in

accordance with Paragraph 13(G) of the Plan, to permit the Optionee to

exercise completely such final installment. 

Any fractional share with respect to which an installment of this option

cannot be exercised because of the limitation contained in the preceding

sentence shall

 

5

 

remain subject to this option and shall be available for later purchase

by the Optionee in accordance with the terms hereof.

 

7.                                      Payment

of Price.

 

(a)                                  Form of

Payment:  The option

price shall be paid in the following manner:

 

(i)                                     in

cash or by check;

 

(ii)                                  subject

to paragraph 7(b) below, by delivery of shares of the Company’s Common

Stock having a fair market value (as determined by the Committee) equal as of

the date of exercise to the option price;

 

(iii)                               by delivery of an

assignment satisfactory in form  and substance to the Company of a

sufficient amount of the proceeds from the sale of the Option Shares and an

instruction to the broker or selling agent to pay that amount to the Company;

or

 

(iv)                              by

any combination of the foregoing.

 

(b)                                  Limitations

on Payment by Delivery of Common Stock:  If the Optionee delivers Common Stock held

by the Optionee (“Old Stock”) to the Company in full or partial payment of the

option price, and the Old Stock so delivered is subject to restrictions or

limitations imposed by agreement between the Optionee and the Company, an

equivalent number of Option Shares shall be subject to all restrictions and

limitations applicable to the Old Stock to the extent that the Optionee paid

for the Option Shares by delivery of Old Stock, in addition to any restrictions

or limitations imposed by this Agreement. 

Notwithstanding the foregoing, the Optionee may not pay any part of the

exercise price hereof by transferring Common Stock to the Company unless such

Common Stock has been owned by the Optionee free of any substantial risk of

forfeiture for at least six months.

 

(c)                                  Permitted

Payment by Recourse Note: 

In addition, if this paragraph is initialed below by the person signing

this Agreement on behalf of the Company, the option price may be paid by

delivery of the Optionee’s three-year personal recourse promissory note bearing

interest payable not less than annually at the applicable Federal rate, as

defined in Section 1274(d) of the Code.

 

	

   

  	

   

  	

   

  
	

   

  	

  (initials)

  

 

6

 

8.                                      Method of

Exercising Option. 

Subject to the terms and conditions of this Agreement, this option may

be exercised by written notice to the Company, at the principal executive

office of the Company, or to such transfer agent as the Company shall

designate.  Such notice shall state the

election to exercise this option and the number of Option Shares for which it is

being exercised and shall be signed by the person or persons so exercising this

option.  Such notice shall be

accompanied by payment of the full purchase price of such shares, and the

Company shall deliver a certificate or certificates representing such shares as

soon as practicable after the notice shall be received.  Such certificate or certificates shall be

registered in the name of the person or persons so exercising this option (or,

if this option is exercised by the Optionee and if the Optionee shall so

request in the notice exercising this option, shall be registered in the name

of the Optionee and another person jointly, with right of survivorship).  If any person or persons other than the

Optionee exercises this option pursuant to Section 5 hereof, such notice

shall be accompanied by appropriate proof of the right of such person or

persons to exercise this option.

 

9.                                      Option

Not Transferable.  This

option is not transferable or assignable except by will or by the laws of

descent and distribution or pursuant to a valid domestic relations order.  Except as set forth in the preceding

sentence, during the Optionee’s lifetime, only the Optionee may exercise this

option.

 

10.                               No

Obligation to Exercise Option. 

The grant and acceptance of this option imposes no obligation on the

Optionee to exercise it.

 

11.                               No

Obligation to Continue Business Relationship.  Neither the Plan, this Agreement, nor the

grant of this option imposes any obligation on the Company or any Related

Corporation to continue to maintain a Business Relationship with the Optionee.

 

12.                               No Rights

as Stockholder until Exercise. 

The Optionee has no rights as a stockholder with respect to the Option

Shares until such time as the Optionee has exercised this option by delivering

a notice of exercise and has paid in full the purchase price for the number of

shares for which this option is to be so exercised in accordance with Section

8.  Except as is expressly provided in

the Plan with respect to certain changes in the capitalization of the Company,

no adjustment shall be made for dividends or similar rights for which the

record date is prior to such date of exercise.

 

13.                               Capital

Changes and Business Successions.  The Plan contains provisions covering the treatment of options in

a number of contingencies such as stock splits and mergers.  Provisions in the Plan for adjustment with

respect to stock subject to

 

7

 

options and the related provisions with respect to successors to the

business of the Company are hereby made applicable hereunder and are

incorporated herein by reference.

 

14.                               Withholding

Taxes.  If the Company or

any Related Corporation in its discretion determines that it is obligated to

withhold any tax in connection with the exercise of this option, or in

connection with the transfer of, or the lapse of restrictions on, any Common

Stock or other property acquired pursuant to this option, the Optionee hereby

agrees that the Company or any Related Corporation may withhold from the

Optionee’s wages or other remuneration the appropriate amount of tax; provided,

however, that prior to any such withholding the Optionee shall be given

an opportunity to make alternative arrangements for the provision of such tax

amounts to the Company.  At the

discretion of the Company or Related Corporation, the amount required to be

withheld may be withheld in cash from such wages or other remuneration or in

kind from the Common Stock or other property otherwise deliverable to the

Optionee on exercise of this option. 

The Optionee further agrees that, if the Company or Related Corporation

does not withhold an amount from the Optionee’s wages or other remuneration

sufficient to satisfy the withholding obligation of the Company or Related

Corporation, the Optionee shall make reimbursement on demand, in cash, for the

amount underwithheld.

 

15.                               Lock-up

Agreement.  The Optionee

agrees that in connection with an underwritten public offering of Common Stock,

upon the request of the Company or the principal underwriter managing such

public offering, this Option and the Option Shares may not be sold, offered for

sale or otherwise disposed of without the prior written consent of the Company

or such underwriter, as the case may be, for at least 270 days after the

effectiveness of the Registration Statement filed in connection with such

offering, or such longer period of time as the Board of Directors may determine

if all of the Company’s directors and officers agree to be similarly

bound.  The lock-up agreement

established pursuant to this paragraph 15 shall have perpetual duration.

 

16.                               Arbitration.

 Any dispute, controversy, or claim

arising out of, in connection with, or relating to the performance of this

Agreement or its termination shall be settled by arbitration in the State of

Connecticut, pursuant to the rules then pertaining of the American Arbitration

Association.  Any award shall be final,

binding and conclusive upon the parties and a judgment rendered thereon may be

entered in any court having jurisdiction thereof.

 

17.                               Provision

of Documentation to Optionee. 

By signing this Agreement the Optionee acknowledges receipt of a copy of

this Agreement and a copy of the Plan.

 

8

 

18.                               Miscellaneous.

 

(a) 

Notices:  All notices hereunder shall be in writing

and shall be deemed given when sent by certified or registered mail, postage

prepaid, return receipt requested, to the address set forth below.  The addresses for such notices may be

changed from time to time by written notice given in the manner provided for

herein.

 

(b) 

Entire

Agreement; Modification: 

This Agreement constitutes the entire agreement between the parties

relative to the subject matter hereof, and supersedes all proposals, written or

oral, and all other communications between the parties relating to the subject

matter of this Agreement.  This

Agreement may be modified, amended or rescinded only by a written agreement

executed by both parties.

 

(c) 

Severability:  The invalidity, illegality or

unenforceability of any provision of this Agreement shall in no way affect the

validity, legality or enforceability of any other provision.

 

(d) 

Successors

and Assigns: This Agreement shall be binding upon and inure to

the benefit of the parties hereto and their respective successors and assigns,

subject to the limitations set forth in Section 9 hereof.

 

(e)  Governing Law:  This Agreement shall be governed by and

interpreted in accordance with the laws of the State of Delaware, without

giving effect to the principles of the conflicts of laws thereof.  The preceding choice of law provision shall

apply to all claims, under any theory whatsoever, arising out of the

relationship of the parties contemplated herein.

 

9

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