Exhibit 10.3
SEACHANGE INTERNATIONAL,
INC.
Incentive Stock Option
Agreement
SeaChange International, Inc., a
Delaware corporation (the “Company”), hereby grants as
<DATE> to <NAME> (the “Employee”), an
option to purchase a maximum of <number> shares (the
“Option Shares”) of its Common Stock,
$.01 par value (“Common Stock”), at the price
of $ per share, on the following terms and
conditions:
1. Grant Under the 2005 Equity
Compensation and Incentive Plan . This option is granted pursuant to and is
governed by the Company’s 2005 Equity Compensation and
Incentive 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 Subsidiary (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 . For the purpose of determining the vesting of
the option granted hereunder, the vesting date will be <date>
(the “Vesting Date”) and the option will vest over
three years. If the Employee has continued to be employed by the
Company or any Subsidiary on the following dates, the Employee may
exercise this option for the number of shares of Common Stock set
opposite the applicable date:
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Less than one
year from the Vesting Date
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No
Shares
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One year from
the Vesting Date
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33.33%
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Each subsequent quarter following
one year from the Vesting
Date
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an additional 8.34% of the total
number of shares granted
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Notwithstanding the foregoing, in
accordance with and subject to the provisions of the Plan, the
Compensation and Option Committee (the “Committee”)
may, in its discretion, accelerate the date that any installment of
this option becomes exercisable. The foregoing rights are
cumulative and, while the Employee continues to be employed by the
Company or any Subsidiary, this option may be exercised on or
before the date which is 7 years from the date this option is
granted. All of the foregoing rights are subject to Sections 4
and 5, as appropriate, if the Employee ceases to be employed by the
Company or any Subsidiary.
4. Termination of
Employment .
(a) Termination Other Than for
Cause. If the
Employee ceases to be employed by the Company or any Subsidiary,
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 three months 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.
(b) Termination for Cause
. If the employment of
the Employee is terminated for Cause (as defined in
Section 4(c)), this option shall terminate upon the
Employee’s receipt of written notice of such termination and
shall thereafter not be exercisable to any extent
whatsoever.
(c) Definition of
Cause. “Cause” shall mean conduct involving
one or more of the following: (i) the substantial and
continuing failure of the Employee, after notice thereof, to render
services to the Company or Subsidiary in accordance with the terms
or requirements of his or her employment; (ii) disloyalty,
gross negligence, willful misconduct, dishonesty or breach of
fiduciary duty to the Company or Subsidiary; (iii) the
commission of an act of embezzlement or fraud; (iv) deliberate
disregard of the rules or policies of the Company or Subsidiary
which results in direct or indirect loss, damage or injury to the
Company or Subsidiary; (v) the unauthorized disclosure of any
trade secret or confidential information of the Company or
Subsidiary; or (vi) the commission of an act which constitutes
unfair competition with the Company or Subsidiary or which induces
any customer or supplier to breach a contract with the Company or
Subsidiary.
5. Death; Disability
.
(a) Death .
If the Employee dies while in the
employ of the Company or any Subsidiary, this option may be
exercised, to the extent otherwise exercisable on the date of his
or her death, by the Employee’s estate, personal
representative or beneficiary to whom this option has been assigned
pursuant to Section 10, at any time within 180 days 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 or any Subsidiary by reason of his or
her disability (as defined in the Plan), this option may be
exercised, to the extent otherwise exercisable on the date of the
termination of his or her employment, 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
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
