EXHIBIT 99.2
METADATA SYSTEMS,
INC.
2002 EQUITY INCENTIVE
PLAN
STOCK OPTION
AGREEMENT
This Stock Option Agreement (the
“ Agreement ”) is made and entered into
as of the date of grant set forth below (the “ Date of
Grant ”) by and between Metadata Systems, Inc., a
Delaware corporation (the “ Company ”),
and the participant named below (the “
Participant ”). Capitalized terms not defined
herein shall have the meaning ascribed to them in the
Company’s 2002 Equity Incentive Plan, as amended through
May 1, 2003, (the “ Plan
”).
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Participant:
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Social
Security Number:
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Address:
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Total Option
Shares:
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Exercise
Price Per Share:
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Date of
Grant:
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First
Vesting Date:
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Expiration
Date:
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(unless earlier
terminated under Section 5.6 of the Plan)
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Classification of Optionee
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[ ] Exempt
Employee
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[ ] Nonexempt
Employee
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Type of
Stock Option
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(Check
one):
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[ ] Incentive Stock
Option
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[ ] Nonqualified Stock
Option
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GRANT OF OPTION
. The Company hereby grants to
Participant an option (this “ Option ”)
to purchase the total number of shares of Common Stock, $0.00001
par value per share, of the Company set forth above as Total Option
Shares (the “ Shares ”) at the Exercise
Price Per Share set forth above (the “ Exercise
Price ”), subject to all of the terms and conditions
of this Agreement and the Plan. If designated as an Incentive Stock
Option above, the Option is intended to qualify as an
“incentive stock option” (the “ ISO
”) within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “ Code
”).
EXERCISE
PERIOD .
Exercise Period of
Option . Provided
Participant continues to provide services to the Company or any
Subsidiary or Parent of the Company, the Option will become vested
and exercisable as to portions of the Shares as follows:
(i) this Option shall not vest nor be
exercisable with respect to any of the Shares
until the First Vesting Date set forth on the first page of this
Agreement (the “ First Vesting Date ”);
(ii) on the First Vesting Date the Option will become vested
and exercisable as to twenty-five percent (25%) of the Shares;
and (iii) thereafter at the end of each full succeeding month
the Option will become vested and exercisable as to 1/48th of the
Shares until the Shares are vested with respect to one hundred
percent (100%) of the Shares. If application of the vesting
percentage causes a fractional share, such share shall be rounded
down to the nearest whole share for each month except for the last
month in such vesting period, at the end of which last month this
Option shall become exercisable for the full remainder of the
Shares.
Vesting of
Options . Shares that
are vested pursuant to the schedule set forth in Section 2.1
are “ Vested Shares . ” Shares
that are not vested pursuant to the schedule set forth in
Section 2.1 are “ Unvested Shares .
”
Expiration
. The Option shall expire on the
Expiration Date set forth above or earlier as provided in
Section 0 below or pursuant to Section 5.6 of the
Plan.
TERMINATION
.
Termination for Any Reason
Except Death, Disability or Cause . If Participant is Terminated for any reason,
except death, Disability or for Cause, the Option, to the extent
(and only to the extent) that it would have been exercisable by
Participant on the Termination Date, may be exercised by
Participant no later than three (3) months after the
Termination Date, but in any event no later than the Expiration
Date.
Termination Because of Death
or Disability . If
Participant is Terminated because of death or Disability of
Participant (or Participant dies within three (3) months of
Termination when Termination is for any reason other than
Participant’s Disability or for Cause), the Option, to the
extent that it is exercisable by Participant on the Termination
Date, may be exercised by Participant (or Participant’s legal
representative) no later than twelve (12) months after the
Termination Date, but in any event no later than the Expiration
Date. Any exercise beyond (i) three (3) months after the
Termination Date when the Termination is for any reason other than
the Participant’s death or disability, within the meaning of
Section 22(e)(3) of the Code; or (ii) twelve
(12) months after the Termination Date when the termination is
for Participant’s disability, within the meaning of
Section 22(e)(3) of the Code, is deemed to be an
NQSO.
Termination for
Cause . If the
Participant is terminated for Cause, the Participant may exercise
such Participant’s Options, but not to an extent greater than
such Options are exercisable as to Vested Shares upon the
Termination Date and Participant’s Options shall expire on
such Participant’s Termination Date, or at such later time
and on such conditions as are determined by the
Committee.
No Obligation to
Employ . Nothing in
the Plan or this Agreement shall confer on Participant any right to
continue in the employ of, or other relationship with, the Company
or any Parent or Subsidiary of the Company, or limit in any way the
right of the Company or any Parent or Subsidiary of the Company to
terminate Participant’s employment or other relationship at
any time, with or without Cause.
MANNER OF
EXERCISE .
Stock Option Exercise
Agreement . To
exercise this Option, Participant (or in the case of exercise after
Participant’s death or incapacity, Participant’s
executor, administrator, heir or legatee, as the case may be) must
deliver to the Company an executed stock option exercise agreement
in the form attached hereto as Exhibit A , or in such
other form as may be approved by the Committee from time to time
(the “ Exercise Agreement ”), which shall
set forth, inter alia , (i) Participant’s
election to exercise the Option, (ii) the number of Shares
being purchased, (iii) any restrictions imposed on the Shares
and (iv) any representations, warranties and agreements
regarding Participant’s investment intent and access to
information as may be required by the Company to comply with
applicable securities laws. If someone other than Participant
exercises the Option, then such person must submit documentation
reasonably acceptable to the Company verifying that such person has
the legal right to exercise the Option and such person shall be
subject to all of the restrictions contained herein as if such
person were the Participant.
Limitations on
Exercise . The Option
may not be exercised unless such exercise is in compliance with all
applicable federal and state securities laws, as they are in effect
on the date of exercise. The Option may not be exercised as to
fewer than one hundred (100) Shares unless it is exercised as
to all Shares as to which the Option is then
exercisable.
Payment
. The Exercise Agreement shall be
accompanied by full payment of the Exercise Price for the shares
being purchased in cash (by check), or where permitted by
law:
by cancellation of indebtedness of
the Company to the Participant;
by surrender of shares of the
Company’s Common Stock that (i) either (A) have
been owned by Participant for more than six (6) months and
have been paid for within the meaning of SEC Rule 144 (and, if
such shares were purchased from the Company by use of a promissory
note, such note has been fully paid with respect to such shares);
or (B) were obtained by Participant in the open public market;
and (ii) are clear of all liens, claims, encumbrances or
security interests;
by waiver of compensation due or
accrued to Participant for services rendered;
provided that a public market for
the Company’s stock exists: (i) through a “same
day sale” commitment from Participant and a broker-dealer
that is a member of the National Association of Securities Dealers
(an “ NASD Dealer ”) whereby Participant
irrevocably elects to exercise the Option and to sell a portion of
the Shares so purchased sufficient to pay for the total Exercise
Price and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the total Exercise Price directly to the
Company, or (ii) through a “margin”
commitment from Participant and an NASD Dealer
whereby Participant irrevocably elects to exercise the Option and
to pledge the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount
of the total Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the
total Exercise Price directly to the Company; or
any other form of consideration
approved by the Committee; or
by any combination of the
foregoing.
Tax Withholding
. Prior to the issuance of the
Shares upon exercise of the Option, Participant must pay or provide
for any applicable federal, state and local withholding obligations
of the Company. If the Committee permits, Participant may provide
for payment of withholding taxes upon exercise of the Option by
requesting that the Company retain the minimum number of Shares
with a Fair Market Value equal to the minimum amount of taxes
required to be withheld; but in no event will the Company withhold
Shares if such withholding would result in adverse accounting
consequences to the Company. In such case, the Company shall issue
the net number of Shares to the Participant by deducting the Shares
retained from the Shares issuable upon exercise.
Issuance of
Shares . Provided
that the Exercise Agreement and payment are in form and substance
satisfactory to counsel for the Company, the Company shall issue
the Shares registered in the name of Participant,
Participant’s authorized assignee, or Participant’s
legal representative, and shall deliver certificates representing
the Shares with the appropriate legends affixed thereto.
NOTICE OF DISQUALIFYING
DISPOSITION OF ISO SHARES . If the Option is an ISO, and if Participant
sells or otherwise disposes of any of the Shares acquired pursuant
to the ISO on or before the later of (i) the date two (2) years
after the Date of Grant, and (ii) the date one (1) year after
transfer of such Shares to Participant upon exercise of the Option,
Participant shall immediately notify the Company in writing of such
disposition. Participant agrees that Participant may be subject to
income tax withholding by the Company on the compensation income
recognized by Participant from the early disposition by payment in
cash or out of the current wages or other compensation payable to
Participant.
COMPLIANCE WITH LAWS AND REGULATIONS
. The Plan and this Agreement are
intended to comply with Section 25102(o) of the California
Corporations Code and any regulations relating thereto. Any
provision of this Agreement which is inconsistent with Section
25102(o) or any regulations relating thereto shall, without further
act or amendment by the Company or the Board, be reformed to comply
with the requirements of Section 25102(o) and any regulations
relating thereto. The exercise of the Option and the issuance and
transfer of Shares shall be subject to compliance by the Company
and Participant with all applicable requirements of federal and
state securities laws and with all applicable requirements of any
stock exchange on which the Company’s Common Stock may be
listed at the time of such issuance or transfer. Participant
understands that the Company is under no obligation to register or
qualify the Shares with the SEC, any state securities commission or
any stock exchange to effect such compliance.
NONTRANSFERABILITY OF OPTION
. The Option may not be transferred in any manner
other than by will or by the laws of descent and distribution, and,
with respect to NQSOs, by instrument to an inter vivos or
testamentary trust in which the options are to be passed to
beneficiaries upon the death of the trustor (settlor), or by gift
to “immediate family” as that term is defined in 17
C.F.R. 240.16a-1(e), and may be exercised during the lifetime of
Participant only by Participant or in the event of
Participant’s incapacity, by Participant’s legal
representative. The terms of the Option shall be binding upon the
executors, administrators, successors and assigns of
Participant.
COMPANY’S RIGHT OF FIRST
REFUSAL . Before any
Vested Shares held by Participant or any transferee of such Vested
Shares may be sold or otherwise transferred (including without
limitation a transfer by gift or operation of law), the Company
and/or its assignee(s) shall have an assignable right of first
refusal to purchase the Vested Shares to be sold or transferred on
the terms and conditions set forth in the Exercise Agreement (the
“ Right of First Refusal ”). The
Company’s Right of First Refusal will terminate when the
Company’s securities become publicly traded.
TAX
CONSEQUENCES . Set
forth below is a brief summary as of the Effective Date of the Plan
of some of the federal and California tax consequences of exercise
of the Option and disposition of the Shares. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THE OPTION OR DISPOSING OF THE SHARES.
Exercise of ISO
. If the Option qualifies as an ISO,
there will be no regular federal or California income tax liability
upon the exercise of the Option, although the excess, if any, of
the Fair Market Value of the Shares on the date of exercise over
the Exercise Price will be treated as a tax preference item for
federal alternative minimum tax purposes and may subject the
Participant to the alternative minimum tax in the year of
exercise.
Exercise of Nonqualified Stock
Option . If the
Option does not qualify as an ISO, there may be a regular federal
and California income tax liability upon the exercise of the
Option. Participant will be treated as having received compensation
income (taxable at ordinary income tax rates) equal to the excess,
if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price. If Participant is a current or
former employee of the Company, the Company may be required to
withhold from Participant’s compensation or collect from
Participant and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income at the time of
exercise.
Disposition of
Shares . The
following tax consequences may apply upon disposition of the
Shares.
Incentive Stock
Options . If the Shares
are held for more than twelve (12) months after the date of
purchase of the Shares pursuant to the exercise of an ISO and
are
disposed of more than two (2) years after
the Date of Grant, any gain realized on disposition of the Shares
will be treated as long term capital gain for federal and
California income tax purposes. If Vested Shares purchased under an
ISO are disposed of within the applicable one (1) year or two
(2) year period, any gain realized on such disposition will be
treated as compensation income (taxable at ordinary income rates in
the year of the disposition) to the extent of the excess, if any,
of the Fair Market Value of the Shares on the date of exercise over
the Exercise Price. To the extent the Shares were exercised prior
to vesting coincident with the filing of an 83(b) Election, the
amount taxed because of a disqualifying disposition will be based
upon the excess, if any, of the fair market value on the date of
vesting over the exercise price.
Nonqualified Stock
Options . If the Shares
are held for more than twelve (12) months after the date of
purchase of the Shares pursuant to the exercise of an NQSO, any
gain realized on disposition of the Shares will be treated as long
term capital gain.
Withholding
. The Company may be required to
withhold from the Participant’s compensation or collect from
the Participant and pay to the applicable taxing authorities an
amount equal to a percentage of this compensation
income.
PRIVILEGES OF STOCK
OWNERSHIP . Participant shall not have any of the rights of
a stockholder with respect to any Shares until the Shares are
issued to Participant.
INTERPRETATION
. Any dispute regarding the interpretation of this
Agreement shall be submitted by Participant or the Company to the
Committee for review. The resolution of such a dispute by the
Committee shall be final and binding on the Company and
Participant.
ENTIRE
AGREEMENT . The
Plan is incorporated herein by reference. This Agreement and the
Plan constitute the entire agreement and understanding of the
parties with respect to the subject matter of this Agreement, and
supersede all prior understandings and agreements, whether oral or
written, between or among the parties hereto with respect to the
specific subject matter hereof.
NOTICES
. Any and all notices required or permitted to be
given to a party pursuant to the provisions of this Agreement will
be in writing and will be effective and deemed to provide such
party sufficient notice under this Agreement on the earliest of the
following: (i) at the time of personal delivery, if delivery is in
person; (ii) at the time of transmission by facsimile, addressed to
the other party at its facsimile number specified herein (or
hereafter modified by subsequent notice to the parties hereto),
with confirmation of receipt made by both telephone and printed
confirmation sheet verifying successful transmission of the
facsimile; (iii) one (1) business day after deposit with an express
overnight courier for United States deliveries, or two (2) business
days after such deposit for deliveries outside of the United
States, with proof of delivery from the courier requested; or (iv)
three (3) business days after deposit in the United States mail by
certified mail (return receipt requested) for United States
deliveries.
All notices for delivery outside the
United States will be sent by facsimile or by express courier. All
notices not delivered personally or by facsimile will be sent with
postage and/or other charges prepaid and properly addressed to the
party to be notified at the address or
facsimile number set forth below the signature
lines of this Agreement, or at such other address or facsimile
number as such other party may designate by one of the indicated
means of notice herein to the other parties hereto. Notices to the
Company will be marked “Attention: President”. Notices
by facsimile shall be machine verified as received.
SUCCESSORS AND
ASSIGNS . The Company
may assign any of its rights under this Agreement. including its
rights to purchase Shares under the Right of First Refusal. No
other party to this Agreement may assign, whethe