Instinctive Technology, Inc. Non-Qualified Stock Option and Stock Repurchase Agreement with Robert L. Lentz

Summary

Instinctive Technology, Inc. grants Robert L. Lentz an option to purchase 262,500 shares of its common stock at $1.50 per share under its 1996 Stock Plan. The option vests over three years, with 25% vesting after one year and the remainder vesting monthly. If the company is sold, a portion of unvested shares may vest immediately, with further vesting depending on employment terms with the new owner. The agreement also includes terms for the company to repurchase unvested shares under certain conditions.

EX-10.06 12 b36350etex10-06.txt NON-QUALIFIED STOCK OPTION AND STOCK REPURCHASE 1 EXHIBIT 10.06 INSTINCTIVE TECHNOLOGY, INC. NON-QUALIFIED STOCK OPTION AND STOCK REPURCHASE AGREEMENT COVER SHEET (E) Instinctive Technology, Inc., a Delaware corporation (the "Company"), hereby grants to the person named below (the "Optionee") and the Optionee hereby accepts, an option to purchase the number of shares (the "Option Shares") listed below of the Company's Common Stock, $.01 par value ("Common Stock"), at the price per share and with a vesting date (the "Vesting Date") listed below, such option to be on the terms and conditions specified in the attached Exhibit E. Optionee Name: Robert L. Lentz Grant Date: 2-18-00 Vesting Date: 2-28-00 Number of Option Shares: 262,500 Exercise Price Per Share: $ 1.50 IN WITNESS WHEREOF, the Company and the Optionee have caused this instrument to be executed as of the Grant Date set forth above. /s/ Robert L. Lentz _______________________ Instinctive Technology, Inc. (Optionee Signature) 725 Concord Avenue Cambridge, MA 02138 93 Lake Road Terrace _______________________ /s/ Jeffrey Beir (Street Address) By: ______________________________ Wayland, MA 01778 ____________________________ Name: Jeffrey R. Beir (City/State/Zip Code) President Title: _____________________________ 2 Instinctive Technology, Inc. NON-QUALIFIED STOCK OPTION AND STOCK REPURCHASE AGREEMENT TERMS AND CONDITIONS 1. GRANT UNDER 1996 STOCK PLAN. This option is granted pursuant to and is governed by the Company's 1996 Stock Plan, as amended on (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 and is not intended to qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (the "Code"). 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) FULL EXERCISABILITY. Subject to Sections 4 and 5 hereof, this option may be exercised at any time and from time to time for all or any portion of the Option Shares, except that this option may not be exercised for a fraction of a share. (b) VESTING. If the Optionee has continued 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 vesting dates specified below, Unvested Shares shall become Vested Shares (or shall "vest") on such dates in an amount equal to the number of Option Shares set forth opposite the applicable date: Less than one year from - 0 Option Shares the Vesting Start Date One year from - 25% of the Vesting Start Date (the the Option Shares "Anniversary Date") Every month after the Anniversary Date - an additional (e.g., if the Anniversary Date is 2.0833% of August 10, the Option Shares 3 then on the 10th day of each month thereafter; if the Anniversary Date is on a day of the month for which there is no corresponding day in a given month, then on the last day of such month) up to and including the 35th month after the Anniversary Date) The 36th month after the Anniversary The balance of the Option Shares Date Option Shares shall be called "Unvested Shares" and, when issued, shall be subject to the Company's Repurchase Option described in Section 6 unless and until they become "Vested Shares" in accordance with the vesting schedule set forth above (at which time such Repurchase Option shall terminate as to such Vested Shares). Any vesting of Option Shares under this option shall first be deemed to apply to shares issued upon exercise of this option (in the order of such exercise) and then to unissued shares subject to this option; and any exercise of this option shall be deemed to apply first to any then unissued Vested Shares. The term "Option Shares" used without reference to either Unvested Shares or Vested Shares shall mean both Unvested Shares and Vested Shares, without distinction. In addition, in the event the Company's Repurchase Option is triggered pursuant to Section 6 below, and the Company elects not to exercise its option for the repurchase of any or all of the Unvested Shares, then upon the expiration of the Repurchase Option Period, any and all Option Shares not repurchased by the Company shall become Vested Shares. (c) VESTING ON SALE. Notwithstanding the foregoing, upon the consummation of a Sale of the Company (as defined below), 50% of the Option Shares which remain Unvested Shares at the time of the consummation of such Sale of the Company shall immediately become Vested Shares, and the remaining Unvested Shares (the "Remaining Unvested Shares") shall continue to vest at the rate set forth in Subsection 3(b) hereof (providing that for purposes of this Subsection, "Option Shares," as used in Subsection 3(b), shall mean the number of Option Shares set forth on the Cover Sheet to this Agreement), beginning with the first such date following the consummation of such Sale of the Company on which Option Shares would have continued to vest had there not been a Sale of the Company, and provided further that all of the Remaining Unvested Shares shall become Vested Shares (i) at the time of the consummation of the Sale of the Company if, at or prior to the Sale of the Company, the Optionee is not offered employment by the successor to the Company (1) at the same or higher total compensation level than in effect for the Optionee as an employee of the Company prior to the Sale of the Company, (2) consisting of responsibilities not materially reduced from 2 4 the level of responsibilities undertaken by the Optionee as an employee of the Company prior to the Sale of the Company, and (3) within a 40-mile radius of the Company's principal offices prior to the Sale of the Company (except for business travel consistent with Optionee's responsibilities as an employee of the Company), or (ii) if the Optionee is offered and accepts employment meeting the criteria set forth in clause (i) of this sentence but, within the 12 months following the Sale of the Company, (1) the Optionee's total compensation level is reduced below the total compensation in effect for the Optionee as an employee of the Company prior to the Sale of the Company, (2) the Optionee's responsibilities are materially reduced below the level of responsibilities the Optionee had as an employee of the Company prior to the Sale of the Company, (3) the Optionee is transferred by the successor to the Company (the "New Employer") to a location beyond a 40-mile radius of the Company's principal offices prior to the Sale of the Company (except for business travel consistent with Optionee's responsibilities as an employee of the New Employer), or (4) the Optionee's employment with the New Employer is terminated by the New Employer without Cause, at the time of the happening of any event enumerated in this clause (ii). For purposes of the foregoing, "Sale of the Company" shall mean (i) the sale by the Company of all, or substantially all, of its assets; (ii) the sale by Company shareholders of greater than 50% of the stock of the Company in a single transaction or a group of related transactions; or, (iii) the merger or consolidation of the Company with, or into, another company where the outstanding shares of the Company immediately prior to such merger or consolidation represent or are converted into or exchanged for securities which represent less than 50% of the voting power of the surviving or resulting entity. For purposes of the foregoing, "Cause" shall mean a material violation by the Optionee that is not cured within a reasonable time after written notice thereof of any noncompetition agreement between the Optionee and the New Employer or any of its subsidiaries or a finding in a criminal proceeding that the Optionee has committed felonious criminal misconduct in connection with the Optionee's employment by the New Employer, which misconduct has been materially injurious to the interests of the New Employer. Further, and without limiting the generality of the foregoing, the following circumstances shall be deemed not to involve the voluntary resignation by a Optionee or a termination by the New Employer for Cause: (i) the death of the Optionee, (ii) the disability or incapacity of the Optionee which prevents the Optionee from continuing his employment with the New Employer, in Optionee's then-current capacity, or (iii) the resignation of the Optionee within 30 days of a vote of the board of directors of the New Employer to remove a Optionee from his then-current office (other than for Cause). (d) OTHER ACCELERATION. Notwithstanding the foregoing, in accordance with and subject to the provisions of the Plan, the Committee may, in its discretion, accelerate the date that any Unvested Shares become Vested Shares under this Option. 3 5 The foregoing rights are cumulative and (subject to Sections 4 or 5 hereof if the Optionee ceases to maintain a Business Relationship with the Company and all Related Corporations) may be exercised up to and including the date which is ten years from the date this option is granted. (e) 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 remain subject to this option and shall be available for later purchase by the Optionee in accordance with the terms hereof. 4. TERMINATION OF BUSINESS RELATIONSHIP. 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, vesting of Unvested Shares shall immediately cease, this option may be exercised only as to any Option Shares that are Vested Shares on the date of termination of the Optionee's Business Relationship and this option shall terminate (and may no longer be exercised) after the passage of 90 days after the date of termination of the Optionee's Business Relationship (but in no event later than the scheduled expiration date). In the event of termination the Optionee's Business Relationship with the Company, the Repurchase Option described in Section 6 shall also be applicable and Optionee's only rights hereunder shall be those which are properly exercised before the termination of this option (subject to Section 6). 5. DEATH; DISABILITY; DISSOLUTION. (a) DEATH. If the Optionee is a natural person who dies while in a Business Relationship with the Company, vesting of Unvested Shares shall immediately cease. In such event, this option may be exercised only as to any Option Shares that are Vested Shares on the date of the Optionee's death, by the Optionee's estate, personal representative or beneficiary to whom this option has been transferred or assigned pursuant to Section 10, and this option may be exercised only on or prior to the date which is 180 days after the date of death (but not later than the scheduled expiration date). In the event of death, the Repurchase Option described in Section 6 shall also be applicable. (b) DISABILITY. If the Optionee is a natural person that ceases to maintain a Business Relationship with the Company by reason of his or her disability, vesting of Unvested Shares shall immediately cease. In such event, this option may be exercised only as to any Option Shares that are Vested Shares on the date of termination of the Optionee's Business Relationship with the Company; and this option may be exercised 4 6 only on or prior to the date which is 180 days after the date of termination of the Optionee's Business Relationship with the Company (but not later than the scheduled expiration date). In the event of such termination of the Optionee's Business Relationship with the Company, the Repurchase Option described in Section 6 shall also be applicable. For purposes hereof, "disability" means "permanent and total disability" as defined in Section 22(e)(3) of the Code. (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 (subject to Section 6 hereof). (d) DISSOLUTION. If the Optionee is a corporation, partnership, trust or other entity that is dissolved, is liquidated, becomes insolvent or enters into a merger or acquisition with respect to which the Optionee is not the surviving entity, at a time when the Optionee is involved in a Business Relationship with the Company, this option shall immediately terminate as of the date of such event (and shall thereafter not be exercisable to any extent whatsoever), and the only rights hereunder shall be those as to which this option was properly exercised before such dissolution or other event (subject to Section 6 hereof). 6. REPURCHASE OPTION. In the event of any voluntary or involuntary termination of the Optionee's Business Relationship by the Company for any or no reason, including by reason of death or disability, the Company shall, upon and from the date of such termination (as reasonably fixed and determined by the Company) have an irrevocable, exclusive, assignable option (the "Repurchase Option") for a period of ninety (90) days (the "Repurchase Option Period") to repurchase all or any portion of the Optionee's Unvested Shares at the original purchase price per share paid by the Optionee. Such option may be exercised by the Company by sending written notice to the Optionee, which notice shall specify the number of Unvested Shares being so repurchased and which notice shall be accompanied by the Company's check for the purchase price of those shares. Upon the sending of such notice and payment, the Company shall become the legal and beneficial owner of the Unvested Shares being repurchased and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name the number of Unvested Shares being repurchased by the Company. Upon exercise of the Repurchase Option in the manner provided in this Section 6, if the Company does not have possession of the certificate or certificates representing the Unvested Shares being repurchased, the Optionee shall deliver to the Company, within ten (10) days of receipt of the Company's notice of such repurchase, such certificate or certificates duly endorsed and free and clear of any and all liens, charges and encumbrances. If the Company does have possession of such certificate or certificates pursuant to Section 18 hereof, it may use the Optionee's stock assignment to effectuate the repurchase. 5 7 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. 8. RESTRICTIONS ON TRANSFER. The Optionee agrees not to sell, assign, transfer, pledge, hypothecate, gift, mortgage or otherwise encumber or dispose of (except to the Company or any successor to the Company) all or any Unvested Shares or any interest therein, and any Unvested Shares purchased upon exercise of this option shall be held in escrow by the Company in accordance with the terms of Section 18 below unless and until they become Vested Shares. Option Shares will be of an illiquid nature and will be deemed to be "restricted securities" for purposes of the Securities Act of 1933, as amended. Accordingly, such shares must be sold in compliance with the registration requirements of such Act or an exemption therefrom. Certificates representing the Option Shares shall bear the Securities Exchange Act of 1934 legend and legends which state the restrictions imposed upon the Option Shares as set forth in this Agreement. 6 8 9. 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 shall be 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). In the event this option shall be exercised, pursuant to Section 5 hereof, by any person or persons other than the Optionee, such notice shall be accompanied by appropriate proof of the right of such person or persons to exercise this option. 10. 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 can exercise this option. 11. NO OBLIGATION TO EXERCISE OPTION. The grant and acceptance of this option imposes no obligation on the Optionee to exercise it. 12. 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. 13. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE. The Optionee shall have 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 9. 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. 14. 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. 7 9 15. WITHHOLDING TAXES; 83(B) ELECTION: (a) 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. 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 will make reimbursement on demand, in cash, for the amount underwithheld. THE FILING OF AN ELECTION UNDER SECTION 83(B) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, MAY BE REQUIRED BY SECTION 15(b) OF THIS AGREEMENT. IF REQUIRED, SUCH AN ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE WITHIN 30 DAYS FOLLOWING EACH EXERCISE OF THIS OPTION. (b) SECTION 83(B) ELECTION. Optionee acknowledges that the Unvested Shares acquired upon exercise of this option may be treated as subject to a substantial risk of forfeiture within the meaning of Section 83 of the Code and that, in the absence of an election under Section 83(b) of the Code, such treatment could delay the determination of the tax consequences of such exercise for both the Company and Optionee. In order to ensure that the tax consequences of such exercise will be determined at the time of exercise, Optionee agrees to file a timely election under Section 83(b) of the Code to include in Optionee's taxable income, at the time of exercise, the difference between the fair market value of the Unvested Shares received upon exercise of this option and the amount paid for such shares; provided, however, that the Board, in its sole and absolute discretion, may waive the requirement that the Optionee file such election. 16. COMPANY'S RIGHT OF FIRST REFUSAL: (a) EXERCISE OF RIGHT. If the Optionee or his or her legal representative (the "Transferor") desires to transfer all or any part of the Option Shares to any person other than the Company (an "Offeror"), the Transferor shall: (i) obtain in writing an irrevocable and unconditional bona fide offer (the "Offer") for the purchase thereof from the Offeror; and (ii) give written notice (the "Option Notice") to the Company setting forth the Optionee's desire to transfer such shares, which Option Notice shall be accompanied by a photocopy of the Offer and shall set forth at least the name and address of the Offeror and the price and terms of the bona fide offer. Upon receipt of the Option 8 10 Notice, the Company shall have an assignable option to purchase any or all of such shares (the "Company Option Shares") specified in the Option Notice, such option to be exercisable by giving, within 30 days after receipt of the Option Notice, a written counter-notice to the Transferor. If the Company elects to purchase any or all of such Company Option Shares, it shall be obligated to purchase, and the Transferor shall be obligated to sell to the Company, such Company Option Shares at the price and terms indicated in the Offer within 30 days from the date of delivery by the Company of such counter-notice. (b) SALE OF OPTION SHARES TO OFFEROR. The Transferor may, for 60 days after the expiration of the 30-day period during which the Company may give the counter-notice, sell, pursuant to the terms of the Offer, any or all of such Company Option Shares not purchased or agreed to be purchased by the Company or its assignee; provided, however, that the Transferor shall not sell such Company Option Shares to the Offeror if the Offeror is a competitor of the Company and the Company gives written notice to the Transferor, within 30 days of its receipt of the Option Notice, stating that the Transferor shall not sell such Company Option Shares to such Offeror; and provided, further, that prior to the sale of such Company Option Shares to the Offeror, the Offeror shall execute an agreement with the Company pursuant to which the Offeror agrees to be subject to the restrictions set forth in this Agreement. If any or all of such Company Option Shares are not sold pursuant to an Offer within the time permitted above, the unsold Company Option Shares shall remain subject to the terms of this Section 16. (c) ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. If there shall be any change in the Common Stock of the Company through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination or exchange of shares, or the like, the restrictions contained in Section 8 or this Section 16 shall apply with equal force to additional and/or substitute securities, if any, received by the Optionee in exchange for, or by virtue of his or her ownership of, Company Option Shares, except as otherwise determined by the Board of Directors of the Company. (d) FAILURE TO DELIVER COMPANY OPTION SHARES: If the Transferor fails or refuses to deliver on a timely basis duly endorsed certificates representing Company Option Shares to be sold to the Company or its assignee pursuant to this Section 16, the Company shall have the right to deposit the purchase price for such Company Option Shares in a special account with any bank or trust company in the State of Delaware, giving notice of such deposit to the Transferor, whereupon such Company Option Shares shall be deemed to have been purchased by the Company. All such monies shall be held by the bank or trust company for the benefit of the Transferor. All monies deposited with the bank or trust company remaining unclaimed for two years after the date of deposit shall be repaid by the bank or trust company to the Company on demand, and the Transferor shall thereafter look only to the Company for payment. The Company may place a legend on any stock certificate delivered to the Transferor reflecting the restrictions on transfer provided in Section 8 hereof and this Section 16. 9 11 (e) EXPIRATION OF COMPANY'S RIGHT OF FIRST REFUSAL AND TRANSFER RESTRICTIONS: The first refusal rights of the Company and the transfer restrictions set forth above shall remain in effect until such time, if ever, as a distribution to the public is made of shares of the Company's Common Stock pursuant to a registration statement filed under the Securities Act of 1933, as amended, or a successor statute, at which time the first refusal rights of the Company and the transfer restrictions set forth herein will automatically expire. 17. 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 180 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 17 shall have perpetual duration, except with respect to those Options or Option Shares which are sold pursuant to Rule 701, Rule 144 or similar exemption. 18. ESCROW OF UNVESTED SHARES. (a) If this option is exercised as to any Unvested Shares, such Unvested Shares shall be issued in the name of the Optionee, but shall be held in escrow by the Company, acting in the capacity of escrow agent, together with a stock assignment executed by the Optionee with respect to such Unvested Shares. (b) With respect to any Unvested Shares held in escrow that become Vested Shares, the Company shall promptly issue a new certificate for the number of shares that have become Vested Shares and shall deliver such certificate to the Optionee and shall retain in escrow a new certificate for any remaining Unvested Shares in exchange for the all or the relevant portion of the applicable certificate then being held by the Company as escrow agent. (c) Subject to the terms hereof, the Optionee shall have all the rights of a shareholder with respect to the Unvested Shares while they are held in escrow, including, without limitation, the right to vote the Unvested Shares and receive any cash dividends declared thereon. (d) The Company may terminate this escrow at any time. The Company may also appoint another entity to serve as escrow agent hereunder, in which event the Optionee agrees to execute all documents requested by the Company in connection therewith. 10 12 19. 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. 20. 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 (consisting of the terms and conditions set forth in this Exhibit E and the Cover Sheet attached hereto) 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 this agreement. (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. (f) DEFINED TERMS. Capitalized terms not otherwise defined herein shall have the meaning assigned to such terms in the Stock Option Agreement to which these terms and conditions are attached. 11