{"id":40154,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/non-qualified-stock-option-agreement-red-hat-software-inc-and.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"non-qualified-stock-option-agreement-red-hat-software-inc-and","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/non-qualified-stock-option-agreement-red-hat-software-inc-and.html","title":{"rendered":"Non-Qualified Stock Option Agreement &#8211; Red Hat Software Inc. and Matthew Szulik"},"content":{"rendered":"<pre>\n                             RED HAT SOFTWARE, INC.\n\n                      NON-QUALIFIED STOCK OPTION AGREEMENT\n                                   COVER SHEET\n\n         Red Hat Software, Inc., a Delaware corporation (the \"Company\"), hereby\ngrants as of the date below (the \"Grant Date\") to the person named below (the\n\"Optionee\") and the Optionee hereby accepts, an option to purchase the number of\nshares (the \"Option Shares\") listed below of the Company's Common Stock, $.0001\npar value per share (\"Common Stock\"), at the price per share and with a vesting\nstart date (the \"Vesting Start Date\") listed below, such option to be on the\nterms and conditions specified in the attached EXHIBIT A.\n\n         Optionee Name:                     Matthew Szulik\n                                   ---------------------------------\n\n         Grant Date:                       November 13, 1998\n                                   ---------------------------------\n\n         Vesting Start Date:               November 13, 1998\n                                   ---------------------------------\n\n         Number of Option Shares:          986,227\n                                   ---------------------------------\n\n         Exercise Price Per Share:         $0.857                             \n                                   ---------------------------------\n\n\n\n         IN WITNESS WHEREOF, the Company, the Escrow Agent and the Optionee have\ncaused this instrument to be executed as of the Grant Date set forth above.\n\n\/S\/ Matthew Szulik                               RED HAT SOFTWARE, INC.\n-------------------------------------            2600 Meridian Parkway\n(Optionee Signature)                             Durham, NC 27713\n                                                 \n\n\n-------------------------------------\n(Street Address)\n                                                  By: \/s\/ Robert F. Young\n-------------------------------------             Name: Robert F. Young\n  (City\/State\/Zip Code)                           Title: Chief Executive Officer\n\n\n                                                  ESCROW AGENT\n                                                  RED HAT SOFTWARE, INC.\n\n                                                  By: \/s\/ Robert F. Young\n                                                  Name: Robert F. Young\n                                                  Title: Chief Executive Officer\n\n\n\n\n\n\n                                    EXHIBIT A\n\n\n                             RED HAT SOFTWARE, INC.\n\n                      NON-QUALIFIED STOCK OPTION AGREEMENT\n                              TERMS AND CONDITIONS\n\n         1. GRANT UNDER RED HAT SOFTWARE, INC. 1998 STOCK OPTION PLAN. This\noption is granted pursuant to and is governed by the Red Hat Software, Inc. 1998\nStock Option Plan (the \"Plan\") and, unless the context otherwise requires, terms\nused herein shall have the same meaning as in the Plan. Determinations made in\nconnection with this option pursuant to the Plan shall be governed by the Plan\nas it exists on the Grant Date.\n\n         2. GRANT AS NON-QUALIFIED OPTION; OTHER OPTIONS. This option is\nintended to be a non-qualified stock option (rather than an incentive stock\noption). This option is in addition to any other options heretofore or hereafter\ngranted to the Optionee by the Company or any Related Corporation (as defined in\nthe Plan), but a duplicate original of this instrument shall not effect the\ngrant of another option.\n\n         3. EXERCISABILITY OF OPTION; VESTING.\n\n            (a) FULL EXERCISABILITY. This option may be exercised at any time \nand from time to time for all or any portion of the Option Shares, except that\nthis option may not be exercised for a fraction of a share. The foregoing right\n(subject to Sections 4 or 5 hereof if the Optionee ceases to be employed by the\nCompany) may be exercised on or before the date which is ten years from the\nGrant Date. Option Shares which are \"Unvested Shares,\" as specified in paragraph\n(b) below, shall, if purchased, be subject to the Company's Repurchase Option\ndescribed in Section 6 unless and until they become \"Vested Shares\" in\naccordance with paragraph (b) below. As of any date, the Option Shares issued\nupon the exercise of this option on or before such date (the \"Issued Shares\")\nshall first be deemed to be Vested Shares up to the number of Option Shares that\nare Vested Shares under Section 3(b) above as of such date and any Issued Shares\nin excess of the number of Vested Shares as of such date shall be deemed to be\nUnvested Shares. The term \"Option Shares\" used without reference to either\nUnvested Shares or Vested Shares shall mean both Unvested Shares and Vested\nShares, without distinction.\n\n            (b) VESTING. All of the Option Shares initially shall be Unvested \nShares. For so long as the Optionee maintains a continuous service to the\nCompany or a Related Corporation as an employee, officer, director or consultant\n(a \"Business Relationship\"), Unvested Shares (whether or not previously\npurchased) shall become Vested Shares (or shall \"vest\") on the following dates\nin an amount equal to the number of shares set opposite the applicable date:\n\n\n\n                                      -2-\n\n          One year from the Vesting Start Date  -  33.33% of the Option Shares\n\n          On the first day of each subsequent \n          one month period following one year \n          from the Vesting Start Date           -  2.778% of the Option Shares\n\n         In addition, in the event the Company's Repurchase Option becomes\nexercisable pursuant to Section 6 below, and the Company elects not to exercise\nits option for the repurchase of any or all of the Unvested Shares, then upon\nthe expiration of the Repurchase Option Period (as defined in Section 6), any\nand all Option Shares not repurchased by the Company shall become Vested Shares.\nThe Board may, in its discretion, accelerate any of the foregoing vesting dates.\n\n            (c) ACCELERATED VESTING OF UNVESTED SHARES UPON TERMINATION\nWITHOUT CAUSE WITHIN FIRST YEAR OF EMPLOYMENT. If the Optionee's Business\nRelationship is terminated by the Company or its successor or assign without\nCause (as defined in Section 4(c)) within sixteen months after the Vesting Start\nDate, then immediately prior to such termination, a number of shares as is equal\nto 33.3% of such Optionee's Option Shares shall be deemed Vested Shares for\npurposes of this Agreement.\n\n            (d) ACCELERATED VESTING OF UNVESTED SHARES UPON TERMINATION \nFOLLOWING CHANGE IN CONTROL. If the Optionee's Business Relationship is\nterminated by the Company or its successor or assign without Cause (as defined\nin Section 4(c)) or if the Optionee voluntarily terminates his Business\nRelationship for Good Reason, in either case, within one year after a Change in\nControl, then immediately prior to such termination all shares that are Unvested\nShares as of such termination date, shall be deemed Vested Shares for purposes\nof this Agreement. Notwithstanding the foregoing, if the Change in Control that\nwould otherwise give rise to the acceleration of vesting under this Section 3(d)\nis one which the parties intend to account for as a pooling of interests, and if\nthe Board of Directors, following consultation with the Company's accountants,\ndetermines that such acceleration would cause such transaction not to qualify\nfor pooling of interests accounting, then the provisions of this Section 3(d)\nshall not apply to such Change in Control.\n\n            (e) DEFINITIONS.  For purposes of this Section 3\n\n                (i) The term \"Change in Control\" shall mean (i) the effective \ntime of a consolidation of the Company with, or merger of the Company with or\ninto, another corporation or other business organization in which the shares of\nthe stock of the Company are converted into or otherwise exchanged for less than\nfifty percent (50%) of the shares of a resulting or surviving corporation, (ii)\nthe closing of a sale or conveyance of all or substantially all of the assets of\nthe Company, or (iii) an acquisition in a transaction or a series of related\ntransactions by a person or group (as defined in Rule 13d-5(b)(1) of the\nSecurities Act of 1934, as amended) of more than a majority of the outstanding\nvoting stock of the Company.\n\n\n\n                                      -3-\n\n\n\n                (ii) The term \"Good Reason\" shall mean, without such Optionee's \nexpress written consent, (i) any significant diminution in the Optionee's\nposition, duties, responsibilities, power, title or office as in effect\nimmediately prior to the Change in Control; (ii) any reduction in the Optionee's\nannual base salary as in effect on the effective date of the Change in Control\nor failure to continue coverage of such Optionee under any compensation or\nbenefit plan in which such Optionee participates on the effective date of the\nChange in Control; or (iii) a requirement that (A) the location in which the\nOptionee perform his principal duties for the Company be changed to a new\nlocation that is outside a radius of 75 miles from such Optionee's principal\nresidence at the effective date of the Change in Control or (B) such Optionee\ntravel on an overnight basis more than 90 days in any 12-month consecutive\nperiod.\n\n         4. TERMINATION OF BUSINESS RELATIONSHIP.\n\n            (a) TERMINATION OTHER THAN FOR CAUSE. If the Optionee's Business \nRelationship with the Company or any Related Corporation terminates, other than\nby reason of death or disability as defined in Section 5 or termination for\nCause as defined in Section 4(c), vesting of Unvested Shares shall immediately\ncease, this option shall terminate (may no longer be exercised) immediately as\nto any Unvested Shares and may be exercised only as to any Option Shares that\nare Vested Shares on the date of termination of the Optionee's Business\nRelationship. This option may then be exercised only as to any Option Shares\nthat are Vested Shares as of such termination date on or prior to the date which\nis 90 days after the date of termination of the Optionee's Business Relationship\n(but not later than the scheduled expiration date). In the event of termination\nof the Optionee's Business Relationship, the Repurchase Option described in\nSection 6 shall also be applicable. For purposes hereof, a Business Relationship\nshall be considered as continuing uninterrupted during any bona fide leave of\nabsence (such as those attributable to illness, military obligations or\ngovernmental service); PROVIDED that the period of such leave does not exceed 90\ndays or, if longer, any period during which the Optionee's right to reemployment\nis guaranteed by statute or by contract. A bona fide leave of absence with the\nwritten approval of the Company shall not be considered an interruption of the\nBusiness Relationship for purposes hereof; PROVIDED that such written approval\ncontractually obligates the Company to continue the Business Relationship of the\nOptionee after the approved period of absence. This option shall not be affected\nby any change of Business Relationship within or among the Company or any\nRelated Corporation so long as the Optionee continuously maintains its Business\nRelationship with the Company or any Related Corporation.\n\n            (b) TERMINATION FOR CAUSE. If the Business Relationship of the\nOptionee is terminated for Cause (as defined in Section 4(c)), this option shall\nterminate (may no longer be exercised) as to any Vested Shares and Unvested\nShares upon the Optionee's receipt of written notice of such termination. In the\nevent of termination of the Optionee's Business Relationship, the Repurchase\nOption described in Section 6 shall also be applicable.\n\n\n                                      -4-\n\n\n\n            (c) DEFINITION OF CAUSE. \"Cause\" shall mean conduct involving one or\nmore of the following: (i) the substantial and continuing failure of the\nOptionee, after notice thereof, to render services to the Company or any Related\nCorporation in accordance with the terms or requirements of his or her Business\nRelationship; (ii) disloyalty, gross negligence, willful misconduct, dishonesty,\nfraud or breach of fiduciary duty to the Company or any Related Corporation;\n(iii) deliberate disregard of the rules or policies of the Company or any\nRelated Corporation, or breach of an employment or other agreement with the\nCompany or any Related Corporation, which results in direct or indirect loss,\ndamage or injury to the Company or any Related Corporation; (iv) the\nunauthorized disclosure of any trade secret or confidential information of the\nCompany or any Related Corporation; or (v) the commission of an act which\nconstitutes unfair competition with the Company or any Related Corporation or\nwhich induces any customer or supplier to breach a contract with the Company or\nany Related Corporation.\n\n         5. DEATH; DISABILITY.\n\n            (a) DEATH. If the Optionee dies while in a Business Relationship \nwith the Company or any Related Corporation, vesting of Unvested Shares shall\nimmediately cease. In such event, this option may be exercised only as to any\nOption Shares that are Vested Shares on the date of the Optionee's death, by the\nOptionee's estate, personal representative or beneficiary to whom this option\nhas been assigned pursuant to Section 10, and this option may be exercised only\non or prior to the date which is 180 days after the date of death (but not later\nthan the scheduled expiration date). In the event of death, the Repurchase\nOption described in Section 6 shall also be applicable.\n\n            (b) DISABILITY. If the Optionee ceases its Business Relationship \nwith the Company or any Related Corporation by reason of his or her disability,\nvesting of Option Shares shall immediately cease; this option may be exercised\nonly as to any Option Shares that are Vested Shares on the date of termination\nof the Optionee's Business Relationship; and this option may be exercised only\non or prior to the date which is 180 days after the date of termination of the\nOptionee's Business Relationship (but not later than the scheduled expiration\ndate). In the event of such termination of Business Relationship, the Repurchase\nOption described in Section 6 shall also be applicable. For purposes hereof,\n\"disability\" means \"permanent and total disability\" as defined in Section\n22(e)(3) of the Code.\n\n         6. REPURCHASE OPTION. In the event of any voluntary or involuntary\ntermination of the Optionee's Business Relationship with the Company or any\nRelated Corporation for any or no reason, including by reason of death or\ndisability, the Company shall, upon and from the date of such termination (as\nreasonably fixed and determined by the Company) have an irrevocable, exclusive,\nassignable option (the \"Repurchase Option\") for a period of ninety (90) days\nfollowing the termination of such Business Relationship (the \"Repurchase Option\nPeriod\") to repurchase all or any portion of the Unvested Shares held by the\nOptionee at the original purchase price per share paid by the Optionee. Such\noption may be exercised by the Company by sending written notice to the\nOptionee, which notice shall specify the number of Unvested Shares being so\nrepurchased and which notice shall be accompanied by the Company's check for the\npurchase price of those shares. Upon the sending of such notice and check, the\nCompany \n\n\n                                      -5-\n\n\nshall become the legal and beneficial owner of the Unvested Shares being\nrepurchased and all rights and interests therein or relating thereto, and the\nCompany shall have the right to retain and transfer to its own name the number\nof Unvested Shares being repurchased by the Company.\n\n         7. PAYMENT OF EXERCISE PRICE.\n\n            (a) PAYMENT OPTIONS. The exercise price shall be paid by one or any \ncombination of the following forms of payment:\n\n                (i)   in cash, or by check payable to the order of the Company;\n\n                (ii)  subject to Section 7(b) below, if the Common Stock is then\ntraded on a national securities exchange or on the Nasdaq National Market (or\nsuccessor trading system), by delivery of shares of Common Stock having a fair\nmarket value equal as of the date of exercise to the option price; or\n\n                (iii) delivery of an irrevocable and unconditional undertaking,\nsatisfactory in form and substance to the Company, by a creditworthy broker to\ndeliver promptly to the Company sufficient funds to pay the exercise price, or\ndelivery by the Optionee to the Company of a copy of irrevocable and\nunconditional instructions, satisfactory in form and substance to the Company,\nto a creditworthy broker to deliver promptly to the Company cash or a check\nsufficient to pay the exercise price.\n\n         In the case of (ii) above, fair market value shall be determined as of\nthe last business day for which such prices or quotes are available prior to the\ndate of exercise and shall mean (i) the average (on that date) of the high and\nlow prices of the Common Stock on the principal national securities exchange on\nwhich the Common Stock is traded, if the Common Stock is then traded on a\nnational securities exchange; or (ii) the last reported sale price (on that\ndate) of the Common Stock on the Nasdaq National Market (or successor trading\nsystem), if the Common Stock is not then traded on a national securities\nexchange.\n\n            (b) LIMITATIONS ON PAYMENT BY DELIVERY OF COMMON STOCK. If the \nOptionee delivers Common Stock held by the Optionee (\"Old Stock\") to the Company\nin full or partial payment of the exercise price, and the Old Stock so delivered\nis subject to restrictions or limitations imposed by agreement between the\nOptionee and the Company, an equivalent number of Option Shares shall be subject\nto all restrictions and limitations applicable to the Old Stock to the extent\nthat the Optionee paid for the Option Shares by delivery of Old Stock, in\naddition to any restrictions or limitations imposed by this Agreement.\nNotwithstanding the foregoing, the Optionee may not pay any part of the exercise\nprice hereof by transferring Common Stock to the Company unless such Common\nStock has been owned by the Optionee free of any substantial risk of forfeiture\nfor at least six months.\n\n\n                                      -6-\n\n\n\n         8. RESTRICTIONS ON RESALE; LEGEND.\n\n            (a) TRANSFER RESTRICTIONS.\n\n                (i)   UNVESTED SHARES.  The Optionee agrees not to sell, assign,\ntransfer, pledge, hypothecate, gift, mortgage or otherwise encumber or dispose\nof (except to the Company or any successor to the Company) all or any Unvested\nShares or any interest therein, and any Unvested Shares purchased upon exercise\nof this option shall be held in escrow by the Company in accordance with the\nterms of Section 18 below unless and until they become Vested Shares.\n\n                (ii)  VESTED SHARES. Option Shares that are Vested Shares may \nnot be transferred without the Company's written consent except by will, by the\nlaws of descent and distribution and in accordance with the provisions of\nSection 16, if applicable.\n\n                (iii) SECURITIES ACT RESTRICTIONS.  Option Shares will be of an \nilliquid nature and will be deemed to be \"restricted securities\" for purposes of\nthe Securities Act of 1933, as amended (the \"Securities Act\"). Accordingly, such\nshares must be sold in compliance with the registration requirements of the\nSecurities Act or an exemption therefrom. Each certificate evidencing any of the\nOption Shares shall bear a legend substantially as follows:\n\n         \"The shares represented by this certificate are subject to restrictions\n         on transfer and may not be sold, exchanged, transferred, pledged,\n         hypothecated or otherwise disposed of except in accordance with and\n         subject to all the terms and conditions of a certain Non-Qualified\n         Stock Option Agreement, a copy of which the Company will furnish to the\n         holder of this certificate upon request and without charge.\"\n\n            (b) TERMINATION OF RESTRICTIONS. The restrictions on transfer \ncontained in Section 8(a)(ii) (including without limitation the provisions of\nSection 16) shall expire as to Option Shares on the earliest to occur of (i) a\ndistribution to the public of shares of common stock of the Company pursuant to\nan effective registration statement filed under the Securities Act or any\nsuccessor statute (a \"Public Offering\"), or (ii) an Organic Change (as defined\nin the Plan).\n\n         9. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of\nthis Agreement, this option may be exercised by written notice to the Company at\nits principal executive office, or to such transfer agent as the Company shall\ndesignate. Such notice shall state the election to exercise this option and the\nnumber of Option Shares for which it is being exercised and shall be signed by\nthe person or persons so exercising this option. Such notice shall be\naccompanied by payment of the full purchase price of such shares, and the\nCompany shall deliver a certificate or certificates representing such shares as\nsoon as practicable after the notice shall be received. Such certificate or\ncertificates shall be registered in the name of the person or persons so\nexercising this option (or, if this option shall be exercised by the Optionee\nand if the Optionee shall so request in the notice exercising this option, shall\nbe registered in the\n\n\n\n\n\n                                      -7-\n\n\nname of the Optionee and another person jointly, with right of survivorship). In\nthe event this option shall be exercised, pursuant to Section 5 hereof, by any\nperson or persons other than the Optionee, such notice shall be accompanied by\nappropriate proof of the right of such person or persons to exercise this\noption.\n\n         10. OPTION NOT TRANSFERABLE. This option is not transferable or\nassignable except by will or by the laws of descent and distribution. During the\nOptionee's lifetime only the Optionee can exercise this option.\n\n         11. NO OBLIGATION TO EXERCISE OPTION. The grant and acceptance of this\noption imposes no obligation on the Optionee to exercise it.\n\n         12. NO OBLIGATION TO CONTINUE BUSINESS RELATIONSHIP. Neither the Plan,\nthis Agreement, nor the grant of this option imposes any obligation on the\nCompany to continue the Optionee in the Business Relationship.\n\n         13. ADJUSTMENTS. Except as is expressly provided in the Plan with\nrespect to certain changes in the capitalization of the Company, no adjustment\nshall be made for dividends or similar rights for which the record date is prior\nto such date of exercise.\n\n         14. CAPITAL CHANGES AND BUSINESS SUCCESSIONS. The Plan contains\nprovisions covering the treatment of options in a number of contingencies such\nas stock splits and mergers. Provisions in the Plan for adjustment with respect\nto stock subject to options and the related provisions with respect to\nsuccessors to the business of the Company are hereby made applicable hereunder\nand are incorporated herein by reference.\n\n         15. WITHHOLDING TAXES; SECTION 83(b) ELECTION.\n\n            (a) WITHHOLDING TAXES. If the Company in its discretion determines \nthat it is obligated to withhold any tax in connection with the exercise of this\noption, or in connection with the transfer of, or the lapse of restrictions on,\nany Common Stock or other property acquired pursuant to this option, the\nOptionee hereby agrees that the Company may withhold from the Optionee's wages\nor other remuneration the appropriate amount of tax. At the discretion of the\nCompany, the amount required to be withheld may be withheld in cash from such\nwages or other remuneration or in kind from the Common Stock or other property\notherwise deliverable to the Optionee on exercise of this option. The Optionee\nfurther agrees that, if the Company does not withhold an amount from the\nOptionee's wages or other remuneration sufficient to satisfy the withholding\nobligation of the Company, the Optionee will make reimbursement on demand, in\ncash, for the amount underwithheld.\n\n            (b) SECTION 83(b) ELECTION. The Optionee acknowledges that if this \noption is exercised as to any Unvested Shares, such Unvested Shares may be\ntreated as subject to a substantial risk of forfeiture under Section 83(b) of\nthe Code. In such event, the Optionee may make an election under Section 83(b)\nto include in income currently the difference between the fair market value of\nsuch Unvested Shares and the exercise price. If the Optionee does not make\n\n\n\n                                      -8-\n\n\nsuch an election, the Optionee understands that he or she will recognize income\nat the time such Unvested Shares become Vested Shares. The Optionee agrees to\nconsult with his or her own tax advisor prior to the exercise of this option for\nUnvested Shares.\n\n         16. COMPANY'S RIGHT OF FIRST REFUSAL.\n\n            (a) EXERCISE OF RIGHT. If the Optionee desires to transfer all or \nany part of the Vested Shares to any person other than the Company (an\n\"Offeror\"), the Optionee shall: (i) obtain in writing an irrevocable and\nunconditional bona fide offer (the \"Offer\") for the purchase thereof from the\nOfferor; and (ii) give written notice (the \"Option Notice\") to the Company\nsetting forth the Optionee's desire to transfer such shares, which Option Notice\nshall be accompanied by a photocopy of the Offer and shall set forth at least\nthe name and address of the Offeror and the price and terms of the Offer. Upon\nreceipt of the Option Notice, the Company shall have an assignable option to\npurchase any or all of such Vested Shares (the \"Company Option Shares\")\nspecified in the Option Notice, such option to be exercisable by giving, within\n30 days after receipt of the Option Notice, a written counter-notice to the\nOptionee. If the Company elects to purchase any or all of such Company Option\nShares, it shall be obligated to purchase, and the Optionee shall be obligated\nto sell to the Company, such Company Option Shares at the price and terms\nindicated in the Offer within 30 days from the date of delivery by the Company\nof such counter-notice.\n\n            (b) SALE OF OPTION SHARES TO OFFEROR. The Optionee may, for 60 days\nafter the expiration of the 30-day option period as set forth in Section 16(a),\nsell to the Offeror, pursuant to the terms of the Offer, any or all of such\nCompany Option Shares not purchased or agreed to be purchased by the Company or\nits assignee; PROVIDED, HOWEVER, that the Optionee shall not sell such Option\nShares to such Offeror if such Offeror is a competitor of the Company and the\nCompany gives written notice to the Optionee, within 30 days of its receipt of\nthe Option Notice, stating that the Optionee shall not sell his or her Option\nShares to such Offeror; and PROVIDED, FURTHER, that prior to the sale of such\nOption Shares to an Offeror, such Offeror shall execute an agreement with the\nCompany pursuant to which such Offeror agrees to be subject to the restrictions\nset forth in this Section 16. If any or all of such Option Shares are not sold\npursuant to an Offer within the time permitted above, the unsold Option Shares\nshall remain subject to the terms of this Section 16.\n\n            (c) FAILURE TO DELIVER OPTION SHARES. If the Optionee fails or\nrefuses to deliver on a timely basis duly endorsed certificates representing\nCompany Option Shares to be sold to the Company or its assignee pursuant to this\nSection 16, the Company shall have the right to deposit the purchase price for\nsuch Company Option Shares in a special account with any bank or trust company,\ngiving notice of such deposit to the Optionee, whereupon such Company Option\nShares shall be deemed to have been purchased by the Company. All such monies\nshall be held by the bank or trust company for the benefit of the Optionee. All\nmonies deposited with the bank or trust company but remaining unclaimed for two\nyears after the date of deposit shall be repaid by the bank or trust company to\nthe Company on demand, and the Optionee shall thereafter look only to the\nCompany for payment.\n\n\n\n                                      -9-\n\n\n            (d) EXPIRATION OF COMPANY'S RIGHT OF FIRST REFUSAL AND\nTRANSFER RESTRICTIONS. The first refusal rights of the Company (or any of its\nassignees) and the transfer restrictions set forth in Section 16(a)-(c) above\nshall remain in effect until the earlier to occur of a Public Offering or an\nOrganic Change.\n\n         17. LOCK-UP AGREEMENT. The Optionee agrees that in connection with any\nunderwritten public offering of Common Stock, upon the request of the Company or\nthe principal underwriter managing such public offering, the Option Shares may\nnot be sold, offered for sale or otherwise disposed of without the prior written\nconsent of the Company or such underwriter, as the case may be, for at least 180\ndays after the execution of an underwriting agreement in connection with such\noffering, or such longer period of time as the Board of Directors may determine\nif all of the Company's directors and executive officers agree to be similarly\nbound. The obligations under this Section 17 shall remain effective for all\nunderwritten public offerings with respect to which the Company has filed a\nregistration statement on or before the date two (2) years after the closing of\nthe Company's initial public offering; PROVIDED, HOWEVER, that this Section 17\nshall cease to apply to any Option Shares sold to the public pursuant to an\neffective registration statement or an exemption from the registration\nrequirements of the Securities Act in a transaction that complied with the terms\nof this Agreement.\n\n         18. ESCROW OF UNVESTED SHARES.\n\n            (a) If this option is exercised as to any Unvested Shares, such \nUnvested Shares shall be issued in the name of the Optionee, but shall be held\nin escrow by the Company, acting in the capacity of escrow agent, together with\na stock assignment executed by the Optionee with respect to such Unvested\nShares.\n\n            (b) With respect to any Unvested Shares held in escrow that become \nVested Shares, the Company shall promptly issue a new certificate for the number\nof shares that have become Vested Shares and shall deliver such certificate to\nthe Optionee and shall retain in escrow a new certificate for any remaining\nUnvested Shares in exchange for the all or the relevant portion of the\napplicable certificate then being held by the Company as escrow agent.\n\n            (c) Subject to the terms hereof, the Optionee shall have all the \nrights of a shareholder with respect to the Unvested Shares while they are held\nin escrow, including without limitation, the right to vote the Unvested Shares\nand receive any cash dividends declared thereon.\n\n            (d) The Company may terminate this escrow at any time. The Company \nmay also appoint another entity to serve as escrow agent hereunder, in which\nevent the Optionee agrees to execute all documents requested by the Company in\nconnection therewith.\n\n         19. PROVISION OF DOCUMENTATION TO OPTIONEE. By signing this Agreement\non the cover page hereto the Optionee acknowledges receipt of a copy of this\nAgreement and a copy of the Plan.\n\n\n                                      -10-\n\n\n         20.      MISCELLANEOUS.\n\n            (a) NOTICES. All notices hereunder shall be in writing and shall be \ndeemed given when sent by certified or registered mail, postage prepaid, return\nreceipt requested, if to the Optionee, to the address set forth below or at the\naddress shown on the records of the Company, and if to the Company, to the\nCompany's principal executive offices, attention of the Corporate Secretary.\n\n            (b) ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes the \nentire agreement between the parties relative to the subject matter hereof, and\nsupersedes all proposals, written or oral, and all other communications between\nthe parties relating to the subject matter of this Agreement. This Agreement may\nbe modified, amended or rescinded only by a written agreement executed by both\nparties.\n\n            (c) FRACTIONAL SHARES. If this option becomes exercisable for a \nfraction of a share because of the adjustment provisions contained in the Plan,\nsuch fraction shall be rounded down.\n\n            (d) ISSUANCES OF SECURITIES. Except as expressly provided herein or\nin the Plan, no issuance by the Company of shares of stock of any class, or\nsecurities convertible into shares of stock of any class, shall affect, and no\nadjustment by reason thereof shall be made with respect to, the number or price\nof shares subject to this option.\n\n            (e) ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. If there shall be\nany change in the Common Stock of the Company through merger, consolidation,\nreorganization, recapitalization, stock dividend, stock split, combination or\nexchange of shares, spin-off, split-up or other similar change in capitalization\nor event, the restrictions and other provisions contained in Section 3, Section\n6, Section 8, Section 16, Section 17 and Section 18 shall apply with equal force\nto additional and\/or substitute securities, if any, received by the Optionee in\nexchange for, or by virtue of his or her ownership of, Option Shares, except as\notherwise determined by the Board.\n\n            (f) SEVERABILITY. The invalidity, illegality or unenforceability of\nany provision of this Agreement shall in no way affect the validity, legality or\nenforceability of any other provision.\n\n            (g) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and\ninure to the benefit of the parties hereto and their respective successors and\nassigns, subject to the limitations set forth in Section 10 hereof.\n\n            (h) GOVERNING LAW. This Agreement shall be governed by and \ninterpreted in accordance with the laws of Delaware, without giving effect to\nthe principles of the conflicts of laws thereof.\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8659],"corporate_contracts_industries":[9510],"corporate_contracts_types":[9539,9544],"class_list":["post-40154","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-red-hat-inc","corporate_contracts_industries-technology__programming","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/40154","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=40154"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=40154"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=40154"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=40154"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}