EX-4.02 3 dex402.htm FORMS OF INCENTIVE STOCK OPTION AGREEMENT Forms of Incentive Stock Option Agreement

Exhibit 4.02

 

iMANAGE, INC.

 

STOCK OPTION GRANT AGREEMENT

 

«FirstName» «LastName» (the “Optionee”) has been granted an option (the “Option”) to purchase shares of the Common Stock of iManage, Inc. (the “Company”) pursuant to this Stock Option Grant Agreement, the Company’s Amended 1997 Stock Option Plan (the “Plan”) and a standard form of the Terms of Stock Option Agreement (the “Option Agreement”), the provisions of which are incorporated herein by reference. The following terms shall have their respective meanings as set forth below or in the Plan.

 

Date of Option Grant” means «OptionDate».

 

Number of Option Shares” means «SharesGranted» shares of Stock.

 

Exercise Price” means «OptionPrice» per share.

 

Tax Status of Option” Incentive Stock Option

 

Initial Vesting Date” means the date occurring one (1) year after «VestBaseDate».

 

Option Expiration Date” means the date ten (10) years after the Date of Option Grant.

 

Vested Ratio” means, on any relevant date, the ratio determined as follows:

 

Prior to Initial Vesting Date:

   0

On Initial Vesting Date, provided the Optionee’s Service has not

terminated prior to the Initial Vesting Date:

   1/4

For each full month of the Optionee’s Service from the Initial Vesting Date until

the Vested Ratio equals 1/1, an additional:

   1/48

 

The Optionee represents that he/she is familiar with the terms and provisions of the Option Agreement, and hereby accepts the Option subject to all of the terms and provisions thereof. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under the Option. The Optionee acknowledges receipt of a copy of the Plan.

 

OPTIONEE

   iMANAGE, INC
     

By:

    

   

«FirstName» «LastName»

  

Its:

 

General Counsel

Address:                                                                                                        

  

Address:    950 Tower Lane, Suite 500

          Foster City, CA 94404

 


   

Attachments: Amended 1997 Stock Option Plan

              Terms of Stock Option Agreement

        

 

 


iMANAGE, INC.

TERMS OF STOCK OPTION AGREEMENT

 

The Company has granted to the Optionee, pursuant to a Stock Option Grant Agreement (the “Grant Agreement”) and the Company’s Amended 1997 Stock Option Plan (the “Plan”), an Option to purchase certain shares of Stock, upon the terms and conditions set forth in this Agreement. The Option shall in all respects be subject to the terms and conditions of the Grant Agreement and the Plan, the provisions of which are incorporated herein by reference.

 

  1. DEFINITIONS AND CONSTRUCTION.

 

1.1 Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Agreement or the Plan.

 

1.2 Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

 

2. TAX CONSEQUENCES.

 

2.1 Tax Status of Option. As indicated in the Grant Agreement, this Option is intended to be either an Incentive Stock Option (“ISO”) within the meaning of Section 422(b) of the Code or a nonstatutory stock option, which is not intended to qualify as an ISO. The Optionee should consult with the Optionee’s own tax advisor regarding the tax effects of this Option (and any requirements necessary to obtain favorable income tax treatment under Section 422 of the Code, including, but not limited to, holding period requirements).

 

2.2 ISO Fair Market Value Limitation. If this Option is designated an ISO in the Grant Agreement, to the extent that the Option (together with all ISOs granted to the Optionee under all stock option plans of the Participating Company Group, including the Plan) becomes exercisable for the first time during any calendar year for shares having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portion of such options which exceeds such amount will be treated as Nonstatutory Stock Options. For purposes of this Section 2.2, options designated as ISOs are taken into account in the order in which they were granted, and the Fair Market Value of stock is determined as of the time the option with respect to such stock is granted. If the Code is amended to provide for a different limitation from that set forth in this Section 2.2, such different limitation shall be deemed incorporated herein effective as of the date required or permitted by such amendment to the Code. If the Option is treated as an ISO in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section 2.2, the Optionee may designate which portion of such Option the Optionee is exercising. In the absence of such designation, the Optionee shall be deemed to have exercised the ISO portion of the Option first. Separate certificates representing each such portion shall be issued upon the exercise of the Option. (NOTE: If the aggregate Exercise Price of the Option (that is, the Exercise Price multiplied by the Number of Option Shares) plus the aggregate

 

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exercise price of any other ISOs you hold (whether granted pursuant to the Plan or any other stock option plan of the Participating Company Group) is greater than $100,000, you should contact the Chief Financial Officer of the Company to ascertain whether the entire Option qualifies as an ISO.

 

3. EXERCISE OF THE OPTION.

 

3.1 Right to Exercise. Except as otherwise provided herein, the Option shall be exercisable on and after the Initial Vesting Date and prior to the termination of the Option (as provided in Section 5) in an amount not to exceed the Number of Option Shares multiplied by the Vested Ratio less the number of shares previously acquired upon exercise of the Option. In no event shall the Option be exercisable for more shares than the Number of Option Shares.

 

3.2 Method of Exercise. Exercise of the Option shall be by written notice to the Company which must state the election to exercise the Option, the number of whole shares of Stock for which the Option is being exercised and such other representations and agreements as to the Optionee’s investment intent with respect to such shares as may be required pursuant to the provisions of this Agreement. The written notice must be signed by the Optionee and must be delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by such other means as the Company may permit, to the Chief Financial Officer of the Company, or other authorized representative of the Participating Company Group, prior to the termination of the Option as set forth in Section 5, accompanied by full payment of the aggregate Exercise Price for the number of shares of Stock being purchased. The Option shall be deemed to be exercised upon receipt by the Company of such written notice and the aggregate Exercise Price.

 

3.3 Payment of Exercise Price.

 

(a) Forms of Consideration Authorized. Except as otherwise provided below, payment of the aggregate Exercise Price for the number of shares of Stock for which the Option is being exercised shall be made (i) in cash, by check, or cash equivalent, (ii) by tender to the Company, or attestation to the ownership, of whole shares of Stock owned by the Optionee having a Fair Market Value (as determined by the Company without regard to any restrictions on transferability applicable to such stock by reason of federal or state securities laws or agreements with an underwriter for the Company) not less than the aggregate Exercise Price, (iii) by means of a Cashless Exercise, as defined in Section 3.3(b), or (iv) by any combination of the foregoing.

 

(b) Limitations on Forms of Consideration.

 

(i) Tender of Stock. Notwithstanding the foregoing, the Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock to the extent such tender, or attestation to the ownership, of Stock would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. The Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Optionee for more than six (6) months or were not acquired, directly or indirectly, from the Company.

 

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(ii) Cashless Exercise. A Cashless Exercise means the assignment in a form acceptable to the Company of the proceeds of a sale or loan with respect to some or all of the shares of Stock acquired upon the exercise of the Option pursuant to a program or procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System). The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to decline to approve or terminate any such program or procedure. Generally, and without limiting the Company’s absolute discretion, a “cashless exercise” will only be permitted at such times in which the shares underlying this Option are publicly traded.

 

3.4 Tax Withholding. At the time the Option is exercised, in whole or in part, or at any time thereafter as requested by the Company, the Optionee hereby authorizes withholding from payroll and any other amounts payable to the Optionee, and otherwise agrees to make adequate provision for (including by means of a Cashless Exercise to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Participating Company Group, if any, which arise in connection with the Option, including, without limitation, obligations arising upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in whole or in part, of any shares acquired upon exercise of the Option, (iii) the operation of any law or regulation providing for the imputation of interest, or (iv) the lapsing of any restriction with respect to any shares acquired upon exercise of the Option. The Optionee is cautioned that the Option is not exercisable unless the tax withholding obligations of the Participating Company Group are satisfied. Accordingly, the Optionee may not be able to exercise the Option when desired even though the Option is vested, and the Company shall have no obligation to issue a certificate for such shares.

 

3.5 Certificate Registration. Except in the event the Exercise Price is paid by means of a Cashless Exercise, the certificate for the shares as to which the Option is exercised shall be registered in the name of the Optionee, if requested by the Optionee, in the name of the Optionee and his or her spouse, or, if applicable, the Optionee’s heirs.

 

3.6 Restrictions on Grant of the Option and Issuance of Shares. The grant of the Option and the issuance of shares of Stock upon exercise of the Option shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. The Option may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, the Option may not be exercised unless (i) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel

 

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to be necessary to the lawful issuance and sale of any shares subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of the Option, the Company may require the Optionee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

 

3.7 Fractional Shares. The Company shall not be required to issue fractional shares upon the exercise of the Option.

 

4. NONTRANSFERABILITY OF THE OPTION.

 

The Option may be exercised during the lifetime of the Optionee only by the Optionee or the Optionee’s guardian or legal representative and may not be assigned or transferred in any manner except by will or by the laws of descent and distribution. Following the death of the Optionee, the Option, to the extent provided in Section 6, may be exercised by the Optionee’s legal representative or by any person empowered to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution.

 

5. TERMINATION OF THE OPTION.

 

The Option shall terminate and may no longer be exercised on the first to occur of (a) the Option Expiration Date, (b) the last date for exercising the Option following termination of the Optionee’s Service as described in Section 6, or (c) pursuant to a Transfer of Control, to the extent provided in the Plan.

 

6. EFFECT OF TERMINATION OF SERVICE.

 

6.1 Option Exercisability.

 

(a) Disability. If the Optionee’s Service with the Participating Company Group is terminated because of the Disability of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee (or the Optionee’s guardian or legal representative) at any time prior to the expiration of six (6) months after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date. (NOTE: If the Option is designated as an ISO in the Grant Agreement and it is exercised more than three (3) months after the date on which the Optionee’s Service as an Employee terminated as a result of a Disability other than a permanent and total disability as defined in Section 22(e)(3) of the Code, the Option will be treated as a Nonstatutory Stock Option and not as an ISO.

 

(b) Death. If the Optionee’s Service with the Participating Company Group is terminated because of the death of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee’s legal representative or other person who acquired the right to exercise the Option by reason of the Optionee’s death at any time prior to the expiration of six (6) months after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration

 

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Date. The Optionee’s Service shall be deemed to have terminated on account of death if the Optionee dies within three (3) months after the Optionee’s termination of Service.

 

(c) Other Termination of Service. If the Optionee’s Service with the Participating Company Group terminates for any reason, except Disability or death, the Option, to the extent unexercised and exercisable by the Optionee on the date on which the Optionee’s Service terminated, may be exercised by the Optionee within thirty (30) days (or such other longer period of time as determined by the Board, in its sole discretion) after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date.

 

6.2 Extension if Exercise Prevented by Law. Notwithstanding the foregoing, if the exercise of the Option within the applicable time periods set forth in Section 6.1 is prevented by the provisions of Section 3.6, the Option shall remain exercisable until thirty (30) days after the date the Optionee is notified by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date.

 

6.3 Extension if Optionee Subject to Section 16(b). Notwithstanding the foregoing, if a sale within the applicable time periods set forth in Section 6.1 of shares acquired upon the exercise of the Option would subject the Optionee to suit under Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the Optionee would no longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day after the Optionee’s termination of Service, or (iii) the Option Expiration Date.

 

7. RIGHTS AS A STOCKHOLDER, EMPLOYEE OR CONSULTANT.

 

The Optionee shall have no rights as a stockholder with respect to any shares covered by the Option until the date of the issuance of a certificate for the shares for which the Option has been exercised (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 4.2 of the Plan. If the Optionee is an Employee, the Optionee understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Optionee, the Optionee’s employment is “at will” and is for no specified term. Nothing in this Agreement shall confer upon the Optionee any right to continue in the Service of a Participating Company or interfere in any way with any right of the Participating Company Group to terminate the Optionee’s Service as an Employee or Consultant, as the case may be, at any time.

 

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8. NOTICE OF SALES UPON DISQUALIFYING DISPOSITION.

 

The Optionee shall dispose of the shares acquired pursuant to the Option only in accordance with the provisions of this Agreement. In addition, if the Option is designated as an ISO in the Grant Agreement, the Optionee shall promptly notify the Chief Financial Officer of the Company if the Optionee disposes of any of the shares acquired pursuant to the Option within one (1) year after the date of the Optionee exercises all or part of the Option or within two (2) years after the Date of Grant. Until such time as the Optionee disposes of such shares in a manner consistent with the provisions of this Agreement, unless otherwise expressly authorized by the Company, the Optionee shall hold all shares acquired pursuant to the Option in the Optionee’s name (and not in the name of any nominee) for the one-year period immediately after the exercise of the Option and the two-year period immediately after Date of Grant. At any time during the one-year or two-year periods set forth above, the Company may place a legend on any certificate representing shares acquired pursuant to the Option requesting the transfer agent for the Company’s stock to notify the Company of any such transfers. The obligation of the Optionee to notify the Company of any such transfer shall continue notwithstanding that a legend has been placed on the certificate pursuant to the preceding sentence.

 

9. LEGENDS.

 

The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions, and, if applicable, that the Option is an ISO, on all certificates representing shares of stock subject to the provisions of this Agreement. The Optionee shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to the Option in the possession of the Optionee in order to carry out the provisions of this Section.

 

10. RESTRICTIONS ON TRANSFER OF SHARES.

 

No shares acquired upon exercise of the Option may be sold, exchanged, transferred (including, without limitation, any transfer to a nominee or agent of the Optionee), assigned, pledged, hypothecated or otherwise disposed of, including by operation of law, in any manner which violates any of the provisions of this Agreement, and any such attempted disposition shall be void. The Company shall not be required (a) to transfer on its books any shares which will have been transferred in violation of any of the provisions set forth in this Option Agreement or (b) to treat as owner of such shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares will have been so transferred.

 

11. BINDING EFFECT.

 

Subject to the restrictions on transfer set forth herein, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns.

 

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12. TERMINATION OR AMENDMENT.

 

The Board may terminate or amend the Plan or the Option at any time; provided, however, that except in connection with a Transfer of Control, no such termination or amendment may adversely affect the Option or any unexercised portion hereof without the consent of the Optionee unless such termination or amendment is necessary to comply with any applicable law or government regulation or is required to enable an Option designated as an ISO to qualify as an ISO. No amendment or addition to this Agreement shall be effective unless in writing.

 

13. NOTICES.

 

Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Option Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail, with postage and fees prepaid, addressed to the other party at the address shown on the Grant Agreement or at such other address as such party may designate in writing from time to time to the other party.

 

14. INTEGRATED AGREEMENT.

 

The Grant Agreement, this Agreement and the Plan constitute the entire understanding and agreement of the Optionee and the Participating Company Group with respect to the subject matter contained herein and therein and there are no agreements, understandings, restrictions, representations, or warranties among the Optionee and the Participating Company Group with respect to such subject matter other than those as set forth or provided for herein or therein. To the extent contemplated herein or therein, the provisions of the Grant Agreement and this Agreement shall survive any exercise of the Option and shall remain in full force and effect.

 

15. APPLICABLE LAW.

 

This Agreement shall be governed by the laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within the State of California.

 

 

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Optionee:                             

 

Date:                                     

 

EXERCISE NOTICE

[Public Company/Registered Shares]

 

iManage, Inc.

2121 South El Camino Real, Suite 400

San Mateo, CA 94403

Attention: Chief Financial Officer

 

Ladies and Gentlemen:

 

1. Option. I was granted an option (Option) to purchase shares of the common stock of iManage, Inc. (Company) pursuant to the Company’s Amended 1997 Stock Option Plan (the “Plan”), and a Stock Option Grant Agreement and related Terms of Stock Option Agreement (collectively, the “Option Agreement”) as follows:

 

Grant Number:                                                                                                              
Date of Option Grant:                                                                                                              
Number of Option Shares:                                                                                                              
Exercise Price per Share:   $                                                                                                        

 

2. Exercise of Option. I hereby elect to exercise the Option to purchase              shares of the Company’s Common Stock (the “Shares”), all of which have vested in accordance with the Option Agreement.

 

3. Payment. I enclose payment in full or have made arrangements for payment from the sales proceeds of the Shares of the total exercise price for the Shares in the following form(s), as authorized by my Option Agreement:

 

 

Cash:

  $                                                                                              

 

Check:

  $                                                                                              

 

Tender of Company shares:

  $                                                                                              

 

Cashless exercise (same-day-sale):

  $                                                                                              

 

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4. Tax Withholding. I authorize payroll withholding and otherwise will make adequate provision for federal, state, local and foreign tax withholding obligations of the Company, if any, in connection with my exercise of the Option and my subsequent disposition of the Shares.

 

5. Notice of Disqualifying Disposition. I agree that, if the Option is designated anISO, I will promptly notify the Chief Financial Officer of the Company if I transfer any of the Shares within one (1) year from the date I exercise all or part of the Option or within two (2) years of the Date of Option Grant.

 

  6. Optionee Information.

 

My address is:
                                                                                                                                                                               
                                                                                                                                                                               
My Social Security Number is:                                                                                                                  

 

I understand that I am purchasing the Shares pursuant to the terms of the Plan and my Option Agreement, copies of which I have received and carefully read and understand.

 

Very truly yours,
 

 

 

Receipt of the above is hereby acknowledged.

 

iMANAGE, INC.

By:

   
 

Title:

   
 

Dated:

   
 

 

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iMANAGE, INC.

 

STOCK OPTION GRANT AGREEMENT

 

«FirstName» «LastName» (the “Optionee”) has been granted an option (the “Option”) to purchase shares of the Common Stock of iManage, Inc. (the “Company”) pursuant to this Stock Option Grant Agreement, the Company’s Amended 1997 Stock Option Plan (the “Plan”) and a standard form of the Terms of Stock Option Agreement (the “Option Agreement”), the provisions of which are incorporated herein by reference. The following terms shall have their respective meanings as set forth below or in the Plan.

 

Date of Option Grant” means «OptionDate».

 

Number of Option Shares” means «SharesGranted» shares of Stock.

 

Exercise Price” means «OptionPrice» per share.

 

Tax Status of Option” Incentive Stock Option

 

Initial Vesting Date” means the date occurring one (1) year after «VestBaseDate».

 

Option Expiration Date” means the date ten (10) years after the Date of Option Grant.

 

Vested Ratio” means, on any relevant date, the ratio determined as follows:

 

Prior to Initial Vesting Date:

   0
On Initial Vesting Date, provided the Optionee’s Service has not terminated prior to the Initial Vesting Date:    1/4
For each full month of the Optionee’s Service from the Initial Vesting Date until the Vested Ratio equals 1/1, an additional:    1/48

 

The Optionee represents that he/she is familiar with the terms and provisions of the Option Agreement, and hereby accepts the Option subject to all of the terms and provisions thereof. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under the Option. The Optionee acknowledges receipt of a copy of the Plan.

 

OPTIONEE       iMANAGE, INC.
By:           By:    
 
       
   

«FirstName» «LastName»

           
           

Its:

 

General Counsel

             
                 

Address:

 

 


     

Address:

 

950 Tower Lane, Suite 500

Foster City, CA 94404


           
Attachments:  

Amended 1997 Stock Option Plan

Terms of Stock Option Agreement

           


THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

 

THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

iMANAGE, INC.

1997 STOCK OPTION PLAN

INLAND REVENUE APPROVED RULES FOR UK EMPLOYEES

(“THE SUB-PLAN”)

NONSTATUTORY STOCK OPTION AGREEMENT

 

THIS NONSTATUTORY STOCK OPTION AGREEMENT (the “Option Agreement”) is made and entered into as of «Date_of_Grant», by and between iManage, Inc. and «Optionee» (the “Optionee”).

 

The Company has granted to the Optionee an option to purchase certain shares of Stock, upon the terms and conditions set forth in this Option Agreement (the “Option”). The Option shall in all respects be subject to the terms and conditions of the iManage, Inc. 1997 Stock Option Plan—Inland Revenue Approved Rules for UK Employees (the “Sub-Plan”), the provisions of which are- incorporated herein by reference.

 

1. DEFINITIONS AND CONSTRUCTION.

 

1.1 Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Sub-Plan. Whenever used herein, the following terms shall have their respective meanings set forth below:

 

(a) “Date of Option Grant” means «Date of Grant».

 

(b) “Number of Option Shares” means «No of_Shares» shares of Stock, as adjusted from time to time pursuant to Section 9.

 

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(c) “Exercise Price” means $«Share Price» per share of Stock, as adjusted from time to time pursuant to Section 9.

 

(d) “Initial Exercise Date” means the Initial Vesting Date.

 

(e) “Initial Vesting Date” means the date occurring one (1) year after (check one):

 

X the Date of Option Grant.

 

(f) “Vested Ratio” means, on any relevant date, except as otherwise provided herein, the ratio determined as follows:

 

     Vested Ratio

Prior to Initial Vesting Date

   0

On Initial Vesting Date, provided the Optionee’s Service has not terminated prior to such date

   1/4

Plus

    
For each full month of the Optionee’s continuous Service from the Initial Vesting Date until the Vested Ratio equals 1/1, an additional    1/48

 

(g) “Option Expiration Date” means the date ten (10) years after the Date of Option Grant.

 

(h) “Company” means iManage, Inc., a Delaware corporation, or any successor corporation thereto.

 

(i) “Service” means the Optionee’s employment with the Participating Company Group, whether in the capacity of an Employee or a Director: The Optionee’s Service shall not be deemed to have terminated merely because of a change in the Participating Company for which the Optionee renders such Service, provided that there is no interruption or termination of the Optionee’s Service. Furthermore, the Optionee’s Service with the Participating Company Group shall not be deemed to have terminated if the Optionee takes any military leave, sick leave, or other bona fide leave of absence approved by the Company; provided, however, that if any such leave exceeds ninety (90) days, on the ninety-first (91st) day of such leave the Optionee’s Service shall be deemed to have terminated unless the Optionee’s right to return to Service with the Participating Company Group is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, a leave of absence shall not be treated as Service for purposes of determining the Optionee’s Vested Ratio. The Optionee’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the corporation for which the Optionee performs Service ceasing to be a Participating Company. Subject to

 

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the foregoing, the Company, in its sole discretion, shall determine whether the Optionee’s Service has terminated and the effective date of such termination.

 

1.2 Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Option Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

 

2. TAX STATUS OF OPTION.

 

2.1 Classification. This Option is intended to be a Nonstatutory Stock Option and shall not be treated as an Incentive Stock Option within the meaning of Section 422(b) of the Code.

 

2.2 UK Tax Consequences. Set forth below is a brief summary as of the date the Board adopted the Sub-Plan of some of the tax consequences of exercise of this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

 

(a) Exercise of Stock Option. No income tax will be payable when you exercise the Option provided that the Sub-Plan is still approved by the Inland Revenue and:

 

• at least three years, and no more than ten years have elapsed from the Date of Grant, and

 

• more than three years have elapsed since the date on which you last exercised an option obtained under an approved share option scheme (except a savings related scheme) for which income tax relief was given.

 

An exercise outside of the above parameters will give rise to taxable income equal to the excess, if any, of the Fair Market Value of the shares on the date of exercise over the Exercise Price. As the grant of the Option is under an Inland Revenue Approved plan, this will be collected via your tax return rather than the PAYE system.

 

(b) Disposition of Shares. On the disposition of the shares following exercise in an approved manner, capital gains tax will be payable on the difference between the value realised on disposal and the exercise price.

 

3. ADMINISTRATION.

 

All questions of interpretation concerning this Option Agreement shall be determined by the Board, including any duly appointed Committee of the Board. All determinations by the Board shall be final and binding upon all persons having an interest

 

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in the Option. Any officer of a Participating Company shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the officer has apparent authority with respect to such matter, right, obligation, or election.

 

4. EXERCISE OF THE OPTION.

 

4.1 Right to Exercise. Except as otherwise provided herein, the Option shall be exercisable on and after the Initial Exercise Date and prior to the termination of the Option (as provided in Section 6) in an amount not to exceed the Number of Option Shares multiplied by the Vested Ratio less the number of shares previously acquired upon exercise of the Option.

 

4.2 Method of Exercise. Exercise of the Option shall be by written notice to the Company which must state the election to exercise the Option, the number of whole shares of Stock for which the Option is being exercised and such other representations and agreements as to the Optionee’s investment intent with respect to such shares as may be required pursuant to the provisions of this Option Agreement. The written notice must be signed by the Optionee and must be delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by such other means as the Company may permit, to the Chief Financial Officer of the Company, or other authorized representative of the Participating Company Group, prior to the termination of the Option as set forth in Section 6, accompanied by (i) full payment of the aggregate Exercise Price for the number of shares of Stock being purchased and (ii) an executed copy, if required herein, of the then current forms of escrow and security agreement referenced below. The Option shall be deemed to be exercised upon receipt by the Company of such written notice, the aggregate Exercise Price, and, if required by the Company, such executed agreements.

 

4.3 Payment of Exercise Price.

 

(a) Forms of Consideration Authorized. Except as otherwise provided below, payment of the aggregate Exercise Price for the number of shares _of Stock for which the Option is being exercised shall be made in cash or by check.

 

4.4 Tax Withholding. At the time the Option is exercised, in whole or in part, or at any time thereafter as requested by the Company, the Optionee hereby authorizes withholding from payroll and any other amounts payable to the Optionee, and otherwise agrees to make adequate provision for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Participating Company Group, if any, which arise in connection with the Option, including, without limitation, obligations arising upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in whole or in part, of any shares acquired upon exercise of the Option, (iii) the operation of any law or regulation providing for the imputation of interest, or (iv) the lapsing of any restriction with respect to any shares acquired upon exercise of the Option. The Optionee is cautioned that the Option is not exercisable unless the tax withholding obligations of the Participating Company Group are satisfied. Accordingly, the Optionee may not be

 

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able to exercise the Option when desired even though the Option is vested, and the Company shall have no obligation to issue a certificate for such shares or release such shares from any escrow provided for herein.

 

4.5 Certificate Registration. The certificate for the shares as to which the Option is exercised shall be registered in the name of the Optionee.

 

4.6 Restrictions on Grant of the Option and Issuance of Shares. The grant of the Option and the issuance of shares of Stock upon exercise of the Option shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. The Option may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, the Option may not be exercised unless (i) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of the Option, the Company may require the Optionee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

 

4.7 Fractional Shares. The Company shall not be required to issue fractional shares upon the exercise of the Option.

 

5. NONTRANSFERABILITY OF THE OPTION.

 

The Option may be exercised during the lifetime of the Optionee only by the Optionee or the Optionee’s guardian or legal representative and may not be assigned or transferred in any manner. Following the death of the Optionee, the Option, to the extent provided in Section 7, may be exercised by the Optionee’s personal representative.

 

6. TERMINATION OF THE OPTION.

 

The Option shall terminate and may no longer be exercised on the first to occur of (a) the Option Expiration Date, (b) the last date for exercising the Option following

 

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termination of the Optionee’s Service as described in Section 7, or (c) a Change of Control to the extent provided in Section 8.

 

7. EFFECT OF TERMINATION OF SERVICE.

 

7.1 Option Exercisability.

 

(a) Disability. If the Optionee’s Service with the Participating Company Group is terminated because of the Disability of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee (or the Optionee’s guardian or legal representative) at any time prior to the expiration of six (6) months after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date.

 

(b) Death. If the Optionee’s Service with the Participating Company Group is terminated because of the death of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee’s legal representative at any time prior to the expiration of six (6) months after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date. The Optionee’s Service shall be deemed to have terminated on account of death if the Optionee dies within three (3) months after the Optionee’s termination of Service.

 

(c) Other Termination of Service. If the Optionee’s Service with the Participating Company Group terminates for any reason, except for Disability or death, the Option, to the extent unexercised and exercisable by the Optionee on the date on which the Optionee’s Service terminated, may be exercised by the Optionee within thirty (30) days after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date.

 

7.2 Extension if Exercise Prevented by Law. Notwithstanding the foregoing, if the exercise of the Option within the applicable time periods set forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option shall remain exercisable until thirty (30) days after the date the Optionee is notified by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date.

 

7.3 Extension if Optionee Subject to Section 16(b). Notwithstanding the foregoing, if a sale within the applicable time periods set forth in Section 7.1 of shares acquired upon the exercise of the Option would subject the Optionee to suit under Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the Optionee would no longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day after the Optionee’s termination of Service, or (iii) the Option Expiration Date.

 

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8. CHANGE OF CONTROL.

 

8.1 Exchange of Options. If a company (“Acquiring Company”) obtains control of the Company as a result of making:

 

(a) a general offer to acquire the whole of the issued ordinary share capital of the Company which is made on a condition such that if it is satisfied the person making the offer will have control of the Company; or

 

(b) a general offer to acquire all the shares in the Company of the same class as the Stock;

 

an Optionee may, at any time during the period set out in section 8.2 below, by agreement with the Acquiring Company, release his Option in whole or in part in consideration of the grant to him of a new option (“New Option”) which is equivalent to the Option but which relates to shares (“New Shares”) in:

 

(c) the Acquiring Company;

 

(d) a company which has Control of the Acquiring Company; or

 

(e) a company which either is, or has Control of, a company which is a member of a consortium which owns either the Acquiring Company or a company having Control of the Acquiring Company.

 

8.2 Period Allowed for Exchange of Options. The period referred to in 8.1 above is the period of six months beginning with the time when the person making the offer has obtained Control of the Company and any condition subject to which the offer is made has been satisfied.

 

8.3 Meaning of (“equivalent”). The New Option shall not be regarded for the purposes of this section 8 as equivalent to the Option unless:

 

(a) the New Shares satisfy the conditions in paragraphs 10—14 of Schedule 9 to ICTA 1988; and

 

(b) save for any performance target or other condition imposed on the exercise of the Option, the New Option will be exercisable in the same manner as the Option and subject to the provisions of the Sub-Plan as it had effect immediately before the release of the Option; and

 

(c) the total market value, immediately before the release of the Option, of the Stock which was subject to the Option is as nearly as may be equal to the total market value, immediately after the grant of the New Option, of the New Shares (market value being determined for this purpose in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992); and

 

(d) the total amount payable by the Optionee for the acquisition of the New Shares under the New Option is as nearly as may be equal to the total amount that

 

7


would have been payable by the Optionee for the acquisition of the Stock under the Option.

 

8.4 Date of Grant of New Option. The date of grant of the New Option shall be deemed to be the same as the Date of Grant of the Option.

 

8.5 Lapse of Option. To the extent that an Option is not exchanged under this section 8, they shall lapse at the end of the period specified at 8.2 above.

 

9. ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

 

In the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification, or similar change in the capital structure of the Company, appropriate adjustments shall be made in the number, Exercise Price and class of shares of stock subject to the Option. Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant to this Section 9 shall be rounded up or down to the nearest whole number, as determined by the Board, and in no event may the Exercise Price be decreased to an amount less than the par value, if any, of the stock subject to the Option. The adjustments determined by the Board pursuant to this Section 9 shall be final, binding and conclusive.

 

10. RIGHTS AS A STOCKHOLDER, EMPLOYEE.

 

The Optionee shall have no rights as a stockholder with respect to any shares covered by the Option until the date of the issuance of a certificate for the shares for which the Option has been exercised (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 9. If the Optionee is an Employee, the Optionee understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Optionee, the Optionee’s employment is “at will” and is for no specified term. Nothing in this Option Agreement shall confer upon the Optionee any right to continue in the Service of a Participating Company or interfere in any way with any right of the Participating Company Group to terminate the Optionee’s Service as an Employee, at any time.

 

11. STOCK DISTRIBUTIONS SUBJECT TO OPTION AGREEMENT.

 

If, from time to time, there is any stock dividend, stock split or other change, as described in Section 9, in the character or amount of any of the outstanding stock of the corporation the stock of which is subject to the provisions of this Option Agreement, then in such event any and all new, substituted or additional securities to which the Optionee is entitled by reason of the Optionee’s ownership of the shares acquired upon exercise of the Option shall be immediately subject to any security interest- held by the Company with the same force and effect as the shares subject to the Right of First Refusal and such security interest immediately before such event.

 

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12. LEGENDS.

 

The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of stock subject to the provisions of this Option Agreement. The Optionee shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to the Option in the possession of the Optionee in order to carry out the provisions of this Section. Unless otherwise specified by the Company, legends placed on such certificates may include, but shall not be limited to, the following:

 

12.1 “THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 OR RULE 701 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.”

 

12.2 Any legend required to be placed thereon by the Commissioner of Corporations of the State of California.

 

13. PUBLIC OFFERING.

 

The Optionee hereby agrees that in the event of any underwritten public offering of stock, including an initial public offering of stock, made by the Company pursuant to an effective registration statement filed under the Securities Act, the Optionee shall not offer, sell, contract to sell, pledge, hypothecate, grant any option to purchase or make any short sale of, or otherwise dispose of any shares of stock of the Company or any rights to acquire stock of the Company for such period of time from and after the effective date of such registration statement as may be established by the underwriter for such initial public offering; provided, however, that such period of time shall not exceed one hundred eighty (180) days from the effective date of the registration statement to be filed in connection with such public offering. The foregoing limitation shall not apply to shares registered in the public offering under the Securities Act. The Optionee shall be subject to this Section provided and only if the officers and directors of the Company are also subject to similar arrangements.

 

14. BINDING EFFECT.

 

Subject to the restrictions on transfer set forth herein, this Option Agreement shall inure to the benefit of and be binding upon the parties hereto and their personal representatives.

 

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15. TERMINATION OR AMENDMENT.

 

The Board may terminate or amend the Sub-Plan or the Option at any time; provided, however, that except as provided in Section 8 in connection with a Transfer of Control, no such termination or amendment may adversely affect the Option or any unexercised portion hereof without the consent of the Optionee unless such termination or amendment is necessary to comply with any applicable law or government regulation. No amendment or addition to this Option Agreement shall be effective unless in writing.

 

16. NOTICES.

 

Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Option Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail, with postage and fees prepaid, addressed to the other party at the address shown below that party’s signature or at such other address as such party may designate in writing from time to time to the other party.

 

17. INTEGRATED AGREEMENT.

 

This Option Agreement and the Sub-Plan constitute the entire understanding and agreement of the Optionee and the Participating Company Group with respect to the subject matter contained herein or therein, and there are no agreements, understandings, restrictions, representations, or warranties among the Optionee and the Participating Company Group with respect to such subject matter other than those as set forth or provided for herein or therein. To the extent contemplated herein or therein, the provisions of this Option Agreement shall survive any exercise of the Option and shall remain in full force and effect.

 

18. APPLICABLE LAW.

 

This Option Agreement shall be governed by the laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within the State of California.

 

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iMANAGE, INC.

By:    
 

Title:

   
 

Address:

 

2121 South El Camino Real

Suite 400

San Mateo, CA 94403

 

The Optionee represents that the Optionee is familiar with the terms and provisions of this Option Agreement, and hereby accepts the Option subject to all of the terms and provisions thereof. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under this Option Agreement. The undersigned acknowledges receipt of a copy of the Plan.

 

       

OPTIONEE

Date:

 

 


     

 


           

«Optionee»

 

Optionee Address:

           

 


           

 


 

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Optionee:

 

                «Optionee»


           

Date:

 

 


 

NONSTATUTORY STOCK OPTION

 

EXERCISE NOTICE

 

iManage, Inc.

2121 South El Camino Real

Suite 400

San Mateo, CA 94403

 

Attention: Chief Financial Officer

 

Ladies and Gentlemen:

 

1. Exercise of Option. I was granted a nonstatutory stock option (the “Option”) to purchase shares of the common stock of iManage, Inc. (the “Company”) on «Date_of_Grant», pursuant to the Company’s 1997 Stock Option Plan (the “Plan”) – Inland Revenue Approved Rules for UK Employees (the “Sub-Plan”) and pursuant to the Nonstatutory Stock Option Agreement dated                                     ,          (the “Option Agreement”). I hereby elect to exercise the Option as to a total of                                      shares of the common stock of the Company (the “Shares”), all of which have vested in accordance with the Option Agreement.

 

2. Payments. Enclosed herewith is full payment in the aggregate amount of $                                 (representing $«Share_Price» per share) for the Shares in the manner set forth in the Option Agreement. I authorize payroll withholding and otherwise will make adequate provision for foreign, federal state and local tax withholding obligations of the Company, if any.

 

3. Binding Effect. I agree that the Shares are being acquired in accordance with and subject to the terms, provisions and conditions of the Option Agreement, set forth therein, to all of which I hereby expressly assent. This Agreement shall inure to the benefit of and be binding upon my personal representatives.

 

4. Transfer. I am aware that Rule 144, promulgated under the Securities Act, which permits limited public resale of securities acquired in a nonpublic offering, is not currently available with respect to the Shares and, in any event, is available only if certain conditions are satisfied. I understand that any sale of the Shares that might be made in reliance upon Rule 144 may only be made in limited amounts in accordance with the terms and conditions of such rule and that a copy of Rule 144 will be delivered to me upon request.

 

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My address of record is:

 


 


 

My National Insurance Number is:

  

 

I understand that I am purchasing the Shares pursuant to the terms of the iManage, Inc. 1997 Stock Option Plan – Inland Revenue Approved Rules for UK Employees and my Option Agreement, copies of which I have received and carefully read and understand.

 

Very truly yours,

 

 


«Optionee»

 

Receipt of the above is hereby acknowledged.

 

iMANAGE, INC.

By:    
 

 

Title:

   
 

 

Dated:

   
 

 

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