EXHIBIT 99.2
INCENTIVE STOCK OPTION
____________________, Optionee:
SBE, Inc. (the "Company"), pursuant to its 1996 Stock Option Plan
(the "Plan"), has granted to you, the optionee named above, an option
to purchase shares of the common stock of the Company ("Common Stock").
This option is intended to qualify as an "incentive stock option"
within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
The grant hereunder is in connection with and in furtherance of
the Company's compensatory benefit plan for participation of the
Company's employees (including officers), directors or consultants.
The details of your option are as follows:
1. Total Number Of Shares Subject To This Option. The total
number of shares of Common Stock subject to this option is
____________________ (__________).
2. Vesting. Subject to the limitations contained herein,
__________ of the shares will vest (become exercisable) on
____________, 19__ and __________ of the shares will then vest each
____________ thereafter until either (i) you cease to provide services
to the Company for any reason, or (ii) this option becomes fully
vested.
3. Exercise Price And Method Of Payment.
(a) Exercise Price. The exercise price of this option is
___________________________ ($___________) per share, being not less
than the fair market value of the Common Stock on the date of grant of
this option.
(b) Method of Payment. Payment of the exercise price per
share is due in full upon exercise of all or any part of each
installment which has accrued to you. You may elect, to the extent
permitted by applicable statutes and regulations, to make payment of
the exercise price under one of the following alternatives:
(i) Payment of the exercise price per share in cash
(including check) at the time of exercise;
(ii) Payment pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which, prior
to the issuance of Common Stock, results in either the receipt of cash
(or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales
proceeds;
(iii) Provided that at the time of exercise the
Company's Common Stock is publicly traded and quoted regularly in the
Wall Street Journal, payment by delivery of already-owned shares of
Common Stock, held for the period required to avoid a charge to the
Company's reported earnings, and owned free and clear of any liens,
claims, encumbrances or security interests, which Common Stock shall be
valued at its fair market value on the date of exercise; or
(iv) Payment by a combination of the methods of
payment permitted by subparagraph 3(b)(i) through 3(b)(iii) above.
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4. Whole Shares; Minimum Shares Exercisable.
(a) This option may not be exercised for any number of
shares which would require the issuance of anything other than whole
shares.
(b) The minimum number of shares with respect to which
this option may be exercised at any one time is one hundred (100)
shares, except that (i) as to that number of shares to which it is
exercisable under the provisions of paragraph 2 of this option, if
fewer than one hundred (100) shares, the number of such shares
exercisable shall be the minimum number of shares that are vested
thereunder, and (ii) with respect to the final exercise of this option
this minimum shall not apply.
5. Securities Law Compliance. Notwithstanding anything to the
contrary contained herein, this option may not be exercised unless the
shares issuable upon exercise of this option are then registered under
the Act or, if such shares are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the
registration requirements of the Act.
6. Term. The term of this option commences on __________,
19__, the date of grant, and expires on ---___________________ (the
"Expiration Date," which date shall be no more than ten (10) years from
the date this option is granted), unless this option expires sooner as
set forth below or in the Plan. In no event may this option be
exercised on or after the Expiration Date. This option shall terminate
prior to the Expiration Date as follows: three (3) months after the
termination of your Continuous Status as an Employee, Director or
Consultant with the Company or an Affiliate of the Company unless one
of the following circumstances exists:
(a) Your termination of Continuous Status as an Employee,
Director or Consultant is due to your permanent and total disability
(within the meaning of Section 422(c)(6) of the Code). This option
will then expire on the earlier of the Expiration Date set forth above
or twelve (12) months following such termination of Continuous Status
as an Employee, Director or Consultant.
(b) Your termination of Continuous Status as an Employee,
Director or Consultant is due to your death or your death occurs within
three (3) months following your termination of Continuous Status as an
Employee, Director or Consultant for any other reason. This option
will then expire on the earlier of the Expiration Date set forth above
or eighteen (18) months after your death.
(c) If during any part of such three (3) month period you
may not exercise your option solely because of the condition set forth
in paragraph 5 above, then your option will not expire until the
earlier of the Expiration Date set forth above or until this option
shall have been exercisable for an aggregate period of three (3) months
after your termination of Continuous Status as an Employee, Director or
Consultant.
(d) If your exercise of the option within three (3)
months after termination of your Continuous Status as an Employee,
Director or Consultant with the Company or with an Affiliate of the
Company would result in liability under section 16(b) of the Securities
Exchange Act of 1934, then your option will expire on the earlier of
(i) the Expiration Date set forth above, (ii) the tenth (10th) day
after the last date upon which exercise would result in such liability
or (iii) six (6) months and ten (10) days after the termination of your
Continuous Status as an Employee, Director or Consultant with the
Company or an Affiliate of the Company.
However, this option may be exercised following termination of
Continuous Status as an Employee, Director or Consultant only as to
that number of shares as to which it was exercisable on the date of
termination of Continuous Status as an Employee, Director or Consultant
under the provisions of paragraph 2 of this option.
In order to obtain the federal income tax advantages associated
with an "incentive stock option," the Code requires that at all times
beginning on the date of grant of the option and ending on the day
three (3) months before the date of the option's exercise, you must be
an employee of the Company or an Affiliate of the Company, except in
the event of your death or permanent and total disability. The Company
has provided for continued vesting or extended exercisability of your
option under certain circumstances for your benefit, but cannot
guarantee that your option will necessarily be treated as an "incentive
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stock option" if you provide services to the Company or an Affiliate of
the Company as a consultant or exercise your option more than three (3)
months after the date your employment with the Company and all
Affiliates of the Company terminates.
7. Exercise.
(a) This option may be exercised, to the extent specified
above, by delivering a notice of exercise (in a form designated by the
Company) together with the exercise price to the Secretary of the
Company, or to such other person as the Company may designate, during
regular business hours, together with such additional documents as the
Company may then require pursuant to subsection 6(f) of the Plan.
(b) By exercising this option you agree that:
(i) as a precondition to the completion of any
exercise of this option, the Company may require you to enter an
arrangement providing for the payment by you to the Company of any tax
withholding obligation of the Company arising by reason of (1) the
exercise of this option; (2) the lapse of any substantial risk of
forfeiture to which the shares are subject at the time of exercise; or
(3) the disposition of shares acquired upon such exercise;
(ii) you will notify the Company in writing within
fifteen (15) days after the date of any disposition of any of the
shares of the Common Stock issued upon exercise of this option that
occurs within two (2) years after the date of this option grant or
within one (1) year after such shares of Common Stock are transferred
upon exercise of this option; and
8. Transferability. This option is not transferable, except
by will or by the laws of descent and distribution, and is exercisable
during your life only by you. Notwithstanding the foregoing, by
delivering written notice to the Company, in a form satisfactory to the
Company, you may designate a third party who, in the event of your
death, shall thereafter be entitled to exercise this option.
9. Option Not A Service Contract. This option is not an
employment contract and nothing in this option shall be deemed to
create in any way whatsoever any obligation on your part to continue in
the employ of the Company, or of the Company to continue your
employment with the Company. In addition, nothing in this option shall
obligate the Company or any Affiliate of the Company, or their
respective stockholders, Board of Directors, officers or employees to
continue any relationship which you might have as a Director or
Consultant for the Company or Affiliate of the Company.
10. Notices. Any notices provided for in this option or the
Plan shall be given in writing and shall be deemed effectively given
upon receipt or, in the case of notices delivered by the Company to
you, five (5) days after deposit in the United States mail, postage
prepaid, addressed to you at the address specified below or at such
other address as you hereafter designate by written notice to the
Company.
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11. Governing Plan Document. This option is subject to all the
provisions of the Plan, a copy of which is attached hereto and its
provisions are hereby made a part of this option, including without
limitation the provisions of Section 6 of the Plan relating to option
provisions, and is further subject to all interpretations, amendments,
rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the
provisions of this option and those of the Plan, the provisions of the
Plan shall control.
Dated the ____ day of __________________, 19__.
Very truly yours,
_______________________
By ____________________
Duly authorized
on behalf of the
Board of Directors
ATTACHMENTS:
SBE, Inc. 1996 Stock Option Plan
Notice of Exercise
21
The undersigned:
(a) Acknowledges receipt of the foregoing option and the
attachments referenced therein and understands that all rights and
liabilities with respect to this option are set forth in the option and
the Plan; and
(b) Acknowledges that as of the date of grant of this option,
it sets forth the entire understanding between the undersigned optionee
and the Company and its Affiliates regarding the acquisition of stock
in the Company and supersedes all prior oral and written agreements on
that subject with the exception of (i) the options previously granted
and delivered to the undersigned under stock option plans of the
Company, and (ii) the following agreements only:
NONE _____________________________
(Initial)
OTHER
_____________________________
_____________________________
(c) Acknowledges receipt of a copy of Section 260.141.11 of
Title 10 of the California Code of Regulations.
_______________________
OPTIONEE
Address:_______________________
_______________________
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NONSTATUTORY STOCK OPTION
____________________, Optionee:
SBE, Inc. (the "Company"), pursuant to its 1996 Stock Option Plan
(the "Plan"), has granted to you, the optionee named above, an option
to purchase shares of the common stock of the Company ("Common Stock").
This option is not intended to qualify and will not be treated as an
"incentive stock option" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
The grant hereunder is in connection with and in furtherance of
the Company's compensatory benefit plan for participation of the
Company's employees (including officers), directors or consultants.
The details of your option are as follows:
1. Total Number Of Shares Subject To This Option. The total
number of shares of Common Stock subject to this option is
_________________________ ( ).
2. Vesting. Subject to the limitations contained herein,
__________ of the shares will vest (become exercisable) on
____________, 19__ and __________ of the shares will then vest each
____________ thereafter until either (i) you cease to provide services
to the Company for any reason, or (ii) this option becomes fully
vested.
3. Exercise Price And Method Of Payment.
(a) Exercise Price. The exercise price of this option is
__________________________ ($_________) per share, being not less than
85% of the fair market value of the Common Stock on the date of grant
of this option.
(b) Method of Payment. Payment of the exercise price per
share is due in full upon exercise of all or any part of each
installment which has accrued to you. You may elect, to the extent
permitted by applicable statutes and regulations, to make payment of
the exercise price under one of the following alternatives:
(i) Payment of the exercise price per share in cash
(including check) at the time of exercise;
(ii) Payment pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which, prior
to the issuance of Common Stock, results in either the receipt of cash
(or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales
proceeds;
(iii) Provided that at the time of exercise the
Company's Common Stock is publicly traded and quoted regularly in the
Wall Street Journal, payment by delivery of already-owned shares of
Common Stock, held for the period required to avoid a charge to the
Company's reported earnings, and owned free and clear of any liens,
claims, encumbrances or security interests, which Common Stock shall be
valued at its fair market value on the date of exercise; or
(iv) Payment by a combination of the methods of
payment permitted by subparagraph 3(b)(i) through 3(b)(iii) above.
4. Whole Shares; Minimum Shares Exercisable.
(a) This option may not be exercised for any number of
shares which would require the issuance of anything other than whole
shares.
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(b) The minimum number of shares with respect to which
this option may be exercised at any one time is one hundred (100)
shares, except that (i) as to that number of shares to which it is
exercisable under the provisions of paragraph 2 of this option, if
fewer than one hundred (100) shares, the number of such shares
exercisable shall be the minimum number of shares that are vested
thereunder, and (ii) with respect to the final exercise of this option
this minimum shall not apply.
5. Securities Law Compliance. Notwithstanding anything to the
contrary contained herein, this option may not be exercised unless the
shares issuable upon exercise of this option are then registered under
the Act or, if such shares are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the
registration requirements of the Act.
6. Term. The term of this option commences on _________,
19__, the date of grant and expires on __________________ (the
"Expiration Date," which date shall be no more than ten (10) years from
the date this option is granted), unless this option expires sooner as
set forth below or in the Plan. In no event may this option be
exercised on or after the Expiration Date. This option shall terminate
prior to the Expiration Date as follows: three (3) months after the
termination of your Continuous Status as an Employee, Director or
Consultant with the Company or an Affiliate of the Company for any
reason or for no reason unless:
(a) such termination of Continuous Status as an Employee,
Director or Consultant is due to your permanent and total disability
(within the meaning of Section 422(c)(6) of the Code), in which event
the option shall expire on the earlier of the Expiration Date set forth
above or twelve (12) months following such termination of Continuous
Status as an Employee, Director or Consultant; or
(b) such termination of Continuous Status as an Employee,
Director or Consultant is due to your death or your death occurs within
three (3) months following your termination for any other reason, in
which event the option shall expire on the earlier of the Expiration
Date set forth above or eighteen (18) months after your death; or
(c) during any part of such three (3) month period the
option is not exercisable solely because of the condition set forth in
paragraph 5 above, in which event the option shall not expire until the
earlier of the Expiration Date set forth above or until it shall have
been exercisable for an aggregate period of three (3) months after the
termination of Continuous Status as an Employee, Director or
Consultant; or
(d) exercise of the option within three (3) months after
termination of your Continuous Status as an Employee, Director or
Consultant with the Company or with an Affiliate of the Company would
result in liability under section 16(b) of the Securities Exchange Act
of 1934 (the "Exchange Act), in which case the option will expire on
the earlier of (i) the Expiration Date set forth above, (ii) the tenth
(10th) day after the last date upon which exercise would result in such
liability or (iii) six (6) months and ten (10) days after the
termination of your Continuous Status as an Employee, Director or
Consultant with the Company or an Affiliate of the Company.
However, this option may be exercised following termination of
Continuous Status as an Employee, Director or Consultant only as to
that number of shares as to which it was exercisable on the date of
termination of Continuous Status as an Employee, Director or Consultant
under the provisions of paragraph 2 of this option.
7. Exercise.
(a) This option may be exercised, to the extent specified
above, by delivering a notice of exercise (in a form designated by the
Company) together with the exercise price to the Secretary of the
Company, or to such other person as the Company may designate, during
regular business hours, together with such additional documents as the
Company may then require pursuant to subsection 6(f) of the Plan.
24
(b) By exercising this option you agree that:
(i) as a precondition to the completion of any
exercise of this option, the Company may require you to enter an
arrangement providing for the cash payment by you to the Company of any
tax withholding obligation of the Company arising by reason of: (1) the
exercise of this option; (2) the lapse of any substantial risk of
forfeiture to which the shares are subject at the time of exercise; or
(3) the disposition of shares acquired upon such exercise. You also
agree that any exercise of this option has not been completed and that
the Company is under no obligation to issue any Common Stock to you
until such an arrangement is established or the Company's tax
withholding obligations are satisfied, as determined by the Company;
and
8. Transferability. This option is not transferable, except
by will or by the laws of descent and distribution, and is exercisable
during your life only by you or pursuant to a qualified domestic
relations order as satisfying the requirements of Rule 16b-3 of the
Exchange Act (a "QDRO"), and is exercisable during your life only by
you or a transferee pursuant to a QDRO. Notwithstanding the foregoing,
by delivering written notice to the Company, in a form satisfactory to
the Company, you may designate a third party who, in the event of your
death, shall thereafter be entitled to exercise this option.
9. Option Not A Service Contract. This option is not an
employment contract and nothing in this option shall be deemed to
create in any way whatsoever any obligation on your part to continue in
the employ of the Company, or of the Company to continue your
employment with the Company. In addition, nothing in this option shall
obligate the Company or any Affiliate of the Company, or their
respective stockholders, Board of Directors, officers, or employees to
continue any relationship which you might have as a Director or
Consultant for the Company or Affiliate of the Company.
10. Notices. Any notices provided for in this option or the
Plan shall be given in writing and shall be deemed effectively given
upon receipt or, in the case of notices delivered by the Company to
you, five (5) days after deposit in the United States mail, postage
prepaid, addressed to you at the address specified below or at such
other address as you hereafter designate by written notice to the
Company.
11. Governing Plan Document. This option is subject to all the
provisions of the Plan, a copy of which is attached hereto and its
provisions are hereby made a part of this option, including without
limitation the provisions of Section 6 of the Plan relating to option
provisions, and is further subject to all interpretations, amendments,
rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the
provisions of this option and those of the Plan, the provisions of the
Plan shall control.
Dated the ____ day of __________________, 19__.
Very truly yours,
_______________________
By ____________________
Duly authorized
on behalf of the
Board of Directors
ATTACHMENTS:
SBE, Inc. 1996 Stock Option Plan
Notice of Exercise
25
The undersigned:
(a) Acknowledges receipt of the foregoing option and the
attachments referenced therein and understands that all rights and
liabilities with respect to this option are set forth in the option and
the Plan; and
(b) Acknowledges that as of the date of grant of this
option, it sets forth the entire understanding between the undersigned
optionee and the Company and its Affiliates regarding the acquisition of
stock in the Company and supersedes all prior oral and written
agreements on that subject with the exception of (i) the options
previously granted and delivered to the undersigned under stock option
plans of the Company, and (ii) the following agreements only:
NONE ________________________
(Initial)
OTHER
________________________
________________________
(c) Acknowledges receipt of a copy of Section 260.141.11
of Title 10 of the California Code of Regulations.
_______________________
OPTIONEE
Address: _______________________
_______________________
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