Exhibit 10.5
INCENTIVE STOCK OPTION
_______________________________, Optionee:
Xxxxxx-Xxxx, 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 and is intended to comply with the provisions of Rule
701 promulgated by the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Act"). Defined
terms not explicitly defined in this agreement but defined in the
Plan shall have the same definitions as in the Plan.
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. The date that vesting begins on this option
is _________________. Subject to the limitations contained
herein, 12/48ths of the shares vest (become exercisable) on the
one-year anniversary of the date vesting begins and 1/48th of the
shares will then vest on each successive one-month anniversary
date 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.
4. WHOLE SHARES. This option may not be exercised for any
number of shares which would require the issuance of anything
other than whole shares.
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 disability. 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. You
should be aware that if your disability is not considered a
permanent and total disability within the meaning of Section
422(c)(6) of the Code, and you exercise this option more than
three (3) months following the date of your termination of
employment, your exercise will be treated for tax purposes as the
exercise of a "nonstatutory stock option" instead of an
"incentive stock option."
(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 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
(iii) the Company (or a representative of the
underwriters) may, in connection with the first underwritten
registration of the offering of any securities of the Company
under the Act, require that you not sell or otherwise transfer or
dispose of any shares of Common Stock or other securities of the
Company during such period (not to exceed one hundred eighty
(180) days) following the effective date (the "Effective Date")
of the registration statement of the Company filed under the Act
as may be requested by the Company or the representative of the
underwriters. You further agree that the Company may impose
stop-transfer instructions with respect to securities subject to
the foregoing restrictions until the end of such period.
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.
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,
Xxxxxx-Xxxx, Inc.
By
Xxxx authorized on behalf of
the Board of Directors
ATTACHMENTS:
Xxxxxx-Xxxx, Inc. 1996 Stock Option Plan
Notice of Exercise
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 __________________________________
__________________________________
__________________________________
____________________________
OPTIONEE
Address:______________________
______________________
NONSTATUTORY STOCK OPTION
_____________________, Optionee:
Xxxxxx-Xxxx, 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 and is intended to comply with the provisions of Rule
701 promulgated by the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Act"). Defined
terms not explicitly defined in this agreement but defined in the
Plan shall have the same definitions as in the Plan.
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. The date that vesting begins on this option
is _________________. Subject to the limitations contained
herein, 12/48ths of the shares vest (become exercisable) on the
one-year anniversary of the date vesting begins and 1/48th of the
shares will then vest on each successive one-month anniversary
date 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. This option may not be exercised for any
number of shares which would require the issuance of anything
other than whole shares.
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 disability, 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.
(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
(ii) the Company (or a representative of the
underwriters) may, in connection with the first underwritten
registration of the offering of any securities of the Company
under the Act, require that you not sell or otherwise transfer or
dispose of any shares of Common Stock or other securities of the
Company during such period (not to exceed one hundred eighty
(180) days) following the effective date (the "Effective Date")
of the registration statement of the Company filed under the Act
as may be requested by the Company or the representative of the
underwriters. You further agree that the Company may impose
stop-transfer instructions with respect to securities subject to
the foregoing restrictions until the end of such period.
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.
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,
Xxxxxx-Xxxx, Inc.
By
Xxxx authorized on behalf
of the Board of Directors
ATTACHMENTS:
Xxxxxx-Xxxx, Inc. 1996 Stock Option Plan
Notice of Exercise
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 _______________________________
_______________________________
_______________________________
_____________________________
OPTIONEE
Address:_____________________
_____________________
