LANDBANK GROUP, INC.
2006 STOCK INCENTIVE PLAN
STOCK OPTION EXERCISE AGREEMENT
This Stock Option Exercise Agreement (the "Exercise Agreement") is made and
entered into as of , 2006 (the "Effective Date") by and between Landbank Group,
Inc., a Delaware corporation (the "Company"), and the purchaser named below (the
"Purchaser"). Capitalized terms not defined herein shall have the meanings
ascribed to them in the Landbank's 2006 Stock Incentive Plan (the "Plan") or the
Stock Option Agreement.
Participant: ___________________________________
Social Security Number: ___________________________________
Address: ___________________________________
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Option Shares Being Purchased: ___________________________________
Exercise Price Per Share: ___________________________________
Date of Grant: ___________________________________
Expiration Date: ___________________________________
Type of Stock Option: [ ] Incentive Stock Option
[X] Nonqualified Stock Option
1. Exercise of Option.
1.1. Exercise. Pursuant to exercise of that certain option (the
"Option") granted to Purchaser under the Plan and the Stock Option Agreement and
subject to the terms and conditions of this Exercise Agreement, Purchaser hereby
purchases from the Company, and the Company hereby sells to Purchaser, the Total
Number of Shares set forth above (the "Shares") of the Company's Common Stock at
the Exercise Price Per Share set forth above (the "Exercise Price"). As used in
this Exercise Agreement, the term "Shares" refers to the Shares purchased under
this Exercise Agreement and includes all securities received (a) in replacement
of the Shares, (b) as a result of stock dividends or stock splits with respect
to the Shares, and (c) all securities received in replacement of the Shares in a
merger, recapitalization, reorganization or similar corporate transaction.
1.2. Title to Shares. The exact spelling of the name(s) under which
Purchaser will take title to the Shares is: ____________________________________
_________________________.
Purchaser desires to take title to the Shares as follows:
[ ] Individual, as separate property
[ ] Husband and wife, as community property
[ ] Joint Tenants
[ ] Other; please specify: _______________________________________
1.3. Payment. Purchaser hereby delivers payment of the Exercise Price
in cash (by check), whether or not acquired through a loan from the Company, in
the amount of $___________, receipt of which is acknowledged by the Company.
2. Delivery.
2.1. Deliveries by Purchaser. Purchaser hereby delivers to the Company
(a) this Exercise Agreement, (b) if Purchaser is married, a consent of spouse in
the form of Exhibit A attached hereto executed by Purchaser's spouse, (c) the
Exercise Price and payment or other provision for any applicable tax obligations
in the form of a check, or a secured full recourse promissory note ("Note") and
(d) if the Purchaser has provided a Note for exercise of the Shares, a stock
pledge agreement executed by Purchaser ("Pledge Agreement") and two (2) copies
of a blank stock power ("Stock Power"), both executed by Purchaser (and
Purchaser's spouse, if any).
2.2. Deliveries by the Company. Upon its receipt of the Exercise Price,
payment or other provision for any applicable tax obligations and all the
documents to be executed and delivered by Purchaser to the Company under Section
2.1 hereof, the Company will issue a duly executed stock certificate evidencing
the Shares in the name of Purchaser, provided however, if the Purchaser has
provided a Note for exercise of the Shares, such stock certificate shall be
placed in escrow as provided in Section 10 hereof to secure payment of
Purchaser's obligation under the Note.
3. Representations and Warranties of Purchaser. Purchaser represents and
warrants to the Company that:
3.1. Agrees to Terms of the Plan. Purchaser has received a copy of the
Plan and the Stock Option Agreement, has read and understands the terms of the
Plan, the Stock Option Agreement and this Exercise Agreement, and agrees to be
bound by their terms and conditions. Purchaser acknowledges that there may be
adverse tax consequences upon exercise of the Option or disposition of the
Shares, and that Purchaser should consult a tax advisor prior to such exercise
or disposition.
3.2. Purchase for Own Account for Investment. Purchaser is purchasing
the Shares for Purchaser's own account for investment purposes only and not with
a view to, or for sale in connection with, a distribution of the Shares within
the meaning of the Securities Act. Purchaser has no present intention of selling
or otherwise disposing of all or any portion of the Shares and no one other than
Purchaser has any beneficial ownership of any of the Shares.
3.3. Access to Information. Purchaser has had access to all information
regarding the Company and its present and prospective business, assets,
liabilities and financial condition that Purchaser reasonably considers
important in making the decision to purchase the Shares, including the Company's
most recent balance sheet and income statement, and Purchaser has had ample
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opportunity to ask questions of the Company's representatives concerning such
matters and this investment.
3.4. Understanding of Risks. Purchaser is fully aware of: (a) the
highly speculative nature of the investment in the Shares; (b) the financial
hazards involved; (c) the lack of liquidity of the Shares and the restrictions
on transferability of the Shares (e.g., that Purchaser may not be able to sell
or dispose of the Shares or use them as collateral for loans); (d) the
qualifications and backgrounds of the management of the Company; and (e) the tax
consequences of investment in the Shares. Purchaser is capable of evaluating the
merits and risks of this investment, has the ability to protect Purchaser's own
interests in this transaction and is financially capable of bearing a total loss
of this investment.
3.5. No General Solicitation. At no time was Purchaser presented with
or solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Shares.
4. Compliance with Securities Laws. Purchaser understands and acknowledges
that the Shares have not been registered with the SEC under the Securities Act
and that, notwithstanding any other provision of the Stock Option Agreement to
the contrary, the exercise of any rights to purchase any Shares is expressly
conditioned upon compliance with the Securities Act and all applicable state
securities laws. Purchaser agrees to cooperate with the Company to ensure
compliance with such laws.
5. Restricted Securities.
5.1. No Transfer Unless Registered or Exempt. Purchaser understands
that Purchaser may not transfer any Shares unless such Shares are registered
under the Securities Act or qualified under applicable state securities laws or
unless, in the opinion of counsel to the Company, exemptions from such
registration and qualification requirements are available. Purchaser understands
that only the Company may file a registration statement with the SEC and that
the Company is under no obligation to do so with respect to the Shares.
Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit Purchaser to transfer all
or any of the Shares in the amounts or at the times proposed by Purchaser.
5.2. SEC Rule 144. In addition, Purchaser has been advised that SEC
Rule 144 promulgated under the Securities Act, which permits certain limited
sales of unregistered securities, is not presently available with respect to the
Shares and, in any event, requires that the Shares be held for a minimum of one
(1) year, and in certain cases two (2) years, after they have been purchased and
paid for (within the meaning of Rule 144). Purchaser understands that Rule 144
may indefinitely restrict transfer of the Shares so long as Purchaser remains an
"affiliate" of the Company or if "current public information" about the Company
(as defined in Rule 144) is not publicly available.
5.3. SEC Rule 701. If the Shares are issued pursuant to SEC Rule 701
promulgated under the Securities Act, the Shares may become freely tradeable by
non-affiliates (under limited conditions regarding the method of sale) ninety
(90) days after the first sale of Common Stock of the Company to the general
public pursuant to a registration statement filed with and declared effective by
the SEC, subject to the lengthier market standoff agreement contained in Section
7 hereof or any other agreement entered into by Purchaser. Affiliates must
comply with the provisions (in addition to the holding period requirements) of
Rule 144.
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6. Restrictions on Transfers.
6.1. Disposition of Shares. Purchaser hereby agrees that Purchaser
shall make no disposition of the Shares (other than as permitted by this
Exercise Agreement) unless and until:
(a) Purchaser shall have notified the Company of the proposed
disposition and provided a written summary of the terms and conditions of the
proposed disposition;
(b) Purchaser shall have complied with all requirements of this
Exercise Agreement applicable to the disposition of the Shares;
(c) Purchaser shall have provided the Company with written
assurances, in form and substance satisfactory to counsel for the Company, that
(i) the proposed disposition does not require registration of the Shares under
the Securities Act or (ii) all appropriate actions necessary for compliance with
the registration requirements of the Securities Act or of any exemption from
registration available under the Securities Act (including Rule 144) have been
taken; and
(d) Purchaser shall have provided the Company with written
assurances, in form and substance satisfactory to the Company, that the proposed
disposition will not result in the contravention of any transfer restrictions
applicable to the Shares pursuant to the provisions of Section 4 hereof.
6.2. Transferee Obligations. Each person (other than the Company) to
whom the Shares are transferred by means of one of the permitted transfers
specified in this Exercise Agreement must, as a condition precedent to the
validity of such transfer, acknowledge in writing to the Company that such
person is bound by the provisions of this Exercise Agreement and that the
transferred Shares are subject to (a) both the Company's Repurchase Option, if
any, and (b) the market stand-off provisions of Section 7 hereof, to the same
extent such Shares would be so subject if retained by the Purchaser.
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7. Market Standoff Agreement. In the case of the initial underwritten
public offering by the Company of shares of Common Stock, if the officers and
directors of the Company agree not to effect any disposition of any equity
security of the Company or of any security convertible into or exchangeable or
exercisable for any equity security of the Company (in each case, other than as
part of such underwritten public offering), Purchaser agrees to the same during
the one hundred eighty (180) day period (or such longer period as may be
reasonably requested by the underwriter of such offering) beginning on the
effective date of such registration statement (except as a part of such
registration), provided that Purchaser has received written notice of such
registration prior to such effective date; provided, however, that any waiver of
the foregoing restriction by the Company or the Company's underwriters shall
apply to all persons subject to such restrictions pro rata based on the number
of shares of Company capital stock owned.
8. Rights as a Stockholder. Subject to the terms and conditions of this
Exercise Agreement, Purchaser will have all of the rights of a stockholder of
the Company with respect to the Shares from and after the date that Shares are
issued to Purchaser until such time as Purchaser disposes of the Shares.
9. Escrow. If the Purchaser has provided a Note for exercise of the Shares,
as security for Purchaser's faithful performance of this Exercise Agreement,
Purchaser agrees, immediately upon receipt of the stock certificate(s)
evidencing the Shares, to deliver such certificate(s), together with the Stock
Powers executed by Purchaser and by Purchaser's spouse, if any (with the date
and number of Shares left blank), to the Secretary of the Company or other
designee of the Company (the "Escrow Holder"), who is hereby appointed to hold
such certificate(s) and Stock Powers in escrow and to take all such actions and
to effectuate all such transfers and/or releases of such Shares as are in
accordance with the terms of this Exercise Agreement. Purchaser and the Company
agree that Escrow Holder will not be liable to any party to this Exercise
Agreement (or to any other party) for any actions or omissions unless Escrow
Holder is grossly negligent or intentionally fraudulent in carrying out the
duties of Escrow Holder under this Exercise Agreement. Escrow Holder may rely
upon any letter, notice or other document executed with any signature purported
to be genuine and may rely on the advice of counsel and obey any order of any
court with respect to the transactions contemplated by this Exercise Agreement.
The Shares will remain in escrow so long as they are subject to the Pledge
Agreement.
10. Restrictive Legends and Stop-Transfer Orders.
10.1. Legends. Purchaser understands and agrees that the Company will
place the legends set forth below or similar legends on any stock certificate(s)
evidencing the Shares, together with any other legends that may be required by
state or U.S. Federal securities laws, the Company's Certificate of
Incorporation or Bylaws, any other agreement between Purchaser and the Company
or any agreement between Purchaser and any third party:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES
ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF
THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE
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ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND
ANY APPLICABLE STATE SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON PUBLIC RESALE AND
TRANSFER, INCLUDING THE RIGHT OF FIRST REFUSAL OPTION
HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET
FORTH IN A STOCK OPTION EXERCISE AGREEMENT BETWEEN
THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES.
SUCH PUBLIC SALE AND TRANSFER RESTRICTIONS INCLUDING
THE RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES
OF THESE SHARES.
10.2. Stop-Transfer Instructions. Purchaser agrees that, to ensure
compliance with the restrictions imposed by this Exercise Agreement, the Company
may issue appropriate "stop-transfer" instructions to its transfer agent, if
any, and if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
10.3. Refusal to Transfer. The Company will not be required (a) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Exercise Agreement or (b) to treat as
owner of such Shares, or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares have been so transferred.
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11. Tax Consequences. PURCHASER UNDERSTANDS THAT PURCHASER MAY SUFFER
ADVERSE TAX CONSEQUENCES AS A RESULT OF PURCHASER'S PURCHASE OR DISPOSITION OF
THE SHARES. PURCHASER REPRESENTS: (a) THAT PURCHASER. HAS CONSULTED WITH ANY TAX
ADVISOR THAT PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND (b) THAT PURCHASER IS NOT RELYING ON THE COMPANY
FOR ANY TAX ADVICE.
12. Compliance with Laws and Regulations. The issuance and transfer of the
Shares will be subject to and conditioned upon compliance by the Company and
Purchaser with all applicable state, local and U.S. Federal laws and regulations
and with all applicable requirements of any stock exchange or automated
quotation system on which the Company's Common Stock may be listed or quoted at
the time of such issuance or transfer.
13. Successors and Assigns. The Company may assign any of its rights under
this Exercise Agreement. This Exercise Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Exercise Agreement will be
binding upon Purchaser and Purchaser's heirs, executors, administrators, legal
representatives, successors and assigns.
14. Governing Law; Severability. This Exercise Agreement shall be governed
by and construed in accordance with the laws of the State of California without
giving effect to its conflict of law principles. If any provision of this
Exercise Agreement is determined by a court of law to be illegal or
unenforceable, then such provision will be enforced to the maximum extent
possible and the other provisions will remain fully effective and enforceable.
15. Notices. Any notice required to he given or delivered to the Company
shall be in writing and addressed to the Corporate Secretary of the Company at
its principal corporate offices. Any notice required to be given or delivered to
Purchaser shall be in writing and addressed to Purchaser at the address
indicated above or to such other address as Purchaser may designate in writing
from time to time to the Company. All notices shall be deemed effectively given
upon personal delivery, (a) five (5) days after deposit in the United States
mail by certified or registered mail (return receipt requested), (b) two (2)
business day after its deposit with any return receipt express courier
(prepaid), or (c) one (1) business day after transmission by facsimile.
16. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Exercise Agreement.
17. Headings. The captions and headings of this Exercise Agreement are
included for ease of reference only and will be disregarded in interpreting or
construing this Exercise Agreement.
18. Entire Agreement. The Plan, the Stock Option Agreement and this
Exercise Agreement, together with all Exhibits thereto, constitute the entire
agreement and understanding of the parties with respect to the subject matter of
this Exercise Agreement, and supersede all prior understandings and agreements,
whether oral or written, between the parties hereto with respect to the specific
subject matter hereof. If there is any inconsistency between the terms of this
Exercise Agreement and the terms of the Plan and Stock Option Agreement, the
terms of the Plan and Stock Option Agreement shall govern and control.
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In witness whereof, the Company has caused this Exercise Agreement to be
executed in triplicate by its duly authorized representative and Purchaser has
executed this Exercise Agreement in triplicate as of the Effective Date,
indicated above.
LANDBANK GROUP, INC.
By:
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Printed Name:
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Title:
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PARTICIPANT
(Signature)
Printed Name:
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EXHIBIT A
Spouse Consent
SPOUSE CONSENT
The undersigned spouse of (the "Purchaser") has read, understands, and
hereby approves the Stock Option Exercise Agreement (the "Agreement") between
Purchaser and Landbank Group, Inc., a Delaware corporation (the "Company"). In
consideration of the Company's granting my spouse the right to purchase the
Shares as set forth in the Agreement, the undersigned hereby agrees to be
irrevocably bound by the Agreement and further agrees that any community
property interest I may have in the Shares shall similarly be bound by the
Agreement. The undersigned hereby appoints Purchaser as my attorney-in-fact with
respect to any amendment or exercise of any rights under the Agreement.
Dated:
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SPOUSE
(Signature)
Printed Name:
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Address:
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