INTERMARK CORPORATION
STOCK OPTION AGREEMENT
Type of Option (check one):
[ ] Incentive [ ] Nonqualified
This Stock Option Agreement (the "Agreement") is entered into as of
April 24, 1998, by and between INTERMARK CORPORATION, a California
corporation (the "Company") and (the "Optionee") pursuant
to the Company's 1997 Stock Incentive Plan (the "Plan").
Grant of Option. The Company hereby grants to Optionee an option (the
"Option") to purchase all or any portion of a total of _________________
(__________) shares (the "Shares") of the Common Stock of the Company at a
purchase price of _______________ (_____________) per share (the "Exercise
Price"), subject to the terms and conditions set forth herein and the
provisions of the Plan. If the box marked "Incentive" above is checked,
then this Option is intended to qualify as an "incentive stock option" as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). If this Option fails in whole or in part to qualify as an
incentive stock option, or if the box marked "Nonqualified" is checked, then
this Option shall to that extent constitute a nonqualified stock option.
Vesting of Option. The right to exercise this Option shall vest
immediately, and this Option shall be exercisable from time to time in whole
or in part.
Term of Option. Optionee's right to exercise this Option shall
terminate upon the first to occur of the following:
the expiration of ten (10) years from the date of this Agreement;
the expiration of three (3) months from the date of termination
of Optionee's Continuous Service if such termination occurs for any reason
other than permanent disability, death, voluntary resignation or for
"cause"; provided, however, that if Optionee dies during such three-month
period the provisions of Section 3(e) below shall apply;
the expiration of one (1) month from the date of termination of
Optionee's Continuous Service if such termination occurs due to voluntary
resignation; provided, however, that if Optionee dies during such one-month
period the provisions of Section 3(e) below shall apply;
(d) the expiration of one (1) year from the date of termination of
Optionee's Continuous Service if such termination is due to permanent
disability of the Optionee (as defined in Section 22(e)(3) of the Code);
(e) the expiration of one (1) year from the date of termination of
Optionee's Continuous Service if such termination is due to Optionee's death
or if death occurs during either the three-month or one-month period
following termination of Optionee's Continuous Service pursuant to Section
3(b) or 3(c) above, as the case may be; or
(f) in the event Optionee's Continuous Service is terminated by the
Company for "cause," defined hereto to mean the performance of those acts
identified in Section 2924 of the California Labor Code, then this Option,
whether or not exercisable on the date of termination, shall terminate
immediately and become void and of no effect.
As used herein, the term "Continuous Service" means (i) employment by
either the Company or any parent or subsidiary corporation of the Company,
or by a corporation or a parent or subsidiary of a corporation issuing or
assuming a stock option in a transaction to which Section 424(a) of the Code
applies, which is uninterrupted except for vacations, illness (except for
permanent disability, as defined in Section 22(e)(3) of the Code), or leaves
of absence which are approved in writing by the Company or any of such other
employer corporations, if applicable, (ii) service as a member of the Board
of Directors of the Company until Optionee resigns, is removed from office,
or Optionee's term of office expires and he or she is not reelected, or
(iii) so long as Optionee is engaged as a consultant or service provider to
the Company or other corporation referred to in clause (i) above.
4. Exercise of Option. On or after the vesting of any portion of
this Option in accordance with Section 2 above, and until termination of
this Option in accordance with Section 3 above, the portion of this Option
which has vested may be exercised in whole or in part by the Optionee (or,
after his or her death, by the person designated in Section 5 below) upon
delivery of the following to the Company at its principal executive offices:
(a) a written notice of exercise which identifies this Agreement and
states the number of Shares then being purchased (but no fractional Shares
may be purchased);
(b) a check or cash in the amount of the Exercise Price (or payment
of the Exercise Price in such other form of lawful consideration as the
Administrator may approve from time to time under the provisions of Section
5.3 of the Plan);
(c) a check or cash in the amount reasonably requested by the
Company to satisfy the Company's withholding obligations under federal,
state or other applicable tax laws with respect to the taxable income, if
any, recognized by the Optionee in connection with the exercise of this
Option (unless the Company and Optionee shall have made other arrangements
for deductions or withholding from Optionee's wages, bonus or other
compensation payable to Optionee, or by the withholding of Shares issuable
upon exercise of this Option or the delivery of Shares owned by the Optionee
in accordance with Section 10.1 of the Plan, provided such arrangements
satisfy the requirements of applicable tax laws); and
(d) a letter, if requested by the Company, in such form and
substance as the Company may require, setting forth the investment intent of
the Optionee, or person designated in Section 5 below, as the case may be.
5. Death of Optionee; No Assignment. The rights of the Optionee
under this Agreement may not be assigned or transferred except by will or by
the laws of descent and distribution, and may be exercised during the
lifetime of the Optionee only by such Optionee. Any attempt to sell,
pledge, assign, hypothecate, transfer or dispose of this Option in
contravention of this Agreement or the Plan shall be void and shall have no
effect. If the Optionee's Continuous Service terminates as a result of his
or her death, and provided Optionee's rights hereunder shall have vested
pursuant to Section 2 hereof, Optionee's legal representative, his or her
legatee, or the person who acquired the right to exercise this Option by
reason of the death of the Optionee (individually, a "Successor") shall
succeed to the Optionee's rights and obligations under this Agreement.
After the death of the Optionee, only a Successor may exercise this Option.
6. Representations and Warranties of Optionee.
(a) Optionee represents and warrants that this Option is being
acquired by Optionee for Optionee's personal account, for investment
purposes only, and not with a view to the distribution, resale or other
disposition thereof.
(b) Optionee acknowledges that the Company may issue Shares upon the
exercise of the Option without registering such Shares under the Securities
Act of 1933, as amended (the "Act"), on the basis of certain exemptions from
such registration requirement. Accordingly, Optionee agrees that his or her
exercise of the Option may be expressly conditioned upon his or her delivery
to the Company of an investment certificate including such representations
and undertakings as the Company may reasonably require in order to assure
the availability of such exemptions, including a representation that
Optionee is acquiring the Shares for investment and not with a present
intention of selling or otherwise disposing thereof and an agreement by
Optionee that the certificates evidencing the Shares may bear a legend
indicating such non-registration under the Act and the resulting
restrictions on transfer. Optionee acknowledges that, because Shares
received upon exercise of an Option may be unregistered, Optionee may be
required to hold the Shares indefinitely unless they are subsequently
registered for resale under the Act or an exemption from such registration
is available.
(c) Optionee acknowledges receipt of a copy of the Plan and
understands that all rights and obligations connected with this Option are
set forth in this Agreement and in the Plan.
(d) Optionee hereby acknowledges that, in addition to certain
restrictive legends that the securities laws of the state in which Optionee
resides may require, each certificate representing the Shares may be
endorsed with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933; THEY HAVE BEEN ACQUIRED BY THE HOLDER
FOR INVESTMENT AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED,
OR OTHERWISE DISPOSED OF EXCEPT AS MAY BE AUTHORIZED UNDER THE
SECURITIES ACT OF 1933, AND THE RULES AND REGULATIONS PROMULGATED
THEREUNDER.
7. Adjustments Upon Changes in Capital Structure. In the event
that the outstanding shares of Common Stock of the Company are hereafter
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of a recapitalization, stock split,
combination of shares, reclassification, stock dividend (in excess of two
percent (2%)) or other change in the capital structure of the Company, then
appropriate adjustments shall be made by the Administrator to the number of
Shares subject to the unexercised portion of this Option and to the Exercise
Price per share, in order to preserve, as nearly as practical, but not to
increase, the benefits of the Optionee under this Option, in accordance with
the provisions of Section 4.2 of the Plan. No fractional share shall be
issued under this Option or upon any such adjustment.
8. Mergers, Reorganizations, Etc. Upon the effective date of the
dissolution or liquidation of the Company or upon the sale of substantially
all of its assets, or a merger, consolidation, acquisition of property or
shares, separation or reorganization of the Company with one or more
entities, corporate or otherwise, as a result of which the Company is not
the surviving corporation (other than one in which 50% or more of the
outstanding capital stock of the surviving corporation is held by the
Company's current stockholders), or if the Company is the surviving entity
and the ownership of the outstanding capital stock of the Company following
the transaction changes by 50% or more as a result of such transaction, this
Option shall automatically accelerate immediately prior to the consummation
of such transaction. Unless a provision is made in writing in connection
with such transaction for (a) the assumption of this Option or the
substitution for this Option of a new option of comparable value covering
shares of a successor corporation, with appropriate adjustments as to the
number and kind of shares and the Exercise Price, in which event this Option
or the new option substituted therefor shall continue in the manner and
under the terms so provided, or (b) the substitution for this Option of a
program or plan to provide rights to Optionee to receive, on exercise of
such rights, the type and amount of consideration Optionee would have
received had he or she exercised this Option prior to such transaction and
less the aggregate Exercise Price therefor, then, if such provision is not
made in such transaction, then the Administrator shall cause written notice
of the proposed transaction to be given to Optionee not less than fifteen
(15) days prior to the anticipated effective date of the proposed
transaction, during which period Optionee may exercise any unexercised
portion of this Option.
9. No Employment Contract Created. Neither the granting of this
Option nor the exercise hereof shall be construed as granting to the
Optionee any right with respect to continuance of employment by the Company
or any of its subsidiaries. The right of the Company or any of its
subsidiaries to terminate at will the Optionee's employment at any time
(whether by dismissal, discharge or otherwise), with or without cause, is
specifically reserved.
10. Rights as Shareholder. The Optionee (or transferee of this
option by will or by the laws of descent and distribution) shall have no
rights as a shareholder with respect to any Shares covered by this Option
until the date of the issuance of a stock certificate or certificates to him
or her for such Shares, notwithstanding the exercise of this Option.
"Market Stand-Off" Agreement. Optionee agrees that, if requested by
the Company or the managing underwriter of any proposed public offering of
the Company's securities, Optionee will not sell or otherwise transfer or
dispose of any Shares held by Optionee without the prior written consent of
the Company or such underwriter, as the case may be, during such period of
time, not to exceed 180 days following the effective date of the
registration statement filed by the Company with respect to such offering,
as the Company or the underwriter may specify.
12. Stop-Transfer Notices.
Optionee understands and agrees that, in order to ensure compliance
with the restrictions referred to herein, the Company may issue appropriate
"stop-transfer" instructions to its transfer agent, if any, and that, if the
Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.
13. Interpretation. This Option is granted pursuant to the terms of
the Plan, and shall in all respects be interpreted in accordance therewith.
The Administrator shall interpret and construe this Option and the Plan, and
any action, decision, interpretation or determination made in good faith by
the Administrator shall be final and binding on the Company and the
Optionee. As used in this Agreement, the term "Administrator" shall refer
to the committee of the Board of Directors of the Company appointed to
administer the Plan, and if no such committee has been appointed, the term
Administrator shall mean the Board of Directors.
14. Notices. Any notice, demand or request required or permitted to
be given under this Agreement shall be in writing and shall be deemed given
when delivered personally or three (3) days after being deposited in the
United States mail, as certified or registered mail, with postage prepaid,
and addressed, if to the Company, at its principal place of business,
Attention: the Chief Financial Officer, and if to the Optionee, at his or
her most recent address as shown in the records of the Company.
15. Annual and Other Periodic Reports. During the term of this
Agreement, the Company will furnish to the Optionee copies of all annual and
other periodic financial and informational reports that the Company
distributes generally to its shareholders.
16. Governing Law. The validity, construction, interpretation, and
effect of this Option shall be governed by and determined in accordance with
the laws of the State of California.
17. Severability. Should any provision or portion of this Agreement
be held to be unenforceable or invalid for any reason, the remaining
provisions and portions of this Agreement shall be unaffected by such holding.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed one instrument.
19. Attorneys' Fees. If any party shall bring an action in law or
equity against another to enforce or interpret any of the terms, covenants
and provisions of this Agreement, the prevailing party in such action shall
be entitled to recover reasonable attorneys' fees and costs.
20. Entire Agreement. This Agreement and the plan constitute the
entire agreement between the parties with respect to the subject matter
hereof and supersede all prior or contemporaneous written or oral agreements
and understandings of the parties, either express or implied.
21. Amendment. This Agreement may not be amended, waived,
discharged, or terminated other than by a written agreement of the parties.
22. General. The Company shall at all times during the term of the
Option reserve and keep available such number of Shares as will be
sufficient to satisfy the requirements of this Option Agreement, shall pay
all original issue and transfer taxes with respect to the issue and transfer
of Shares pursuant hereto and all other fees and expenses necessarily
incurred by the Company in connection therewith, and will from time to time
use its best efforts to comply with all laws and regulations, which, in the
opinion of counsel for the Company, shall be applicable thereto.
IN WITNESS WHEREOF, the parties have executed this Stock Option
Agreement as of the date first above written.
INTERMARK CORPORATION
By: XXX XXXXXXXXX
------------------------
Xxx Xxxxxxxxx, President
By: T. XXXXXXX XXXX
-------------------------
T. Xxxxxxx Xxxx, Secretary
"OPTIONEE"
OPTIONEE SIGNATURE
(Signature)
OPTIONEE NAME
(Type or print name)
