EXHIBIT 4.6
FORM OF DIRECTOR
NONQUALIFIED STOCK OPTION AGREEMENT
This AGREEMENT (the "Agreement") is made as of [date] (the "Date of
Grant") by and between XXX.XXX INC., a Delaware corporation (the "Company"),
and (the "Optionee").
1. GRANT OF STOCK OPTION. Subject to and upon the terms, conditions,
and restrictions set forth in this Agreement and in the Company's 1999 Equity
Incentive Plan (the "Plan"), the Company hereby grants to the Optionee as of
the Date of Grant a stock option (the "Option") to purchase Common Shares
(the "Optioned Shares"). The Option may be exercised from time to time in
accordance with the terms of this Agreement. The price at which the Optioned
Shares may be purchased pursuant to this Option shall be $ per share
subject to adjustment as hereinafter provided (the "Option Price"). The
Option is intended to be a nonqualified stock option and shall not be treated
as an "incentive stock option" within the meaning of that term under Section
422 of the Code.
2. TERM OF OPTION. The term of the Option shall commence on the Date of
Grant and, unless earlier terminated in accordance with Section 6 hereof, shall
expire ten (10) years from [date].
3. RIGHT TO EXERCISE. Subject to the expiration or earlier termination
of the Option, on each anniversary of [date] the number of Optioned Shares equal
to twenty-five percent (25%) multiplied by the initial number of Optioned Shares
specified in this Agreement shall become exercisable on a cumulative basis until
the Option is fully exercisable. To the extent the Option is exercisable, it may
be exercised in whole or in part. In no event shall the Optionee be entitled to
acquire a fraction of one Optioned Share pursuant to this Option. The Optionee
shall be entitled to the privileges of ownership with respect to Optioned Shares
purchased and delivered to the Optionee upon the exercise of all or part of this
Option.
4. OPTION NONTRANSFERABLE. (a) The Option granted hereby shall be
neither transferable nor assignable by the Optionee other than by will or by the
laws of descent and distribution and may be exercised, during the lifetime of
the Optionee, only by the Optionee, or in the event of his or her legal
incapacity, by his or her guardian or legal representative acting on behalf of
the Optionee in a fiduciary capacity under state law and court supervision.
(b) Notwithstanding the provisions of Section 4(a), the Option
granted hereby shall be transferable by the Optionee, without payment of
consideration therefor by the transferee, to any one or more members of the
Optionee's Immediate Family (or to one or more trusts established solely for the
benefit of one or more members of the Optionee's Immediate Family or to one or
more partnerships in which the only partners are members of the Optionee's
Immediate Family); provided, however, that (i) no such transfer shall be
effective unless reasonable prior notice thereof is delivered to the Company and
such transfer is thereafter effected in accordance with any terms and conditions
that shall have been made applicable to the Company or the Board and (ii) any
such transferee shall be subject to the same terms and conditions hereunder as
the Optionee.
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5. NOTICE OF EXERCISE; PAYMENT. To the extent then exercisable, the
Option may be exercised by written notice to the Company stating the number of
Optioned Shares for which the Option is being exercised and the intended manner
of payment. Payment equal to the aggregate Option Price of the Optioned Shares
for which the Option is being exercised shall be tendered in full with the
notice of exercise to the Company in cash in the form of currency or check or
other cash equivalent acceptable to the Company. The Optionee may also tender
the Option Price by (a) the actual or constructive transfer to the Company of
nonforfeitable, nonrestricted Common Shares that have been owned by the Optionee
for (i) more than one year prior to the date of exercise and for more than two
years from the date on which the option was granted, if they were originally
acquired by the Optionee pursuant to the exercise of an incentive stock option,
within the meaning of Section 422 of the Code or (ii) more than six months prior
to the date of exercise, if they were originally acquired by the Optionee other
than pursuant to the exercise of an incentive stock option, or (b) by any
combination of the foregoing methods of payment, including a partial tender in
cash and a partial tender in nonforfeitable, nonrestricted Common Shares. Within
ten days thereafter, the Company shall direct the due issuance of the Optioned
Shares so purchased. Nonforfeitable, nonrestricted Common Shares that are
transferred by the Optionee in payment of all or any part of the Option Price
shall be valued on the basis of their Fair Market Value per Common Share. The
requirement of payment in cash shall be deemed satisfied if the Optionee makes
arrangements that are satisfactory to the Company with a bank or broker that is
a member of the National Association of Securities Dealers, Inc. to sell on the
exercise date a sufficient number of Optioned Shares that are being purchased
pursuant to the exercise, so that the net proceeds of the sale transaction will
at least equal the amount of the aggregate Option Price plus payment of any
applicable withholding taxes, and pursuant to which the bank or broker
undertakes to deliver to the Company the amount of the aggregate Option Price
plus payment of any applicable withholding taxes on a date satisfactory to the
Company, but not later than the date on which the sale transaction will settle
in the ordinary course of business. As a further condition precedent to the
exercise of this Option, the Optionee shall comply with all regulations and
requirements of any regulatory authority having control of, or supervision over,
the issuance of Common Shares and in connection therewith shall execute any
documents that the Board shall in its sole discretion deem necessary or
advisable. The date of the Optionee's written notice shall be the exercise date.
6. TERMINATION OF AGREEMENT. This Agreement and the Option granted
hereby shall terminate automatically and without further notice on the earliest
of the following dates:
(a) 90 days after the Optionee's death or permanent and total
disability, if the Optionee dies or becomes permanently and totally disabled
while a member of the Board or during the 30-day period specified in Section
6(c);
(b) Except as provided on a case-by-case basis, 30 calendar days
after the Optionee ceases to be a member of the Board for any reason other than
as described in Section 6(a) hereof; or
(c) [10 years from Date of Grant].
Notwithstanding the foregoing, in the event that the Optionee's directorship is
terminated for cause, the Agreement shall terminate immediately after such
termination notwithstanding any
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other provision of this Agreement. For purposes of this provision, "cause" shall
mean the Optionee shall have committed prior to termination of his or her
directorship any of the following acts:
(i) fraud, misappropriation, embezzlement, dishonesty or other
similar act of misconduct by the Optionee against the Company or any of
its Subsidiaries or affiliates, the Optionee's willful misconduct with
respect to the business and affairs of the Company or any of its
Subsidiaries or affiliates;
(ii) intentional wrongful damage to material assets of the
Company;
(iii) intentional wrongful disclosure of material confidential
information of the Company;
(iv) intentional wrongful engagement in any competitive activity
that would constitute a material breach of the duty of loyalty;
(v) intentional breach of any stated material policy of the
Company; or
(vi) the Optionee's conviction of or plea of guilty or nolo
contendre to a felony or crime involving moral turpitude.
This Agreement shall not be exercisable for any number of Optioned Shares in
excess of the number of Optioned Shares for which this Agreement is then
exercisable, pursuant to Sections 3 and 7 hereof, on the date of termination of
directorship. For the purposes of this Agreement, "permanent and total
disability" shall be defined by Section 22(e)(3) of the Code.
7. ACCELERATION OF OPTION. The Option granted hereby shall become
immediately exercisable in full in the event of (a) a Change in Control, (b) the
Optionee's permanent and total disability if the Optionee becomes permanently
and totally disabled while a member of the Board or (c) the death of the
Optionee if such death occurs while the Optionee is a member of the Board.
8. NO CONTRACT. Nothing contained in this Agreement shall confer upon
the Optionee any right with respect to continuance of membership on the Board,
nor limit or affect in any manner the right of the Company to remove the
Optionee from the Board or adjust the compensation of the Optionee.
9. COMPLIANCE WITH LAW. The Company shall make reasonable efforts to
comply with all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Option shall not be
exercisable if the exercise thereof would result in a violation of any such law.
10. ADJUSTMENTS. The Board will make or provide for such adjustments in
the number of Optioned Shares covered by this Option, in the Option Price
applicable to such Option, and in the kind of shares covered thereby, as the
Board, in its sole discretion, exercised in good faith, may determine is
equitably required to prevent dilution or enlargement of the
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Optionee's rights that otherwise would result from (a) any stock dividend, stock
split, combination of shares, recapitalization, or other change in the capital
structure of the Company, (b) any merger, consolidation, spin-off, split-off,
spin-out, split-up, reorganization, partial or complete liquidation, or other
distribution of assets or issuance of rights or warrants to purchase securities,
or (c) any other corporate transaction or event having an effect similar to any
of the foregoing. In the event of any such transaction or event, the Board, in
its discretion, may provide in substitution for this Option such alternative
consideration as it may determine to be equitable in the circumstances and may
require in connection therewith the surrender of this Option.
11. AVAILABILITY OF COMMON SHARES. The Company shall at all times until
the expiration of the Option reserve and keep available, either in its treasury
or out of its authorized but unissued Common Shares, the full number of Optioned
Shares deliverable upon the exercise of this Option.
12. AMENDMENTS. Any amendment to the Plan shall be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable
hereto; provided, however, that no amendment shall adversely affect the rights
of the Optionee under this Agreement without the Optionee's consent.
13. SEVERABILITY. In the event that one or more of the provisions of
this Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.
14. RELATION TO PLAN; INTERPRETATION. This Agreement is subject to the
terms and conditions of the Plan. In the event of any inconsistency between the
provisions of this Agreement and the Plan, the Plan shall govern. Capitalized
terms used herein without definition shall have the meanings assigned to them in
the Plan. The Board acting pursuant to the Plan, as constituted from time to
time, shall, except as expressly provided otherwise herein, have the right to
determine any questions which arise in connection with this Option or its
exercise. Any reference herein to a provision of a statute, rule or regulation
shall also include any successor provision thereto.
15. SUCCESSORS AND ASSIGNS. Without limiting Section 4 hereof, the
provisions of this Agreement shall inure to the benefit of, and be binding upon,
the successors, administrators, heirs, legal representatives and assigns of the
Optionee, and the successors and assigns of the Company.
16. GOVERNING LAW. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of Delaware, without
giving effect to the principles of conflict of laws thereof.
17. NOTICES. Any notice to the Company provided for herein shall be in
writing to the Company, marked Attention: Secretary, and any notice to the
Optionee shall be addressed to the Optionee at his or her address on file with
the Company. Except as otherwise provided herein, any written notice shall be
deemed to be duly given if and when delivered personally or deposited in the
United States mail, first class certified or registered mail, postage and fees
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prepaid, return receipt requested, and addressed as aforesaid. Any party may
change the address to which notices are to be given hereunder by written notice
to the other party as herein specified (provided that for this purpose any
mailed notice shall be deemed given on the third business day following deposit
of the same in the United States mail).
[signature page follows]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by its duly authorized officer and Optionee has also
executed this Agreement in duplicate, as of the day and year first above
written.
XXX.XXX INC.
By:
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[Optionee]
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