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EXHIBIT 99.2
ALTIMA COMMUNICATIONS, INC.
NON-STATUTORY STOCK OPTION AGREEMENT
This Non-Statutory Stock Option Agreement (this "Agreement") is entered
into effective as of the Date of Grant, between ALTIMA COMMUNICATIONS, INC., a
California corporation (the "Company"), and the Optionee.
A. The Company has adopted the ADHOC TECHNOLOGIES, INC. 1997 Stock
Option Plan (the "Plan") authorizing the Board of Directors of the Company, or a
committee as provided for in the Plan (the Board or such a committee to be
referred to as the "Committee"), to grant non-statutory stock options to
employees and non-employee directors, consultants, and independent contractors
of the Company and its Subsidiaries (as defined in the Plan).
B. The Company desires to give the Optionee an inducement to acquire a
proprietary interest in the Company and an added incentive to advance the
interests of the Company by granting to the Optionee an option to purchase
shares of Common Stock of the Company pursuant to the Plan.
ACCORDINGLY, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Definition.
1.1 Date of Grant shall mean.
1.2 Optionee shall mean.
1.3 Option Shares shall mean shares.
1.4 Share Price shall mean per share.
1.5 Vesting Start Date shall mean.
2. Grant of Option.
The Company hereby grants to the Optionee the right, privilege, and
option (the "Option") to purchase the Option Shares of the Company's Common
Stock (the "Common Stock"), according to the terms and subject to the conditions
hereinafter set forth and as set forth in the Plan. This Option is not intended
to be an "incentive stock option," as that term is used in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
3. Option Exercise Price.
The per share price to be paid by the Optionee in the event of any
exercise of the Option will be at the Share Price.
4. Duration of Option and Time of Exercise.
4.1 Period of Exercisability. The Option shall be exercisable from time
to time with respect to the Vested Shares, if any. Notwithstanding anything else
to the contrary in this Agreement or in the Plan, the Option shall no longer be
exercisable after (and this Option will become void and expire as to
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all unexercised Option Shares at) 5:00 p.m., California time, on the tenth
anniversary of the Date of Grant (the "Time of Termination").
4.1.1 Definitions. As used in this Agreement, the following
capitalized terms shall have the following respective definitions (unless the
context requires otherwise):
"Termination" means: (i) the termination of the Optionee's
employment or other service with the Company (and all its Subsidiaries) for any
reason whatsoever, with or without cause; or (ii) the Optionee is in the employ
or other service of a Subsidiary and the Subsidiary ceases to be a Subsidiary of
the Company (unless the Optionee continues in the employ or other service of the
Company or another Subsidiary).
"Termination Date" means the Date of Termination, as
reasonably determined by the Company.
"Vested Shares" means from time to time the Option Shares
which have vested according to the following:
(i) 12/48ths of the Option Shares shall become vested
as of the last day of twelve full calendar months of continuous
consultation with the Company or Altima Communications Asia, Inc.
("ACAI") after the Vesting Start Date (the "Twelve Month Date").
(ii) For each three full calendar month of continuous
consultation (with the Company or ACAI) from the Twelve Month Date to
the Termination Date, an additional 3/48th of the Option Shares shall
vest.
(iii) In the event that the Termination is caused by
the death or Disability (as defined in the Plan) of the Optionee, then
any and all remaining Nonvested Shares shall vest on such Termination
Date.
The number of Vested Shares at any one point in time shall be rounded to the
nearest whole number. The Optionee agrees that the Company shall have sole
discretion in determining the existence of the consultation relationship with
the Optionee.
"Nonvested Shares" means from time to time the Option Shares
which are not Vested Shares. Once all of the Option Shares become Vested Shares,
there will be no Nonvested Shares.
4.2 Termination of Employment.
(a) Termination Due to Death or Disability. In the event that
the Optionee's employment with ACAI and all Subsidiaries is terminated
by reason of death or Disability, then this Option will become
immediately exercisable in full and will remain exercisable until the
Time of Termination.
(b) Termination for Reasons Other Than Death or Disability. In
the event that the Optionee's employment with ACAI and all Subsidiaries
is terminated for any reason other than death or Disability, or the
Optionee is in the employ of a Subsidiary and the Subsidiary ceases to
be a Subsidiary of ACAI (unless the Optionee continues in the employ of
ACAI or another Subsidiary), then this Option will remain exercisable,
to the extent exercisable as of such termination, for a period of three
months after such termination (30 days in the case of voluntary
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termination by the Optionee or termination by ACAI or any Subsidiary
for "cause", as defined in Section 7.2 of the Plan) (but in no event
after the Time of Termination).
4.3 Change in Control.
(a) Impact of Change in Control. If a Change in Control (as
defined in the Plan) of the Company occurs, then the automatic
acceleration of exercisability provided in Section 9.3 of the Plan
shall not apply to this Option, provided however, that the Committee,
in its sole discretion, may provide that this Option will become
immediately exercisable in full and will remain exercisable until the
Time of Termination, regardless of whether the Optionee remains in the
employ or other service of the Company or any Subsidiary. In addition,
if a Change in Control of the Company occurs, then the Committee, in
its sole discretion and without the consent of the Optionee, may
determine that the Optionee will receive, with respect to some or all
of the Option Shares, as of the effective date of any such Change in
Control of the Company, cash in an amount per share equal to the excess
of: (x) the Fair Market Value (as defined in the Plan) of each such
Option Share immediately prior to the effective date of such Change in
Control of the Company; over (y) the option exercise price per share of
this Option.
(b) Limitation on Change in Control Payments. Notwithstanding
anything in this Section 3.3 to the contrary, if, with respect to the
Optionee, acceleration of the vesting of this Option or the payment of
cash in exchange for all or part of the Option Shares as provided above
(which acceleration or payment could be deemed a "payment" within the
meaning of Section 280G(b)(2) of the Code), together with any other
payments which the Optionee has the right to receive from the Company
or any corporation which is a member of an "affiliated group" (as
defined in Section 1504(a) of the Code without regard to Section
1504(b) of the Code) of which the Company is a member, would constitute
a "parachute payment" (as defined in Section 280G(b)(2) of the Code),
then the payments to the Optionee as set forth herein will be reduced
to the largest amount as will result in no portion of such payments
being subject to the excise tax imposed by Section 4999 of the Code;
provided, however, that if the Optionee is subject to a separate
agreement with the Company or a Subsidiary that expressly addresses the
potential application of Sections 280G or 4999 of the Code (including,
without limitation, that "payments" under such agreement or otherwise
will be reduced, that the Optionee will have the discretion to
determine which "payments" will be reduced, that such "payments" will
not be reduced or that such "payments" will be "grossed up" for tax
purposes), then this Section 3.3(b) will not apply, and any "payments"
to the Optionee pursuant to Section 3.3(a) of this Agreement will be
treated as "payments" arising under such separate agreement.
5. Manner of Option Exercise.
5.1 Notice. This Option may be exercised by the Optionee in whole or in
part from time to time, subject to the conditions contained in the Plan and in
this Agreement, by delivery, in person, by facsimile or electronic transmission
or through the mail, to the Company at its principal executive office
(Attention: President), of a written notice of exercise. Such notice must be in
a form satisfactory to the Committee, must identify the Option, must specify the
number of Option Shares with respect to which the Option is being exercised, and
must be signed by the person or persons so exercising the Option. Such notice
must be accompanied by payment in full of the total purchase price of the Option
Shares purchased. In the event that the Option is being exercised, as provided
by the Plan and Section 3.2 above, by any person or persons other than the
Optionee, then the notice must be accompanied by appropriate proof of right of
such person or persons to exercise the Option. As soon as practicable after the
effective exercise of the Option, the Optionee will be recorded on the stock
transfer books of the
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Company as the owner of the Option Shares purchased, and the Company will
deliver to the Optionee one or more duly issued stock certificates evidencing
such ownership.
5.2 Payment. At the time of exercise of this Option, the Optionee must
pay the total purchase price of the Option Shares to be purchased entirely in
cash (including a check, bank draft or money order, payable to the order of the
Company); provided, however, that the Committee, in its sole discretion, may
allow such payment to be made, in whole or in part, by tender of a promissory
note (on terms acceptable to the Committee in its sole discretion) or a Broker
Exercise Notice or Previously Acquired Shares (as such terms are defined in the
Plan), or by a combination of such methods. In the event that the Optionee is
permitted to pay the total purchase price of this Option in whole or in part
with Previously Acquired Shares, then the value of such shares will be equal to
their Fair Market Value on the date of exercise of this Option.
5.3 Investment Representations. In the event that the Option Shares
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), at the time that this Option is exercised to purchase such
Option Shares, then: (i) concurrently with such exercise, the person exercising
this Option (the "Purchaser") shall make such investment representations to the
Company in writing as may be deemed necessary or advisable by counsel for the
Company; and (ii) in connection with such purchase of such Option Shares, the
Purchaser hereby represents and warrants to the Company as follows:
5.3.1 Investment Intent. The Purchaser is purchasing the
Option Shares solely for the Purchaser's own account (or for a trust account)
for investment purposes only and not with a view to, or for resale in connection
with any "distribution" thereof as that term is used for purposes of the
Securities Act.
5.3.2 Information About the Company. The Purchaser is aware of
the Company's business affairs and financial condition and has acquired
sufficient information about the Company to reach an informed and knowledgeable
decision to acquire the Option Shares.
5.3.3 High Risk. The Purchaser realizes that the investment in
the Option Shares involves a high degree of risk. The Purchaser is able, without
impairing the Purchaser's financial condition, to hold the Option Shares for an
indefinite period of time and to suffer a complete loss of the investment.
5.3.4 Shares Not Registered. The Purchaser understands that
the Option Shares have not been registered under the Securities Act in reliance
upon a specific exemption therefrom, which exemption depends upon, among other
things, the bona fide nature of the investment intent as expressed herein. In
this connection, the Purchaser understands that, in the view of the SEC, the
statutory basis for such exemption may be unavailable if the Purchaser's
representations were predicated solely upon a present intention to hold the
Option Shares: (i) for the minimum capital gains period specified under tax
statutes; (ii) for a deferred sale; (iii) for or until an increase or decrease
in the market price of the Option Shares; or (iv) for a period of one year or
any other fixed period in the future.
5.3.5 Held Indefinitely. The Purchaser understands that the
Option Shares must be held indefinitely unless subsequently registered under the
Securities Act or unless an exemption from registration is otherwise available.
Moreover, the Purchaser understands that the Company is under no obligation to
register the Option Shares. The Purchaser understands that the stock
certificate(s) evidencing the Option Shares will be imprinted with a legend
which prohibits the transfer of the Option
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Shares unless they are registered or such registration is not required in the
opinion of counsel for the Company.
5.3.6 Rule 144. The Purchaser is aware of the provisions of
Rule 144 promulgated under the Securities Act, which in substance, permits
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof (or from an affiliate of such issuer), in a
non-public offering, subject to the satisfaction of certain conditions,
including, among other things: (i) the availability of certain public
information about the Company; (ii) the resale occurring not less than one year
after the party has purchased and "fully" paid for the securities to be sold;
(iii) the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as such term is
defined under the Securities Exchange Act of 1934, as amended); and (iv) the
amount of securities being sold during any three month period not exceeding
certain limitations stated the Rule.
5.3.7 No Public Market. The Purchaser further understands that
at the time the Purchaser wishes to sell the Option Shares, there may be no
public market upon which to make such a sale, and that, even if such a public
market then exists, the Company may not be satisfying the current public
information requirements of Rule 144, and that, in such event, the Purchaser
would be precluded from selling the Option Shares under Rule 144 even if the
one-year minimum holding period were satisfied.
5.3.8 Substantial Burden of Proof. The Purchaser understands
that: (i) notwithstanding the fact that Rule 144 is not exclusive, the staff of
the SEC has expressed its opinion that persons proposing to sell private
placement securities other than in a registered offering and otherwise than
pursuant to Rule 144 will have a substantial burden of proof in establishing
that an exemption from registration is available for such offers or sales; and
(ii) any such persons and their respective brokers who participate in such
transactions do so at their own risk.
6. Rights of Optionee; Transferability.
6.1 Employment or Other Services. Nothing in this Agreement will
interfere with or limit in any way the right of the Company or any Subsidiary to
terminate the employment or other services of the Optionee at any time, nor
confer upon the Optionee any right to continue in the employ or other services
of the Company or any Subsidiary at any particular position or rate of pay or
for any particular period of time.
6.2 Rights as a Shareholder. The Optionee will have no rights as a
shareholder unless and until all conditions to the effective exercise of this
Option (including, without limitation, the conditions set forth in Sections 4
and 6 of this Agreement) have been satisfied and the Optionee has become the
holder of record of such shares. No adjustment will be made for dividends or
distributions with respect to this Option as to which there is a record date
preceding the date the Optionee becomes the holder of record of such shares,
except as may otherwise be provided in the Plan or determined by the Committee
in its sole discretion.
6.3 Restrictions on Transfer. Except pursuant to testamentary will or
the laws of descent and distribution or as otherwise expressly permitted by the
Plan, no right or interest of the Optionee in this Option prior to exercise may
be assigned or transferred, or subjected to any lien, during the lifetime of the
Optionee, either voluntarily or involuntarily, directly or indirectly, by
operation of law or otherwise. The Optionee will, however, be entitled to
designate a beneficiary to receive this Option upon such Optionee's death, and,
in the event of the Optionee's death, exercise of this Option (to the extent
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permitted pursuant to Section 3.2(a) of this Agreement) may be made by the
Optionee's legal representatives, heirs and legatees.
6.4 Breach of Confidentiality or Non-Compete Agreements.
Notwithstanding anything in this Agreement or the Plan to the contrary, in the
event that the Optionee materially breaches the terms of any confidentiality or
non-compete agreement entered into with the Company or any Subsidiary (including
any confidentiality or non-compete agreement made in connection with the grant
of this Option), whether such breach occurs before or after termination of the
Optionee's employment or other service with the Company or any Subsidiary, the
Committee in its sole discretion may immediately terminate all rights of the
Optionee under the Plan and this Agreement without notice of any kind and may
require the Optionee to disgorge any profits (however defined by the Committee)
made by the Optionee relating to this Option or any Option Shares.
7. Securities Law and Other Restrictions.
7.1 Restrictions on Issuance and on Transfer. Notwithstanding any other
provision of the Plan or this Agreement, the Company will not be required to
issue, and the Optionee may not sell, assign, transfer or otherwise dispose of,
any Option Shares, unless (a) there is in effect with respect to the Option
Shares a registration statement under the Securities Act of 1933, as amended,
and any applicable state or foreign securities laws or an exemption from such
registration, and (b) there has been obtained any other consent, approval, or
permit from any other regulatory body which the Committee, in its sole
discretion, deems necessary or advisable. The Company may condition such
issuance, sale, or transfer upon the receipt of any representations or
agreements from the parties involved, and the placement of any legends on
certificates representing Option Shares, as may be deemed necessary or advisable
by the Company in order to comply with such securities law or other
restrictions.
7.2 Lock-up. The Optionee (and any other holder of any of the Option
Shares) hereby agrees not to offer, sell, or otherwise dispose of any of the
Company's Common Stock held of record or beneficially owned by such person
during such period following the effective date of the registration statement
for any underwritten public offering by the Company as is requested by the
managing underwriter for such offering. Such restriction shall not apply to
Option Shares registered in such offering. In order to enforce this provision,
the Company may impose stop-transfer instructions with respect to such Option
Shares until the end of such period.
8. Withholding Taxes.
The Company is entitled to (a) withhold and deduct from future wages of
the Optionee (or from other amounts that may be due and owing to the Optionee
from the Company), or make other arrangements for the collection of, all legally
required amounts necessary to satisfy any federal, state or local withholding
and employment-related tax requirements attributable to the Option, including,
without limitation, the grant or exercise of this Option or a disqualifying
disposition of any Option Shares, or (b) require the Optionee promptly to remit
the amount of such withholding to the Company before acting on the Optionee's
notice of exercise of this Option. In the event that the Company is unable to
withhold such amounts, for whatever reason, the Optionee agrees to pay to the
Company an amount equal to the amount the Company would otherwise be required to
withhold under federal, state, or local law.
9. Adjustments.
In the event of any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering, divestiture, or extraordinary dividend
(including a spin-off), or any other change in the corporate structure or shares
of
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the Company, then the Committee (or, if the Company is not the surviving
corporation in any such transaction, the board of directors of the surviving
corporation), in order to prevent dilution or enlargement of the rights of the
Optionee, will make appropriate adjustment (which determination will be
conclusive) as to the number and kind of securities or other property (including
cash) subject to, and the exercise price of, this Option.
10. Subject to Plan.
The Option and the Option Shares granted and issued pursuant to this
Agreement have been granted and issued under, and are subject to the terms of,
the Plan. The terms of the Plan are incorporated by reference in this Agreement
in their entirety, and the Optionee, by execution of this Agreement,
acknowledges having received a copy of the Plan. The provisions of this
Agreement will be interpreted as to be consistent with the Plan, and any
ambiguities in this Agreement will be interpreted by reference to the Plan. In
the event that any provision of this Agreement is inconsistent with the terms of
the Plan, then the terms of the Plan will prevail.
11. Tax Consequences.
11.1 Valuation of the Option Shares. The exercise price of the Option
Shares has been determined by the Committee to be equal to [100%] of the fair
market value of the Option Shares on the Date of Grant. The Company believes
that this is a fair attempt at reaching an accurate appraisal of the worth of
the Option Shares. However, it is possible that the Internal Revenue Service
(the "IRS") could later assert that the value of the Option Shares was
substantially greater on the Date of Grant than that determined by the
Committee. In the event that the IRS were to succeed in such a claim, then any
resulting income tax would be payable by the Optionee. The Company gives no
assurance that such a determination and resulting tax liability will not occur
and specifically assumes no responsibility therefor.
11.2 Section 83(b) Election. If the Optionee ever exercises the Option
to purchase any Nonvested Shares, then the Optionee understands that: (i) if no
Section 83(b) election is made with respect to such purchase, then under Section
83 of the Code, the Optionee will be taxed (at ordinary income rates) at each
time that any restrictions on such Nonvested Shares lapse in an amount equal to
the difference between: (a) the amount paid for such Nonvested Shares; and (b)
the fair market value of such Nonvested Shares as of the date any restrictions
on such Nonvested Shares lapse; (ii) in this context, the term "restriction"
means the right of the Company to repurchase such Nonvested Shares pursuant to
the Company's Repurchase Option; (iii) if a Section 83(b) election is made with
respect to such purchase (by filing an election under Section 83(b) of the Code
with the IRS within 30 days after the date of such purchase), then this means
that the Optionee is electing instead to be taxed (at ordinary income rates) at
the time that the Nonvested Shares are purchased, in an amount equal to the
difference between: (a) the price paid for the Nonvested Shares; and (b) the
fair market value of the Nonvested Shares as of the date of such purchase; and
(iv) a form for making an election under Section 83(b) of the Code is attached
hereto as Exhibit A.
Before entering into this Agreement (and before any exercise of the
Option), the Optionee has reviewed (and will review) with the Optionee's own tax
advisors the federal, state, local, and foreign tax consequences of the purchase
of the Option Shares and the other transactions contemplated by this Agreement.
The Optionee is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. The Optionee understands
that the Optionee (and not the Company) will be responsible for the Optionee's
own tax liability that may arise as a result of the purchase of the Option
Shares or the other transactions contemplated by this Agreement.
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THE OPTIONEE ACKNOWLEDGES THAT IT IS THE OPTIONEE'S SOLE RESPONSIBILITY
AND NOT THE COMPANY'S RESPONSIBILITY TO FILE TIMELY THE ELECTION UNDER SECTION
83(b) OF THE CODE, EVEN IF THE OPTIONEE REQUESTS THAT THE COMPANY OR ITS
REPRESENTATIVES MAKE SUCH FILING ON THE OPTIONEE'S BEHALF.
11.3 No Representations. The Optionee understands and acknowledges
that: (i) the Company has made no representations or warranties to the Optionee
with respect to any of the tax consequences of the transactions contemplated by
this Agreement; and (ii) the Optionee is in no manner relying on the Company or
any of its representatives for an assessment of such tax consequences.
12. Miscellaneous.
12.1 Binding Effect. This Agreement will be binding upon the heirs,
executors, administrators, and successors of the parties to this Agreement.
12.2 Governing Law. This Agreement and all rights and obligations under
this Agreement will be construed in accordance with the Plan and governed by the
laws of the State of California, without regard to conflicts of laws provisions.
Any legal proceeding related to this Agreement will be brought in an appropriate
California court, and the parties to this Agreement consent to the exclusive
jurisdiction of the court for this purpose.
12.3 Entire Agreement. This Agreement and the Plan set forth the entire
agreement and understanding of the parties to this Agreement with respect to the
grant and exercise of this Option and the administration of the Plan and
supersede all prior agreements (including any letter from the Company setting
forth the terms of the Optionee's employment or other service with the Company),
arrangements, proposals, plans, and understandings relating to the grant and
exercise of this Option and the administration of the Plan.
12.4 Amendment and Waiver. Other than as provided in the Plan, this
Agreement may be amended, waived, modified, or canceled only by a written
instrument executed by the parties to this Agreement or, in the case of a
waiver, by the party waiving compliance.
The parties to this Agreement have executed this Agreement effective as
of the date first set forth above.
THE COMPANY: ALTIMA COMMUNICATIONS, INC., a California
corporation
By: ____________________________________
Name: Xxxxxxx Xx
Title: President
Addr: 0000 Xxxxxxx Xxxxx, #000
Xxx Xxxx, XX 00000
By execution of this Agreement, OPTIONEE
the Optionee acknowledges having
received a copy of the Plan. ___________________________________________
Address: ___________________________________________
___________________________________________
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CONSENT OF SPOUSE
The undersigned hereby acknowledges and agrees that:
1. The undersigned is the spouse of the Optionee.
2. The undersigned has read and understands the provisions of the
foregoing Non-Statutory Stock Option Agreement (the "Agreement").
3. In consideration of the granting to the Optionee by the Company of
the right to acquire the Option Shares, the undersigned hereby:
(i) Consents and agrees to be irrevocably bound by the
Agreement.
(ii) Agrees that any community property or similar interest
shall be similarly bound.
(iii) Appoints the Optionee as the undersigned's
attorney-in-fact with respect to any amendment of, or exercise of any rights
under, the Agreement.
Executed effective as of the date of the Agreement.
---------------------------------------------
(Signature of the Optionee's Spouse)
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(Type or Print Name of the Optionee's Spouse)
(If none, please sign below)
SIGN ABOVE OR BELOW AS APPLICABLE
The Optionee hereby certifies that the Optionee is not legally married
as of the date of the Agreement.
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(Signature of the Optionee)
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