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EXHIBIT 99.4
FORM OF STOCK OPTION AGREEMENT-XXXXXX
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THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.
SUPPLYBASE, INC.:
STOCK OPTION AGREEMENT
SECTION 1. GRANT OF OPTION.
(a) OPTION. On the terms and conditions set forth in the Notice of
Stock Option Grant and this Agreement, the Company grants to the Optionee on the
Date of Grant the option to purchase at the Exercise Price the number of Shares
set forth in the Notice of Stock Option Grant. The Exercise Price is agreed to
be at least 100% of the Fair Market Value per Share on the Date of Grant. This
option is intended to be a Nonstatutory Option, as provided in the Notice of
Stock Option Grant.
SECTION 2. RIGHT TO EXERCISE.
(a) EXERCISABILITY. Subject to Subsections (b) and (c) below and the
other conditions set forth in this Agreement, all or part of this option may be
exercised prior to its expiration at the time or times set forth in the Notice
of Stock Option Grant. Shares purchased by exercising this option may be subject
to the Right of Repurchase under Section 7.
(b) $100,000 LIMITATION. If this option is designated as an ISO in the
Notice of Stock Option Grant, then the Optionee's right to exercise this option
shall be deferred to the extent (and only to the extent) that this option
otherwise would not be treated as an ISO by reason of the $100,000 annual
limitation under Section 422(d) of the Code, except that:
(i) The Optionee's right to exercise this option shall in any
event become exercisable at least as rapidly as 20% per year over the
five-year period commencing on the Date of Grant, unless the Optionee
is an officer of the Company, an Outside Director or a Consultant; and
(ii) The Optionee's right to exercise this option shall no
longer be deferred if (A) the Company is subject to a Change in Control
before the Optionee's Service terminates, (B) this option does not
remain outstanding, (C) this option is not assumed by the surviving
corporation or its parent and (D) the surviving corporation or its
parent does not substitute an option with substantially the same terms
for this option.
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SECTION 3. NO TRANSFER OR ASSIGNMENT OF OPTION.
Except as otherwise provided in this Agreement, this option and the
rights and privileges conferred hereby shall not be sold, pledged or otherwise
transferred (whether by operation of law or otherwise) and shall not be subject
to sale under execution, attachment, levy or similar process.
SECTION 4. EXERCISE PROCEDURES.
(a) NOTICE OF EXERCISE. The Optionee or the Optionee's representative
may exercise this option by giving written notice to the Company pursuant to
Section 13(c). The notice shall specify the election to exercise this option,
the number of Shares for which it is being exercised and the form of payment.
The notice shall be signed by the person exercising this option. In the event
that this option is being exercised by the representative of the Optionee, the
notice shall be accompanied by proof (satisfactory to the Company) of the
representative's right to exercise this option. The Optionee or the Optionee's
representative shall deliver to the Company, at the time of giving the notice,
payment in a form permissible under Section 5 for the full amount of the
Purchase Price.
(b) ISSUANCE OF SHARES. After receiving a proper notice of exercise,
the Company shall cause to be issued a certificate or certificates for the
Shares as to which this option has been exercised, registered in the name of the
person exercising this option (or in the names of such person and his or her
spouse as community property or as joint tenants with right of survivorship).
The Company shall cause such certificate or certificates to be deposited in
escrow or delivered to or upon the order of the person exercising this option.
(c) WITHHOLDING TAXES. In the event that the Company determines that it
is required to withhold any tax as a result of the exercise of this option, the
Optionee, as a condition to the exercise of this option, shall make arrangements
satisfactory to the Company to enable it to satisfy all withholding
requirements. The Optionee shall also make arrangements satisfactory to the
Company to enable it to satisfy any withholding requirements that may arise in
connection with the vesting or disposition of Shares purchased by exercising
this option.
SECTION 5. PAYMENT FOR STOCK.
(a) CASH. All or part of the Purchase Price may be paid in cash or cash
equivalents.
(b) SURRENDER OF STOCK. All or any part of the Purchase Price may be
paid by surrendering, or attesting to the ownership of, Shares that are already
owned by the Optionee. Such Shares shall be surrendered to the Company in good
form for transfer and shall be valued at their Fair Market Value on the date
when this option is exercised. The Optionee shall not surrender, or attest to
the ownership of, Shares in payment of the Purchase Price if such action would
cause the Company to recognize compensation expense (or additional compensation
expense) with respect to this option for financial reporting purposes.
(c) EXERCISE/SALE. If Stock is publicly traded, all or part of the
Purchase Price and any withholding taxes may be paid by the delivery (on a form
prescribed by the Company)
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of an irrevocable direction to a securities broker approved by the Company to
sell Shares and to deliver all or part of the sales proceeds to the Company.
(d) EXERCISE/PLEDGE. If Stock is publicly traded, all or part of the
Purchase Price and any withholding taxes may be paid by the delivery (on a form
prescribed by the Company) of an irrevocable direction to pledge Shares to a
securities broker or lender approved by the Company, as security for a loan, and
to deliver all or part of the loan proceeds to the Company.
SECTION 6. TERM AND EXPIRATION.
(a) BASIC TERM. This option shall in any event expire on the expiration
date set forth in the Notice of Stock Option Grant, which date is 10 years after
the Date of Grant.
(b) TERMINATION OF SERVICE (EXCEPT BY DEATH). If the Optionee's Service
terminates for any reason other than death, then this option shall expire on the
earliest of the following occasions:
(i) The expiration date determined pursuant to Subsection (a)
above;
(ii) The date three months after the termination of the
Optionee's Service for any reason other than Disability; or
(iii) The date six months after the termination of the
Optionee's Service by reason of Disability.
The Optionee may exercise all or part of this option at any time before its
expiration under the preceding sentence, but only to the extent that this option
had become exercisable for vested shares before the Optionee's Service
terminated. When the Optionee's Service terminates, this option shall expire
immediately with respect to the number of Shares for which this option is not
yet exercisable and with respect to any Restricted Shares. In the event that the
Optionee dies after termination of Service but before the expiration of this
option, all or part of this option may be exercised (prior to expiration) by the
executors or administrators of the Optionee's estate or by any person who has
acquired this option directly from the Optionee by beneficiary designation,
bequest or inheritance, but only to the extent that this option had become
exercisable before the Optionee's Service terminated.
(c) DEATH OF THE OPTIONEE. If the Optionee dies while in Service, then
this option shall expire on the earlier of the following dates:
(i) The expiration date determined pursuant to Subsection (a)
above; or
(ii) The date 12 months after the Optionee's death.
All or part of this option may be exercised at any time before its expiration
under the preceding sentence by the executors or administrators of the
Optionee's estate or by any person who has acquired this option directly from
the Optionee by beneficiary designation, bequest or
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inheritance, but only to the extent that this option had become exercisable
before the Optionee's death. When the Optionee dies, this option shall expire
immediately with respect to the number of Shares for which this option is not
yet exercisable and with respect to any Restricted Shares.
(d) LEAVES OF ABSENCE. For any purpose under this Agreement, Service
shall be deemed to continue while the Optionee is on a bona fide leave of
absence, if such leave was approved by the Company in writing and if continued
crediting of Service for such purpose is expressly required by the terms of such
leave or by applicable law (as determined by the Company).
SECTION 7. RIGHT OF REPURCHASE.
(a) SCOPE OF REPURCHASE RIGHT. Unless they have become vested in
accordance with the Notice of Stock Option Grant and Subsection (c) below, the
Shares acquired under this Agreement initially shall be Restricted Shares and
shall be subject to a right (but not an obligation) of repurchase by the
Company. The Optionee shall not transfer, assign, encumber or otherwise dispose
of any Restricted Shares, except as provided in the following sentence. The
Optionee may transfer Restricted Shares (i) by beneficiary designation, will or
intestate succession or (ii) to the Optionee's spouse, children or grandchildren
or to a trust established by the Optionee for the benefit of the Optionee or the
Optionee's spouse, children or grandchildren, provided in either case that the
Transferee agrees in writing on a form prescribed by the Company to be bound by
all provisions of this Agreement. If the Optionee transfers any Restricted
Shares, then this Section 7 shall apply to the Transferee to the same extent as
to the Optionee.
(b) CONDITION PRECEDENT TO EXERCISE. The Right of Repurchase shall be
exercisable with respect to any Restricted Shares only during the 60-day period
next following the later of:
(i) The date when the Optionee's Service terminates for any
reason, with or without cause, including (without limitation) death or
disability; or
(ii) The date when such Restricted Shares were purchased by
the Optionee, the executors or administrators of the Optionee's estate
or any person who has acquired this option directly from the Optionee
by bequest, inheritance or beneficiary designation.
(c) LAPSE OF REPURCHASE RIGHT. The Right of Repurchase shall lapse with
respect to the Shares subject to this option in accordance with the vesting
schedule set forth in the Notice of Stock Option Grant. In addition, the Right
of Repurchase shall lapse and all of the remaining Restricted Shares shall
become vested if (i) the Company is subject to a Change in Control before the
Optionee's Service terminates and (ii) the Right of Repurchase is not assigned
to the entity that employs the Optionee immediately after the Change in Control
or to its parent or subsidiary.
(d) REPURCHASE COST. If the Company exercises the Right of Repurchase,
it shall pay the Optionee an amount equal to the Exercise Price for each of the
Restricted Shares being repurchased.
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(e) EXERCISE OF REPURCHASE RIGHT. The Right of Repurchase shall be
exercisable only by written notice delivered to the Optionee prior to the
expiration of the 60-day period specified in Subsection (b) above. The notice
shall set forth the date on which the repurchase is to be effected. Such date
shall not be more than 30 days after the date of the notice. The certificate(s)
representing the Restricted Shares to be repurchased shall, prior to the close
of business on the date specified for the repurchase, be delivered to the
Company properly endorsed for transfer. The Company shall, concurrently with the
receipt of such certificate(s), pay to the Optionee the purchase price
determined according to Subsection (d) above. Payment shall be made in cash or
cash equivalents or by canceling indebtedness to the Company incurred by the
Optionee in the purchase of the Restricted Shares. The Right of Repurchase shall
terminate with respect to any Restricted Shares for which it has not been timely
exercised pursuant to this Subsection (e).
(f) ADDITIONAL SHARES OR SUBSTITUTED SECURITIES. In the event of the
declaration of a stock dividend, the declaration of an extraordinary dividend
payable in a form other than stock, a spin-off, a stock split, an adjustment in
conversion ratio, a recapitalization or a similar transaction affecting the
Company's outstanding securities without receipt of consideration, any new,
substituted or additional securities or other property (including money paid
other than as an ordinary cash dividend) which are by reason of such transaction
distributed with respect to any Restricted Shares or into which such Restricted
Shares thereby become convertible shall immediately be subject to the Right of
Repurchase. Appropriate adjustments to reflect the distribution of such
securities or property shall be made to the number and/or class of the
Restricted Shares. Appropriate adjustments shall also, after each such
transaction, be made to the price per share to be paid upon the exercise of the
Right of Repurchase in order to reflect any change in the Company's outstanding
securities effected without receipt of consideration therefor; provided,
however, that the aggregate purchase price payable for the Restricted Shares
shall remain the same.
(g) TERMINATION OF RIGHTS AS STOCKHOLDER. If the Company makes
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Restricted Shares to be repurchased in
accordance with this Section 7, then after such time the person from whom such
Restricted Shares are to be repurchased shall no longer have any rights as a
holder of such Restricted Shares (other than the right to receive payment of
such consideration in accordance with this Agreement). Such Restricted Shares
shall be deemed to have been repurchased in accordance with the applicable
provisions hereof, whether or not the certificate(s) therefor have been
delivered as required by this Agreement.
(h) ESCROW. Upon issuance, the certificates for Restricted Shares shall
be deposited in escrow with the Company to be held in accordance with the
provisions of this Agreement. Any new, substituted or additional securities or
other property described in Subsection (f) above shall immediately be delivered
to the Company to be held in escrow, but only to the extent the Shares are at
the time Restricted Shares. All regular cash dividends on Restricted Shares (or
other securities at the time held in escrow) shall be paid directly to the
Optionee and shall not be held in escrow. Restricted Shares, together with any
other assets or securities held in escrow hereunder, shall be (i) surrendered to
the Company for repurchase and cancellation upon the Company's exercise of its
Right of Repurchase or Right of First Refusal or (ii) released to the Optionee
upon the Optionee's request to the extent the Shares are no longer Restricted
Shares (but not more frequently than once
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every six months). In any event, all Shares which have vested (and any other
vested assets and securities attributable thereto) shall be released within 60
days after the earlier of (i) the Optionee's cessation of Service or (ii) the
lapse of the Right of First Refusal.
SECTION 8. RIGHT OF FIRST REFUSAL.
(a) RIGHT OF FIRST REFUSAL. In the event that the Optionee proposes to
sell, pledge or otherwise transfer to a third party any Shares acquired under
this Agreement, or any interest in such Shares, the Company shall have the Right
of First Refusal with respect to all (and not less than all) of such Shares. If
the Optionee desires to transfer Shares acquired under this Agreement, the
Optionee shall give a written Transfer Notice to the Company describing fully
the proposed transfer, including the number of Shares proposed to be
transferred, the proposed transfer price, the name and address of the proposed
Transferee and proof satisfactory to the Company that the proposed sale or
transfer will not violate any applicable federal or state securities laws. The
Transfer Notice shall be signed both by the Optionee and by the proposed
Transferee and must constitute a binding commitment of both parties to the
transfer of the Shares. The Company shall have the right to purchase all, and
not less than all, of the Shares on the terms of the proposal described in the
Transfer Notice (subject, however, to any change in such terms permitted under
Subsection (b) below) by delivery of a notice of exercise of the Right of First
Refusal within 30 days after the date when the Transfer Notice was received by
the Company. The Company's rights under this Subsection (a) shall be freely
assignable, in whole or in part.
(b) TRANSFER OF SHARES. If the Company fails to exercise its Right of
First Refusal within 30 days after the date when it received the Transfer
Notice, the Optionee may, not later than 90 days following receipt of the
Transfer Notice by the Company, conclude a transfer of the Shares subject to the
Transfer Notice on the terms and conditions described in the Transfer Notice,
provided that any such sale is made in compliance with applicable federal and
state securities laws and not in violation of any other contractual restrictions
to which the Optionee is bound. Any proposed transfer on terms and conditions
different from those described in the Transfer Notice, as well as any subsequent
proposed transfer by the Optionee, shall again be subject to the Right of First
Refusal and shall require compliance with the procedure described in Subsection
(a) above. If the Company exercises its Right of First Refusal, the parties
shall consummate the sale of the Shares on the terms set forth in the Transfer
Notice within 60 days after the date when the Company received the Transfer
Notice (or within such longer period as may have been specified in the Transfer
Notice); provided, however, that in the event the Transfer Notice provided that
payment for the Shares was to be made in a form other than cash or cash
equivalents paid at the time of transfer, the Company shall have the option of
paying for the Shares with cash or cash equivalents equal to the present value
of the consideration described in the Transfer Notice.
(c) ADDITIONAL SHARES OR SUBSTITUTED SECURITIES. In the event of the
declaration of a stock dividend, the declaration of an extraordinary dividend
payable in a form other than stock, a spin-off, a stock split, an adjustment in
conversion ratio, a recapitalization or a similar transaction affecting the
Company's outstanding securities without receipt of consideration, any new,
substituted or additional securities or other property (including money paid
other than as an ordinary cash dividend) which are by reason of such transaction
distributed with respect to any
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Shares subject to this Section 8 or into which such Shares thereby become
convertible shall immediately be subject to this Section 8. Appropriate
adjustments to reflect the distribution of such securities or property shall be
made to the number and/or class of the Shares subject to this Section 8.
(d) TERMINATION OF RIGHT OF FIRST REFUSAL. Any other provision of this
Section 8 notwithstanding, in the event that the Stock is readily tradable on an
established securities market when the Optionee desires to transfer Shares, the
Company shall have no Right of First Refusal, and the Optionee shall have no
obligation to comply with the procedures prescribed by Subsections (a) and (b)
above.
(e) PERMITTED TRANSFERS. This Section 8 shall not apply to (i) a
transfer by beneficiary designation, will or intestate succession or (ii) a
transfer to the Optionee's spouse, children or grandchildren or to a trust
established by the Optionee for the benefit of the Optionee or the Optionee's
spouse, children or grandchildren, provided in either case that the Transferee
agrees in writing on a form prescribed by the Company to be bound by all
provisions of this Agreement. If the Optionee transfers any Shares acquired
under this Agreement, either under this Subsection (e) or after the Company has
failed to exercise the Right of First Refusal, then this Section 8 shall apply
to the Transferee to the same extent as to the Optionee.
(f) TERMINATION OF RIGHTS AS STOCKHOLDER. If the Company makes
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Shares to be purchased in accordance with
this Section 8, then after such time the person from whom such Shares are to be
purchased shall no longer have any rights as a holder of such Shares (other than
the right to receive payment of such consideration in accordance with this
Agreement). Such Shares shall be deemed to have been purchased in accordance
with the applicable provisions hereof, whether or not the certificate(s)
therefor have been delivered as required by this Agreement.
SECTION 9. LEGALITY OF INITIAL ISSUANCE.
No Shares shall be issued upon the exercise of this option unless and
until the Company has determined that:
(a) It and the Optionee have taken any actions required to register the
Shares under the Securities Act or to perfect an exemption from the registration
requirements thereof;
(b) Any applicable listing requirement of any stock exchange or other
securities market on which Stock is listed has been satisfied; and
(c) Any other applicable provision of state or federal law has been
satisfied.
SECTION 10. NO REGISTRATION RIGHTS.
The Company may, but shall not be obligated to, register or qualify the
sale of Shares under the Securities Act or any other applicable law. The Company
shall not be obligated to take any affirmative action in order to cause the sale
of Shares under this Agreement to comply with any law.
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SECTION 11. RESTRICTIONS ON TRANSFER.
(a) SECURITIES LAW RESTRICTIONS. Regardless of whether the offering and
sale of Shares under this Agreement have been registered under the Securities
Act or have been registered or qualified under the securities laws of any state,
the Company at its discretion may impose restrictions upon the sale, pledge or
other transfer of such Shares (including the placement of appropriate legends on
stock certificates or the imposition of stop-transfer instructions) if, in the
judgment of the Company, such restrictions are necessary or desirable in order
to achieve compliance with the Securities Act, the securities laws of any state
or any other law.
(b) MARKET STAND-OFF. In connection with any underwritten public
offering by the Company of its equity securities pursuant to an effective
registration statement filed under the Securities Act, including the Company's
initial public offering, the Optionee shall not directly or indirectly sell,
make any short sale of, loan, hypothecate, pledge, offer, grant or sell any
option or other contract for the purchase of, purchase any option or other
contract for the sale of, or otherwise dispose of or transfer, or agree to
engage in any of the foregoing transactions with respect to, any Shares acquired
under this Agreement without the prior written consent of the Company or its
underwriters. Such restriction (the "Market Stand-Off") shall be in effect for
such period of time following the date of the final prospectus for the offering
as may be requested by the Company or such underwriters. In no event, however,
shall such period exceed 180 days. The Market Stand-Off shall in any event
terminate two years after the date of the Company's initial public offering. In
the event of the declaration of a stock dividend, a spin-off, a stock split, an
adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company's outstanding securities without receipt of consideration,
any new, substituted or additional securities which are by reason of such
transaction distributed with respect to any Shares subject to the Market
Stand-Off, or into which such Shares thereby become convertible, shall
immediately be subject to the Market Stand-Off. In order to enforce the Market
Stand-Off, the Company may impose stop-transfer instructions with respect to the
Shares acquired under this Agreement until the end of the applicable stand-off
period. The Company's underwriters shall be beneficiaries of the agreement set
forth in this Subsection (b). This Subsection (b) shall not apply to Shares
registered in the public offering under the Securities Act, and the Optionee
shall be subject to this Subsection (b) only if the directors and officers of
the Company are subject to similar arrangements.
(c) INVESTMENT INTENT AT GRANT. The Optionee represents and agrees that
the Shares to be acquired upon exercising this option will be acquired for
investment, and not with a view to the sale or distribution thereof.
(d) INVESTMENT INTENT AT EXERCISE. In the event that the sale of Shares
under this Agreement is not registered under the Securities Act but an exemption
is available which requires an investment representation or other
representation, the Optionee shall represent and agree at the time of exercise
that the Shares being acquired upon exercising this option are being acquired
for investment, and not with a view to the sale or distribution thereof, and
shall make such other representations as are deemed necessary or appropriate by
the Company and its counsel.
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(e) LEGENDS. All certificates evidencing Shares purchased under this
Agreement shall bear the following legend:
"THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE
TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED
HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES).
SUCH AGREEMENT GRANTS TO THE COMPANY CERTAIN RIGHTS OF FIRST REFUSAL
UPON AN ATTEMPTED TRANSFER OF THE SHARES AND CERTAIN REPURCHASE RIGHTS
UPON TERMINATION OF SERVICE WITH THE COMPANY. THE SECRETARY OF THE
COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO
THE HOLDER HEREOF WITHOUT CHARGE."
All certificates evidencing Shares purchased under this Agreement in an
unregistered transaction shall bear the following legend (and such other
restrictive legends as are required or deemed advisable under the provisions of
any applicable law):
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
(f) REMOVAL OF LEGENDS. If, in the opinion of the Company and its
counsel, any legend placed on a stock certificate representing Shares sold under
this Agreement is no longer required, the holder of such certificate shall be
entitled to exchange such certificate for a certificate representing the same
number of Shares but without such legend.
(g) ADMINISTRATION. Any determination by the Company and its counsel in
connection with any of the matters set forth in this Section 11 shall be
conclusive and binding on the Optionee and all other persons.
SECTION 12. ADJUSTMENT OF SHARES.
(a) In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of an extraordinary
dividend payable in a form other than Shares in an amount that has a material
effect on the Fair Market Value of the Stock, a combination or consolidation of
the outstanding Stock into a lesser number of Shares, a recapitalization, a
spin-off, a reclassification or a similar occurrence, the Board of Directors
shall make appropriate adjustments in one or more of (i) the number of Shares
covered by the outstanding Option or (ii) the Exercise Price under the
outstanding Option. In the event that the Company is a party to a merger or
consolidation, the outstanding Option shall be subject to the
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agreement of merger or consolidation. Such agreement, without the Optionee's
consent, may provide for:
(i) The continuation of such outstanding Options by the
Company (if the Company is the surviving corporation);
(ii) The assumption of this Agreement and such outstanding
Options by the surviving corporation or its parent;
(iii) The substitution by the surviving corporation or its
parent of options with substantially the same terms for such
outstanding Options; or
The cancellation of such outstanding Options without payment of any
consideration.
SECTION 13. MISCELLANEOUS PROVISIONS.
(a) RIGHTS AS A STOCKHOLDER. Neither the Optionee nor the Optionee's
representative shall have any rights as a stockholder with respect to any Shares
subject to this option until the Optionee or the Optionee's representative
becomes entitled to receive such Shares by filing a notice of exercise and
paying the Purchase Price pursuant to Sections 4 and 5.
(b) NO RETENTION RIGHTS. Nothing in this option or in this Agreement
shall confer upon the Optionee any right to continue in Service for any period
of specific duration or interfere with or otherwise restrict in any way the
rights of the Company (or any Parent or Subsidiary employing or retaining the
Optionee) or of the Optionee, which rights are hereby expressly reserved by
each, to terminate his or her Service at any time and for any reason, with or
without cause.
(c) NOTICE. Any notice required by the terms of this Agreement shall be
given in writing and shall be deemed effective upon personal delivery or upon
deposit with the United States Postal Service, by registered or certified mail,
with postage and fees prepaid. Notice shall be addressed to the Company at its
principal executive office and to the Optionee at the address that he or she
most recently provided to the Company.
(d) ENTIRE AGREEMENT. The Notice of Stock Option Grant and this
Agreement constitute the entire contract between the parties hereto with regard
to the subject matter hereof. They supersede any other agreements,
representations or understandings (whether oral or written and whether express
or implied) which relate to the subject matter hereof.
(e) CHOICE OF LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California, as such laws are
applied to contracts entered into and performed in such State.
SECTION 14. DEFINITIONS.
(a) "AGREEMENT" shall mean this Stock Option Agreement.
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(b) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted from time to time or, if a Committee has been appointed,
such Committee.
(c) "CHANGE IN CONTROL" shall mean:
(i) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate
reorganization, if persons who were not stockholders of the Company
immediately prior to such merger, consolidation or other reorganization
own immediately after such merger, consolidation or other
reorganization 50% or more of the voting power of the outstanding
securities of each of (A) the continuing or surviving entity and (B)
any direct or indirect parent corporation of such continuing or
surviving entity; or
(ii) The sale, transfer or other disposition of all or
substantially all of the Company's assets.
A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(e) "COMMITTEE" shall mean a committee of the Board of Directors.
(f) "COMPANY" shall mean SupplyBase, Inc., a Delaware corporation.
(g) "CONSULTANT" shall mean a person who performs bona fide services
for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding
Employees and Outside Directors.
(h) "DATE OF GRANT" shall mean the date specified in the Notice of
Stock Option Grant, which date shall be the later of (i) the date on which the
Board of Directors resolved to grant this option or (ii) the first day of the
Optionee's Service.
(i) "DISABILITY" shall mean that the Optionee is unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment.
(j) "EMPLOYEE" shall mean any individual who is a common-law employee
of the Company, a Parent or a Subsidiary.
(k) "EXERCISE PRICE" shall mean the amount for which one Share may be
purchased upon exercise of this option, as specified in the Notice of Stock
Option Grant.
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(l) "FAIR MARKET VALUE" shall mean the fair market value of a Share, as
determined by the Board of Directors in good faith. Such determination shall be
conclusive and binding on all persons.
(m) "NONSTATUTORY OPTION" shall mean a stock option not described in
Sections 422(b) or 423(b) of the Code.
(n) "NOTICE OF STOCK OPTION GRANT" shall mean the document so entitled
to which this Agreement is attached.
(o) "OPTIONEE" shall mean the individual named in the Notice of Stock
Option Grant.
(p) "OUTSIDE DIRECTOR" shall mean a member of the Board of Directors
who is not an Employee.
(q) "PARENT" shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
(r) "PURCHASE PRICE" shall mean the Exercise Price multiplied by the
number of Shares with respect to which this option is being exercised.
(s) "RESTRICTED SHARE" shall mean a Share that is subject to the Right
of Repurchase.
(t) "RIGHT OF FIRST REFUSAL" shall mean the Company's right of first
refusal described in Section 8.
(u) "RIGHT OF REPURCHASE" shall mean the Company's right of repurchase
described in Section 7.
(v) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
(w) "SERVICE" shall mean service as an Employee, Outside Director or
Consultant.
(x) "SHARE" shall mean one share of Stock, as adjusted in accordance
with Section 12 of this Agreement (if applicable).
(y) "STOCK" shall mean the Common Stock of the Company, with a par
value of $0.001 per Share.
(z) "SUBSIDIARY" shall mean any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
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(aa) "TRANSFEREE" shall mean any person to whom the Optionee has
directly or indirectly transferred any Share acquired under this Agreement.
(bb) "TRANSFER NOTICE" shall mean the notice of a proposed transfer of
Shares described in Section 8.
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