EXHIBIT 4.4
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (the "Agreement") is made and
entered into, dated for reference purposes as of the "Effective Date" set forth
on the signature page hereof (the "Effective Date"), by and between
MACHINETALKER, INC., a Delaware corporation (the "Company"), and the person
executing this Agreement as the "Holder" hereunder ("Holder"), pursuant to the
STOCK OPTION PLAN (the "Plan") sponsored by the Company, with reference to the
following facts:
RECITALS:
In recognition of past services by Holder and as an inducement to
Holder to provide services for the Company, the Company has agreed to grant to
Holder a nonqualified option to purchase certain shares of the common capital
stock of the Company, and the parties have agreed to execute this Agreement in
order to evidence the grant of such option.
AGREEMENTS:
NOW, THEREFORE, FOR VALUABLE CONSIDERATION, receipt which is hereby
acknowledged, Company hereby grants to Holder the following option (the
"Option"):
Section 1. GRANT OF OPTION. Subject to the terms and conditions set forth below,
the Company hereby grants to Holder the right and option (the "Option") to
purchase from the Company the number of shares of the Company's common capital
stock ("Common Stock") designated on the signature page hereof as "Option
Shares" (the "Option Shares") at an exercise price per share set forth on the
signature page hereof (the "Exercise Price"), subject to Holder's becoming
vested in the Option as set forth in this Section 1.
(a) Subject to Sections 1(b) and 1(c), below, the Option shall be
exercisable only to the extent Holder has become vested therein. As of any date
during the term of this Option, Holder shall be entitled to purchase such number
of the Option Shares (to the extent not previously purchased hereunder) as is
determined by multiplying the total number of Option Shares times Holder's
then-current vesting percentage as determined under this Section 1(a) and
Section 7, below. In consideration for Holder's service to the Company from and
after the "Vesting Commencement Date" set forth on the signature page hereof
(the "Vesting Commencement Date"), Holder shall become vested in this Option as
follows:
(i) After one year of continuous service as a consultant of the
Company following Holder's Vesting Commencement Date, Holder shall be
twenty-five percent (25.0%) vested in this Option.
(ii) For each subsequent period of thirty (30) days that Holder
thereafter remains continuously as a consultant of the Company, Holder
shall become vested in one-thirty-sixth (1/36th) of the remainder of
this Option.
(b) Notwithstanding any provision hereof to the contrary, Holder shall
forfeit any portion of the Option in which Holder is not then vested as of the
effective date as of which Holder's service engagement as a consultant to the
Company is terminated.
(c) Subject to the foregoing provisions of this Section 1, the Option is
exercisable at any time and from time to time during its term, in whole or in
part, to the extent that Holder has become vested in such Option pursuant to
this Section 1. This Option will terminate in all respects, and all rights and
options to purchase shares hereunder will terminate ten (10) years from the
Effective Date of this Option.
1
Section 2. MANNER OF EXERCISE OF OPTION. Holder may exercise the Option only by
delivering to the Company (a) a written notice of exercise specifying the number
of shares with respect to which the Option is to be exercised and the address to
which the certificate representing such shares is to be mailed, (b) cash,
certified or bank check or postal money order payable to the order of the
Company for an amount equal to the sum of (x) the Exercise Price of such shares,
and (y) such amount, if any, as may be due to fund withholding taxes due with
respect to such exercise, as required by Section 11, below, and(c) such
documentation establishing that the conditions precedent specified in Section 3,
below, have been satisfied by the Holder.
Section 3. CONDITIONS PRECEDENT. As a condition precedent to any exercise of
this Option, upon request of the Company, the Holder (or if any other individual
or individuals are exercising this Option, such individual or individuals) shall
deliver to the Company each of the following:
(a) Upon request of the Company, an investment letter in form and substance
satisfactory to the Company and its counsel which will contain among other
things a statement in writing that (i) the Option is then being exercised for
the account of the Holder and only with a view to investment in, and not for, in
connection with or with a view to the disposition of, the shares with respect to
which the Option is then being exercised; (ii) Holder has been advised that Rule
144 of the Securities and Exchange Commission (the "Commission"), which permits
the resale, subject to various terms and conditions, of small amounts of
"restricted securities" (as therein defined) after they have been held for one
(1) year, does not now apply to the Company because the Company is not now
required to file, and does not file, current reports under the Securities
Exchange Act of 1934 (the "Exchange Act"), nor is there publicly available
information concerning the Company substantially equivalent to that which would
be available if the Company were required to file such reports; (iii) Holder
understands that there is no assurance that the Company will ever become a
reporting company under the Exchange Act and that the Company has no obligation
to the Holder to do so; (iv) Holder and Holder's representatives have fully
investigated the Company and the business and financial conditions concerning it
and have knowledge of the Company's then current corporate activities and
financial condition; and (v) Holder believes that the nature and amount of the
shares being purchased are consistent with Holder's investment objectives,
abilities and resources. The foregoing investment representations no longer
shall be required after registration with the Commission of the stock subject to
this Option or acquired through the exercise of this Option.
(b) An executed Stock Transfer Agreement (the "Stock Transfer Agreement")
in a form reasonably satisfactory to the Company and permitted by the terms of
the Plan, in which, inter alia, Holder shall grant to the Company a right of
first refusal prior to any sale or attempted sale of any Option Shares to any
other person. Such first-refusal rights shall not apply to any Transaction (as
defined in Section 7, below), and in all events shall terminate and be of no
further force or effect from and after the first date as of which the Company
has filed with the United States Securities and Exchange Commission (the
"Commission") a registration statement for the sale of any shares of Common
Stock under the Securities Act of 1933, as amended (the "Securities Act"), and
such registration statement becomes effective. If there is any conflict or
inconsistency between the provisions of this Option and the provisions of any
Stock Transfer Agreement, then the provisions of the Stock Transfer Agreement
shall control.
Section 4. MARKET STAND-OFF. Holder agrees that in addition to the restrictions
on transfer of the Option Shares set forth in the Stock Transfer Agreement, for
a period of up to one hundred eighty (180) days from the effective date of any
registration of securities of the Company under the Securities Act of 1933, as
amended (the "Securities Act"), upon request of the Company or the underwriters
managing any underwritten offering of the Company's securities, Holder shall not
sell, make any short sale of, loan, grant any option for the purchase of, or
2
otherwise dispose of this Option or any shares issued pursuant to the exercise
of this Option, without the prior written consent of the Company and such
underwriters.
Section 5. DELIVERY OF SHARES. Within a reasonable time following the receipt by
the Company of the written notice and payment of the option exercise price for
the shares to be purchased hereunder and the fulfillment by Holder of the
conditions precedent to exercise of this Option, the Company will deliver or
cause to be delivered to Holder (or if any other individual or individuals are
exercising this Option, to such individual or individuals) at the address
specified pursuant to Section 2, above, a certificate or certificates for the
number of shares with respect to which the Option is then being exercised,
registered in the name of the Holder (or the name or names of the individual or
individuals exercising the Option, either alone or jointly with another person
or persons with rights of survivorship, as the individual or individuals
exercising the Option will prescribe in writing to the Company); provided,
however, that:
(a) Such delivery will be deemed effected for all purposes when a stock
transfer agent will have deposited such certificate or certificates in the
United States mail, addressed to the Holder (or such individual or individuals)
at the address so specified; and provided further that if any law, regulation or
order of the Commission or other body having jurisdiction in the premises will
require the Company or the Holder (or the individual or individuals exercising
this Option) to take any action in connection with the sale of the shares then
being purchased, then, subject to the other provisions of this paragraph, the
date on which such sale will be deemed to have occurred and the date for the
delivery of the certificates for such shares will be extended for the period
necessary to take and complete such action, it being understood that the Company
will have no obligation to take and complete any such action.
(b) Notwithstanding the foregoing, if this Option is exercised for shares
subject to the first-refusal rights set forth in the Stock Transfer Agreement,
then the certificate or certificates representing such shares will be delivered
in accordance with the terms of, and as described in the Stock Transfer
Agreement.
Section 6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The existence of this
Option will not affect in any way the right or power of the Company or its
Shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Common
Stock or the rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
If the Company will effect a subdivision or consolidation of shares or other
capital readjustment, the payment of a stock dividend, or other increase or
reduction of the number of shares of the Common Stock outstanding, without
receiving compensation therefor in money, services or property, then the number,
class, and per share price of shares of stock subject to this Option will be
appropriately adjusted in such a manner as to entitle the Holder to receive upon
exercise of this Option, for the same aggregate cash consideration, the same
total number and class of shares that the owner of an equal number of
outstanding shares of Common Stock would own as a result of the event requiring
the adjustment. Except as hereinbefore expressly provided, the issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, for cash or property, or for labor or services, either
upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares of obligations of the Company convertible
into such shares or other securities, will not affect, and no adjustment by
reason thereof will be made with respect to, the number or price of shares of
Common Stock then subject to this Option.
Section 7. EFFECT OF CERTAIN TRANSACTIONS. If the Company is a party to a merger
or reorganization with one or more other corporations, whether or not the
Company is the surviving or resulting corporation, or if the Company
3
consolidates with or into one or more other corporations, or if the Company is
liquidated, or if there is a sale or other disposition of substantially all of
the Company's capital stock or assets to a third party or parties (each
hereinafter referred to as a "Transaction"), in any case while this Option
remains outstanding: (a) subject to the provisions of clause (b) below, after
the effective date of such Transaction this Option will remain outstanding and
will be exercisable in shares of Common Stock or, if applicable, shares of such
stock or other securities, cash or property as the holders of shares of Common
Stock received pursuant to the terms of such Transaction; or (b) the time for
exercise of this Option may be accelerated by the Board so that this Option will
be fully exercisable on or prior to the effective date of such Transaction;
provided that (x) notice of such acceleration will be given to the Holder, (y)
the Holder will have the right to exercise this Option in part or in full prior
to the effective date of such Transaction, and (z) to the extent not so
exercised, this Option will be canceled prior to or as of such effective date;
and provided, further, that the Board may not accelerate unexercised and
unexpired options pursuant to this clause (b) if to do so would adversely affect
pooling of interests treatment intended to be effected in connection with a
Transaction.
Section 8. RIGHTS OF HOLDER. No person will, by virtue of the granting of this
Option to the Holder, be deemed to be a holder of any shares purchasable under
this Option or to be entitled to the rights or privileges of a holder of such
shares unless and until this Option has been exercised with respect to such
shares and they have been issued pursuant to that exercise of this Option. The
granting of this Option will not impose upon the Company or its shareholders any
obligations to continue Holder's service engagement with the Company, and the
right of the Company to terminate Holder's service engagement with the Company
will not be diminished or affected by reason of the fact that this Option has
been granted to the Holder. Nothing herein contained will impose any obligation
upon the Holder to exercise this Option.
Section 9. RESERVATION OF SHARES. At all times while any portion of this Option
is outstanding, the Company will reserve and keep available, out of shares of
its authorized and unissued stock or reacquired shares, a sufficient number of
shares of its Common Stock to satisfy the requirements of this Option; comply
with the terms of this Option promptly upon exercise of the Option rights; and
pay all fees or expenses necessarily incurred by the Company in connection with
the issuance and delivery of shares pursuant to the exercise of this Option.
Section 10. TRANSFER AND TERMINATION. Holder may not sell, pledge, assign,
hypothecate, transfer, or otherwise dispose of all or any portion of the Option
other than by will or the laws of descent and distribution.
Section 11. TAX WITHHOLDING. To the extent that the exercise of the Option gives
rise to an obligation on the part of the Company to withhold income tax from
amounts otherwise to be paid to Holder, the Company shall do so on such terms
and in accordance with such procedures as may be required under applicable law.
Section 12. MISCELLANEOUS.
(a) NOTICES. All notices permitted or required by this Agreement shall be
in writing and shall be deemed to be delivered and received (i) when personally
delivered, or (ii) on the day on which sent by facsimile, electronic mail, or
other similar device generating a receipt evidencing a successful transmission,
or (iii) on the third (3rd) business day after the day on which deposited in the
United States mail, first-class-certified mail, postage prepaid, transmitted or
addressed to the person for whom intended, at the facsimile number, email
address, or mailing address appearing at the end of this Agreement, or such
other facsimile number, email address, or mailing address, notice of which is
given in the manner contemplated by this Section 12(a).
4
(b) NO EMPLOYMENT RIGHTS. Neither the granting of the Option evidenced by
this Agreement, nor any other action taken by the Company in connection
therewith, are intended or shall be construed as giving to Holder any right to
be engaged to provide services for the Company for any period of time or to
restrict in any manner the right and power of the Company to terminate Holders
relationship with Company.
(c) GOVERNING LAW. This Option shall be governed by and construed in
accordance with the internal laws of the State of California, without regard to
conflict of law principles.
(d) GOVERNMENT REGULATIONS. The Option is subject to all laws, regulations
and orders of any governmental authority which may be applicable thereto and,
notwithstanding any of the provisions hereof, the Holder agrees that he will not
exercise the Option granted hereby nor will the Company be obligated to issue
any shares of stock hereunder if the exercise thereof or the issuance of such
shares, as the case may be, would constitute a violation by the Holder or the
Company of any such law, regulation or order or any provision thereof. The
Company will not be obligated to take any affirmative action in order to cause
the exercise of this Option or the issuance of shares pursuant hereto to comply
with any such law, regulation, order or provision.
(e) OPTION SUBJECT TO PLAN. This Option is and will be subject in every
respect to the provisions of the Company's Plan, as amended from time to time,
which is incorporated herein by reference and made a part hereof. Holder hereby
accepts this Option subject to all the terms and provisions of the Plan and
agrees that (i) in the event of any conflict between the terms hereof and those
of the Plan, the latter will prevail, and (ii) all decisions under and
interpretations of the Plan by the Company's Board of Directors (or its
designee) will be final, binding and conclusive upon the Holder and his or her
heirs and legal representatives.
[Signatures appear on the following page.]
5
IN WITNESS WHEREOF, the parties have executed this Option, or caused
this Agreement to be executed as of the Effective Date.
"COMPANY": "HOLDER:"
MACHINETALKER, INC.,
a Delaware corporation
By_____________________________ ______________________________
Xxxxxx X. Xxxxx, President Holder's Signature
Address and Facsimile No. for Notices: ______________________________
Holder's Printed Name
MachineTalker, Inc.
000 Xx Xx Xxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000 Address and Facsimile No.
for Notices:
-------------------------------
-------------------------------
-------------------------------
Facsimile No.: (000) 000-0000
Facsimile No.:( )_____________
No. of Option Shares:__________
Vesting Commencement Date:_____
Effective Date:_________________
Exercise Price Per Share:_______
6
