Incentive Stock Option Agreement
[
DATE]
[NAME]
[ADDRESS]
Dear
[ ]:
I
am
pleased to inform you that MRU Holdings, Inc. (the “Company”) has granted you
incentive
stock options
to
purchase shares of the Company’s common stock, par value $0.001, (the "Common
Stock") as set forth below.
The
grant
of this option is made pursuant to the MRU Holdings, Inc. 2004 Incentive Plan
(the “Plan”). This stock option is intended to qualify as an "incentive stock
option" under Section 422 of the Internal Revenue Code of 1986, as amended
from
time to time. The terms of the Plan are incorporated into this letter and in
the
case of any conflict between the Plan and this letter, the terms of the Plan
shall control. Terms that begin with initial capital letters shall have the
defined meaning set forth herein or in the Plan, as the case may
be.
Now,
therefore, in consideration of the foregoing and the mutual covenants
hereinafter set forth:
1. Incentive
Stock Option.
The
Company hereby grants you an incentive stock option (“ISO”) to purchase from the
Company [ ] shares of Common Stock at a price of $[ ] per share. The
Date of Grant is [ ]. Unless earlier exercised or terminated in accordance
with the terms hereunder and in the Plan, this ISO will expire on the date
that
is the tenth (10th)
anniversary of the Date of Grant.
2. Entitlement
to Exercise the ISO.
The
grant of the ISO is subject to the following terms and conditions:
(a) This
ISO
will become vested and exercisable, with respect to the total shares granted,
at
the rate of [ ] shares on [ ], [ ] shares on [ ], and
the remaining [ ] shares on [ ]; provided that you are employed by
the Company on the particular vesting date.
(b) Notwithstanding
the foregoing vesting and exercisability conditions, this ISO will become
immediately vested and fully exercisable upon a Change in Control.
4. Method
of Exercise & Payment Under ISO.
You may
exercise the vested portion of the ISO in whole or in part, by giving written
notice to the Company which shall state the election to exercise the ISO and
the
number of shares of Common Stock with respect to which the ISO is being
exercised. The written notice shall be signed by the person exercising the
ISO,
shall be delivered to the Corporate Secretary of the Company at the Company’s
principal executive office, and shall be accompanied either by (i) payment
in
full of the exercise price for the shares of Common Stock being purchased,
by
delivery of cash or check, or (ii) your written election to receive a net number
of shares determined by reducing the shares with respect to which you are
exercising this Option by a number of shares that have a Fair Market Value,
determined on the date of exercise, equal to the sum of the aggregate exercise
price payable hereunder for such shares, and the “Applicable Withholding Taxes”
within the meaning of and pursuant to Section 5(iii) of this ISO.
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5. Tax
Withholding.
As a
condition of exercise, you agree that at the time of exercise that you will
pay
to the Company the Applicable Withholding Taxes (as that term is defined in
the
Plan), if any, that the Company is required to withhold in connection with
the
exercise of the ISO. To satisfy the Applicable Withholding Taxes, you may elect
to (i) make cash payment or authorize additional withholding from cash
compensation, (ii) deliver Mature Shares (as that term is defined in the Plan)
(valued at their Fair Market Value) or (iii) have the Company retain that number
of shares of Common Stock that would satisfy all or a portion of the Applicable
Withholding Taxes.
6. Transferability
of ISO.
The ISO
is not transferable by you (other than by will or by the laws of descent and
distribution) and may be exercised during your lifetime only by
you.
7. Termination
of ISO.
In the
event that your employment or other relationship underlying the issuance of
this
ISO is terminated your rights under this Option shall be as
follows:
(i)
in
the event that the Company terminates your employment or other relationship
underlying the issuance of this ISO for Cause (as that term is defined in the
Plan), any portion of the ISO that has not vested shall be forfeited and
terminated immediately and may not thereafter be exercised to any extent and
any
portion of the ISO that has vested may be exercised until the last date of
your
employment, and not thereafter;
(ii)
in
the event that your employment or other relationship underlying the issuance
of
this ISO terminates due to death or disability, you may exercise the portion
of
the ISO that has vested within eighteen (18) months after the date of
termination, and not thereafter;
(iii)
in
the event that your employment or other relationship underlying the issuance
of
this ISO is terminated by you for Good Reason, you may exercise the portion
of
the ISO that has vested within two (2) years after the date of termination,
and
not thereafter; or
(iv)
in
the event that your employment or other relationship underlying the issuance
of
this ISO is terminated for any reason other than Cause, Good Reason or your
death or disability, you shall have the right to exercise the portion of the
ISO
that has vested as of the date of such termination at any time during the
one-year period following the date of such termination, and not thereafter.
Nothwithstanding
the foregoing, no ISO may be exercised in any event more than ten (10) years
after the Date of Grant.
The
term
“Good Reason” means the occurrence (without your express written consent) of any
of the following circumstances:
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(i)
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any
material diminution in your authority, duties, or responsibilities;
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(ii)
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a
material reduction of your annual base salary as in effect on the
date
hereof or as the same may be increased from time to time;
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(iii)
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relocation
of the Company’s offices at which you are employed which increases your
daily commute by more than 100 miles on a round trip basis;
or
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(iv)
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any
other action or inaction that constitutes a material breach by the
Company
of any agreement under which you provide services;
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provided,
however, that
Good
Reason shall not exist unless (I) you have given the Company written notice
of
the existence of one or more of the foregoing conditions within sixty (60)
days of
its
initial existence, (II) the Company shall have failed within the following
thirty (30) days to remedy each such condition, and (III) you have resigned
within six (6) months following the initial existence of the condition or
conditions that the Company has failed to cure.
Your
right to terminate your employment for Good Reason shall not be affected by
your
incapacity due to physical or mental illness. Your continued employment shall
not constitute consent to, or a waiver of rights with respect to, any
circumstance constituting Good Reason hereunder.
8. Adjustments.
If the
number of outstanding shares of Common Stock is increased or decreased as a
result of one or more stock splits, reverse stock splits, stock dividends,
recapitalizations, mergers, share exchange acquisitions, combinations or
reclassifications, the number of shares with respect to which you have an
unexercised ISO and the ISO price shall be appropriately adjusted as provided
in
the Plan.
9. Delivery
of Certificate.
The
Company may delay delivery of the certificate for shares purchased pursuant
to
the exercise of an ISO until (i) receipt of any required representation by
you
or completion of any registration or other qualification of such shares under
any state or federal law regulation that the Company’s counsel shall determine
as necessary or advisable, and (ii) receipt by the Company of advice by counsel
that all applicable legal requirements have been complied with. As a condition
of exercising the ISO, you may be required to execute a customary written
indication of your investment intent and such other agreements the Company
deems
necessary or appropriate to comply with applicable securities laws.
10. No
Guaranteed Right of Employment.
If you
are employed by the Company, nothing contained herein shall confer upon you
any
right to be continued in the employment of the Company or interfere in any
way
with the right of the Company to terminate your employment at any time for
any
cause.
11. Notice
of Disqualifying Dispositions.
You
agree to notify the Company in writing immediately after you make a disposition
of any shares acquired upon exercise of this ISO if such disposition occurs
before the later of (a) the date that is two years after the Date of Grant,
or
(b) the date that is one year after the date that you acquired such shares
upon
exercise of this ISO.
12. Notices.
Notices
hereunder shall be mailed or delivered to the Company at its principal place
of
business, and shall be delivered to you in person or mailed or delivered to
you
at the address set forth below, or in either case at such other address as
one
party may subsequently furnish to the other party in writing.
13. Choice
of Law.
This
Agreement shall be governed by Delaware law, without giving effect to the
conflicts of laws provisions thereof.
[SIGNATURE
PAGE FOLLOWS]
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MRU
Holdings, Inc.
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By:
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Name:
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Xxxxx
X. XxXxxxx, Xx.
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Title:
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Chief
Executive Officer
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ACKNOWLEDGEMENT
BY OPTIONEE
The
foregoing ISO is hereby accepted and the terms and conditions thereof hereby
agreed to by the undersigned as of the Date of Grant specified
above.
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Optionee's
Signature
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