EXHIBIT 10.4
U-SHIP, INC.
NON-STATUTORY
STOCK OPTION AGREEMENT
1. U-Ship, Inc., a Utah corporation (the "Company"), hereby grants to
______________ (the "Optionee"), an option (the "Option") to purchase a total
________________________________ shares of Common Stock (the "Shares"), at the
price determined as provided herein, and subject to the terms, definitions and
provisions of the 1995 Stock Option Plan (the "Plan") adopted by the Company,
which is incorporated herein by reference except to the extent the Plan is
inconsistent with paragraph 13 of this agreement (the "Agreement"). Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings herein.
2. Nature of the Option. This Option is not intended to qualify as an
Incentive Stock Option as defined in Section 422 of the Code, but is instead a
Non-Statutory Stock Option as defined pursuant to the Plan.
3. Exercise Price. The exercise price for each share of Common Stock is
Forty Cents ($0.40) representing the fair market value per share of the Common
Stock on the date of grant.
4. Exercise of Option. This Option shall be exercisable during its term in
accordance with the provisions of Section 8 of the Plan as follows:
(i) Right to Exercise.
(a) This Option shall be exercisable immediately in full.
(b) This Option may not be exercised for a fraction of a
share.
(c) In the event of Optionee's death or disability, the
exercisability of the Option is governed by Sections 7, 8 and 9 below.
(d) In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in Section 11 below.
(ii) Method of Exercise. This Option shall be exercisable by written
notice which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect
to such shares of Common Stock as may be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Secretary of the
Company. The written notice shall be accompanied by payment of the exercise
price. Until certificates for the Shares are issued to the Optionee, such
Optionee shall not have any rights as a Shareholder of the Company.
No Shares will be issued pursuant to the exercise of an Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange upon which the Shares may then be listed.
Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which the Option is exercised with
respect to such Shares.
5. Optionee's Representations. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, concurrently with the exercise of all or any portion of this
Option, deliver to the Company his Investment Representation Statement in the
form attached hereto as Exhibit A.
6. Method of Payment. Payment of the exercise price shall be by (i) cash;
(ii) check, bank draft or money order; (iii) if authorized by the Board of
Directors of the Company, by delivery of Common Stock or other securities of the
Company (valued at the fair market value thereof on the date of exercise) or
(iv) by delivery of a combination of cash and Common Stock or other securities.
The Committee may, in order to prevent any possible violation of law, require
the option price to be paid in cash.
7. Restrictions on Exercise. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
promulgated by the Federal Reserve Board. As a condition to the exercise of this
Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by any applicable law or regulation.
8. Disability of Optionee. In the event of the complete or partial mental
or physical disability of the Optionee such that the Optionee is unable by
himself to make decisions affecting his rights under this Agreement, including
but not limited to the exercise of the Option, the Option may be exercised (but
in no event later than the date of expiration of the term of this Option as set
forth in Section 11 below), by the authorized legal representative or guardian
of the Optionee, and if no such legal representative or guardian has been
appointed, then the Company may petition any Court of competent jurisdiction to
appoint such representative or guardian prior to Company being required to take
any action hereunder.
9. Death of Optionee. In the event of the death of Optionee during the
term of this Option, the Option may be exercised, at any time within three (3)
years following the date of death (but in no event later than the date of
expiration of the term of this Option as set forth in Section 11 below), by
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent Optionee was entitled to
exercise the Option at the date of death.
10. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by him. The terms of this
Option shall be binding upon the Optionee and his or her personal
representatives, heirs, successors and assigns.
11. Term of Option. This Option may not be exercised after March 24, 2008,
and may be exercised only in accordance with the Plan and the terms of this
Option.
12. Change in Control. In accordance with section 12.4 of the Plan, in the
event of a merger, consolidation, acquisition of property or stock, or
reorganization as a result of which the Company is not the surviving corporation
or upon a sale of substantially all the property or stock of the Company to
another corporation, the Company immediately prior to any such transaction will
cause a new option to be substituted for the unexercised portion of all
outstanding Options or cause such old Option to be assumed in its entirety, by
the surviving or purchasing corporation, or a parent or subsidiary of such
corporation; and such new or substitued option shall apply to all shares issued
in
addition to or in substitution, replacement or modification of the Shares
theretofore covered by such Option.
13. Plan Interpretation. The Board of Directors shall interpret the
Agreement in a manner which is consistent with the terms of the Plan and, in any
case of inconsistency, the terms of he Plan shall control. Optionee hereby
agrees to accept as binding, conclusive and final all decisions and
interpretations of the Board of Directors as to questions arising under the
Plan.
14. Withholding Taxes. As a condition to the issuance of Shares of Common
Stock of the Company under this Option, the Optionee authorizes the Company to
withhold in accordance with applicable law from any regular cash compensation
payable to him any taxes required to be withheld by the Company under federal or
state law as a result of his exercise of this Option.
DATE OF GRANT: March 23, 1998
U-SHIP, INC.
By:___________________________________________
Title: Chief Executive Officer and President
Optionee acknowledges receipt of a copy of the Plan and certain
information related thereto and represents that he is familiar with the terms
and provisions thereof, and hereby accepts this Option subject to all of the
terms and provisions thereof. Optionee has reviewed the Plan and this Option in
their entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Option.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board upon any questions arising under the Plan.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.
Optionee:
______________________________________________
Dated: March 23, 1998
Residence Address:
______________________________________________
______________________________________________
EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
PURCHASER :
ISSUER : U-Ship, Inc.
SECURITY : COMMON STOCK
AMOUNT : _________________________
DATE : _________________________
In connection with the purchase of the Common Stock ("Securities") of U-SHIP,
INC. (the "Company"), the undersigned represents to the Company the following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the Securities. I am
purchasing these Securities for my own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933, as amended (the "Securities
Act").
(b) I understand that the Securities 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 my investment intent
as expressed herein. In this connection, I understand that, in the view of the
Securities and Exchange Commission (the "SEC"), the statutory basis for such
exemption may be unavailable if my representation was predicated solely upon a
present intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future.
(c) I further understand that the Securities must be held indefinitely
unless subsequently registered under the Securities Act or unless an exemption
from registration is otherwise available. Moreover, I understand that the
Company is under no obligation to register the Securities. In addition, I
understand that the certificate evidencing the Securities will be imprinted with
a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel for
the Company.
(d) I am familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited public
resale of "restricted securities" acquired, directly or indirectly, from the
issuer thereof, in a non-public offering subject to the satisfaction of certain
conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the
time of
issuance of the Securities, such issuance will be exempt from registration under
the Securities Act. In the event the Company later becomes subject to the
reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, ninety (90) days thereafter the securities exempt under Rule 701 may be
resold, subject to the satisfaction of certain of the conditions specified by
Rule 144, including among other things: (1) the sale being made through a broker
in an unsolicited "broker's transaction" or in transactions directly with a
market maker (as said term is defined under the Securities Exchange Act of
1934); and, in the case of an affiliate, (2) the availability of certain public
information about the Company, and the amount of securities being sold during
any three month period not exceeding the limitations specified in Rule 144(e),
if applicable. Notwithstanding this paragraph (d), I acknowledge and agree to
the restrictions set forth in paragraph (e) hereof.
In the event that the Company does not qualify under Rule 701 at the time of
issuance of the Securities, then the Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which requires among other
things: (1) the availability of certain public information about the Company,
(2) the resale occurring not less than two years after the party has purchased,
and made full payment for, within the meaning of Rule 144, the securities to be
sold; and, in the case of an affiliate, or of a non-affiliate who has held the
securities less than three years, (3) the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934) and
the amount of securities being sold during any three month period not exceeding
the specified limitations stated therein, if applicable.
(e) I further understand that in the event all of the applicable
requirements of Rule 144 or Rule 701 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rule 144 and
Rule 701 are 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 or Rule 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their own
risk.
Signature of Purchaser:
______________________________________________
Date: ________________________________________
