LIGHTING SCIENCE GROUP CORPORATION 2005 EQUITY-BASED COMPENSATION PLAN STOCK OPTION AGREEMENT
Exhibit 4.13
THE SHARES ISSUABLE PURSUANT TO THIS AGREEMENT ARE SUBJECT TO THE PROVISIONS OF THE COMPANY’S 2005
EQUITY-BASED COMPENSATION PLAN AND THIS AGREEMENT IS ENTERED INTO PURSUANT THERETO.
This Agreement is made and entered into as of the Grant Date (as defined below) by and between
Lighting Science Group Corporation, a Delaware corporation (the “Company”) and
(the “Optionee”):
WHEREAS, the Company in order to induce you to enter into and continue in service to the
Company and to contribute to the success of the Company, agrees to grant you an option to acquire a
priority interest in the Company through the purchase of shares of stock of the Company;
WHEREAS, the Company adopted the Lighting Science Group Corporation 2005 Equity-Based
Compensation Plan as it may be amended from time to time (the “Plan”) under which the Company is
authorized to grant stock options to certain employees and directors of the Company;
WHEREAS, a copy of the Plan has been furnished to you and shall be deemed a part of this
common stock option agreement (the “Agreement”) as if fully set forth herein; and
WHEREAS, you desire to accept the option created pursuant to the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other
valuable consideration hereinafter set forth, the parties agree as follows:
1. The
Grant. Subject to the conditions set forth below and the approval
by the stockholders of the Company of a sufficient increase in the
number of shares of the Company's common stock, par value $0.001 per
share (“the Company Common Stock”), available under the Plan, the Company hereby grants to
you, effective as of April 17, 2008 (“Grant Date”), as a matter of separate inducement and not in
lieu of any salary or other compensation for your services for the Company, the right and option to
purchase (the “Option”), in accordance with the terms and conditions set forth herein and in the
Plan, an aggregate of ___ shares of the Company Common Stock (the “Option
Shares”), at the Exercise Price (as hereinafter defined). As used herein, the term “Exercise
Price” shall mean a price equal to [$___] per share, subject to the adjustments and limitations
set forth herein and in the Plan. The Exercise Price as of the Grant Date shall not be less than
the Fair Market Value of the Company Common Stock. The Option granted hereunder is intended to
comply with the provisions governing nonqualified stock options under the Final Treasury
Regulations issued on April 17, 2007, in order to exempt this Option from application of Section
409A of the Internal Revenue Code of 1986, as amended; however, you should consult with your tax
advisor concerning the proper reporting of any federal, state or local tax liability that may arise
as a result of the grant or exercise of the Option.
2. Exercise.
(a) For purposes of this Agreement, the Option Shares shall be deemed “Nonvested Shares”
unless and until they have become “Vested Shares.” The Option shall in all events terminate at the
close of business on the fourth (4th) anniversary of the date of this Agreement. Subject to other
terms and conditions set forth herein, including, without limitation,
the approval by the stockholders of the Company of a sufficient
increase in the number of shares of the Company Common Stock
available under the Plan, the Option may be exercised in cumulative installments as
follows:
| On or After Each of the Following | Cumulative Percentage of Shares as to | |
| Vesting Dates | Which Option is Exercisable | |
| First Anniversary of the Grant Date | 33% | |
| Second Anniversary of the Grant Date | 67% | |
| Third Anniversary of the Grant Date | 100% |
Option Shares shall constitute Vested Shares once they are exercisable.
(b) Subject to the relevant provisions and limitations contained herein and in the Plan, you
may exercise the Option to purchase all or a portion of the applicable number of Vested Shares at
any time prior to the termination of the Option pursuant to this Option Agreement. In no event
shall you be entitled to exercise the Option for any Nonvested Shares or for a fraction of a Vested
Share.
(c) Notwithstanding any other provision of this Agreement as of the business day immediately
preceding a Change in Control all Nonvested Shares shall become Vested Shares.
(d) Notwithstanding any other provision of this Agreement upon your employment termination due
to your Retirement as determined by the Board in their sole and absolute discretion, all Nonvested
Shares shall become Vested Shares.
(e) Any exercise by you of the Option shall be in writing addressed to the Secretary of the
Company at its principal place of business. Exercise of the Option shall be made by delivery to
the Company by you (or other person entitled to exercise the Option as provided hereunder) of (i)
an executed “Notice of Exercise of Common Stock Option and Record of Common Stock Transfer,” in the
form attached hereto as Exhibit A and incorporated herein by reference, and (ii) payment of the
aggregate purchase price for shares purchased pursuant to the exercise.
(f) Payment of the Exercise Price may be made, at your election, in cash, by certified or
official bank check or by wire transfer of immediately available funds, or subject to the Company’s
approval by delivery to the Company of a number of shares of Stock having a fair market value as of
the date of exercise equal to the Exercise Price.
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(g) In the event that you shall cease to be employed by the Company or any Subsidiary or
parent thereof for any reason other than as a result of a Cause termination, your
death or your “disability” (within the meaning of section 22(e)(3) of the Code), the Option
may only be exercised within 90 days after the date on which you ceased to be so employed, and only
to the same extent that you were entitled to exercise the Option on the date on which you ceased to
be so employed and had not previously done so.
(h) In the event that you shall cease to be employed by the Company or any Subsidiary or
parent thereof due to a Cause termination, no portion of the Option shall continue to be
exercisable as of your date of termination.
(i) In the event that you shall cease to be employed by the Company or any Subsidiary or
parent thereof by reason of “disability” (within the meaning of section 22(e)(3) of the Code), the
Option may only be exercised within one year after the date you ceased to be so employed, and only
to the same extent that you were entitled to exercise the Option on the date on which you ceased to
be so employed by reason of such disability and had not previously done so.
(j) In the event that you shall die while employed by the Company or any Subsidiary or parent
thereof, the Option may be exercised at any time prior to its termination as provided in Section
2(a). In such event, the Option may be exercised during such period by the executor or
administrator of your estate or by any person who shall have acquired the Option through bequest or
inheritance, but only to the same extent that you were entitled to exercise the Option immediately
prior to the time of your death and you had not previously done so.
(k) If you are on leave of absence for any reason, the Company may, in its sole discretion,
determine that you will be considered to still be in the employ of or providing services for the
Company, provided that rights to the Option Shares will be limited to the extent to which those
rights were earned or vested when the leave or absence began. Notwithstanding the foregoing, you
shall only be treated as continuing in the employ of the Company while you are on a leave of
absence if the period of your leave does not exceed three months, or if longer, so long as your
rights to reemployment with the Company are provided by either statute or contract. If your period
of leave exceeds three months and your right to reemployment is not provided either by statute or
contract, your employment with the Company will be deemed to terminate on the first day immediately
following such three-month period (and your right to exercise the Option following your termination
of employment will be governed by Section 2(g), (h), (i) and (j) as applicable).
(l) The terms and provisions of the employment agreement, if any, between you and the Company
or any Subsidiary (the “Employment Agreement”) that relate to or affect the Option are incorporated
herein by reference. Notwithstanding the foregoing provisions of this Section 2, in the event of
any conflict or inconsistency between the terms and conditions of this Section 2 and the terms and
conditions of the Employment Agreement, the terms and conditions of the Employment Agreement shall
be controlling.
3. Transferability. The Option, and any rights or interests therein will be
transferable by you only by will or the laws of descent and distribution.
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4. Registration. From time to time, the Board and appropriate officers of the Company
shall and are authorized to take whatever actions are necessary to file required documents with
governmental authorities, stock exchanges, and other appropriate persons to make shares of Common
Stock available for issuance pursuant to the exercise of Options and subsequent lapse of
restrictions.
5. Withholding Taxes. The Committee may, in its discretion, require you to pay to the
Company at the time of the exercise of an Option or thereafter, the amount that the Committee deems
necessary to satisfy the Company’s current or future obligation to withhold federal, state or local
income or other taxes that you incur by exercising an Option. In connection with such an event
requiring tax withholding, you may, subject to the provisions of this Section 5 (a) direct the
Company to withhold from the shares of Common Stock to be issued to you the number of shares
necessary to satisfy the Company’s obligation to withhold taxes, that determination to be based on
the shares’ fair market value as of the date of exercise; (b) deliver to the Company sufficient
shares of Common Stock (based upon the fair market value as of the date of such delivery) to
satisfy the Company’s tax withholding obligation, which tax withholding obligation is based on the
shares’ fair market value as of the date of exercise; or (c) deliver sufficient cash to the Company
to satisfy its tax withholding obligations. If you elect to use a Common Stock withholding feature
you must make the election at the time and in the manner that the Committee prescribes. The
Committee may, at its sole option, deny your request to satisfy withholding obligations through
Common Stock instead of cash. In the event the Committee subsequently determines that the
aggregate fair market value (as determined above) of any shares of Common Stock withheld or
delivered as payment of any tax withholding obligation is insufficient to discharge that tax
withholding obligation, then you shall pay to the Company, immediately upon the Committee’s
request, the amount of that deficiency in the form of payment requested by the Committee.
6. Adjustments. The terms of the Option shall be subject to adjustment from time to
time, in accordance with the following provisions:
(a) If at any time, or from time to time, the Company shall subdivide as a whole (by
reclassification, by a Common Stock split, by the issuance of a distribution on Common Stock
payable in Common Stock or otherwise) the number of shares of Common Stock then outstanding into a
greater number of shares of Common Stock, then (i) the number of shares of Common Stock (or other
kind of securities) that may be acquired under the Option shall be increased proportionately and
(ii) the price (including exercise price) for each share of Common Stock (or other kind of shares
or securities) subject to then outstanding Options shall be reduced proportionately, without
changing the aggregate purchase price or value as to which outstanding Options remain exercisable
or subject to restrictions.
(b) If at any time, or from time to time, the Company shall consolidate as a whole (by
reclassification, reverse Common Stock split or otherwise) the number of shares of Common Stock
then outstanding into a lesser number of shares of Common Stock, (i) the number of shares of Common
Stock (or other kind of shares or securities) that may be acquired under the Option shall be
decreased proportionately and (ii) the price (including exercise price) for each share of Common
Stock (or other kind of shares or securities) subject to then
outstanding Options shall be increased proportionately, without changing the aggregate
purchase price or value as to which outstanding Options remain exercisable or subject to
restrictions.
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(c) Whenever the number of shares of Common Stock subject to the Option and the price for each
share of Common Stock subject to the Option are required to be adjusted as provided in this Section
6, the Committee shall promptly prepare a notice setting forth, in reasonable detail, the event
requiring adjustment, the amount of the adjustment, the method by which such adjustment was
calculated, and the change in price and the number of shares of Common Stock, other securities,
cash, or property purchasable and held by you pursuant to the exercise of the Option or subject to
the Option after giving effect to the adjustments. The Committee shall promptly give you such a
notice.
(d) Adjustments under this Section 6 shall be made by the Committee, and its determination as
to what adjustments shall be made and the extent thereof shall be final, binding, and conclusive.
No fractional interest shall be issued under the Plan on account of any such adjustments.
7. Furnish Information. You agree to furnish to the Company all information requested
by the Company to enable it to comply with any reporting or other requirement imposed upon the
Company by or under any applicable statute or regulation.
8. Remedies. The Company shall be entitled to recover from you reasonable attorneys’
fees incurred in connection with the enforcement of the terms and provisions of this Agreement
whether by an action to enforce specific performance or for damages for its breach or otherwise.
9. No Liability for Good Faith Determinations. The Company and the members of the
Committee and the Board shall not be liable for any act, omission or determination taken or made in
good faith with respect to this Agreement or the Option granted hereunder.
10. Execution of Receipts and Releases. Any payment of cash or any issuance or
transfer of shares of Common Stock or other property to you, or to your legal representative, heir,
legatee or distributee, in accordance with the provisions hereof, shall, to the extent thereof, be
in full satisfaction of all claims of such persons hereunder. The Company may require you or your
legal representative, heir, legatee or distributee, as a condition precedent to such payment or
issuance, to execute a release and receipt therefore in such form as it shall determine.
11. No Guarantee of Interests. The Board and the Company do not guarantee the Common
Stock of the Company from loss or depreciation.
12. Company Records. Records of the Company regarding your service and other matters
shall be conclusive for all purposes hereunder, unless determined by the Company to be incorrect.
13. Notice. All notices required or permitted under this Agreement must be in writing
and personally delivered or sent by mail and shall be deemed to be delivered on the date on which
it is actually received by the person to whom it is properly addressed or if earlier the date
it is deposited, postage paid in the United States mail. A notice shall be effective when
actually received by the appropriate Company representative, in writing and in conformance with
this Agreement and the Plan.
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14. Waiver of Notice. Any person entitled to notice hereunder may, by written form,
waive such notice.
15. Information Confidential. As partial consideration for the granting of this
Option, you agree that you will keep confidential all information and knowledge that you have
relating to the manner and amount of your participation in the Plan; provided, however, that such
information may be disclosed as required by law and may be given in confidence to your spouse, tax
and financial advisors, or a financial institution to the extent that such information is necessary
to obtain a loan.
16. Successors. This Agreement shall be binding upon you, your legal representatives,
heirs, legatees and distributees, and upon the Company, its successors and assigns.
17. Headings. The titles and headings of paragraphs are included for convenience of
reference only and are not to be considered in construction of the provisions hereof.
18. Governing Law. All questions arising with respect to the provisions of this
Agreement shall be determined by application of the laws of the State of Delaware except to the
extent Delaware law is preempted by federal law and without application of Delaware’s choice of law
provisions.
19. Word Usage. Words used in the masculine shall apply to the feminine where
applicable, and wherever the context of this Agreement dictates, the plural shall be read as the
singular and the singular as the plural.
20. No Assignment. You may not assign this Agreement or any of your rights under this
Agreement without the Company’s prior written consent, and any purported or attempted assignment
without such prior written consent shall be void.
21. Specific Performance. The parties acknowledge that remedies at law will be
inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall
be enforceable by specific performance. The remedy of specific performance shall be cumulative of
all of the rights and remedies at law or in equity of the parties under this Agreement.
22. Miscellaneous.
(a) This Agreement is subject to all the terms, conditions, limitations and restrictions
contained in the Plan. In the event of any conflict or inconsistency between the terms hereof and
the terms of the Plan, the terms of the Plan shall be controlling.
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(b) The Option may be amended by the Board of the Company or by the Committee at any time (i)
if the Board or the Committee determines, in its sole discretion, that
amendment is necessary or advisable in light of any addition to or change in any federal or
state, tax or securities law or other law or regulation, which change occurs after the Grant Date
and by its terms applies to the Option; or (ii) other than in the circumstances described in clause
(i) or provided in the Plan, with your consent. The foregoing notwithstanding, the Committee may,
in its sole discretion, cancel the Option at any time prior to your exercise of the Option if, in
the opinion of the Committee, you engage in activities contrary to the interests of the Company.
(c) For purposes of this Agreement, Cause means:
(i) your continued failure to substantially perform your duties, as such duties exist at the
time you enter into this Agreement or as such duties thereafter may be modified with your written
consent, as an employee of the Company or any other Subsidiary (other than any such failure
resulting from your incapacity due to physical or mental illness) after written demand for
substantial performance is delivered by the Board specifically identifying the manner in which the
Board believes you have not substantially performed your duties;
(ii) your dishonesty of a material nature that relates to the performance of your duties as an
employee of the Company or any other Subsidiary or the commission by you of an act of fraud upon,
or willful misconduct toward, the Company or any Subsidiary, as reasonably determined by the Board
after a hearing following ten days’ notice to you of such hearing and at which hearing you will be
present and have the opportunity to present your position;
(iii) your criminal conduct (other than minor infractions, traffic violations, or alleged
criminal conduct for which you are entitled to indemnification with respect to such conduct under
any indemnity agreement or arrangement between you and the Company) or your conviction, by a court
of competent jurisdiction, of any felony (or plea of nolo contendere thereto);
(iv) a material violation by you of your duty of loyalty to the Company or any Subsidiary
which results or may reasonably be expected to result in material injury to the Company or any
Subsidiary;
(v) your failure to cease any conduct reasonably determined in good faith by the Board to be
detrimental to the well-being or morale, or otherwise not in the best interest, of the Company or
any Subsidiary after written demand directing you to cease such conduct is delivered by the Board
specifically identifying such conduct and demanding cessation thereof; or
(vi) your use of alcohol which renders you unable to perform the essential functions of your
position as an employee of the Company or your illegal use of illegal or controlled drugs or other
substances (provided that the use of controlled drugs or substances as prescribed by a physician
shall not constitute grounds for Cause).
Any termination of your employment by the Company for Cause shall be communicated to you in a
written notice of termination which shall set forth in reasonable detail the facts and
circumstances, if any, claimed to provide a basis for such termination. For
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purposes of this definition of Cause, the Company shall mean Lighting Science Group
Corporation, a Delaware corporation, or if a Change of Control occurs and on or after the date of
the Change of Control Lighting Science Group Corporation is merged, reorganized or otherwise
consolidated with or into another Person, the Person surviving the merger, reorganization or
consolidation.
Please indicate your acceptance of all the terms and conditions of the award and the Plan by
signing and returning a copy of this Agreement.
LIGHTING SCIENCE GROUP CORPORATION
By:
Name:
Xxxx Xxx
Title: Chief Executive Officer
Title: Chief Executive Officer
ACCEPTED:
| Signature of Optionee | ||||
| Name of Optionee (Please Print) | ||||
| Date: | , | |||
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EXHIBIT A
LIGHTING SCIENCE GROUP CORPORATION
2005 EQUITY-BASED COMPENSATION PLAN
2005 EQUITY-BASED COMPENSATION PLAN
Notice of Exercise of Option and
Record of Common Stock Transfer
Record of Common Stock Transfer
PLEASE PRINT:
| 1. | TODAY’S DATE: | |||||||
| 2. | OPTION HOLDER: | |||||||
| NAME: | ||||||||
| MAILING ADDRESS: | ||||||||
| SOCIAL SECURITY NUMBER: | ||||||||
| TO: | Attention: | |||||||
| Re: | Notice of Exercise of Option for Lighting Science Group Corporation (the “Company”) Common Stock par value $.001 per share (“Common Stock”) pursuant to the Lighting Science Group Corporation 2005 Equity-Based Compensation Plan (the “Plan”) |
I hereby
exercise my option to acquire ___ shares of Common Stock, at my exercise price per
share of $___. Enclosed is the original of my Stock Option Agreement evidencing my
Option hereby exercised. Any capitalized terms not defined herein shall have the meaning set forth
in the Plan.
Select and complete the appropriate payment provision from the following alternatives.
1.
|
My personal check in the amount of $___ (the exercise price per share times the number of option shares exercised) as payment in full of the total exercise price has been attached hereto. | |
2.
|
I desire to pay the exercise price in full with shares of Common Stock that I currently own. Certificates representing ___ shares of Common Stock of the Company, duly endorsed for transfer to the Company have been attached. | |
3.
|
I desire to pay part of the exercise price with shares of Common Stock that I currently own. My personal check for $___ and certificates representing ___ shares of Common Stock, duly endorsed for transfer to the Company have been attached hereto. |
I understand that any election pursuant to Items 2-3 above is subject to approval by the Committee
administering the Plan.
A-1
I hereby represent that I have previously received a Stock Option Agreement and a copy of the Plan
from the Company and that I understand the terms and restrictions described herein and therein and
agree to be bound by the terms of each such document.
| (Signature) |
Receipt of Notice Acknowledged:
Date:
Receipt of Payment in Full Acknowledged:
Date:
Receipt of Committee Approval if Election under
Items 2-3.
Items 2-3.
Date:
NOTE: If exercising the stock option represented by the enclosed Stock Option Agreement to
purchase less than all of the shares to which the option relates, the original agreement will be
returned with an appropriate notation evidencing the shares for which the Option has been
exercised.
A-2
RECEIPT
Receipt is hereby acknowledged of the delivery to me by Lighting Science Group Corporation, on the
___ day of ___, 200___ of Common Stock Certificates for ___
shares of Common Stock purchased by me pursuant to the terms and conditions of the Lighting Science
Group Corporation 2005 Equity-Based Compensation Plan referred to above, which shares were
transferred to me on the Company’s stock record books on the
___ day of ___,
200___.
| (Signature) |
A-3
