Homestead Technologies Inc. 2006 Equity Incentive Plan Stock Option Agreement (Incentive Stock Option or Nonstatutory Stock Option)
Exhibit 99.4
Homestead Technologies Inc.
2006 Equity Incentive Plan
2006 Equity Incentive Plan
Stock Option Agreement
(Incentive Stock Option or Nonstatutory Stock Option)
(Incentive Stock Option or Nonstatutory Stock Option)
Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Stock Option Agreement,
Homestead Technologies Inc. (the “Company”) has granted you an option under its 2006 Equity
Incentive Plan (the “Plan”) to purchase the number of shares of the Company’s Common Stock
indicated in your Grant Notice at the exercise price indicated in your Grant Notice. Defined terms
not explicitly defined in this Stock Option Agreement but defined in the Plan shall have the same
definitions as in the Plan.
The details of your option are as follows:
1. Vesting. Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.
2. Number of Shares and Exercise Price. The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments.
3. Exercise Restriction for Non-Exempt Employees. In the event that you are an
Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended
(i.e., a “Non-Exempt Employee”), you may not exercise your option until you have completed at least
six (6) months of Continuous Service measured from the Date of Grant specified in your Grant
Notice, notwithstanding any other provision of your option.
4. Exercise prior to Vesting (“Early Exercise”). If permitted in your Grant Notice
(i.e., the “Exercise Schedule” indicates that “Early Exercise” of your option is permitted) and
subject to the provisions of your option, you may elect at any time that is both (i) during the
period of your Continuous Service and (ii) during the term of your option, to exercise all or part
of your option, including the nonvested portion of your option; provided, however, that:
(a) a partial exercise of your option shall be deemed to cover first vested shares of Common
Stock and then the earliest vesting installment of unvested shares of Common Stock;
(b) any shares of Common Stock so purchased from installments that have not vested as of the
date of exercise shall be subject to the purchase option in favor of the Company as described in
the Company’s form of Early Exercise Stock Purchase Agreement;
(c) you shall enter into the Company’s form of Early Exercise Stock Purchase Agreement with a
vesting schedule that will result in the same vesting as if no early exercise had occurred; and
1.
(d) if your option is an Incentive Stock Option, then, to the extent that the aggregate Fair
Market Value (determined at the time of grant) of the shares of Common Stock with respect to which
your option plus all other Incentive Stock Options you hold are exercisable for the first time by
you during any calendar year (under all plans of the Company and its Affiliates) exceeds one
hundred thousand dollars ($100,000), your option(s) or portions thereof that exceed such limit
(according to the order in which they were granted) shall be treated as Nonstatutory Stock Options.
5. Method of Payment. Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any other manner permitted by your Grant Notice, which may include one or more of the
following:
(a) Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in The Wall Street Journal, pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in
either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales proceeds.
(b) Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in The Wall Street Journal, by delivery of already-owned shares of Common Stock either
that you have held for the period required to avoid a charge to the Company’s reported earnings
(generally six (6) months) or that you did not acquire, directly or indirectly from the Company,
that are owned free and clear of any liens, claims, encumbrances or security interests, and that
are valued at Fair Market Value on the date of exercise. “Delivery” for these purposes, in the
sole discretion of the Company at the time you exercise your option, shall include delivery to the
Company of your attestation of ownership of such shares of Common Stock in a form approved by the
Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company
of Common Stock to the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Company’s stock.
6. Whole Shares. You may exercise your option only for whole shares of Common Stock.
7. Securities Law Compliance. Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.
2.
8. Term. You may not exercise your option before the commencement or after the
expiration of its term. The term of your option commences on the Date of Grant and expires upon
the earliest of the following:
(a) thirty (30) days after the termination of your Continuous Service for any reason other
than your Disability or death, provided that if during any part of such thirty (30)-day period your
option is not exercisable solely because of the condition set forth in Section 7, your option shall
not expire until the earlier of the Expiration Date or until it shall have been exercisable for an
aggregate period of thirty (30) days after the termination of your Continuous Service;
(b) twelve (12) months after the termination of your Continuous Service due to your
Disability;
(c) eighteen (18) months after your death if you die either during your Continuous Service or
within thirty (30) days after your Continuous Service terminates;
(d) the Expiration Date indicated in your Grant Notice; or
(e) the day before the tenth (10th) anniversary of the Date of ▇▇▇▇▇.
If your option is an Incentive Stock Option, note that to obtain the federal income tax
advantages associated with an Incentive Stock Option, the Code requires that at all times beginning
on the date of grant of your option and ending on the day three (3) months before the date of your
option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of
your death or your Disability. The Company has provided for extended exercisability of your option
under certain circumstances for your benefit but cannot guarantee that your option will necessarily
be treated as an Incentive Stock Option if you continue to provide services to the Company or an
Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise
your option more than three (3) months after the date your employment with the Company or an
Affiliate terminates.
9. Exercise.
(a) You may exercise the vested portion of your option (and the unvested portion of your
option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a
form designated by the Company) together with the exercise price to the Secretary of the Company,
or to such other person as the Company may designate, during regular business hours, together with
such additional documents as the Company may then require.
(b) By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock
acquired upon such exercise.
3.
(c) If your option is an Incentive Stock Option, by exercising your option you agree that you
will notify the Company in writing within fifteen (15) days after the date of any disposition of
any of the shares of the Common Stock issued upon exercise of your option that occurs within two
(2) years after the date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option.
(d) By exercising your option you agree that you shall not sell, dispose of, transfer, make
any short sale of, grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, any shares of Common Stock or other securities
of the Company held by you, for a period of time specified by the managing underwriter(s) (not to
exceed one hundred eighty (180) days (or such longer period, not to exceed 18 days after the
expiration of the 180-day period, as the underwriters or the Company shall request in order to
facilitate compliance with NASD Rule 2711) following the effective date of a registration statement
of the Company filed under the Securities Act (the “Lock Up Period”); provided, however, that
nothing contained in this section shall prevent the exercise of a repurchase option, if any, in
favor of the Company during the Lock Up Period. You further agree to execute and deliver such
other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are
consistent with the foregoing or that are necessary to give further effect thereto. In order to
enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to
your shares of Common Stock until the end of such period. The underwriters of the Company’s stock
are intended third party beneficiaries of this Section 9(d) and shall have the right, power and
authority to enforce the provisions hereof as though they were a party hereto.
10. Transferability. Your option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you. Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you
may designate a third party who, in the event of your death, shall thereafter be entitled to
exercise your option.
11. Right of First Refusal. Shares of Common Stock that you acquire upon exercise of
your option are subject to any right of first refusal that may be described in the Company’s bylaws
in effect at such time the Company elects to exercise its right; provided, however, that if your
option is an Incentive Stock Option and the right of first refusal described in the Company’s
bylaws in effect at the time the Company elects to exercise its right is more beneficial to you
than the right of first refusal described in the Company’s bylaws on the Date of ▇▇▇▇▇, then the
right of first refusal described in the Company’s bylaws on the Date of Grant shall apply. The
Company’s right of first refusal shall expire on the Listing Date. For purposes of this Agreement,
Listing Date shall mean the first date upon which any security of the Company is listed (or
approved for listing) upon notice of issuance on a national securities exchange or on the National
Market System of the Nasdaq Stock Market (or any successor to that entity).
12. Right of Repurchase. To the extent provided in the Company’s bylaws in effect at
such time the Company elects to exercise its right, the Company shall have the right to repurchase
all or any part of the shares of Common Stock you acquire pursuant to the exercise of your option.
4.
13. Option not a Service Contract. Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.
14. Withholding Obligations.
(a) At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
“cashless exercise” pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with the exercise of your option.
(b) Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable legal conditions or restrictions, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or
such lower amount as may be necessary to avoid variable award accounting). If the date of
determination of any tax withholding obligation is deferred to a date later than the date of
exercise of your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of the Code, covering
the aggregate number of shares of Common Stock acquired upon such exercise with respect to which
such determination is otherwise deferred, to accelerate the determination of such tax withholding
obligation to the date of exercise of your option. Notwithstanding the filing of such election,
shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined
as of the date of exercise of your option that are otherwise issuable to you upon such exercise.
Any adverse consequences to you arising in connection with such share withholding procedure shall
be your sole responsibility.
(c) You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock or release such shares of Common Stock from any escrow
provided for herein unless such obligations are satisfied.
15. Notices. Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
5.
16. Governing Plan Document. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations, which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
6.
Homestead Technologies Inc.
2006 Equity Incentive Plan
2006 Equity Incentive Plan
Option Grant Notice
Homestead Technologies Inc. (the “Company”), pursuant to its 2006 Equity Incentive Plan (the
“Plan”), hereby grants to Optionholder an option to purchase the number of shares of the Company’s
Common Stock set forth below. This option is subject to all of the terms and conditions as set
forth herein and in the Option Agreement, the Plan, and the Notice of Exercise, all of which are
attached hereto and incorporated herein in their entirety.
| Optionholder: | ||||||
| Date of Grant: | ||||||
| Vesting Commencement Date: | ||||||
| Number of Shares Subject to Option: | ||||||
| Exercise Price (Per Share): | ||||||
| Total Exercise Price: | ||||||
| Expiration Date: |
Type of Grant:
|
o Incentive Stock Option1 | o Nonstatutory Stock Option | ||
Exercise Schedule:
|
o Same as Vesting Schedule | o Early Exercise Permitted | ||
| Vesting Schedule: | 1/4th of the shares vest and become exercisable one year after the Vesting Commencement Date; the balance of the shares vest and become exercisable in a series of thirty-six (36) successive equal monthly installments measured from the first anniversary of the Vesting Commencement Date. | |||
| Payment: | By one or a combination of the following items (described in the Option Agreement): | |||
| x By cash or check | ||||
| x Pursuant to a Regulation T Program if the Shares are publicly traded | ||||
| x By delivery of already-owned shares if the Shares are publicly traded | ||||
| o By net exercise2 | ||||
Additional Terms/Acknowledgements: The undersigned Optionholder acknowledges receipt of, and
understands and agrees to, this Option Grant Notice, the Option Agreement, and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Option Grant Notice, the
Option Agreement, and the Plan set forth the entire understanding between Optionholder and the
Company regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted and delivered to
Optionholder under the Plan, and (ii) the following agreements only:
Other Agreements: |
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| Homestead Technologies Inc. | Optionholder: | |||||
By: |
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| Signature | Signature | |||||
Title:
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Date: | |||||
Date: |
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Attachments: Option Agreement, 2006 Equity Incentive Plan, and Notice of Exercise
| 1 | If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option. | |
| 2 | An Incentive Stock Option may not be exercised by a net exercise arrangement. |