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EXHIBIT 99.6
STOCK OPTION AGREEMENT
AGREEMENT, dated as of June 30, 1998, between iName, Inc. (the "Company"),
a Delaware corporation doing business at 00 Xxxxxxxx, Xxxxx 000, Xxx Xxxx, Xxx
Xxxx and Xxx Xxxxxxx (the "Grantee") residing at ______________________________
______________________________________. The Company and the Grantee are
collectively referred to as the "Parties."
WHEREAS, the Grantee is employed by the Company in the capacity as Chief
Operating Officer, and in partial consideration for the Grantee's services, the
Company desires to award stock options to the Grantee in accordance with the
terms of this Agreement;
NOW, THEREFORE, in consideration of the promises and the mutual covenants
and agreements set forth herein, the Parties hereto agree as follows:
SECTION I. OPTION TO PURCHASE SHARES
1.1. Option. The Company hereby grants, as of the date of this Agreement,
to the Grantee an irrevocable option (the "Option") to purchase the number of
shares of Class A Common Stock (the "Shares") listed on the attached Schedule A
at the purchase price listed on Schedule A (the "Purchase Price"). This option
is not intended to satisfy the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended nor to qualify as an incentive stock option.
1.2. Exercise of Option. In the event the Grantee wishes to exercise the
Option, in accordance with the restrictions specified below, the Grantee shall
send a written notice to the Company (the "Stock Exercise Notice") specifying a
date for the closing of such purchase.
1.3. Vesting. The right to exercise an Option is limited as hereinafter
provided:
(a) An Option may be exercised as hereinafter provided only to the
extent that the Option has become vested as provided herein.
(b) The Options shall vest over a three (3) year period at the rate
of one-twelfth per each three-month period of a year with
commencing dates on January 1, April 1, July 1 and October 1 (a
"Calendar Quarter"), beginning on the first day of a Calendar
Quarter subsequent to the date of this Agreement.
(c) (i) An Option granted after the first day of a Calendar Quarter
but prior to the fifteenth day of the second month of the
Calendar Quarter shall not begin to vest until the last day of
the subsequent Calendar Quarter (the "Initial Vesting Date"). For
such Options, one-half of the Option shall vest on the Initial
Vesting Date, and an additional one-quarter will vest for
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EXHIBIT 99.6
each additional Calendar Quarter until the Option is fully
vested. (ii) Options granted after the fifteenth day of the
second month of a Calendar Quarter shall not begin to vest until
the last day of the subsequent Calendar Quarter. For such
Options, one-quarter of the Option will vest on the Initial
Vesting Date, and an additional one-quarter will vest for each
additional Calendar Quarter until the Option is fully vested.
1.4. Termination of Employment. Upon the termination of the Grantee's
employment, the right to exercise an Option held by the Grantee shall be as
follows:
(a) Disability. If the Grantee's employment is terminated because of
permanent disability as defined in Code Section 22(e)(3), the Grantee may,
within one year following termination, exercise the Option with respect to all
or part of the shares subject thereto in which the right to purchase shares had
accrued or vested at the time of termination of employment.
(b) Death. If a Grantee's employment is terminated by death, his or
her estate shall have the right for a period of one year following the date of
death to exercise the Option to the extent that the right to exercise had
accrued or vested prior to the date of death. A Grantee's "estate" shall mean
his or her legal representative or any person who acquires the right to exercise
an Option by reason of the Grantee's death. The Board or Committee may in its
discretion require the estate of the Grantee to supply the Board or Committee
with written notice of the Grantee's death and a copy of the will or other
documents deemed necessary to establish the validity of the transfer of an
Option. The Board or Committee may also require that the estate of a deceased
Grantee agree to be bound by all of the terms and conditions of the Plan.
(c) Cause and Competition. If the employment of Grantee is terminated
for "Cause" (as defined below) or the Grantee terminates his or her employment
and commences working for a competitor (as defined below), the Grantee's rights
under any then outstanding Option, whether or not vested, shall terminate at the
time of termination of employment. "Cause" shall mean any willful or intentional
act having the effect of injuring the reputation, business or business
relationship of the Company. "Competitor" shall mean any person or entity
engaged in a business competitive (in the good faith judgment of the Board or
Committee) with that of the Company.
(d) Other Reason. In the case of a Grantee whose employment is
terminated for any reason other than those provided above, the Grantee may,
within sixty (60) days following the termination (or if the Board has notified
the Grantee of its intent to register an offering of the Company's securities as
described in Section 1.4 of this Agreement, the time period becomes sixty (60)
days following the 180-day lock-up period provided for in Section 1.4) exercise
an Option to the extent the right to exercise had accrued prior to termination;
provided, however that the Company may retain the shares of Stock issuable upon
exercise of an Option pursuant to this paragraph (iv) for a period of sixty (60)
days from exercise and, if the Grantee becomes employed or otherwise associated
with a competitor or enters into an agreement to do so during that sixty (60)
day period, either as a director, officer, employee, agent, representative or
otherwise, then the Company may retain and cancel those shares, refund the
exercise price paid
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EXHIBIT 99.6
by the Grantee and thereafter all rights of the Grantee in the Stock shall
immediately cease; and provided, further, that if the Grantee dies prior to the
end of the sixty (60) day period after termination of employment, his or her
estate (as defined above) shall have the right, subject to the procedures set
forth above, to exercise the Option within one year following the termination.
1.5. Transferability. No Option shall be transferable except by will or the
laws of descent and distribution. An Option shall be exercisable during the
Grantee's lifetime only by the Grantee.
1.6. Duration of Options. Options may be exercised, upon satisfaction of
the conditions specified in Section 1.3, for terms of up to but not exceeding
ten (10) years from the date of grant.
1.7. Additional Options. In the event that the Company grants additional
options to purchase shares of Class A Common Stock to the Grantee, unless agreed
to the contrary between the Parties, the additional options will be subject to
the terms of this Agreement.
SECTION II. THE CLOSING
2.1. Closing Date. Any closing hereunder shall take place on the date
specified by the Grantee in its Stock Exercise Notice pursuant to Section 1 at
10:00 A.M., at the offices of the Company, or at such other time and place as
the parties hereto may agree (the "Closing Date"). On the Closing Date, the
Company will deliver to the Grantee a certificate or certificates, duly
endorsed, representing the Shares and the Grantee will purchase such Shares from
the Company at the price per Share equal to the Exercise Price. In the event
that any federal, state, or local income taxes, employment taxes, Federal
Insurance Contribution Act ("FICA") withholdings or other amounts are required
by applicable law or governmental regulation to be withheld from the grantee in
connection with the exercise, these amounts must be remitted to the Company in
addition to the Exercise Price. Any payment made by the Grantee to the Company
pursuant to this Agreement shall be made by certified or official bank check.
2.2. Legends. The certificates representing the Shares may bear an
appropriate legend relating to the fact that such Shares have not been
registered under the Securities Act of 1933, as amended (the "Act").
SECTION III. REPRESENTATIONS AND WARRANTIES OF THE GRANTEE
3.1. Investment Representation. The Grantee represents and warrants to the
Company that the Grantee is acquiring the Option and, if and when it exercises
the Option, will be acquiring the Shares issuable upon the exercise thereof for
its own account and not with a view to distribution or resale in any manner
which would be in violation of the Act.
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EXHIBIT 99.6
3.2. Restricted Securities. The Grantee represents and warrants to the
Company that the Grantee is an Accredited Investor as defined in Rule 501
promulgated under the Act. The Grantee understands that, if and when it
exercises the Option, the Grantee will be acquiring restricted securities under
applicable federal securities laws, and may dispose of such Shares only pursuant
to an effective registration statement under the Act or an exemption from
registration if available. The Grantee represents and warrants to the Company
that the Grantee is acquiring the Option and, if and when it exercises the
Option, will be acquiring the Shares issuable upon the exercise thereof for its
own account and not with a view to distribution or resale in any manner which
would be in violation of the Act.
SECTION IV. RIGHT OF FIRST REFUSAL
If, at any time after the Closing Date, the Grantee proposes to sell all or
any part of the Shares in a transaction not required to be registered under the
Act, it shall give the Company the opportunity, in the following manner, to
purchase such Shares:
4.1. Notice. The Grantee shall give notice to the Company in writing of its
intent to sell Shares (a "Disposition Notice"), specifying the number of Shares
to be sold, the price and the material terms of any agreement relating thereto.
The Disposition Notice may be given at any time, including prior to the giving
of any Stock Exercise Notice.
4.2. Right to Purchase. The Company or its designee shall have the right,
exercisable by written notice given to the Grantee within five (5) days after
receipt of a Disposition Notice, to purchase all, but not less than all, of the
Shares specified in the Disposition Notice at the price set forth in the
Disposition Notice.
4.3. Closing. If the Company exercises its right of first refusal
hereunder, the closing of the purchase of the Shares with respect to which such
right has been exercised shall take place within five (5) days after the notice
of such exercise; provided, however, that at any time prior to the closing of
the purchase of Shares hereunder, the Grantee may determine not to sell the
Shares and revoke the Disposition Notice and, by so doing, cancel the Company's
right of first refusal with respect thereto.
4.4. Right to Sell. If the Company does not exercise its right of first
refusal hereunder within the time specified for such exercise, the Grantee shall
be free for thirty (30) days following the expiration of such time for exercise
to sell or enter into an agreement to sell the Shares specified in the
Disposition Notice, at the price specified in the Disposition Notice or any
price in excess thereof and otherwise on substantially the same terms set forth
in the Disposition Notice; provided, that if such sale is not consummated within
such 30-day period, then the provisions of this Section 4 will again apply to
the sale of such Shares.
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EXHIBIT 99.6
SECTION V. INFORMATION
Upon written request by the Grantee, the Company shall furnish to the
Grantee such information regarding the Company and its operation as shall be
reasonably necessary to enable the Grantee to make a decision as to whether or
not to exercise the Option; provided, however, that in no event shall the
Company be required to furnish information which constitutes trade secrets or
other proprietary information or the furnishing of which would be unduly
burdensome, financially or otherwise, to the Company.
SECTION VI. ADJUSTMENT FOR CHANGES IN THE STOCK
6.1. Stock Reclassification. In the event the shares of Stock, as presently
constituted, shall be changed into or exchanged for a different number or kind
of shares or other securities of the Company (whether by reason of merger,
consolidation, recapitalization, reclassification, split, reverse split,
combination of shares or otherwise), then there shall be substituted for or
added to each share of Stock theretofore or thereafter subject to an Option the
number and kind of shares of capital stock or other securities into, which each
outstanding share of Stock shall be changed, or for which each such share shall
be exchanged, or to which each such share shall be entitled, as the case may be.
The price and other terms of outstanding Options shall also be appropriately
amended to reflect the foregoing events. In the event there shall be any other
change in the number or kind of outstanding shares of the Stock, or of any
capital stock or other securities into which the Stock shall have been changed
or for which it shall have been exchanged, if the Board of Directors shall, in
its sole discretion, determine that the change equitably requires an adjustment
in any Option theretofore granted, then adjustments shall be made in accordance
with its determination.
6.2. Fractional Shares. Fractional shares resulting from any adjustment in
Options pursuant to this Section 6 may be settled in cash or otherwise as the
Board of Directors shall determine.
6.3. Notice. Notice of any adjustment shall be given by the Company to the
Grantee in accordance with the requirements for providing notice to a Party set
forth in Section 7.7.
6.4. Sale of the Assets of the Company, etc. Notwithstanding Section 6.1,
the Board of Directors shall have the power, in the event of the disposition of
all or substantially all of the assets of the Company, or the dissolution of the
Company, or the merger or consolidation of the Company, or the making of a
tender offer to purchase all or a substantial portion of outstanding Stock of
the Company, to amend this Agreement (upon such conditions as it shall deem fit)
to (i) permit the exercise of the Options described herein prior to the
effective date of the transaction and to terminate all unexercised Options as of
that date, or (ii) require the forfeiture of all Options, provided the Company
pays to the Grantee the excess of the fair market value of the Stock subject to
the Option (as determined by the Board of Directors if the Company's common
stock is not then freely tradable) over the exercise price of the Option.
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EXHIBIT 99.6
SECTION VII. PUBLIC OFFERING OF COMPANY'S COMMON STOCK
7.1. Lock-Up Agreement. Grantee, if requested by the Company and the lead
underwriter of any public offering of the common stock or other securities of
the Company (the "Lead Underwriter"), hereby irrevocably agrees not to sell,
contract to sell, grant any option to purchase, transfer the economic risk of
ownership in, make any short sale of, pledge or otherwise transfer or dispose of
any interest in any common stock or any securities convertible into or
exchangeable or exercisable for or any other rights to purchase or acquire
common stock (except common stock included in such public offering or acquired
on the public market after such offering) during the 180-day period following
the effective date of a registration statement of the Company filed under the
Securities Act, or such shorter period of time as the Lead Underwriter shall
specify. Grantee further agrees to sign such documents as may be requested by
the Lead Underwriter to effect the foregoing and agrees that the Company may
impose stop-transfer instructions with respect to such common stock subject
until the end of such period. The Company and Grantee acknowledge that each Lead
Underwriter of a public offering of the Company's stock, during the period of
such offering and for the 180-day period thereafter, is an intended beneficiary
of this Section 7.
7.2. No Amendment or Waiver. During the period from identification as a
Lead Underwriter in connection with any public offering of the Company's common
stock until the earlier of (i) the expiration of the lock-up period specified in
Section 7.1 in connection with such offering or (ii) the abandonment of such
offering by the Company and the Lead Underwriter, the provisions of the Section
7 may not be amended or waived except with the consent of the Lead Underwriter.
SECTION VIII. TAXES
The amount to be paid by the Grantee upon exercise of any Option granted by
this Agreement shall be the full purchase price thereof provided in the Option,
together with the amount of federal, state, and local income and FICA taxes
required to be withheld by the Company. The Grantee may elect to pay his or her
federal, state, or local income and FICA withholding tax by having the Company
withhold shares of Company common stock having a value equal to the amount
required to be withheld. The value of the shares to be withheld is deemed to
equal the fair market value of the shares on the day the option is exercised (as
determined by the Board of Directors if the Company's common stock is not then
freely tradable). An election by a Grantee to have shares withheld for this
purpose will be subject to the following restrictions:
(a) if the Grantee has received additional Option grants in
accordance with this Agreement, a separate election must be made
for each grant;
(b) the election must be made prior to the day the Option is
exercised;
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EXHIBIT 99.6
(c) the election will be irrevocable;
(d) the election will be subject to the disapproval of the Board of
Directors;
(e) the election may not be made within six months following the
grant of the Option; and
(f) the election must be made either six months prior to the day the
Option is exercised or ten (10) days beginning on the third day
following the release of the Company's quarterly or annual
summary statement of sales and earnings.
SECTION IX. MISCELLANEOUS
9.1. No Third Party Beneficiaries. This Agreement shall not confer any
rights of remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
9.2. Default. In the event a Party fails to comply with the terms of this
Agreement, any other Party to this Agreement shall be entitled to (a) injunctive
relief, as a matter of right, in any court of competent jurisdiction; (b) any
other relief or remedy that may be available pursuant to this Agreement or at
law or equity.
9.3. Waivers. The waiver by the undersigned of any of the provisions of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach.
9.4. Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect the construction and interpretation
of this Agreement.
9.5. Severability. The invalidity of all of any part of any section of this
Agreement shall not render invalid the remainder of such section. If any
provision of this Agreement is so broad as to be unenforceable, such provisions
shall be interpreted to be only so broad as is enforceable.
9.6. Binding Effects. This Agreement shall not be assigned by any Purchaser
without the prior written consent of the Company. This Agreement shall be
binding upon and inure to the benefit of the Parties, their heirs, personal
representatives, successors, and permitted assignees.
9.7. Notices. Any notices provided pursuant to this Agreement shall be in
writing and shall be deemed given (i) if by hand, upon receipt thereof; (ii) if
mailed, three (3) days after deposit in the U.S. mails, postage prepaid,
certified mail return receipt requested, or (iii) if sent via overnight courier
upon receipt. All notices shall be addressed to the parties at the respective
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EXHIBIT 99.6
addresses indicated herein. Either party may change its address by giving
written notice to the other in accordance with the terms of this paragraph.
9.8. Entire Agreement. This writing contains the entire agreement of the
Parties. The Parties are not bound by any oral statements that are made outside
of this Agreement.
9.9. Governing Law. The interpretation, performance and enforcement of this
Agreement shall be governed of the laws of the State of Delaware.
WHEREAS, the Parties have signed their names to this Agreement on the date
as above written:
iNAME, INC.
/s/ Xxxx Xxxxxx
-----------------------------------
By: Xxxx Xxxxxx
Title: President
GRANTEE
/s/ Xxx Xxxxxxx
-----------------------------------
Xxx Xxxxxxx
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EXHIBIT 99.6
NON-PLAN STOCK OPTION AGREEMENT
SCHEDULE A
NP
--------------------------------------------------------------------------------
XXX XXXXXXX
----------------------------- ----------------------- ------------------------
EXERCISE PRICE DATE GRANTED OPTIONS GRANTED
----------------------------- ----------------------- ------------------------
$2.00 6/30/98 10,114
----------------------------- ----------------------- ------------------------
$2.00 7/31/98 18,590
----------------------------- ----------------------- ------------------------
$2.00 8/30/98 46,312
----------------------------- ----------------------- ------------------------
$2.00 9/30/98 82,161
----------------------------- ----------------------- ------------------------
$2.00 10/31/98 208,445
----------------------------- ----------------------- ------------------------
$2.00 11/30/98 24,402
----------------------------- ----------------------- ------------------------
$2.00 12/31/98 12,950
----------------------------- ----------------------- ------------------------
Note: All of the options granted and exercise prices on Schedule A are post the
9/30/98 stock split.
