Exhibit 99.2
RALEIGH TECHNOLOGY CORP.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT (this "Agreement") is made as of
the ___ day of ________________ (the "Grant Date"), by and between RALEIGH
TECHNOLOGY CORP., a Delaware corporation (the "Corporation"), and
__________________________________ (the "Participant").
WHEREAS, the committee appointed under the Raleigh Technology Corp.
Equity Compensation Plan (the "Committee") granted Participant an option to
purchase shares of the Corporation's Common Stock, $.01 par value per share (the
"Common Stock"), pursuant to the Raleigh Technology Corp. Equity Compensation
Plan (the "Plan") (capitalized terms used herein shall have the meanings set out
in the Plan unless otherwise specified in this Agreement); and
WHEREAS, this Agreement evidences the grant of such option.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises set forth below and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. Grant of Option. The Committee granted Participant an option
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to purchase from the Corporation, during the period specified in Section 2 of
this Agreement, a total of _____________________________________________
(_________) shares of Common Stock, at the purchase price of $___________ per
share (the "Purchase Price"), in accordance with the terms and conditions stated
in this Agreement. The shares of Common Stock subject to the option granted
hereby are referred to below as the "Shares," and the option to purchase such
Shares is referred to below as the "Option."
2. Vesting and Exercise of Option. The Option shall vest and
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become exercisable in increments in accordance with the four-year schedule set
forth below measured from _____________________ (the "Commencement Date"),
provided that the Option shall vest and become exercisable with respect to an
increment as specified only if Participant is employed with the Corporation on
the specified date for such increment:
(a) On the first annual anniversary of the Commencement Date the
Option shall vest and become fully exercisable with respect to
twenty five percent (25%) of the Shares;
(b) on the second annual anniversary of the Commencement Date, the
Option shall vest and become exercisable with respect to an
additional twenty five percent (25%) of the Shares;
(c) on the third annual anniversary of the Commencement Date, the
Option shall vest and become exercisable with respect to an
additional twenty five percent (25%) of the Shares; and
(d) on the fourth annual anniversary of the Commencement Date, the
Option shall vest and become exercisable with respect to an
additional twenty five percent (25%) of the Shares.
The schedule set forth above is cumulative, so that Shares as to which the
Option has become vested and exercisable on and after a date indicated by the
schedule may be purchased pursuant to exercise of the Option at any subsequent
date prior to termination of the Option. The Option may be exercised at any time
and from time to time to purchase up to the number of Shares as to which it is
then vested and exercisable.
Notwithstanding the foregoing, the Option shall vest and become exercisable, to
the extent not already vested and exercisable, upon a Corporate Reorganization,
provided that Participant is employed by the Corporation on the date of such
Corporate Reorganization. In the event of a Corporate Reorganization, the
Corporation shall send Participant prior written notice of the effectiveness of
such event and the last day on which Participant may exercise the Option.
Participant may, upon compliance with all of the terms of this Agreement and the
Plan, purchase any or all of the Shares with respect to which the Option is
vested and exercisable on or prior to the last day specified in such notice,
and, to the extent the Option is not exercised, it shall terminate at 5:00 P.M.,
eastern standard time, on the last day specified in such notice.
3. Termination of Option. The Option shall remain exercisable as
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specified in Section 2 above until the earliest to occur of the dates specified
below, upon which date the Option shall terminate:
(a) the date all of the Shares are purchased pursuant to
the terms of this Agreement;
(b) upon the expiration of ninety (90) days following the
Termination of Employment of Participant;
(c) at 5:00 P.M., eastern standard time, on the last date
specified in the notice described in Section 2 above
in the event of a Corporate Reorganization; or
(d) the ten year anniversary of the Grant Date at 5:00
P.M., eastern standard time.
Upon its termination, the Option shall have no further force or effect and
Participant shall have no further rights under the Option or to any Shares which
have not been purchased pursuant to prior exercise of the Option.
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4. Manner of Exercise of Option.
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(a) The Option may be exercised only by (i) Participant's
completion, execution and delivery to the Corporation of a notice of exercise
and, if required by the Corporation, an "investment letter" as supplied by the
Corporation confirming Participant's representations and warranties in Section
24 of this Agreement, including the representation that Participant is acquiring
the Shares for investment only and not with a view to the resale or other
distribution thereof, and (ii) the payment to the Corporation, pursuant to the
terms of this Agreement, of an amount equal to the Purchase Price multiplied by
the number of Shares being purchased as specified in Participant's notice of
exercise. Participant's notice of exercise shall be given in the manner
specified in Section 18 but any exercise of the Option shall be effective only
when the items required by the preceding sentence are actually received by the
Corporation. The notice of exercise and the "investment letter" may be in the
form set forth in Exhibit A attached to this Agreement. Payment of the aggregate
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Purchase Price for Shares Participant has elected to purchase shall be made by
cash or good check. Notwithstanding anything to the contrary in this Agreement,
the Option may be exercised only if compliance with all applicable federal and
state securities laws can be effected.
(b) Upon any exercise of the Option by Participant or as
soon thereafter as is practicable, the Corporation shall issue and deliver to
Participant a certificate or certificates evidencing such number of Shares as
Participant has then elected to purchase. Such certificate or certificates shall
be registered in the name of Participant and shall bear the legend specified in
Section 23 of this Agreement and any legend required by any federal or state
securities laws and by the North Carolina Business Corporation Act.
5. Definitions; Authority of Committee.
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(a) A "Corporate Reorganization" means the happening of
any one (1) of the following events: (i) the dissolution or liquidation of the
Corporation; (ii) a reorganization, merger or consolidation involving the
Corporation, unless (A) the transaction involves only the Corporation and one or
more of the Corporation's parent corporation and wholly-owned (excluding
interests held by employees, officers and directors) subsidiaries; or (B) the
shareholders who had the power to elect a majority of the board of directors of
the Corporation immediately prior to the transaction have the power to elect a
majority of the board of directors of the surviving entity immediately following
the transaction; (iii) the sale of all or substantially all of the assets of the
Corporation to another corporation, person or business entity; or (iv) an
acquisition of Corporation stock, unless the shareholders who had the power to
elect a majority of the board of directors of the Corporation immediately prior
to the acquisition have the power to elect a majority of the board of directors
of the Corporation immediately following the transaction.
(b) "Termination of Employment" shall mean termination of
any employment relationship of Participant with the Corporation for any reason
whatsoever, including, without limitation, death, disability, retirement,
voluntary termination, involuntary termination, dismissal with or without Cause
or resignation.
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(c) "Cause" shall be limited to the following events: (i) drug
abuse by Participant; (ii) alcohol abuse by Participant if it interferes with
the efficient conduct of business by Participant; (iii) theft, embezzlement or
other similar act by Participant of any tangible or intangible asset of the
Corporation or any customer, supplier or investor of the Corporation; (iv)
commission of any other criminal act by Participant (whether or not Participant
is prosecuted and convicted) if such act causes or is likely to cause damage to
the business of the Corporation; (v) a material breach by Participant of any
written agreement between the Corporation and Participant, or any written policy
of the Corporation known by and applicable to all its employees, but a mere
mistake in business judgment shall not constitute "Cause" unless it is a part of
a continuing pattern of bad judgment that has caused actual damage to the
Corporation or its business, and (vi) willful failure by Participant to follow
the instructions of the Board of Directors of the Corporation (the "Board") or
an officer or other supervisory employee of the Corporation duly authorized by
the Board, the Bylaws of the Corporation or an officer of the Corporation to
give instructions to Participant, to the extent such instructions are reasonably
related to the business of the Corporation, are given in good faith to promote
the interest of the Corporation, would not require Participant to commit any
illegal act and are not given to provide the Corporation with cause for
terminating Participant.
(d) All determinations made by the Committee with respect
to the interpretation, construction and application of any provision of this
Agreement shall be final, conclusive and binding on the parties.
6. Default Treatment.
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(a) The Option shall be construed so that it is in
compliance with the requirements of section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). If for any reason the Option does not meet the
requirements of section 422 of the Code, then the Option or any portion of the
Option, as necessary, shall be deemed a nonqualified stock option granted under
the Plan.
(b) If the aggregate Fair Market Value, determined on the
date of grant, of the stock to which this Option and any other incentive stock
options are exercisable for the first time by Participant during any calendar
year under the Plan or any other stock option plan of the Corporation exceeds
$100,000, the Option shall be deemed a nonqualified stock option granted under
the Plan to the extent of such excess.
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7. Restrictions on Transfer of Shares.
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(a) Except as otherwise provided in subsection (b) below
and in Sections 8, 9 and 15 of this Agreement, neither the Option nor any Shares
shall or may be sold, exchanged, delivered, assigned, bequeathed or gifted,
pledged, mortgaged, hypothecated or otherwise encumbered, transferred or
permitted to be transferred, or otherwise disposed of, whether voluntarily,
involuntarily or by operation of law (including, without limitation, the laws of
bankruptcy, intestacy, descent and distribution or succession) or on an absolute
or contingent basis. For purposes of Sections 8, 9, 10, 15 and 19 hereof, any
reference to Participant shall (when applicable) be deemed to be and include
references to Participant's estate, executors or administrators, personal or
legal representatives and transferees (direct or indirect).
(b) In the event of Participant's death, the Option
and/or any Shares then held of record by Participant may be transferred to any
executor, administrator, personal or legal representative, legatee, heir or
distributee of the estate of Participant; provided, that, as a condition
precedent to such transfer of any of the Option and/or any Shares, each and
every prospective transferee shall (i) provide or cause to be provided to the
Corporation, at its request, sufficient evidence of the legal right and
authority of such prospective transferee to have the Option and/or any such
Shares so transferred and (ii) comply with the provisions of Section 11 of this
Agreement.
8. Option of the Corporation to Purchase Shares Upon Termination
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of Employment.
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(a) In the event of the Termination of Employment of
Participant, if Shares have been previously issued by the Corporation pursuant
to exercise of the Option, the Corporation shall have the option (but shall not
be obligated) to repurchase at the price specified in subsection (c) below any
or all of the Shares owned by Participant and Participant's estate, executors or
administrators, personal or legal representatives, and transferees (direct or
indirect).
(b) The option specified in Section 8(a) hereof, to the
extent applicable, may be exercised by the Corporation after the Termination of
Employment of Participant by giving written notice of such exercise to
Participant, specifying the time and date on which settlement on the purchase of
such Shares by the Corporation is to be made and the number of Shares to be so
purchased by the Corporation. The date specified shall not be later than sixty
(60) days after the date such notice is given. Settlement shall be held on the
purchase of Shares under this Section 8 at the principal executive offices of
the Corporation or at such other place as the Corporation shall notify
Participant. At settlement, Participant shall deliver to the Corporation the
materials required pursuant to Section 10 hereof and, simultaneously therewith,
the Corporation shall deliver to Participant a good check in the amount of the
purchase price of the Shares being purchased by the Corporation pursuant to this
Section 8.
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(c) The per share purchase price of the Shares to be
purchased and sold pursuant to this Section 8 shall be as follows:
(i) If the Termination of Employment giving rise
to the purchase by the Corporation under this Section 8 was other than for
Cause, as determined by the Committee in its discretion, then the per share
purchase price under this Section 8 shall be the fair market value of the Shares
on the date of such Termination of Employment, as determined by the Committee in
its discretion.
(ii) If the Termination of Employment giving rise
to the purchase by the Corporation under this Section 8 was for Cause, as
determined by the Committee in its discretion, then the per share purchase price
under this Section 8 shall be equal to the Purchase Price.
(d) The option specified in this Section 8, to the extent
applicable, shall terminate when the Corporation has consummated a public
offering of its Common Stock pursuant to the Securities Act of 1933, as amended.
9. Right of First Refusal.
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(a) In the event that Participant shall receive a Bona
Fide Offer (as defined in Section 9(b) hereof) to purchase some or all of the
Shares then owned by Participant (assuming Participant has purchased some or all
of the Shares), and in the further event that Participant desires to accept such
Bona Fide Offer, Participant shall give written notice to the Corporation
containing the information required by Section 9(c) and offering to sell such
Shares to the Corporation upon the same terms and conditions as are contained in
the Bona Fide Offer or upon such other terms to which Participant consents. The
Corporation shall then have such rights and privileges, for the prescribed time
periods, as are set forth in Section 9(d) hereof.
(b) The term "Bona Fide Offer" as used in this Agreement
means an offer in writing, signed by an offeror or offerors (who must be a
person or persons financially capable of carrying out the terms of such Bona
Fide Offer) not affiliated in any manner with, or related to, Participant, in a
form legally enforceable, upon its acceptance, against such nonaffiliated and
unrelated offeror or offerors.
(c) The notice from Participant to the Corporation with
respect to a Bona Fide Offer under Section 9(a) shall contain a true and
complete copy of the Bona Fide Offer, setting forth the price and all of the
terms and conditions, with the name(s), address(es) and business(es) or other
occupation(s) of the nonaffiliated and unrelated offeror or offerors. Any notice
which does not contain all such information shall not be considered effective
under Section 9(a).
(d) For a period of sixty (60) days from its receipt of
Participant's notice under Section 9(a) the Corporation shall have the right, at
its sole option, to purchase the
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Shares so offered. Such right of the Corporation may be exercised by the
Corporation by giving written notice of such exercise to Participant within such
sixty (60) day period. Such notice from the Corporation shall specify the time
and date on which settlement in connection with the exercise of such right is to
be made. The date specified shall not be later than ninety (90) days from the
date such notice is given by the Corporation. Settlement shall be held on the
purchase of Shares under this Section 9 at the principal executive offices of
the Corporation or at such other place as the Corporation shall notify
Participant. At settlement, Participant shall deliver to the Corporation the
materials required pursuant to Section 9 hereof and, simultaneously therewith,
the Corporation shall deliver to Participant the purchase price for such Shares
in the amount, manner and form provided for in the Bona Fide Offer.
(e) If the Corporation shall not elect, within such sixty
(60) day period, to purchase all of the Shares covered by the Bona Fide Offer,
Participant shall have the right to accept the Bona Fide Offer in whole (but not
in part) and to sell such Shares, subject to the provisions and restrictions of
this Agreement, but only in strict accordance with all of the provisions of the
Bona Fide Offer and only if the sale is fully consummated within ninety (90)
days after the date Participant gives the notice required by Section 9(a). In
the event that such sale is not fully consummated within such ninety (90) day
period, the provisions of this Section 9 must again be complied with by
Participant before Participant may sell Shares pursuant to this Section 9.
(f) The right of first refusal specified in this Section
9 shall terminate when the Corporation has consummated a public offering of its
Common Stock pursuant to the Securities Act of 1933, as amended.
(g) The right of first refusal specified in this Section
9 shall be freely assignable by the Corporation.
10. Delivery of Stock and Documents. Upon the closing of any
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purchase by the Corporation of any Shares pursuant to Section 8 or 9 of this
Agreement, Participant shall deliver to the Corporation the certificate or
certificates representing the Shares being sold, free and clear of all options,
contracts, commitments, liens, pledges, security interests and other
encumbrances, duly endorsed for transfer, and such assignments and other
documents and instruments evidencing the title of Participant and of
Participant's compliance with this Agreement as may be reasonably required by
the Corporation or by counsel for the Corporation. Upon the closing of such
purchase, Participant shall be deemed to have represented and warranted to the
Corporation (and, if requested by the Corporation, shall then represent and
warrant in writing) that Participant owns the Shares being purchased, free and
clear of all options, contracts, commitments, liens, pledges, security interests
and other encumbrances. Participant agrees to indemnify the Corporation against
any and all losses, damages, liabilities, claims, actions, proceedings,
judgments, costs and expenses (including reasonable attorneys' fees) arising out
of any breach of such representation and warranty.
11. Binding Upon Transferees. In the event that, at any time or
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from time to time, any Shares are transferred to any party (other than the
Corporation) pursuant to the provisions
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of Section 9 hereof or otherwise, the transferee shall take such Shares pursuant
to all of the provisions, conditions and obligations of the Plan and this
Agreement (including, without limitation, the obligations to sell and transfer,
and to offer to sell and transfer, such Shares pursuant to the provisions of
Section 8, 9 and 15 hereof), and, as a condition precedent to the transfer of
such Shares, the transferee shall agree in writing, for and on behalf of such
transferee and such transferee's successors and assigns, to be bound by all
provisions of the Plan and this Agreement. For purposes of this Section 11, the
obligation of any such transferee pursuant to Section 8 to sell such Shares
shall arise upon the Corporation's exercise of its option pursuant to Section 8
at any time after Participant's termination of employment, not such transferee's
termination of employment (if any).
12. Termination of Restrictions. The restrictions on
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transferability of the Shares under Section 4 of this Agreement and the
application of the provisions of Sections 8, 9 and 15 of this Agreement shall
terminate upon the adoption of resolutions by the Committee expressly
terminating such restrictions and provisions; provided, however, that no
termination under this Section 12 shall be deemed to affect any restrictions
imposed by any applicable federal or state securities law, rule, regulation or
order with respect to the ownership, sale or disposition by Participant of any
of the Shares.
13. Changes in Capital Structure of the Corporation. Subject to
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any required action by the shareholders of the Corporation and the provisions of
the North Carolina Business Corporation Act, the number of shares of Common
Stock subject to this Agreement as well as the Purchase Price of any Shares not
yet purchased by Participant shall be proportionately adjusted for (a) a
division, combination or reclassification of the shares of Common Stock of the
Corporation or (b) a dividend payable in shares of Common Stock of the
Corporation.
14. Rights Prior to Exercise. Participant will have no rights as
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a shareholder with respect to the Shares except to the extent that Participant
has exercised the Option and has been issued and received delivery of a
certificate or certificates evidencing the Shares so purchased.
15. Sale or Other Disposition by Majority Interest. Participant
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hereby irrevocably appoints the Corporation and its President, or either of
them, as Participant's agents and attorneys-in-fact, with full power of
substitution for and in Participant's name, to sell, exchange, transfer or
otherwise dispose of all or a portion of Participant's Shares and to do any and
all things and to execute any and all documents and instruments (including,
without limitation, any stock transfer powers) in connection therewith, such
powers of attorney not to become operable until such time as the holder or
holders of a majority of the issued and outstanding shares of Common Stock of
the Corporation sell, exchange, transfer or otherwise dispose of, or contract to
sell, exchange, transfer or otherwise dispose of, all or a majority of the
issued and outstanding shares of Common Stock of the Corporation. Any sale,
exchange, transfer or other disposition of all or a portion of Participant's
Shares pursuant to the foregoing powers of attorney shall be made upon
substantially the same terms and conditions (including sale price per share)
applicable to a sale, exchange, transfer or other disposition of shares of
Common Stock of the Corporation owned by the holder or holders of a majority of
the issued and
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outstanding shares of Common Stock of the Corporation. For purposes of
determining the sale price per share of the Shares under this Section 15, there
shall be excluded the consideration (if any) paid or payable to the holder or
holders of a majority of the issued and outstanding shares of Common Stock of
the Corporation in connection with any employment, consulting, noncompetition or
similar agreements which such holder or holders may enter into in connection
with or subsequent to such sale, transfer, exchange or other disposition. The
foregoing power of attorney shall not impose or be deemed to impose any
fiduciary duty or any other duty (except as set forth in this Section 15) or
obligation on either the Corporation or its President, shall be irrevocable and
coupled with an interest and shall not terminate by operation of law, whether by
the death, bankruptcy or adjudication of incompetency or insanity of Participant
or the occurrence of any other event.
16. Engagement of Participant. Nothing in this Agreement shall be
-------------------------
construed as constituting a commitment, guarantee, agreement or understanding of
any kind or nature that the Corporation shall continue to employ Participant,
nor shall this Agreement affect in any way the right of the Corporation to
terminate the employment of Participant at any time and for any reason. By
Participant's execution of this Agreement, Participant acknowledges and agrees
that Participant's employment is "at will." No change of Participant's duties as
an employee of the Corporation shall result in, or be deemed to be, a
modification of any of the terms of this Agreement.
17. Burden and Benefit; Corporation. This Agreement shall be
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binding upon, and shall inure to the benefit of, the Corporation and
Participant, and their respective heirs, personal and legal representatives,
successors and assigns. As used in this Section 17, the term the "Corporation"
shall also include any corporation which is the parent or a subsidiary of the
Corporation or any corporation or entity which is an affiliate of the
Corporation by virtue of common (although not identical) ownership, and for
which Participant is providing services in any form during Participant's
employment with the Corporation or any such other corporation or entity.
Participant hereby consents to the enforcement of any and all of the provisions
of this Agreement by or for the benefit of the Corporation and any such other
corporation or entity.
18. Notices. Any and all notices under this Agreement shall be in
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writing, and sent by hand delivery or by certified or registered mail (return
receipt requested and first-class postage prepaid), in the case of the
Corporation, to its principal executive offices to the attention of the
President, and, in the case of Participant, to Participant's address as shown on
the Corporation's records.
19. Specific Performance. Strict compliance by Participant shall
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be required with each and every provision of this Agreement and particularly
with the procedures set forth in Sections 8 and 9 hereof. The parties hereto
agree that the Shares are unique, that Participant's failure to perform the
obligations provided by this Agreement will result in irreparable damage to the
Corporation and that specific performance of Participant's obligations may be
obtained by suit in equity.
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20. Governing Law. This Agreement shall be construed and enforced
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in accordance with the laws of the State of North Carolina, without reference to
its conflicts of laws rules or the principles of the choice of law.
21. Modifications. No change or modification of this Agreement
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shall be valid unless the same is in writing and signed by the parties hereto.
22. Terms and Conditions of Plan. The terms and conditions
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included in the Plan, the receipt of a copy of which Participant hereby
acknowledges by execution of this Agreement, are incorporated by reference
herein, and to the extent that any conflict may exist between any term or
provision of this Agreement and any term or provision of the Plan, such term or
provision of the Plan shall control.
23. Stock Legend. All certificates for Shares issued by the
------------
Corporation to Participant or Participant's successors and assigns or to any
other person becoming a signatory to this Agreement shall be endorsed with
legends in substantially the following form, and any transfer agent of the
Corporation may be instructed to require compliance with all legends on such
certificates:
The securities represented hereby are subject
to the terms of an Option Agreement between the
Corporation and the holder of such securities.
Pursuant to the terms of such Option Agreement,
the Corporation has the right to purchase such
securities under certain circumstances. A copy
of the Option Agreement can be obtained from
the Secretary of the Corporation, without charge,
upon the written request of the holder of record
of this certificate.
The securities represented hereby have not been
registered under any federal or state securities
laws and have been issued under exemptions from
registration that depend, in part, on the intent
of the holder not to sell or transfer these
securities in any manner not permitted by such
laws. These securities therefore may not be sold
or transferred except upon registration under all
applicable federal and state securities laws or
upon delivery to the Corporation of either (a) a
no-action letter from the federal and state
agencies having jurisdiction thereof, or (b) an
opinion of counsel satisfactory to the Corporation
that neither the sale nor the proposed transfer
constitutes a violation of the registration
provisions of any federal or state securities laws.
24. Covenants and Representations of Participant.
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Participant represents, warrants, covenants and agrees with
the Corporation as follows:
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(a) The Option is being received for Participant's own
account without the participation of any other person, with the intent of
holding the Option and the Shares issuable pursuant thereto for investment and
without the intent of participating, directly or indirectly, in a distribution
of the Shares and not with a view to, or for resale in connection with, any
distribution of the Shares or any portion thereof.
(b) Participant is not acquiring the Option or any Shares
based upon any representation, oral or written, by any person with respect to
the future value of, or income from, the Shares, but rather upon an independent
examination and judgment as to the prospects of the Corporation.
(c) Participant has had the opportunity to ask questions
of and receive answers from the Corporation and its executive officers and to
obtain all information necessary for Participant to make an informed decision
with respect to the investment in the Corporation represented by the Option and
any Shares issued upon its exercise.
(d) Participant is able to bear the economic risk of any
investment in the Shares, including the risk of a complete loss of the
investment, and Participant acknowledges that Participant must continue to bear
the economic risk of any investment in Shares received upon exercise of the
Option for an indefinite period.
(e) Participant understands and agrees that the Shares
subject to the Option may be issued and sold to Participant without registration
under any state or federal laws relating to the registration of securities and
in that event will be issued and sold in reliance on exemptions from
registration under appropriate state and federal laws.
(f) Shares issued to Participant upon exercise of the
Option will not be offered for sale, sold or transferred by Participant other
than pursuant to: (i) an effective registration under applicable state
securities laws or in a transaction which is otherwise in compliance with those
laws; (ii) an effective registration under the Securities Act of 1933, or a
transaction otherwise in compliance with such Act; and (iii) evidence
satisfactory to the Corporation of compliance with all applicable state and
federal securities laws. The Corporation shall be entitled to rely upon an
opinion of counsel satisfactory to it with respect to compliance with the
foregoing laws.
(g) The Corporation will be under no obligation to
register the Shares issuable pursuant to the Option or to comply with any
exemption available for sale of the Shares by Participant without registration,
and the Corporation is under no obligation to act in any manner so as to make
Rule 144 promulgated under the Securities Act of 1933 available with respect to
any sale of the Shares by Participant.
(h) Participant has not relied upon the Corporation with
respect to any tax consequences related to the grant or exercise of this Option,
or the disposition of Shares purchased pursuant to its exercise. Participant
acknowledges that, as a result of the grant
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and/or exercise of the Option, Participant may incur a substantial tax
liability. Participant assumes full responsibility for all such consequences and
the filing of all tax returns and elections Participant may be required or find
desirable to file in connection therewith. In the event any valuation of the
Option or Shares purchased pursuant to its exercise must be made under federal
or state tax laws and such valuation affects any return or election of the
Corporation, Participant agrees that the Corporation may determine such value
and that Participant will observe any determination so made by the Corporation
in all returns and elections filed by Participant. In the event the Corporation
is required by applicable law to collect any withholding, payroll or similar
taxes by reason of the grant or any exercise of the Option, Participant agrees
that the Corporation may withhold such taxes from any monetary amounts otherwise
payable by the Corporation to Participant and that, if such amounts are
insufficient to cover the taxes required to be collected by the Corporation,
Participant will pay to the Corporation such additional amounts as are required.
(i) The agreements, representations, warranties and
covenants made by Participant herein with respect to the Option shall also
extend to and apply to all of the Shares issued to Participant from time to time
pursuant to exercise of the Option. Acceptance by Participant of any certificate
representing Shares shall constitute a confirmation by Participant that all such
agreements, representations, warranties and covenants made herein shall be true
and correct at that time.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Corporation and Participant have executed this
Agreement and affixed their seals hereto as of the day and year first above
written.
ATTEST: RALEIGH TECHNOLOGY CORP.
______________________________ By: ______________________________
_________________________, Secretary Print Name: ________________________
Title: _____________________________
[CORPORATE SEAL]
WITNESS: PARTICIPANT
______________________________ _______________________________(SEAL)
Name:
13
