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EXHIBIT 4.03
THROW INC.
INCENTIVE STOCK OPTION LETTER AGREEMENT
TO: _____________________ Date of Grant: _________________
We are pleased to inform you that you have been selected by the Plan
Administrator of Throw Inc.'s (the "Company") 1996 Stock Option Plan (the
"Plan") to receive an incentive stock option for the purchase of ______ shares
of the Company's Common Stock at an exercise price of $____ per share. A copy of
the Plan is attached and incorporated into this Incentive Stock Option Letter
Agreement (the "Stock Option Letter Agreement") by reference. If such Plan has
not been or is not approved by the shareholders of the Company within twelve
(12) months before or after the adoption of this Plan, this option will be
invalid.
The terms of the option are as set forth in the Plan and in this
Agreement. This Agreement is subject to and in accordance with the express terms
and conditions of the Plan and is in all respects limited by and subject to the
express terms and provisions of the Plan. The most important of the terms set
forth in the Plan are summarized as follows:
TERM: The term of the option is ten (10) years from date of grant,
unless sooner terminated.
VESTING: The option shall vest and become exercisable according to the
following schedule.
Date on and Portion of Total
After which Option is Exercisable Option which is Exercisable
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TERMINATION: Unless otherwise determined at any time by the Plan
Administrator, the option will terminate immediately upon termination for Cause
(as defined in the Plan) or one (1) year after termination of service as a
result of retirement, early retirement at the Company's request, disability, or
death or three (3) months after all other terminations, but in each case not
later than the remaining term of the option. The option must be exercised within
three (3) months after termination of employment for reasons other than death or
disability and one (1) year after termination of employment due to disability to
qualify for the beneficial tax treatment afforded to incentive stock options.
EXERCISE: During your lifetime only you can exercise the option. The
Plan also provides for exercise of the option by the personal representative of
your estate or the beneficiary thereof
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following your death. You may use the Notice of Exercise of Incentive Stock
Option in the form attached to this Agreement when you exercise the option.
PAYMENT FOR SHARES: Unless the Plan Administrator at any time determines
otherwise, the option may be exercised by the delivery of:
(a) Cash, personal check, bank certified or cashier's check;
(b) Shares of the capital stock of the Company held by you for a period
of at least six (6) months having a fair market value at the time of exercise,
as determined in good faith by the Plan Administrator, equal to the exercise
price. (You should consult your tax advisor before exercising this option with
stock you received upon the exercise of an incentive stock option); or
(c) A properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds to pay the exercise price; or
(d) Such other consideration as the Plan Administrator may permit,
including without limitation cancellation of indebtedness owed to you by Throw
as of the date of exercise.
TRANSFER OF OPTION: The option is not transferable except by will or by
the applicable laws of descent and distribution.
HOLDING PERIODS:
(a) Securities and Exchange Act Section 16. If an individual subject to
Section 16 of the Exchange Act sells shares of Common Stock obtained upon the
exercise of a stock option within six (6) months after the date the option was
granted, such sale may result in short-swing profit recovery under Section 16(b)
of the Exchange Act.
(b) Taxation of Stock Options. In order to obtain certain tax benefits
afforded to incentive stock options under Section 422 of the Code, an optionee
must hold the shares issued upon the exercise of an incentive stock option for
two (2) years after the date of grant of the option and one (1) year from the
date of exercise. An optionee may be subject to the alternative minimum tax at
the time of exercise.
Tax advice should be obtained when exercising any option and prior to
the disposition of the shares issued upon the exercise of any option.
MARKET STANDOFF AGREEMENT: In connection with the initial public
offering of the Company's securities and upon request of the Company or the
underwriters managing such underwritten offering of the Company's securities,
you hereby agree not to sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any portion of the option without the
prior written consent of the Company or such underwriters, as the case may be,
for such period of time (not to exceed one hundred eighty (180) days) from the
effective date of such registration as may be requested by the Company or such
managing underwriters and to
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execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the Company's public offering.
REGISTRATION: YOUR PARTICULAR ATTENTION IS DIRECTED TO SECTION 14.3 OF
THE PLAN WHICH DESCRIBES CERTAIN IMPORTANT CONDITIONS RELATING TO FEDERAL AND
STATE SECURITIES LAWS THAT MUST BE SATISFIED BEFORE THE OPTION CAN BE EXERCISED
AND BEFORE THE COMPANY CAN ISSUE ANY SHARES TO YOU. THE COMPANY HAS NO
OBLIGATION TO REGISTER THE SHARES THAT WOULD BE ISSUED UPON THE EXERCISE OF YOUR
OPTION, AND IF IT NEVER REGISTERS THE SHARES, YOU WILL NOT BE ABLE TO SELL THE
SHARES ISSUED UPON THE EXERCISE THE OPTION UNLESS AN EXEMPTION FROM REGISTRATION
IS AVAILABLE. AT THE PRESENT TIME, EXEMPTIONS FROM REGISTRATION UNDER FEDERAL
AND STATE SECURITIES LAWS ARE VERY LIMITED AND MIGHT BE UNAVAILABLE TO YOU PRIOR
TO THE EXPIRATION OF THE OPTION.
Please execute the Acceptance and Acknowledgment set forth below on the
enclosed copy of this Agreement and return it to the undersigned.
Very truly yours,
THROW INC.
By
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ACCEPTANCE AND ACKNOWLEDGMENT
I, ___________________, a resident of the State of ________________,
accept the incentive stock option described above and in Throw Inc.'s 1996 Stock
Option Plan, and acknowledge receipt of a copy of this Agreement and a copy of
the Plan. I have read and understand the Plan, including the provisions of
Section 14.3.
Dated:
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Taxpayer I.D. Number
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Address
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By his or her signature below, the spouse of the Optionee, if such
Optionee is legally married as of the date of his or her execution of this
Agreement, acknowledges that he or she has read this Agreement and the Plan and
is familiar with the terms and provisions thereof, and agrees to be bound by all
the terms and conditions of this Agreement and the Plan.
Dated:
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Spouse's Signature
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Printed Name
By his or her signature below, the Optionee represents that he or she is
not legally married as of the date of execution of this Agreement.
Dated:
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NOTICE OF EXERCISE OF INCENTIVE STOCK OPTION
To: Throw Inc.
I, ___________________, a resident of the State of ________________,
hereby exercise my incentive stock option granted by Throw Inc. (the "Company")
on __________, subject to all the terms and provisions thereof and of the 1996
Stock Option Plan referred to therein, and notify the Company of my desire to
purchase _________________ shares of Common Stock of the Company (the
"Securities") at the exercise price of ______________ per share which were
offered to me pursuant to said option.
I hereby represent and warrant that (1) I have been furnished with a
copy of the Plan and all information which I deem necessary to evaluate the
merits and risks of the purchase of the Securities; (2) I have had the
opportunity to ask questions and receive answers concerning the information
received about the Securities and the Company; and (3) I have been given the
opportunity to obtain any additional information I deem necessary to verify the
accuracy of any information obtained concerning the Securities and the Company.
I am aware that the Securities have not been registered under the
Securities Act of 1933, as amended (the "1933 Act") or any state securities
laws, pursuant to exemption(s) from registration. I understand that the reliance
by the Company on such exemption(s) is predicated in part upon the truth and
accuracy of the statements by me in this Notice of Exercise.
I hereby represent and warrant that I am purchasing the Securities for
my own personal account for investment and not with a view to the sale or
distribution of all or any part of the Securities.
I understand that because the Securities have not been registered under
the 1933 Act, I must continue to bear the economic risk of the investment for an
indefinite time and the Securities cannot be sold unless the Securities are
subsequently registered or an exemption from registration is available.
I agree that I will in no event sell or distribute all or any part of
the Securities unless (1) there is an effective registration statement under the
1933 Act and applicable state securities laws covering any such transaction
involving the Securities or (2) the Company receives an opinion of my legal
counsel (concurred in by legal counsel for the Company) stating that such
transaction is exempt from registration or the Company otherwise satisfies
itself that such transaction is exempt from registration.
In connection with the initial public offering of the Company's
Securities and upon request of the Company or the underwriters managing such
underwritten offering of the Company's Securities, I agree not to sell, make any
short sale of, loan, grant any option for the purchase of, or otherwise dispose
of any portion of the Securities without the prior written consent of the
Company or such underwriters, as the case may be, for such period of time (not
to
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exceed one hundred eighty (180) days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of such initial public offering.
In addition to any other limitation on transfer created by applicable
securities laws, I shall not assign, encumber or dispose of any interest in the
Securities except in compliance with the following provisions and applicable
securities laws.
(a) Right of First Refusal. Before any Securities held by me or any
transferee of mine (either being sometimes referred to as the "Holder") may be
sold or otherwise transferred (including transfer by gift or operation of law),
the Company or its assignee(s) shall have a right of first refusal to purchase
the Securities on the terms and conditions set forth in this section (a) (the
"Right of First Refusal").
(i) Notice of Proposed Transfer. The Holder of the Securities
shall deliver to the Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer such Securities; (ii)
the name of each proposed purchaser or other transferee ("Proposed Transferee");
(iii) the number of Securities to be transferred to each Proposed Transferee;
and (iv) the terms and conditions of each proposed sale or transfer. The Holder
shall offer the Securities at the same price (the "Offered Price") and upon the
same terms (or terms as similar as reasonably possible) to the Company or its
assignee(s).
(ii) Exercise of Right of First Refusal. At any time within
thirty (30) days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not less
than all, of the Securities proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (a)(iii) below.
(iii) Purchase Price. The purchase price ("Purchase Price") for
the Securities purchased by the Company or its assignee(s) under this section
shall be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.
(iv) Payment. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within thirty (30) days after receipt of the Notice or in
the manner and at the times set forth in the Notice.
(v) Holder's Right to Transfer. If all of the Securities proposed
in the Notice to be transferred to a given Proposed Transferee are not purchased
by the Company and/or its assignee(s) as provided in this section (a), then the
Holder may sell or otherwise transfer such Securities to that Proposed
Transferee at the Offered Price or at a higher price, provided that such sale or
other transfer is consummated within sixty (60) days after the date of the
Notice and provided further that any such sale or other transfer is effected in
accordance with any applicable securities laws and the Proposed Transferee
agrees in writing that the provisions of this section
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(a) shall continue to apply to the Securities in the hands of such Proposed
Transferee. If the Securities described in the Notice are not transferred to the
Proposed Transferee within such period, or if the Holder proposes to change the
price or other terms to make them more favorable to the Proposed Transferee, a
new Notice shall be given to the Company, and the Company and/or its assignees
shall again be offered the Right of First Refusal before any Securities held by
the Holder may be sold or otherwise transferred.
(vi) Exception for Certain Family Transfers. Anything to the
contrary contained in this section notwithstanding, the transfer of any or all
of the Securities during my lifetime or on my death by will or intestacy to my
Immediate Family (as defined below) or a trust for the benefit of my Immediate
Family shall be exempt from the provisions of this section (a). "Immediate
Family" as used herein shall mean my spouse, lineal descendant or antecedent,
father, mother, brother or sister. In such case, the transferee or other
recipient shall receive and hold the Securities so transferred subject to the
provisions of this section (a), and there shall be no further transfer of such
Securities except in accordance with the terms of this section.
(b) Involuntary Transfer
(i) Company's Right to Purchase upon Involuntary Transfer. In the
event, at any time after the date of this Notice of Exercise, of any transfer by
operation of law or other involuntary transfer (including death or divorce, but
excluding a transfer to Immediate Family as set forth in the above) of all or a
portion of the Securities by the record holder thereof, the Company shall have
the right to purchase all of the Securities transferred at the greater of the
exercise price paid by me or the fair market value of the Securities on the date
of transfer. Upon such a transfer, the person acquiring the Securities shall
promptly notify the Secretary of the Company of such transfer. The right to
purchase such Securities shall be provided to the Company for a period of thirty
(30) days following receipt by the Company of written notice by the person
acquiring the Securities.
(ii) Price for Involuntary Transfer. With respect to any
Securities to be transferred pursuant to the above subsection (b)(i), the price
per share shall be a price set by the Board of Directors of the Company that
will reflect the current value of the Securities in terms of present earnings
and future prospects of the Company. The Company shall notify me or my executor
of the price so determined within thirty (30) days after receipt by it of
written notice of the transfer or proposed transfer of Securities.
(c) Assignment. The right of the Company to purchase any part of the
Securities may be assigned in whole or in part to any shareholder or
shareholders of the Company or other persons or organizations; provided,
however, that an assignee, other than a corporation that is the parent or a 100%
owned subsidiary of the Company, must pay the Company, upon assignment of such
right, cash equal to the difference between the original purchase price and fair
market value, if the original purchase price is less than the fair market value
of the Securities subject to the assignment.
(d) Restrictions Binding on Transferees. All transferees of Securities
or any interest therein will receive and hold such Securities or interest
subject to the provisions of this Notice of
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Exercise, the Plan and the Stock Option Letter Agreement. Any sale or transfer
of the Company's Securities shall be void unless the provisions of this Notice
of Exercise are satisfied.
(e) Termination of Rights. The Right of First Refusal granted the
Company and the right to repurchase the Securities in the event of an
involuntary transfer granted the Company, shall terminate upon the first sale of
Common Stock of the Company to the general public pursuant to a registration
statement filed with and declared effective by the Securities and Exchange
Commission under the 1933 Act. Upon termination of the Right of First Refusal, a
new certificate or certificates representing the Securities not repurchased
shall be issued, on request, without the legend referred to in this Notice of
Exercise and delivered to me.
I consent to the placing of a legend on my certificate(s) for the
Securities stating that the Securities have not been registered and setting
forth the restriction on transfer contemplated hereby and to the placing of a
stop transfer order on the books of the Company and with any transfer agents
against the Securities until the Securities may be legally resold or
distributed.
The certificate or certificates representing the Securities shall
bear the following legends (as well as any legends required by applicable state
and federal corporate and securities laws):
(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE, DISTRIBUTION OR OTHER DISPOSITION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.
I understand that at the present time Rule 144 of the Securities
and Exchange Commission ("SEC") may not be relied on for the resale or
distribution of the Securities by me. I understand that the Company has no
obligation to me to register the Securities with the SEC and has not represented
to me that it will register the Securities.
I AM ADVISED, PRIOR TO MY PURCHASE OF THE SECURITIES, THAT
NEITHER THE OFFERING OF THE SECURITIES NOR ANY OFFERING MATERIALS HAVE BEEN
REVIEWED BY ANY ADMINISTRATOR UNDER THE SECURITIES ACT OF 1933, THE WASHINGTON
STATE SECURITIES ACT OR ANY OTHER APPLICABLE SECURITIES ACT (THE "ACTS") AND
THAT THE SECURITIES HAVE NOT BEEN REGISTERED UNDER ANY OF THE ACTS AND THEREFORE
CANNOT BE RESOLD
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UNLESS THEY ARE REGISTERED UNDER THE ACTS OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
Dated:
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Taxpayer I.D. Number
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Address
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RECEIPT
The Company hereby acknowledges receipt from ___________________ in
payment for shares of Common Stock of Throw Inc., a Washington corporation, of
$__________________ in the form of:
[ ] Cash
[ ] Check (personal, cashier's or bank certified)
[ ] Cancellation of indebtedness owed by Throw Inc. as of the date
hereof
[ ] shares of the Company's Common Stock, fair market value
$_______________ per share held by the Optionee for a period of
at least six (6) months
[ ] Copy of irrevocable instructions to Broker
THROW INC.
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Name:
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Title:
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Date:
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FMV on such date: $
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THROW INC.
NONQUALIFIED STOCK OPTION LETTER AGREEMENT
TO: _____________________ Date of Grant: _________________
We are pleased to inform you that you have been selected by the Plan
Administrator of Throw Inc.'s (the "Company") 1996 Stock Option Plan (the
"Plan") to receive a nonqualified option for the purchase of _______ shares of
the Company's Common Stock at an exercise price of $_____ per share. A copy of
the Plan is attached and incorporated into this Nonqualified Stock Option Letter
Agreement (the "Stock Option Letter Agreement") by reference. If such Plan has
not been or is not approved by the shareholders of the Company, this option will
be invalid.
The terms of the option are as set forth in the Plan and in this
Agreement. This Agreement is subject to and in accordance with the express terms
and conditions of the Plan and is in all respects limited by and subject to the
express terms and provisions of the Plan. The most important of the terms set
forth in the Plan are summarized as follows:
TERM: The option will expire on __________.
VESTING: The option shall vest and become exercisable according to the
following schedule.
Date on and Portion of Total
After which Option is Exercisable Option which is Exercisable
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TERMINATION: Unless otherwise determined at any time by the Plan
Administrator, the option will terminate immediately upon termination for Cause
(as defined in the Plan) or one (1) year after termination of service as a
result of retirement, early retirement at the Company's request, disability, or
death, but in each case not later than the remaining term of the option.
EXERCISE: During your lifetime only you can exercise the option. The
Plan also provides for exercise of the option by the personal representative of
your estate or the beneficiary thereof following your death. You may use the
Notice of Exercise of Nonqualified Stock Option in the form attached to this
Agreement when you exercise the option.
PAYMENT FOR SHARES: Unless the Plan Administrator at any time determines
otherwise, the option may be exercised by the delivery of:
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(a) Cash, personal check, bank certified or cashier's check;
(b) Tendering (either actually or, if and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, by attestation)
shares of the capital stock of the Company held by you for a period of at least
six (6) months (or any shorter period necessary to avoid a charge to the
Company's earnings for financial reporting purposes) having a fair market value
at the time of exercise, as determined in good faith by the Plan Administrator,
equal to the exercise price;
(c) A properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds to pay the exercise price and any withholding tax obligations;
or
(d) Such other consideration as the Plan Administrator may permit,
including without limitation cancellation of indebtedness owed to you by Throw
as of the date of exercise.
WITHHOLDING TAXES: As a condition to the exercise of a nonqualified
stock option, you shall make such arrangements as the Company may require for
the satisfaction of any federal, state or local withholding tax obligations that
may arise in connection with such exercise. The Company shall have the right to
retain without notice sufficient shares of stock to satisfy the withholding
obligation. Unless the Plan Administrator determines otherwise, you may satisfy
the withholding obligation by electing to have the Company or related
corporation withhold from the shares to be issued upon exercise that number of
shares having a fair market value equal to the amount required to be withheld.
TRANSFER OF OPTION: The option is not transferable except by will or by
the applicable laws of descent and distribution.
HOLDING PERIOD: In the case of a Nonqualified Stock Option, if shares
are held for at least one year, any gain realized on disposition of the shares
will be treated as long-term capital gain for federal income tax purposes. If an
individual subject to Section 16 of the Exchange Act sells shares of Common
Stock obtained upon the exercise of a stock option within six (6) months after
the date the option was granted, such sale may result in short-swing profit
recovery under Section 16(b) of the Exchange Act.
MARKET STANDOFF AGREEMENT: In connection with the initial public
offering of the Company's securities and upon request of the Company or the
underwriters managing such underwritten offering of the Company's securities,
you hereby agree not to sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any portion of the option without the
prior written consent of the Company or such underwriters, as the case may be,
for such period of time (not to exceed one hundred eighty (180) days) from the
effective date of such registration as may be requested by the Company or such
managing underwriters and to execute an agreement reflecting the foregoing as
may be requested by the underwriters at the time of the Company's public
offering.
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REGISTRATION: YOUR PARTICULAR ATTENTION IS DIRECTED TO SECTION 14.3 OF
THE PLAN, WHICH DESCRIBES CERTAIN IMPORTANT CONDITIONS RELATING TO FEDERAL AND
STATE SECURITIES LAWS THAT MUST BE SATISFIED BEFORE THE OPTION CAN BE EXERCISED
AND BEFORE THE COMPANY CAN ISSUE ANY SHARES TO YOU. THE COMPANY HAS NO
OBLIGATION TO REGISTER THE SHARES THAT WOULD BE ISSUED UPON THE EXERCISE OF YOUR
OPTION, AND IF IT NEVER REGISTERS THE SHARES, YOU WILL NOT BE ABLE TO SELL THE
SHARES ISSUED UPON THE EXERCISE THE OPTION UNLESS AN EXEMPTION FROM REGISTRATION
IS AVAILABLE. AT THE PRESENT TIME, EXEMPTIONS FROM REGISTRATION UNDER FEDERAL
AND STATE SECURITIES LAWS ARE VERY LIMITED AND MIGHT BE UNAVAILABLE TO YOU PRIOR
TO THE EXPIRATION OF THE OPTION.
Please execute the Acceptance and Acknowledgment set forth below on the
enclosed copy of this Agreement and return it to the undersigned.
Very truly yours,
THROW INC.
By
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ACCEPTANCE AND ACKNOWLEDGMENT
I, ___________________, a resident of the State of ________________,
accept the nonqualified stock option described above and in Throw Inc.'s 1996
Stock Option Plan, and acknowledge receipt of a copy of this Agreement and a
copy of the Plan. I have read and understand the Plan, including the provisions
of Section 14.3.
Dated:
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Taxpayer I.D. Number
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Address
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By his or her signature below, the spouse of the Optionee, if such
Optionee is legally married as of the date of his or her execution of this
Agreement, acknowledges that he or she has read this Agreement and the Plan and
is familiar with the terms and provisions thereof, and agrees to be bound by all
the terms and conditions of this Agreement and the Plan.
Dated:
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Spouse's Signature
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Printed Name
By his or her signature below, the Optionee represents that he or she is
not legally married as of the date of execution of this Agreement.
Dated:
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NOTICE OF EXERCISE OF NONQUALIFIED STOCK OPTION
To: Throw Inc.
I, ___________________, a resident of the State of ________________,
hereby exercise my nonqualified stock option granted by Throw Inc. (the
"Company") on ____________, subject to all the terms and provisions thereof and
of the 1996 Stock Option Plan referred to therein, and notify the Company of my
desire to purchase _________________ shares of Common Stock of the Company (the
"Securities") at the exercise price of ______________ per share which were
offered to me pursuant to said option.
I hereby represent and warrant that (1) I have been furnished with a
copy of the Plan and all information which I deem necessary to evaluate the
merits and risks of the purchase of the Securities; (2) I have had the
opportunity to ask questions and receive answers concerning the information
received about the Securities and the Company; and (3) I have been given the
opportunity to obtain any additional information I deem necessary to verify the
accuracy of any information obtained concerning the Securities and the Company.
I am aware that the Securities have not been registered under the
Securities Act of 1933, as amended (the "1933 Act") or any state securities
laws, pursuant to exemption(s) from registration. I understand that the reliance
by the Company on such exemption(s) is predicated in part upon the truth and
accuracy of the statements by me in this Notice of Exercise.
I hereby represent and warrant that I am purchasing the Securities for
my own personal account for investment and not with a view to the sale or
distribution of all or any part of the Securities.
I understand that because the Securities have not been registered under
the 1933 Act, I must continue to bear the economic risk of the investment for an
indefinite time and the Securities cannot be sold unless the Securities are
subsequently registered or an exemption from registration is available.
I agree that I will in no event sell or distribute all or any part of
the Securities unless (1) there is an effective registration statement under the
1933 Act and applicable state securities laws covering any such transaction
involving the Securities or (2) the Company receives an opinion of my legal
counsel (concurred in by legal counsel for the Company) stating that such
transaction is exempt from registration or the Company otherwise satisfies
itself that such transaction is exempt from registration.
In connection with the initial public offering of the Company's
Securities and upon request of the Company or the underwriters managing such
underwritten offering of the Company's Securities, I agree not to sell, make any
short sale of, loan, grant any option for the purchase of, or otherwise dispose
of any portion of the Securities without the prior written consent of the
Company or such underwriters, as the case may be, for such period of time (not
to
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exceed one hundred eighty (180) days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of such initial public offering.
(a) Right of First Refusal. Before any Securities held by me or any
transferee of mine (either being sometimes referred to as the "Holder") may be
sold or otherwise transferred (including transfer by gift or operation of law),
the Company or its assignee(s) shall have a right of first refusal to purchase
the Securities on the terms and conditions set forth in this section (a) (the
"Right of First Refusal").
(i) Notice of Proposed Transfer. The Holder of the Securities
shall deliver to the Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer such Securities; (ii)
the name of each proposed purchaser or other transferee ("Proposed Transferee");
(iii) the number of Securities to be transferred to each Proposed Transferee;
and (iv) the terms and conditions of each proposed sale or transfer. The Holder
shall offer the Securities at the same price (the "Offered Price") and upon the
same terms (or terms as similar as reasonably possible) to the Company or its
assignee(s).
(ii) Exercise of Right of First Refusal. At any time within
thirty (30) days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not less
than all, of the Securities proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (a)(iii) below.
(iii) Purchase Price. The purchase price ("Purchase Price") for
the Securities purchased by the Company or its assignee(s) under this section
shall be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.
(iv) Payment. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within thirty (30) days after receipt of the Notice or in
the manner and at the times set forth in the Notice.
(v) Holder's Right to Transfer. If all of the Securities proposed
in the Notice to be transferred to a given Proposed Transferee are not purchased
by the Company and/or its assignee(s) as provided in this section (a), then the
Holder may sell or otherwise transfer such Securities to that Proposed
Transferee at the Offered Price or at a higher price, provided that such sale or
other transfer is consummated within sixty (60) days after the date of the
Notice and provided further that any such sale or other transfer is effected in
accordance with any applicable securities laws and the Proposed Transferee
agrees in writing that the provisions of this section (a) shall continue to
apply to the Securities in the hands of such Proposed Transferee. If the
Securities described in the Notice are not transferred to the Proposed
Transferee within such period, or if the Holder proposes to change the price or
other terms to make them more favorable to the Proposed Transferee, a new Notice
shall be given to the Company, and the Company
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and/or its assignees shall again be offered the Right of First Refusal before
any Securities held by the Holder may be sold or otherwise transferred.
(vi) Exception for Certain Family Transfers. Anything to the
contrary contained in this section notwithstanding, the transfer of any or all
of the Securities during my lifetime or on my death by will or intestacy to my
Immediate Family (as defined below) or a trust for the benefit of my Immediate
Family shall be exempt from the provisions of this section (a). "Immediate
Family" as used herein shall mean my spouse, lineal descendant or antecedent,
father, mother, brother or sister. In such case, the transferee or other
recipient shall receive and hold the Securities so transferred subject to the
provisions of this section (a), and there shall be no further transfer of such
Securities except in accordance with the terms of this section.
(b) Involuntary Transfer
(i) Company's Right to Purchase upon Involuntary Transfer. In the
event, at any time after the date of this Notice of Exercise, of any transfer by
operation of law or other involuntary transfer (including death or divorce, but
excluding a transfer to Immediate Family as set forth in the above) of all or a
portion of the Securities by the record holder thereof, the Company shall have
the right to purchase all of the Securities transferred at the greater of the
exercise price paid by me or the fair market value of the Securities on the date
of transfer. Upon such a transfer, the person acquiring the Securities shall
promptly notify the Secretary of the Company of such transfer. The right to
purchase such Securities shall be provided to the Company for a period of thirty
(30) days following receipt by the Company of written notice by the person
acquiring the Securities.
(ii) Price for Involuntary Transfer. With respect to any
Securities to be transferred pursuant to the above subsection (b)(i), the price
per share shall be a price set by the Board of Directors of the Company that
will reflect the current value of the Securities in terms of present earnings
and future prospects of the Company. The Company shall notify me or my executor
of the price so determined within thirty (30) days after receipt by it of
written notice of the transfer or proposed transfer of Securities.
(c) Assignment. The right of the Company to purchase any part of the
Securities may be assigned in whole or in part to any shareholder or
shareholders of the Company or other person or organizations; provided, however,
that an assignee, other than a corporation that is the parent or a 100% owned
subsidiary of the Company, must pay the Company, upon assignment of such right,
cash equal to the difference between the original purchase price and fair market
value, if the original purchase price is less than the fair market value of the
Securities subject to the assignment.
(d) Restrictions Binding on Transferees. All transferees of Securities
or any interest therein will receive and hold such Securities or interest
subject to the provisions of this Notice of Exercise, the Plan and the Stock
Option Letter Agreement. Any sale or transfer of the Company's Securities shall
be void unless the provisions of this Notice of Exercise are satisfied.
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(e) Termination of Rights. The Right of First Refusal granted the
Company and the right to repurchase the Securities in the event of an
involuntary transfer granted the Company, shall terminate upon the first sale of
Common Stock of the Company to the general public pursuant to a registration
statement filed with and declared effective by the Securities and Exchange
Commission under the 1933 Act. Upon termination of the Right of First Refusal, a
new certificate or certificates representing the Securities not repurchased
shall be issued, on request, without the legend referred to in this Notice of
Exercise and delivered to me.
I consent to the placing of a legend on my certificate(s) for the
Securities stating that the Securities have not been registered and setting
forth the restriction on transfer contemplated hereby and to the placing of a
stop transfer order on the books of the Company and with any transfer agents
against the Securities until the Securities may be legally resold or
distributed.
The certificate or certificates representing the Securities shall
bear the following legends (as well as any legends required by applicable state
and federal corporate and securities laws):
(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933.
(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.
I understand that at the present time Rule 144 of the Securities
and Exchange Commission ("SEC") may not be relied on for the resale or
distribution of the Securities by me. I understand that the Company has no
obligation to me to register the Securities with the SEC and has not represented
to me that it will register the Securities.
I AM ADVISED, PRIOR TO MY PURCHASE OF THE SECURITIES, THAT
NEITHER THE OFFERING OF THE SECURITIES NOR ANY OFFERING MATERIALS HAVE BEEN
REVIEWED BY ANY ADMINISTRATOR UNDER THE SECURITIES ACT OF 1933, THE WASHINGTON
STATE SECURITIES ACT OR ANY OTHER APPLICABLE SECURITIES ACT (THE "ACTS") AND
THAT THE SECURITIES HAVE NOT BEEN REGISTERED UNDER ANY OF THE ACTS AND THEREFORE
CANNOT BE RESOLD
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UNLESS THEY ARE REGISTERED UNDER THE ACTS OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
Dated:
---------------------
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Taxpayer I.D. Number
-----------------------------------
Address
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RECEIPT
The Company hereby acknowledges receipt from ___________________ in
payment for shares of Common Stock of Throw Inc., a Washington corporation, of
$__________________ in the form of:
[ ] Cash
[ ] Check (personal, cashier's or bank certified)
[ ] Cancellation of indebtedness owed by Throw Inc. as of the date
hereof
[ ] shares of the Company's Common Stock, fair market value
$_______________ per share held by the Optionee for a period of
at least six (6) months
[ ] Copy of irrevocable instructions to Broker
THROW INC.
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
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FMV on such date: $
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