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EXHIBIT 4.3
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "AGREEMENT"), dated
____________________, is made by and between XXXX-XXXXXXX LEADERSHIP
CONSULTING U.K., LTD., a California corporation (the "COMPANY"), and -------
_________________, an Employee (as defined herein) of Company (the "OPTIONEE")
WHEREAS, the Company wishes to afford the Optionee the opportunity to
purchase shares of its common stock, par value $1.00 per share (the "COMMON
STOCK"); and
WHEREAS, the Board (as defined herein), has determined that it would be to
the advantage and best interest of the Company and its shareholders to grant the
non-qualified option provided for herein to the Optionee as an inducement to
enter into, or remain in, the service of the Company or a Subsidiary of the
Company and as an incentive for increased efforts during such service, and has
advised the Company thereof and instructed the undersigned officers to issue
said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
"AGREEMENT" shall have the meaning set forth in preamble hereto.
"BOARD" shall mean the Board of Directors of the Company.
"CAUSE," unless otherwise defined in an Employee's written employment
agreement with the Company or a Subsidiary of the Company, shall mean (i) gross
negligence or willful misconduct, (ii) a breach of any of the Employee's
material duties under their employment agreement, which breach remains uncured
for a period of 20 days after such Employee receives notice thereof, (iii) fraud
or other conduct against the material best interests of the Company or (iv) a
conviction of a felony if such conviction has a material adverse effect on the
Company.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" shall have the meaning set forth in recitals hereto.
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"COMPANY" shall have the meaning set forth in preamble hereto.
"DIRECTOR" shall mean a member of the Board.
"EMPLOYEE" shall mean any officer or other employee (as defined in
accordance with Section 3401(c) of the Code) of the Company or a Subsidiary of
the Company.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"OPTION" shall mean the non-qualified option to purchase Common Stock of
the Company granted under this Agreement.
"OPTIONEE" shall have the meaning set forth in preamble hereto.
"RULE 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended from time to time.
"SECRETARY" shall mean the Secretary of the Company.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SHAREHOLDERS' AGREEMENT" shall mean that certain Agreement Among
Shareholders, dated as of December 14, 1994, among the Company and the other
persons or entities party thereto, as such agreement may be supplemented or
amended from time to time, or any successor agreement to such agreement.
"SUBSIDIARY" shall mean (i) a corporation, association or other business
entity of which 50% or more of the total combined voting power of all classes of
capital stock is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries of the Company or by the Company and one or more Subsidiaries
thereof, (ii) any partnership of which 50% or more of the capital and profits
interests is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries of the Company or by the Company and one or more Subsidiaries
thereof, and (iii) any other entity not described in clauses (i) or (ii) above
of which 50% or more of the ownership and the power, pursuant to a written
contract or agreement, to direct the policies and management or the financial
and the affairs thereof, are owned or controlled by the Company or by one or
more other Subsidiaries of the Company or by the Company and one or more
Subsidiaries thereof.
"TERMINATION OF EMPLOYMENT" shall mean the time when the employee-employer
relationship between the Optionee and the Company or any Subsidiary is
terminated for any reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death, disability or
retirement; but excluding (i) terminations where there is a simultaneous
reemployment or continuing employment of the Optionee by the Company or any
Subsidiary, (ii) at the discretion of the Board, terminations which result in a
temporary severance of the employee-employer relationship, and (iii) at the
discretion of the Board, terminations which are followed by the simultaneous
establishment of a consulting relationship by the Company or a Subsidiary with
the former employee. The Board, in its
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absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for good cause, and all questions of whether a particular leave of absence
constitutes a Terminations of Employment. Notwithstanding any other provision of
this Agreement, the Company or any Subsidiary has an absolute and unrestricted
right to terminate an Employee's employment at any time for any reason
whatsoever, with or without cause, except to the extent expressly provided
otherwise in writing.
ARTICLE II.
GRANT OF OPTION
Section 2.1. - GRANT OF OPTION
In consideration of the Optionee's agreement to remain in the service of
the Company or any of its Subsidiaries and for other good and valuable
consideration, on the date hereof the Company irrevocably grants to the Optionee
the option to purchase any part or all of an aggregate of _____ shares of Common
Stock upon the terms and conditions set forth in this Agreement.
Section 2.2. - PURCHASE PRICE
The purchase price of the shares of Common Stock covered by the Option
shall be $____ per share without commission or other charge.
Section 2.3. - CONSIDERATION TO COMPANY
In consideration of the granting of this Option by the Company, the
Optionee agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe. Nothing in this Agreement shall confer upon the Optionee any
right to continue in the employ of the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company and its
Subsidiaries, which are hereby expressly reserved, to discharge the Optionee at
any time for any reason whatsoever, with or without Cause.
Section 2.4. - ADJUSTMENTS IN OPTION
The Board may, in its sole discretion, make adjustments with respect to the
Option to the extent that it determines that any dividend or other distribution,
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
liquidation, dissolution, sale of all or substantially all of the assets of the
Company, exchange of Common Stock or issuance or warrants or other convertible
securities, or other similar corporate transaction or event, affects the Common
Stock such that an adjustment is appropriate, as determined by the Board in its
sole discretion, in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available hereunder.
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ARTICLE III.
PERIOD OF EXERCISABILITY
Section 3.1. - COMMENCEMENT OF EXERCISABILITY
(a) The Option shall be exercisable immediately
Section 3.2. - DURATION OF EXERCISABILITY
The Option shall remain exercisable until it becomes unexercisable under
SECTION 3.3.
Section 3.3. - EXPIRATION OF OPTION
The Option may not be exercised to any extent by anyone after the first to
occur of the following events:
(a) The expiration of five (5) years from the date the Option was granted;
or
(b) The time of the Optionee's Termination of Employment unless such
Termination of Employment results from his death, his retirement, his disability
or his being discharged other than for Cause; or
(c) The expiration of three (3) months from the date of the Optionee's
Termination of Employment by reason of his retirement or his being discharged
other than for Cause, unless the Optionee dies within said three-month period;
or
(d) The expiration of one (1) year from the date of the Optionee's
Termination of Employment by reason of his disability; or
(e) The expiration of one (1) year from the date of the Optionee's death.
ARTICLE IV.
EXERCISE OF OPTION
Section 4.1. - PERSON ELIGIBLE TO EXERCISE
During the lifetime of the Optionee, only he may exercise the Option or any
portion thereof. After the death of the Optionee, any exercisable portion of the
Option may, prior to the time when the Option becomes unexercisable under
SECTION 3.3, be exercised by his personal representative or by any person
empowered to do so under the deceased Optionee's will or under the then
applicable laws of descent and distribution.
Section 4.2. - PARTIAL EXERCISE
Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under SECTION 3.3;
provided, however, that each partial exercise
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shall be for not less than ten (10) shares (except that exercise of the Option
with respect to the final remaining shares available thereunder may be for fewer
shares) and shall be for whole shares only.
Section 4.3. - MANNER OF EXERCISE
The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Secretary of the following prior to the time when the Option or
such portion becomes unexercisable under SECTION 3.3:
(a) A written notice complying with the applicable rules established by the
Board stating that the Option, or a portion thereof, is exercised. The notice
shall be signed by the Optionee or other person then entitled to exercise the
Option or such portion;
(b) (i) Full cash payment to the Secretary of the Company for the
shares with respect to which such Option or portion is exercised;
(ii) With the consent of the Board, a full recourse promissory
note bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code or successor provision) and payable
upon such terms as may be prescribed by the Board. The Board may also
prescribe the form of such note and the security to be given for such note.
The Option may not be exercised, however, by delivery of a promissory note
or by a loan from the Company when or where such loan or other extension of
credit is prohibited by law; or
(iii) With the consent of the Board, any combination of the
consideration provided in the foregoing subparagraphs (i) and (ii);
(c) A bona fide written representation and agreement, in a form
satisfactory to the Board, signed by the Optionee or other person then entitled
to exercise such Option or portion, stating that the shares of stock are being
acquired for his own account, for investment and without any present intention
of distributing or reselling said shares or any of them except as may be
permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Optionee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Board may, in its absolute
discretion, take whatever additional actions it deems appropriate to ensure the
observance and performance of such representation and agreement and to effect
compliance with the Securities Act and any other federal or state securities
laws or regulations. Without limiting the generality of the foregoing, the Board
may require an opinion of counsel acceptable to it to the effect that any
subsequent transfer of shares acquired on an Option exercise does not violate
the Securities Act, and may issue stop-transfer orders covering such shares.
Share certificates evidencing stock issued on exercise of this Option shall bear
an appropriate legend referring to the provisions of this subsection (c) and the
agreements herein. The written representation and agreement referred to in the
first sentence of this subsection (c) shall, however, not be required if the
shares to be issued pursuant to such exercise have been
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registered under the Securities Act, and such registration is then effective in
respect of such shares;
(d) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; and
(e) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option.
Section 4.4. - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
The shares of Common Stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of Common Stock purchased
upon the exercise of the Option or portion thereof prior to fulfillment of all
of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed;
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Board shall, in its absolute discretion, deem necessary or advisable;
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Board shall, in its absolute discretion,
determine to be necessary or advisable;
(d) The receipt by the Company of full payment for such shares, including
payment of all amounts which, under federal, state or local tax law, the Company
(or other employer corporation) is required to withhold upon exercise of the
Option;
(e) The receipt by the Company of any documents or other instruments the
Board deems necessary to ensure that such shares, and the holders thereof, are
subject to the Shareholders' Agreement;
(f) The receipt by the Company of a consent to the Company's election to be
taxable as an S Corporation which is appropriately executed by the Optionee or,
if the Optionee has died, by the person who shall own such shares; and
(g) The lapse of such reasonable period of time following the exercise of
the Option as the Board may from time to time establish for reasons of
administrative convenience.
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Section 4.5. - RIGHTS AS SHAREHOLDER
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
ARTICLE V.
OTHER PROVISIONS
Section 5.1. - ADMINISTRATION
The Board shall have the power to interpret this Agreement and to adopt
such rules for the administration, interpretation and application of this
Agreement as are consistent with the intent, as determined by the Board in its
sole discretion, hereof and to interpret, amend or revoke any such rules. All
actions taken and all interpretations and determinations made by the Board in
good faith shall be final and binding upon the Optionee, the Company and all
other interested persons. No member of the Board shall be personally liable for
any action, determination or interpretation made in good faith with respect to
this Agreement or the Option. In its absolute discretion, the Board may at any
time and from time to time exercise any and all rights and duties of the Board
under this Agreement except with respect to matters which under Rule 16b-3 or
Section 162(m) of the Code, or any regulations or rules issued thereunder, are
required to be determined other than by the Board.
Section 5.2. - OPTION NOT TRANSFERABLE
Neither the Option nor any interest or right therein or part thereof shall
be sold, pledged, assigned, or transferred in any manner other than by will or
the laws of descent and distribution, unless and until such Option has been
exercised, or the shares underlying such Option have been issued, and all
restrictions applicable to such shares have lapsed. Neither the Option nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Optionee or his successors in interest or shall
be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
Section 5.3. - SHARES TO BE RESERVED
The Company shall at all times during the term of the Option reserve and
keep available such number of shares of Common Stock as will be sufficient to
satisfy the requirements of this Agreement.
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Section 5.4. - NOTICES
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be
given to the Optionee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this SECTION 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Optionee shall, if the Optionee is
then deceased, be given to the Optionee's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this SECTION 5.4. Any notice shall be deemed duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service; provided, however,
that any notice to be given by the Optionee relating to the exercise of the
Option or any portion thereof shall be deemed duly given upon receipt by the
Secretary.
Section 5.5. - TITLES
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 5.6. - GOVERNING LAW
This Agreement shall be administered, interpreted and enforced under the
internal laws of the State of California without regard to the conflicts of laws
provisions thereof.
Section 5.7. - CONFORMITY TO SECURITIES LAWS
The Optionee acknowledges that this Agreement is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including, without limitation, the applicable exemptive
conditions of Rule 16b-3. Notwithstanding anything herein to the contrary, this
Agreement shall be administered, and the Option is granted and may be exercised,
only in such a manner as to conform to such laws, rules and regulations. To the
extent permitted by applicable law, this Agreement shall be deemed amended to
the extent necessary to conform to such laws, rules and regulations.
Section 5.8. - AMENDMENTS
This Agreement may be amended without the consent of the Optionee, provided
that, subject to SECTION 2.4, such amendment would not impair any rights of the
Optionee under this Agreement. Subject to SECTION 2.4, No amendment of this
Agreement shall, without the consent of the Optionee, impair any rights of the
Optionee under this Agreement.
Section 5.9. - SHAREHOLDERS' AGREEMENT
The Optionee hereby acknowledges and agrees, on his own behalf and on
behalf of his representatives, heirs, successors and assigns, that the Option
and all securities issued pursuant
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to this Agreement shall be subject to the terms of the Shareholders' Agreement,
including, without limitation, the transfer restrictions and repurchase rights
contained therein.
Section 5.10. - LEGENDS
Each certificate representing securities to be issued upon exercise of the
Option shall bear the following legends:
SALE, TRANSFER OR HYPOTHICATION OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED BY THE PROVISIONS OF AN AGREEMENT AMONG
SHAREHOLDERS, DATED AS OF DECEMBER 14, 1994, A COPY OF WHICH MAY BE
INSPECTED AT THE PRINCIPAL OFFICE OF THE CORPORATION ISSUING SUCH
SHARES, ALL OF THE PROVISIONS OF WHICH ARE INCORPORATED HEREIN.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES OR BLUE SKY LAWS. THESE
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR LAWS.
Section 5.11. - S CORPORATION COVENANT
The Optionee acknowledges that the Company is an "S corporation" within the
meaning of Section 1361(a) of the Code and the Optionee hereby agrees to consent
to the Company's election to be taxable as an S corporation at such time and in
such form as may be required by the Company.
Section 5.12. - COUNTERPARTS
This Agreement may be executed simultaneously in one or more counterparts,
any one of which need not contain the signature of more than one party, but all
such counterparts taken together will constitute one and the same agreement.
(signature page follows)
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
XXXX-XXXXXXX LEADERSHIP CONSULTING
U.K., LTD.
By:________________________________
Name:
Title:
___________________________
[Optionee's name]
___________________________
(Optionee's signature)
Optionee's Address:
___________________________
___________________________
___________________________
Optionee's Taxpayer
Identification Number:
___________________________
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