SOUTHWALL TECHNOLOGIES INC. Non-Qualified Stock Option Agreement for Employees
Exhibit
99.7
SOUTHWALL
TECHNOLOGIES INC.
Southwall
Technologies Inc., a Delaware corporation (the “Company”), hereby grants as of
<date> to <name> (the “Employee”), an option to purchase a maximum
of <number> shares (the “Option Shares”) of its Common Stock, $.001 par
value (“Common Stock”), at the price of $___ per share, on the following terms
and conditions:
1. Grant
Under the 1997 Stock Incentive Plan. This
option is granted pursuant to and is governed by the Company’s 1997 Stock
Incentive Plan (the “Plan”) and, unless the context otherwise requires, terms
used herein shall have the same meaning as in the Plan. Determinations made in
connection with this option pursuant to the Plan shall be governed by the Plan
as it exists on this date.
2. Grant
as Non-Qualified Stock Option; Other Options.
This
option shall be treated for federal income tax purposes as a Non-Qualified
Option (rather than an incentive stock option). This option is in addition to
any other options heretofore or hereafter granted to the Employee by the Company
or any Subsidiary of the Company, but a duplicate original of this instrument
shall not effect the grant of another option.
3. Vesting
of Option if Employment Continues.
For the
purpose of determining the vesting of the option granted hereunder, the vesting
date will be <date> (the “Vesting Date”) and the option will vest over
____ years. If the Employee has continued to be employed by the Company or any
Subsidiary of the Company on the following dates, the Employee may exercise this
option for the number of shares of Common Stock set opposite the applicable
date:
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Less
than ____ from the Vesting Date |
- |
No
shares |
|
____
from the Vesting Date |
- |
|
|
Each
subsequent ___ following ____ from the Vesting Date |
- |
An
additional ___% of the total number of shares
granted |
Notwithstanding
the foregoing, in accordance with and subject to the provisions of the Plan, the
Board of Directors (the "Board") or a committee selected by the Board (the
"Committee") may, in its discretion, accelerate the date that any installment of
this option becomes exercisable. The foregoing rights are cumulative and, while
the Employee continues to be employed by the Company or any Subsidiary of the
Company, may be exercised on or before the date which is 10 years from the date
this option is granted. All of the foregoing rights are subject to Sections 4
and 5, as appropriate, if the Employee ceases to be employed by the Company and
all Subsidiaries of the Company.
4. Termination
of Business Relationship.
(a)
Termination
Other Than for Cause.
If the
Employee ceases to be employed by the Company or any Subsidiary of the Company,
other than by reason of death or disability as defined in Section 5 or
termination for Misconduct or for Unsatisfactory Performance, no further
installments of this option shall become exercisable, and this option shall
terminate (and may no longer be exercised) after the passage of eighteen months
from the Employee’s last day of employment, but in no event later than the
scheduled expiration date. In such a case, the Employee’s only rights hereunder
shall be those which are properly exercised before the termination of this
option.
(b)
Termination
for Cause.
If the
employment of the Employee is terminated for Misconduct or for Unsatisfactory
Performance, this option shall terminate upon the Employee’s receipt of written
notice of such termination and shall thereafter not be exercisable to any extent
whatsoever.
5. Death;
Disability.
(a)
Death. If the
Employee dies while in the employ of the Company or any Subsidiary of the
Company, this option may be exercised, to the extent otherwise exercisable on
the date of his or her death, by the Employee’s estate, personal representative
or beneficiary to whom this option has been assigned pursuant to Section 10, at
any time within eighteen months after the date of death, but not later than the
scheduled expiration date.
(b)
Disability. If the
Employee ceases to be employed by the Company and all Subsidiaries of the
Company by reason of his or her disability, this option may be exercised, to the
extent otherwise exercisable on the date of the termination of his or her
employment, at any time within eighteen months after such termination, but not
later than the scheduled expiration date.
(c)
Effect
of Termination.
At the
expiration of the eighteen month period provided in paragraph (a) or (b) of this
Section 5 or the scheduled expiration date, whichever is the earlier, this
option shall terminate (and shall no longer be exercisable) and the only rights
hereunder shall be those as to which the option was properly exercised before
such termination.
6. Partial
Exercise.
This
option may be exercised in part at any time and from time to time within the
above limits, except that this option may not be exercised for a fraction of a
share unless such exercise is with respect to the final installment of stock
subject to this option and cash in lieu of a fractional share must be paid to
permit the Employee to exercise completely such final installment. Any
fractional share with respect to which an installment of this option cannot be
exercised because of the limitation contained in the preceding sentence shall
remain subject to this option and shall be available for later purchase by the
Employee in accordance with the terms hereof.
7. Payment
of Price.
(a) Manner
of Payment. The
option price shall be paid in the following manner:
|
(i) |
by
either cash, check or fund transfer payable to the Company;
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|
(ii) |
subject
to paragraph 7(b) below, by delivery of shares of the Company’s Common
Stock having a fair market value (as determined by the Board or the
Committee) equal as of the date of exercise to the option price;
|
|
(iii) |
by
delivery of an assignment satisfactory in form and substance to the
Company of a sufficient amount of the proceeds from the sale of the Option
Shares and an instruction to the broker or selling agent to pay that
amount to the Company; or |
|
(iv) |
by
any combination of the foregoing. |
(b) Limitations
on Payment by Delivery of Common Stock. If the
Employee delivers Common Stock held by the Employee (“Old Stock”) to the Company
in full or partial payment of the option price, and the Old Stock so delivered
is subject to restrictions or limitations imposed by agreement between the
Employee and the Company, an equivalent number of Option Shares shall be subject
to all restrictions and limitations applicable to the Old Stock to the extent
that the Employee paid for the Option Shares by delivery of Old Stock, in
addition to any restrictions or limitations imposed by this Agreement.
Notwithstanding the foregoing, the Employee may not pay any part of the exercise
price hereof by transferring Common Stock to the Company unless such Common
Stock has been owned by the Employee free of any substantial risk of forfeiture
for at least six months.
8. Method
of Exercising Option.
Subject
to the terms and conditions of this Agreement, this option may be exercised (i)
by written notice to the Company at its principal executive office, or (ii) by
written notice to such transfer agent as the Company shall designate. Such
notice shall state the election to exercise this option and the number of Option
Shares for which it is being exercised and shall be signed (either in writing or
by electronic transmission) by the person or persons so exercising this option.
Such notice shall be accompanied by payment of the full purchase price of such
shares, and the Company shall deliver a certificate or certificates representing
such shares as soon as practicable after the notice shall be received. Such
certificate or certificates shall be registered in the name of the person or
persons so exercising this option (or, if this option shall be exercised by the
Employee and if the Employee shall so request in the notice exercising this
option, shall be registered in the name of the Employee and another person
jointly, with right of survivorship). In the event this option shall be
exercised, pursuant to Section 5 hereof, by any person or persons other than the
Employee, such notice shall be accompanied by appropriate proof of the right of
such person or persons to exercise this option.
9. Option
Not Transferable.
This
option is not transferable or assignable except by will or by the laws of
descent and distribution. During the Employee’s lifetime only the Employee can
exercise this option.
10.
No
Obligation to Exercise Option.
The grant
and acceptance of this option imposes no obligation on the Employee to exercise
it.
11.
No
Obligation to Continue Employment.
Neither
the Plan, this Agreement, nor the grant of this option imposes any obligation on
the Company or any Subsidiary of the Company to continue the employment of the
Employee.
12.
No
Rights as Stockholder until Exercise.
The
Employee shall have no rights as a stockholder with respect to the Option Shares
until such time as the Employee has exercised this option in accordance with
Section 8. Except as is expressly provided in the Plan with respect to certain
changes in the capitalization of the Company, no adjustment shall be made for
dividends or similar rights for which the record date is prior to such date of
exercise.
13.
Capital
Changes and Business Successions.
The Plan
contains provisions covering the treatment of options in a number of
contingencies such as stock splits and mergers. Provisions in the Plan for
adjustment with respect to stock subject to options and the related provisions
with respect to successors to the business of the Company are hereby made
applicable hereunder and are incorporated herein by reference.
14.
Withholding
Taxes.
If the
Company or any Subsidiary of the Company in its discretion determines that it is
obligated to withhold any tax in connection with the exercise of this option, or
in connection with the transfer of, or the lapse of restrictions on, any Common
Stock or other property acquired pursuant to this option, the Employee hereby
agrees that the Company or any Subsidiary of the Company may withhold from the
Employee’s wages or other remuneration the appropriate amount of tax. At the
discretion of the Company or Subsidiary of the Company, the amount required to
be withheld may be withheld in cash from such wages or other remuneration or in
kind from the Common Stock or other property otherwise deliverable to the
Employee on exercise of this option. The Employee further agrees that, if the
Company or any Subsidiary of the Company does not withhold an amount from the
Employee’s wages or other remuneration sufficient to satisfy the withholding
obligation of the Company or Subsidiary of the Company, the Employee will make
reimbursement on demand, in cash, for the amount underwithheld.
15.
Arbitration.
Any
dispute, controversy, or claim arising out of, in connection with, or relating
to the performance of this Agreement or its termination shall be settled by
arbitration in the State of California, pursuant
to the rules then obtaining of the American Arbitration Association. Any award
shall be final, binding and conclusive upon the parties and a judgment rendered
thereon may be entered in any court having jurisdiction thereof.
16.
Provision
of Documentation to Employee. By
signing this Agreement (either in writing or by electronic transmission) the
Employee acknowledges receipt of a copy of this Agreement and a copy of the
Plan.
17.
Miscellaneous.
(a)
Notices. Except
as explicitly provided for herein or in the Plan, all notices hereunder shall be
in writing and shall be deemed given when sent by certified or registered mail,
postage prepaid, return receipt requested, to the address set forth below. The
addresses for such notices may be changed from time to time by written notice
given in the manner provided for herein.
(b)
Entire
Agreement; Modification.
This
Agreement constitutes the entire agreement between the parties relative to the
subject matter hereof, and supersedes all proposals, written or oral, and all
other communications between the parties relating to the subject matter of this
Agreement. This Agreement may be modified, amended or rescinded only by a
written agreement executed by both parties (either in writing or by electronic
transmission).
(c)
Severability.
The
invalidity, illegality or unenforceability of any provision of this Agreement
shall in no way affect the validity, legality or enforceability of any other
provision.
(d)
Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, subject to the limitations set
forth in Section 9 hereof.
(e)
Governing
Law. This
Agreement shall be governed by and interpreted in accordance with the laws of
the State of California, without
giving effect to the principles of the conflicts of laws thereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the Company and the Employee have caused this instrument to be
executed as of the date first above written.
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SOUTHWALL
TECHNOLOGIES INC. | |||||
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Signature
of Employee |
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Print
Name of Employee |
Name of
Officer | |||||
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