Exhibit 10.11
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is made and entered into this
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_____ day of __________, 2000 by and between ___________(the "Optionee") and
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XXXXXXXXXX.XXX, a California corporation (the "Company").
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R E C I T A L S
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A. The Board has authorized the grant of options to purchase Common Stock
of the Company pursuant to the terms and conditions set forth herein. This
option does not qualify as an "incentive stock option" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
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B. The grant hereunder is intended to comply with the provisions of Rule
701 promulgated by the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Act").
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C. Before making any decision concerning this Agreement or an exercise of
any option granted hereby, Optionee is advised to consult with an attorney and a
tax advisor. THE UNTIMELY EXERCISE OF THE OPTION GRANTED MAY CAUSE OPTIONEE TO
INCUR LIABILITIES UNDER THE TAXATION AND SECURITIES LAWS OF WHICH OPTIONEE MAY
BE OTHERWISE UNAWARE WITHOUT SEEKING THE ADVICE OF ADVISORS.
AGREEMENT
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NOW, THEREFORE, the parties agree as follows:
1. Grant to Optionee.
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The Company hereby grants to Optionee, subject to the terms and conditions
herein set forth herein, an option (the "Option") to purchase from the Company
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all or any part of an aggregate of eighty four thousand two hundred seventy nine
(84,279) shares of the Company's Common Stock ("Common Stock").
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2. Exercise of the Option.
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(a) Exercise Price. The exercise price of this Option is Fifty cents
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($0.50) per share. Payment of the exercise price per share is due in full upon
exercise of all or any part of this Option. Optionee may elect, to the extent
permitted by applicable statutes and regulations, to make payment of the
exercise price under one of the following alternatives:
(i) Payment of the exercise price per share in cash (including
check) at the time of exercise;
(ii) Provided that at the time of exercise the Company's Common
Stock is publicly traded and quoted regularly in the Wall Street Journal,
payment by delivery of already-owned shares of Common Stock, held for the
period required to avoid a charge to the
Company's reported earnings in excess of that which the Company is willing
to accept, and owned free and clear of any liens, claims, encumbrances or
security interests, which Common Stock shall be valued at its fair market
value, which is the per share price of the last sale of Common Stock on the
trading day immediately preceding the date the Option is exercised (or the
closing bid if no sales were reported), based on the composite transactions
in the Common Stock as reported in the Wall Street Journal (or any
successor publication thereto) (the "Fair Market Value");
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(iii) Provided that at the time of exercise the Company's Common
Stock is publicly traded and quoted regularly in the Wall Street Journal,
and provided further, that the cashless exercise will not result in a
charge to the Company's earnings, in excess of that which the Company is
willing to accept, payment by delivery and surrender of this Option with a
Cashless Exercise Notice (in the form attached hereto as Exhibit B). In
the event of a cashless exercise, the Optionee shall exchange the Option
for such number of shares of Common Stock underlying the Option determined
by multiplying the number of shares by a fraction, the numerator of which
shall be the difference between the Fair Market Value per share of the
Common Stock and the exercise price per share of the Option, the
denominator of which shall be the Fair Market Value per share of the Common
Stock;
(iv) To the extent permitted by applicable law, payment by a
combination of the methods of payment permitted by Sections 2(a)(i),
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2(a)(ii) and 2(a)(iii) above.
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(b) Exercise Notice. In order to exercise this Option, Optionee or any
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other person or persons entitled to exercise the Option shall give written
notice to the Secretary of the Company or to such other person as may be
designated by the Company, in the form set forth on Exhibit A or Exhibit B
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attached hereto, specifying the number of shares to be purchased. This notice
shall be accompanied by payment of the exercise price for the shares as provided
in Section 2(a). Optionee shall also deliver such additional documents as the
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Company may then require.
(c) Compliance with Securities Laws. Notwithstanding anything to the
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contrary contained herein, this Option may not be exercised unless the shares
issuable upon exercise of this Option are then registered under the Act, or, if
such shares are not then so registered, the Company has determined that such
exercise and issuance would be exempt from the registration requirements of the
Act.
(d) Additional Terms and Conditions. By exercising this Option, Optionee
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agrees that:
(i) the Company may require (as condition to the exercise of this
Option) Optionee to enter an arrangement providing for the payment by
Optionee to the Company of any tax withholding obligation of the Company
arising by reason of (1) the exercise of the Option; (2) the lapse of any
substantial risk of forfeiture to which the shares are subject at the time
of exercise; or (3) the disposition of shares acquired upon such exercise;
and
(ii) the Optionee agrees to notify the Company in writing within
fifteen (15) days after the date of any disposition of any of the shares of
the Common Stock issued upon exercise of this Option that occurs within two
(2) years after the date of grant of this Option or within one (1) year
after such shares of Common Stock are transferred upon exercise of this
Option.
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3. Vesting Schedule.
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Subject to the limitations contained herein, all eighty four thousand two
hundred seventy nine (84,279) shares will vest on 12 January, 2000. Vested
options may be exercised in whole or in part, and, to the extent not exercised,
will accumulate and be exercisable at any time on or before the termination of
the Option; provided however, that this Option may not be exercised for any
number of shares which would require the issuance of anything other than whole
shares. Notwithstanding anything to the contrary contained herein, this Option
may not be exercised unless the shares issuable upon exercise of this Option are
then registered under the Act, or, if such shares are not then so registered,
the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Act.
4. Expiration Date.
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The Option shall terminate and expire at 5:00 p.m., California time, on 12
January, 2002. In no event may this Option be exercised after the date on which
it terminates. This Option shall terminate prior the expiration of its term as
follows:
(i) Death. Such termination is due to Optionee's death, in which
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event the Option shall terminate on the earlier of the termination date set
forth above or twelve (12) months after Optionee's death; or
(ii) Removal for Cause. Such termination is due Optionee's
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commission of fraud, theft or embezzlement against the Company or a
subsidiary, affiliated entity or customer of the Company, or for conflict
of interest (other than legitimate competition), in which event the Option
shall terminate at the time Optionee's employment or engagement is
terminated.
Notwithstanding the foregoing, this Option may be exercised following
termination of Optionee's employment or engagement by the Company or an
affiliate only as to that number of shares as to which it was exercisable on the
date of such termination under the provisions of Section 3 of this Option.
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5. Nontransferable.
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This Option is not transferable, except by will or by the laws of descent
and distribution, and is exercisable during Optionee's life only by Optionee.
Any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of, or
to subject to execution, attachment or similar process, the Option, or any right
thereunder, contrary to the provisions hereof, shall be void and ineffective,
shall give no right to the purported transferee, and shall, at the sole
discretion of the Committee, result in forfeiture of the Option with respect to
the shares involved in such attempt. By delivering written notice to the
Company, in a form satisfactory to the Company, Optionee may designate a third
party who, in the event of Optionee's death, shall thereafter be entitled to
exercise this Option. Notwithstanding the above, the Board of Directors, in its
sole and absolute discretion may consent to the transfer hereof, if such
transfer would otherwise be in compliance with all laws and regulations
(including income tax and securities laws and regulations) governing this
Option.
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6. No Right to Continued Employment or Engagement by the Company.
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This Agreement is not an employment contract and nothing in this Option
shall be deemed to create in any way whatsoever any obligation on Optionee's
part to continue in the employ of the Company, or of the Company or an affiliate
to continue Optionee's employment with the Company or an affiliate. In the
event that this Option is granted to Optionee in connection with the performance
of services as a consultant or director, references to employment, employee and
similar terms shall be deemed to include the performance of services as a
consultant or a director, as the case may be; provided however, that no rights
as an employee shall arise by reason of the use of such terms.
7. No Rights as a Shareholder.
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The holder of this Option shall not have any of the rights of a shareholder
with respect to the shares subject to the Option until such holder shall have
exercised the option and paid the exercise price.
8. Notices.
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Any notices provided for in this Option shall be given in writing and shall
be deemed effectively given upon receipt or five (5) days after deposit in the
United States mail, postage prepaid, certified mail addressed to Optionee or the
Company at the address specified below or at such other address as the parties
may hereafter designate by written notice:
Optionee: ____________________________________________
____________________________________________
____________________________________________
The Company: XxxxxxxXxx.xxx
00000 Xxxxxxxx Xx. Xxx. 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: Corporate Secretary
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first set forth above.
"Company" XXXXXXXXXX.XXX,
a California corporation
By:_______________________________________________
Title:____________________________________________
Date:_____________________________________________
"Optionee"
__________________________________________________
Social Security No.:______________________________
Date:_____________________________________________
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EXHIBIT A
EXERCISE NOTICE
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XxxxxxxXxx.xxx
00000 Xxxxxxxx Xx. Xxx. 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Secretary
Re: Exercise of Stock Option
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Ladies and Gentlemen:
Pursuant to Section 2 of that certain Stock Option Agreement (the
"Agreement") between the undersigned and XxxxxxxXxx.xxx, a California
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corporation (the "Company"), the undersigned hereby elects to exercise the
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option granted thereby to purchase _______________ shares of Common Stock of the
Company at a price of $_______ per share. Accompanying this Notice is the
payment in full for such.
The undersigned represents and warrants to the Company that the undersigned
is acquiring the shares for investment only and not with a view to distribution
or resale.
Dated:________________
_______________________________________
Signature
_______________________________________
Print Name
_______________________________________
Please print here the exact name desired to
be on the stock certificate and the records
of the Company.
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EXHIBIT B
CASHLESS EXERCISE NOTICE
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XxxxxxxXxx.xxx
00000 Xxxxxxxx Xx. Xxx. 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Secretary
Re: Cashless Exercise of Stock Option
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Ladies and Gentlemen:
Pursuant to Section 2(a)(iii) of that certain Stock Option Agreement (the
"Agreement") between the undersigned and XxxxxxxXxx.xxx, a California
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corporation (the "Company"), the undersigned hereby irrevocably elects to
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exchange the Option granted thereby for _______ shares of Common Stock of the
Company.
If the number of shares referenced in this Cashless Exercise Notice shall
not be all of the shares exchangeable or purchasable under the Option, a new
Agreement shall be issued in the name of the undersigned for the balance
remaining of the shares purchasable thereunder rounded up to the next higher
number of shares.
The undersigned represents and warrants to the Company that the undersigned
is acquiring the shares for investment only and not with a view to distribution
or resale.
Dated:________________
_______________________________________
Signature
_______________________________________
Print Name
_______________________________________
Please print here the exact name desired to
be on the stock certificate and the records
of the Company.
NOTE: This form may only be used if the cashless exercise will not
result in a charge to the Company's reported earnings.
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