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EXHIBIT 4.08
NO. _________
XXXXX DESIGN, INC.
NON-PLAN STOCK OPTION AGREEMENT
This Stock Option Agreement ("AGREEMENT") is made and entered
into as of the date of grant set forth below (the "DATE OF GRANT") by and
between Xxxxx Design, Inc., a California corporation (the "COMPANY"), and the
participant named below ("PARTICIPANT").
PARTICIPANT: __________________________________
SOCIAL SECURITY NUMBER: __________________________________
ADDRESS: __________________________________
__________________________________
__________________________________
TOTAL OPTION SHARES: __________________________________
EXERCISE PRICE PER SHARE: __________________________________
DATE OF GRANT: __________________________________
VESTING START DATE: __________________________________
EXPIRATION DATE: __________________________________
1. GRANT OF OPTION. The Company hereby grants to Participant
an option (this "OPTION") to purchase the total number of shares of Common Stock
of the Company set forth above as Total Option Shares (the "SHARES") at the
Exercise Price Per Share set forth above (the "EXERCISE PRICE"), subject to all
of the terms and conditions of this Agreement. This Option is not intended to
qualify as an "incentive stock option" ("ISO") within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "CODE").
2. EXERCISE PERIOD.
2.1 Exercise Period of Option. Provided Participant
continues to provide services to the Company or any Subsidiary, Parent, or
Affiliate of the Company throughout the specified period, the Option shall
become exercisable as to twenty-five percent (25%) of the Total Option Shares on
the date twelve months after the Vesting Start Date specified above and shall be
exercisable as to an additional 2.0833% of the Total Option Shares at the end of
each full succeeding month thereafter until this Option is exercisable with
respect to 100% of the Shares.
2.2 Expiration. The Option shall expire on the
Expiration Date set forth above and must be exercised, if at all, on or before
the Expiration Date.
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3. TERMINATION.
3.1 Termination for Any Reason Except Death or
Disability. If Participant is Terminated for any reason, except death or
Disability, the Option, to the extent (and only to the extent) that it would
have been exercisable by Participant on the Termination Date, may be exercised
by Participant no later than ninety (90) days after the Termination Date, but in
any event no later than the Expiration Date.
3.2 Termination Because of Death or Disability. If
Participant is Terminated because of death or Disability of Participant, the
Option, to the extent that it is exercisable by Participant on the Termination
Date, may be exercised by Participant (or Participant's legal representative) no
later than twelve (12) months after the Termination Date, but in any event no
later than the Expiration Date.
3.3 No Obligation to Employ. Nothing in this Agreement
shall confer on Participant any right to continue in the employ of, or other
relationship with, the Company or any Parent or Subsidiary of the Company, or
limit in any way the right of the Company or any Parent or Subsidiary of the
Company to terminate Participant's employment or other relationship at any time,
with or without Cause.
4. MANNER OF EXERCISE.
4.1 Stock Option Exercise Agreement. To exercise this
Option, Participant (or in the case of exercise after Participant's death or
incapacity, Participant's executor, administrator, heir or legatee, as the case
may be) must deliver to the Company an executed stock option exercise agreement
in the form attached hereto as Exhibit A, or in such other form as may be
approved by the Company from time to time (the "EXERCISE AGREEMENT"), which
shall set forth, inter alia, Participant's election to exercise the Option, the
number of Shares being purchased, any restrictions imposed on the Shares and any
representations, warranties and agreements regarding Participant's investment
intent and access to information as may be required by the Company to comply
with applicable securities laws. If someone other than Participant exercises the
Option, then such person must submit documentation reasonably acceptable to the
Company that such person has the right to exercise the Option.
4.2 Limitations on Exercise. The Option may not be
exercised unless such exercise is in compliance with all applicable federal and
state securities laws, as they are in effect on the date of exercise. The Option
may not be exercised as to fewer than one hundred (100) Shares unless it is
exercised as to all Shares as to which the Option is then exercisable.
4.3 Payment. The Exercise Agreement shall be
accompanied by full payment of the Exercise Price for the shares being purchased
in cash (by check), or where permitted by law:
(a) by cancellation of indebtedness of the Company to the
Participant;
(b) by surrender of shares of the Company's Common Stock that
(1) either (A) have been owned by Participant for more than
six (6) months and have been paid for within the meaning of
SEC Rule 144 (and, if such shares were
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purchased from the Company by use of a promissory note,
such note has been fully paid with respect to such shares);
or (B) were obtained by Participant in the open public
market; and (2) are clear of all liens, claims,
encumbrances or security interests;
(c) by waiver of compensation due or accrued to Participant for
services rendered;
(d) provided that a public market for the Company's stock
exists, (1) through a "same day sale" commitment from
Participant and a broker-dealer that is a member of the
National Association of Securities Dealers (an "NASD
DEALER") whereby Participant irrevocably elects to exercise
the Option and to sell a portion of the Shares so purchased
to pay for the Exercise Price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward
the Exercise Price directly to the Company, or (2) through
a "margin" commitment from Participant and an -- NASD
Dealer whereby Participant irrevocably elects to exercise
the Option and to pledge the Shares so purchased to the
NASD Dealer in a margin account as security for a loan from
the NASD Dealer in the amount of the Exercise Price, and
whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the Exercise Price directly to the
Company; or
(e) by any combination of the foregoing.
4.4 Tax Withholding. Prior to the issuance of the
Shares upon exercise of the Option, Participant must pay or provide for any
applicable federal, state and local withholding obligations of the Company. If
the Committee permits, Participant may provide for payment of withholding taxes
upon exercise of the Option by requesting that the Company retain Shares with a
Fair Market Value equal to the minimum amount of taxes required to be withheld.
In such case, the Company shall issue the net number of Shares to the
Participant by deducting the Shares retained from the Shares issuable upon
exercise.
4.5 Issuance of Shares. Provided that the Exercise
Agreement and payment are in form and substance satisfactory to counsel for the
Company, the Company shall issue the Shares registered in the name of
Participant, Participant's authorized assignee, or Participant's legal
representative, and shall deliver certificates representing the Shares with the
appropriate legends affixed thereto.
5. COMPLIANCE WITH LAWS AND REGULATIONS. The Agreement is
intended to comply with Section 25102(f) of the California Corporations Code.
Any provision of this Agreement which is inconsistent with Section 25102(f)
shall, without further act or amendment by the Company or the Board, be reformed
to comply with the requirements of Section 25102(f). The exercise of the Option
and the issuance and transfer of Shares shall be subject to compliance by the
Company and Participant with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock exchange on
which the Company's Common Stock may be listed at the time of such issuance or
transfer. Participant understands that the Company is under no obligation to
register or qualify the Shares with the SEC, any state securities commission or
any stock exchange to effect such compliance.
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6. NONTRANSFERABILITY OF OPTION. The Option may not be
transferred in any manner other than by will or by the laws of descent and
distribution and may be exercised during the lifetime of Participant only by
Participant or in the event of Participant's incapacity, by Participant's legal
representative. The terms of the Option shall be binding upon the executors,
administrators, successors and assigns of Participant.
7. TAX CONSEQUENCES. Set forth below is a brief summary as of
the date of this Agreement of some of the federal and California tax
consequences of exercise of the Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION
OR DISPOSING OF THE SHARES.
7.1 Exercise of Nonqualified Stock Option. There are
regular federal and California income tax liability upon the exercise of the
Option. Participant will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the Fair
Market Value of the Shares on the date of exercise over the Exercise Price. If
Participant is a current or former employee of the Company, the Company may be
required to withhold from Participant's compensation or collect from Participant
and pay to the applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise.
7.2 Disposition of Shares. If the Shares are held for
more than one (1) year after the date of the transfer of the Shares pursuant to
the exercise of the Option for Vested Shares and any gain realized on
disposition of the Shares will be treated as long term capital gain for federal
and California income tax purposes. The Company will be required to withhold
from Participant's compensation or collect from Participant and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
8. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have
any of the rights of a shareholder with respect to any Shares until Participant
exercises the Option and pays the Exercise Price.
9. INTERPRETATION. Any dispute regarding the interpretation
of this Agreement shall be submitted by Participant or the Company to the
Committee for review. The resolution of such a dispute by the Committee shall be
final and binding on the Company and Participant.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties and supersedes all prior undertakings and agreements
with respect to the subject matter hereof.
11. NOTICES. Any notice required to be given or delivered to
the Company under the terms of this Agreement shall be in writing and addressed
to the Corporate Secretary of the Company at its principal corporate offices.
Any notice required to be given or delivered to Participant shall be in writing
and addressed to Participant at the address indicated above or to such other
address as such party may designate in writing from time to time to the Company.
All notices shall be deemed to have been given or delivered upon: personal
delivery; three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1)
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business day after transmission by facsimile, rapifax or telecopier.
12. SUCCESSORS AND ASSIGNS. The Company may assign any of its
rights under this Agreement. This Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Participant and Participant's heirs, executors, administrators, legal
representatives, successors and assigns.
13. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California as such laws
are applied to agreements between California residents entered into and to be
performed entirely within California. If any provision of this Agreement is
determined by a court of law to be illegal or unenforceable, then such provision
will be enforced to the maximum extent possible and the other provisions will
remain fully effective and enforceable.
14. ACCEPTANCE. Participant hereby acknowledges receipt of a
copy of this Agreement. Participant has read and understands the terms and
provisions thereof, and accepts the Option subject to all the terms and
conditions of this Agreement. Participant acknowledges that there may be adverse
tax consequences upon exercise of the Option or disposition of the Shares and
that Participant should consult a tax adviser prior to such exercise or
disposition.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in triplicate by its duly authorized representative and Participant has
executed this Agreement in triplicate as of the Date of Grant.
XXXXX DESIGN, INC. PARTICIPANT
By: ________________________________ ________________________________
(Signature)
____________________________________ ________________________________
(Please print name) (Please print name)
____________________________________
(Please print title
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EXHIBIT A
NO. _____________
XXXXX DESIGN, INC.
STOCK OPTION EXERCISE AGREEMENT
This Exercise Agreement is made and entered into as of
______________, 19___ (the "EFFECTIVE DATE") by and between Xxxxx Design, Inc.,
a California corporation (the "COMPANY"), and the purchaser named below (the
"PURCHASER").
PURCHASER: ___________________________________
SOCIAL SECURITY NUMBER: ___________________________________
ADDRESS: ___________________________________
___________________________________
TOTAL NUMBER OF SHARES: ___________________________________
EXERCISE PRICE PER SHARE: ___________________________________
TOTAL EXERCISE PRICE: ___________________________________
OPTION NO. ___ DATE OF GRANT: ___________________________________
1. EXERCISE OF OPTION.
1.1 Exercise. Pursuant to exercise of that certain
option ("OPTION") granted to Purchaser under the Non-Plan Stock Option Agreement
(the "AGREEMENT") and subject to the terms and conditions of this Exercise
Agreement, Purchaser hereby purchases from the Company, and the Company hereby
sells to Purchaser, the Total Number of Shares set forth above ("SHARES") of the
Company's Common Stock at the Exercise Price Per Share set forth above
("EXERCISE PRICE"). As used in this Exercise Agreement, the term "SHARES" refers
to the Shares purchased under this Exercise Agreement and includes all
securities received (a) in replacement of the Shares, (b) as a result of stock
dividends or stock splits with respect to the Shares, and (c) all securities
received in replacement of the Shares in a merger, recapitalization,
reorganization or similar corporate transaction.
1.2 Title to Shares. The exact spelling of the name(s)
under which Purchaser will take title to the Shares is:
______________________________________________________
______________________________________________________
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1.3 Payment. Purchaser hereby delivers payment of the
Exercise Price to the extent permitted in the Agreement as follows (check and
complete as appropriate):
[ ] in cash (by check) in the amount of $____________, receipt
of which is acknowledged by the Company;
[ ] where approved by the Committee at the time of grant, by
delivery of _________ fully-paid, nonassessable and vested
shares of the Common Stock of the Company owned by
Purchaser for at least six (6) months prior to the date
hereof which have been paid for within the meaning of SEC
Rule 144, or obtained by Purchaser in the open public
market, and owned free and clear of all liens, claims,
encumbrances or security interests, valued at the current
Fair Market Value of $___________ per share;
[ ] by cancellation of indebtedness of the Company to Purchaser
in the amount of $__________;
[ ] by the waiver hereby of compensation due or accrued for
services rendered in the amount of $_________;
[ ] through a "same-day-sale" commitment, delivered herewith,
from Participant and the NASD Dealer named therein, in the
amount of $__________; or
[ ] through a "margin" commitment, delivered herewith from
Participant and the NASD Dealer named therein, in the
amount of $___________.
2. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to the Company that:
2.1 Agrees to Terms of the Plan. Purchaser has received
a copy of the Agreement, has read and understands the terms of the Agreement and
this Exercise Agreement, and agrees to be bound by their terms and conditions.
Purchaser acknowledges that there may be adverse tax consequences upon exercise
of the Option or disposition of the Shares, and that Purchaser should consult a
tax adviser prior to such exercise or disposition.
2.2 Purchase for Own Account for Investment. Purchaser
is purchasing the Shares for Purchaser's own account for investment purposes
only and not with a view to, or for sale in connection with, a distribution of
the Shares within the meaning of the Securities Act. Purchaser has no present
intention of selling or otherwise disposing of all or any portion of the Shares
and no one other than Purchaser has any beneficial ownership of any of the
Shares.
2.3 Access to Information. Purchaser has had access to
all information regarding the Company and its present and prospective business,
assets, liabilities and financial condition that Purchaser reasonably considers
important in making the decision to purchase the Shares, and Purchaser has had
ample opportunity to ask questions of the Company's representatives concerning
such matters and this investment.
2.4 Understanding of Risks. Purchaser is fully aware
of: (i) the highly speculative nature of the investment in the Shares; (ii) the
financial hazards involved; (iii) the lack of liquidity of the Shares and the
restrictions on transferability of the Shares (e.g., that Purchaser may not be
able to sell or dispose of the Shares or use them as collateral for loans); (iv)
the qualifications and backgrounds of the management of the Company; and (v) the
tax consequences of investment in the Shares.
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Purchaser is capable of evaluating the merits and risks of this investment, has
the ability to protect Purchaser's own interests in this transaction and is
financially capable of bearing a total loss of this investment.
2.5 No General Solicitation. At no time was Purchaser
presented with or solicited by any publicly issued or circulated newspaper,
mail, radio, television or other form of general advertising or solicitation in
connection with the offer, sale and purchase of the Shares.
3. TAX CONSEQUENCES. PURCHASER UNDERSTANDS THAT PURCHASER MAY
SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PURCHASER'S PURCHASE OR
DISPOSITION OF THE SHARES. PURCHASER REPRESENTS THAT PURCHASER HAS CONSULTED
WITH ANY TAX ADVISER PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE
OR DISPOSITION OF THE SHARES AND THAT PURCHASER IS NOT RELYING ON THE COMPANY
FOR ANY TAX ADVICE.
4. ENTIRE AGREEMENT. The Agreement are incorporated herein by
reference. This Exercise Agreement and the Agreement (a) constitute the entire
agreement and understanding of the parties with respect to the subject matter of
this Exercise Agreement, and supersede all prior understandings and agreements,
whether oral or written, between the parties hereto with respect to the specific
subject matter hereof, and (b) are governed by California law except for that
body of law pertaining to conflict of laws.
IN WITNESS WHEREOF, the Company has caused this Exercise Agreement
to be executed in duplicate by its duly authorized representative and Purchaser
has executed this Exercise Agreement in triplicate as of the Effective Date.
XXXXX DESIGN, INC. PURCHASER
By: ________________________________ ________________________________
(Signature)
____________________________________ ________________________________
(Please print name) (Please print name)
____________________________________
(Please print title
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