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EXHIBIT 10.31
FORM OF
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement"), is made and effective
as of this ___ day of __________, by and between NationsRent, Inc., a Delaware
corporation with its principal place of business at 000 Xxxx Xxx Xxxx Xxxxxxxxx,
Xxxx Xxxxxxxxxx, Xxxxxxx 00000 (the "Company"), and ______________ (the
"Optionee").
W I T N E S S E T H:
WHEREAS, as an inducement to Optionee to join the Company as an
employee of the Company on _______________, and to be incentivized to remain in
the employ of the Company and to expend maximum effort for the growth and
success of the Company, the Company has previously committed ("Commitment") to
issue stock options to Optionee, for a number of shares of Common Stock, par
value $0.01 per share, of the Company ("Common Stock") with a value equal to
$______ (such value being derived from the equity value of the Company as of the
first day of Optionee's employment with the Company, being ________________ (the
"Grant Date");
WHEREAS, in full satisfaction of the Commitment, the Company is
desirous of formally granting the Optionee an option to purchase shares of
Common Stock upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. GRANT OF OPTION
Subject to the terms and conditions of this Agreement, the Company
hereby grants to the Optionee an option (the "Option") to purchase an aggregate
of __________________________ shares of Common Stock of the Company (the "Option
Shares"). This Option is a non-qualified option which is not intended to meet
the requirements of an "incentive stock option" within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code").
2. EXERCISE PRICE
The exercise price ("Option Price") of this Option shall be $______ per
Option Share. The Option Price of this Option shall be subject to adjustment in
the event of changes in the capitalization of the Company, as set forth in
Section 8 hereto.
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3. TERM AND VESTING OF OPTION
(a) OPTION PERIOD. Subject to the provisions of Section 6 hereof, this
Option shall terminate and all rights to purchase shares hereunder shall cease
on _______________ (such date being ten (10) years from Grant Date).
(b) VESTING. Subject to the provisions of Section 6 hereof, this Option
shall become exercisable with respect to 25% of the total number of shares
subject to this Option on the date that is 12 months after the Grant Date (the
"Vesting Date") and with respect to an additional 25% of the number of such
shares on each of the next three succeeding anniversaries of the Vesting Date.
Notwithstanding the foregoing, the Board of Directors of the Company ("Board")
may in its discretion provide that any vesting requirement or other such
limitation on the exercise of this Option may be rescinded, modified or waived
by the Board, in its sole discretion, at any time and from time to time after
the Grant Date, so as to accelerate the time at which this Option may be
exercised.
(c) CHANGE IN CONTROL. In the event of a Change in Control (as defined
below), all rights to acquire Option Shares hereunder shall become immediately
exercisable in full, without regard to any limitation on exercise imposed
pursuant to Section 3(b) above. For purposes of this Agreement, a "Change in
Control" shall be deemed to occur if any person (excluding those persons or
affiliates of those persons who were stockholders of the Company prior to the
Company's initial public offering) shall (a) acquire direct or indirect
beneficial ownership of more than 50% of the total combined voting power with
respect to the election of directors of the issued and outstanding capital stock
of the Company (except that no Change in Control shall be deemed to have
occurred if the stockholders of the Company immediately before such acquisition
own all or substantially all of the voting stock or other interests of such
acquiring person immediately after such transaction), or (b) have the power
(whether as a result of stock ownership, revocable or irrevocable proxies,
contract or otherwise) or ability to elect or cause the election of directors
consisting at the time of such election of a majority of the Board. For purposes
of this Agreement, a "person" shall mean any person, corporation, partnership,
joint venture or other entity or any group (as such term is defined for purposes
of Section 13(d) of the Exchange Act) and "beneficial ownership" shall be
determined in accordance with Rule 13d-3 under the Exchange Act.
4. MANNER OF EXERCISE AND PAYMENT
(a) EXERCISE. This Option may be exercised to the extent vested as
provided in Section 3 by delivery to the Company on any business day, at its
principal office, addressed to the attention of the Stock Option Administrator,
of written notice of exercise, which notice shall specify the number of shares
with respect to which the Option is being exercised, and shall be accompanied by
payment in full of the Option Price of the shares for which the Option is being
exercised, by one or more of the methods provided below. The minimum number of
shares of Common Stock with respect to which the Option may be exercised, in
whole or in part, at any time shall be the lesser of
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100 shares or the maximum number of shares available for purchase under the
Option at the time of exercise.
(b) PAYMENT. Payment of the Option Price for the shares of Common Stock
purchased pursuant to the exercise of the Option shall be made (i) in cash or in
cash equivalents; (ii) through the tender to the Company of shares of Common
Stock, which shares shall be valued, for purposes of determining the extent to
which the Option Price has been paid thereby, at their fair market value
(determined in good faith by the Board) on the date of exercise; (iii) by
delivering a written direction to the Company that the Option be exercised
pursuant to a "cashless" exercise/sale procedure (pursuant to which funds to pay
for exercise of the Option are delivered to the Company by a broker upon receipt
of stock certificates from the Company) or a cashless exercise/loan procedure
(pursuant to which the Optionee would obtain a margin loan from a broker to fund
the exercise) through a licensed broker acceptable to the Company whereby the
stock certificate or certificates for the shares of Common Stock for which the
Option is exercised will be delivered to such broker as the agent for the
individual exercising the Option and the broker will deliver to the Company cash
(or cash equivalents acceptable to the Company) equal to the Option Price for
the shares of Common Stock purchased pursuant to the exercise of the Option plus
the amount (if any) of federal and other taxes that the Company, may, in its
judgment, be required to withhold with respect to the exercise of the Option;
(iv) to the extent permitted by applicable law and agreed to by the Board in its
sole and absolute discretion, by the delivery of a promissory note of the
Optionee to the Company on such terms as the Board shall specify in its sole and
absolute discretion; or (v) by a combination of the methods described in clauses
(i), (ii), (iii) and (iv). Payment in full of the Option Price need not
accompany the written notice of exercise if the Option is exercised pursuant to
the cashless exercise/sale procedure described above. An attempt to exercise any
Option granted hereunder other than as set forth above shall be invalid and of
no force and effect.
(c) ISSUANCE OF CERTIFICATES. Promptly after the exercise of the
Option, Optionee shall be entitled to the issuance of a certificate or
certificates evidencing his ownership of such shares of Common Stock. An
individual holding or exercising an Option shall have none of the rights of a
stockholder until the shares of Common Stock covered thereby are fully paid and
issued to him and, except as provided in Section 8 below, no adjustment shall be
made for dividends or other rights for which the record date is prior to the
date of such issuance.
5. TRANSFERABILITY OF OPTION
This Option shall not be assignable or transferable by the Optionee,
other than by will or the laws of descent and distribution.
6. TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY
(a) GENERAL. Upon the termination of the employment or other service of
the Optionee with the Company or any subsidiary of the Company ("Subsidiary"),
other than by reason of death or "permanent and total disability" (within the
meaning of Section 22(e)(3) of the Code) of the
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Optionee, this Option shall terminate upon the date of such termination of
employment or service and Optionee shall have no further right to purchase the
Option Shares. Notwithstanding the foregoing provisions of this Section 6, the
Board may provide, in its discretion, that following the termination of
employment or service of Optionee with the Company or any Subsidiary, Optionee
may exercise this Option, in whole or in part, at any time subsequent to such
termination of employment or service and prior to termination of this Option
pursuant to Section 3(a) above, either subject to or without regard to any
vesting or other limitation on exercise imposed pursuant to Section 3(b) above.
Unless otherwise determined by the Board, temporary absence from employment or
service because of illness, vacation, approved leaves of absence, military
service and transfer of employment shall not constitute a termination of
employment or service with the Company or any Subsidiary.
(b) DEATH. If Optionee dies while in the employ or service of the
Company or any Subsidiary, Optionee's estate shall have the right at any time
within three years after the date of Optionee's death and prior to termination
of the Option pursuant to Section 3(a) above, to exercise, in whole or in part,
any vested portion of the Option (in accordance with Section 3(b) above) held by
Optionee at the date of Optionee's death. On the date of the Optionee's death,
the unvested portion of this Option shall terminate.
(c) DISABILITY. If Optionee terminates employment or service with the
Company or any Subsidiary by reason of the "permanent and total disability"
(within the meaning of Section 22(e)(3) of the Code) of Optionee, then the
Optionee shall have the right at anytime within three years after such
termination of employment or service and prior to termination of the Option
pursuant to Section 3(a) above, to exercise, in whole or in part, any vested
portion of the Option (in accordance with Section 3(b) above) held by Optionee
at the date of such termination of employment or service. On the date of any
such termination of employment or service, the unvested portion of this Option
shall terminate. Whether a termination of employment or service is to be
considered by reason of "permanent and total disability" for purposes of this
Agreement shall be determined by the Board, which determination shall be final
and conclusive.
7. REQUIREMENTS OF LAW
(a) VIOLATIONS OF LAW. The Company shall not be required to sell or
issue any shares of Common Stock under this Option if the sale or issuance of
such shares would constitute a violation by the individual exercising the Option
or the Company of any provisions of any law or regulation of any governmental
authority, including without limitation, any federal or state securities laws or
regulations. Any determination in this connection by the Board shall be final,
binding, and conclusive. The Company shall not be obligated to take any
affirmative action in order to cause the exercise of the Option or the issuance
of shares pursuant thereto to comply with any law or regulation of any
governmental authority.
(b) REGISTRATION. At the time of any exercise of this Option, the
Company may, if it shall determine it necessary or desirable for any reason,
require the Optionee (or his or her heirs, legatees
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or legal representative, as the case may be), as a condition to the exercise
thereof, to deliver to the Company a written representation of present intention
to purchase the shares for their own account as an investment and not with a
view to, or for sale in connection with, the distribution of such shares, except
in compliance with applicable federal and state securities laws with respect
thereto. In the event such representation is required to be delivered, an
appropriate legend may be placed upon each certificate delivered to the Optionee
(or his or her heirs, legatees or legal representative, as the case may be) upon
his or her exercise of part or all of the Option and a stop transfer order may
be placed with the transfer agent. The Option shall also be subject to the
requirement that, if at any time the Company determines, in its discretion, that
the listing, registration or qualification of the shares subject to the Option
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory body is necessary or desirable as a
condition of or in connection with, the issuance or purchase of the shares
thereunder, the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company in its
sole discretion. Optionee agrees to execute any "lock-up" or similar agreement
required by the Company's underwriters in connection with the Company's initial
public offering. The Company shall not be obligated to take any affirmative
action in order to cause the exercisability or vesting of the Option or to cause
the exercise of the Option or the issuance of shares pursuant thereto to comply
with any law or regulation of any governmental authority.
(c) WITHHOLDING. The Board may make such provisions and take such steps
as it may deem necessary or appropriate for the withholding of any taxes that
the Company is required by any law or regulation of any governmental authority,
whether federal, state or local, domestic or foreign, to withhold in connection
with the exercise of the Option, including, but not limited to, (i) the
withholding of delivery of shares of Common Stock upon exercise of the Option
until the holder reimburses the Company for the amount the Company is required
to withhold with respect to such taxes, (ii) the canceling of any number of
shares of Common Stock issuable upon exercise of the Option in an amount
sufficient to reimburse the Company for the amount it is required to so
withhold, or (iii) withholding the amount due from Optionee's wages or
compensation due such person.
8. EFFECT OF CHANGES IN CAPITALIZATION
(a) RECAPITALIZATION. If, after June 5, 1998, the outstanding shares of
Common Stock of the Company are increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of any recapitalization, reclassification, stock split,
reverse split, combination of shares, exchange of shares, stock dividend or
other distribution payable in capital stock of the Company, or other increase or
decrease in such shares effected without receipt of consideration by the
Company, an appropriate and proportionate adjustment shall be made by the Board
in the number and kind of shares of Common Stock issuable upon exercise of the
Option, and in the Option Price per share of the Option.
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(b) REORGANIZATION. In connection with a merger, consolidation,
reorganization or other business combination of the Company with one or more
other entities in which the Company is not the surviving entity, then in lieu of
each Option Share Optionee would otherwise be entitled to acquire upon any
exercise under this Agreement, Optionee shall thereafter be entitle acquire such
number of shares of Common Stock or other securities or property to which a
holder of one share of Common Stock would have been entitled to receive upon
such merger, consolidation, reorganization or other business combination.
(c) DISSOLUTION OR LIQUIDATION. Upon the dissolution or liquidation of
the Company, the Option shall terminate. In the event of any termination of this
Option under this Section 8(c), Optionee shall have the right, immediately prior
to the occurrence of such termination and during such reasonable period as the
Board in its sole discretion shall determine and designate, to exercise the
Option in whole or in part, whether or not the Option was otherwise exercisable
at the time such termination occurs and without regard to any vesting or other
limitation on exercise imposed pursuant to Section 3(b) above.
(d) ADJUSTMENTS. Adjustments under this Section 8 related to stock or
securities of the Company shall be made by the Board, whose determination in
that respect shall be final, binding, and conclusive. No fractional shares of
Common Stock or units of other securities shall be issued pursuant to any such
adjustment, and any fractions resulting from any such adjustment shall be
eliminated in each case by rounding downward to the nearest whole share or unit.
(e) NO LIMITATIONS. The grant of the Option hereunder shall not affect
or limit in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, consolidate, dissolve or liquidate, or to sell or
transfer all or any part of its business or assets.
9. DISCLAIMER OF RIGHTS
No provision of this Agreement shall be construed to confer upon any
individual, including Optionee, the right to remain in the employ of the Company
or any Subsidiary or to interfere in any way with the right and authority of the
Company or any Subsidiary either to increase or decrease the compensation of any
individual, including Optionee, at any time, or to terminate any employment or
other relationship between any individual, including Optionee, and the Company
or any Subsidiary.
10. NONEXCLUSIVITY OF THIS AGREEMENT
This Agreement shall not be construed as creating any limitations upon
the right and authority of the Board to adopt such other incentive compensation
arrangements (which arrangements may be applicable either generally to a class
or classes of individuals or specifically to a particular individual or
individuals) as the Board in its discretion determines desirable, including,
without limitation, the granting of stock options or stock appreciation rights.
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11. MISCELLANEOUS
(a) INDULGENCES, ETC. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.
(b) CONTROLLING LAW. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the State of Delaware, without
application to the principles of conflict of laws.
(c) NOTICES. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received only when personally
delivered, one day following the day when deposited with an overnight courier
service for overnight priority service, such as Federal Express, for delivery to
the intended addressee or three days following the day when deposited in the
United States mails, first class postage prepaid, certified or registered mail,
and addressed, in the case of the Company, as set forth in the first paragraph
of this Agreement, and, in the case of Optionee, as set forth below Optionee's
signature on the last page hereof. Any person may alter the address to which
communications or copies are to be sent by giving notice of such change of
address in conformity with the provisions of this Section for the giving of
notice.
(d) BINDING NATURE OF AGREEMENT; TRANSFERABILITY. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns. This
Agreement shall not be assignable or transferable by the Optionee other than by
will or the laws of descent and distribution.
(e) SEVERABILITY. The provisions of this Agreement are independent of
and separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.
(f) SECTION HEADINGS. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.
(g) NUMBER OF DAYS. In computing the number of days for purposes of
this Agreement, all days shall be counted, including Saturdays, Sundays and
holidays; PROVIDED, HOWEVER that if the
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final day of any time period falls on a Saturday, Sunday or holiday on which
federal banks are or may elect to be closed, then the final day shall be deemed
to be the next day which is not a Saturday, Sunday or such holiday.
(h) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any person other than the parties and their respective
successors and permitted assigns.
(i) ENTIRE AGREEMENT; AMENDMENTS. This Agreement fulfills and satisfies
in full the Company's commitment to issue stock options to the Optionee as of
the date of Optionee's employment with the Company which began on the Grant
Date, as an inducement to Optionee to accept employment with the Company. This
Agreement (including the documents and exhibits referred to herein) constitutes
the entire agreement among the parties and supersedes any prior understandings,
agreements, or representations by or among the parties, written or oral, that
may have related in any way to the subject matter hereof. This Agreement may not
be amended, supplemented or modified in whole or in part except by an instrument
in writing signed by the party or parties against whom enforcement of any such
amendment, supplement or modification is sought.
(j) CONSTRUCTION. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent, and
thereof strict construction shall be applied against any party. Any reference to
any federal, state, local or foreign statute or law shall be deemed also to
refer to the rules and regulations promulgated thereunder, unless the context
requires otherwise. The parties intend that each representation, warranty, and
covenant contained herein shall have independent significance. If any party has
breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty or covenant
relating to the same subject matter (regardless of the relative levels of
specificity) which the party has not breached shall not detract from or mitigate
the fact that the party is in breach of the first representation, warranty or
covenant.
(k) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
(l) PRONOUNS. The use of any gender in this Agreement shall be deemed
to include all genders, and the use of the singular shall be deemed to include
the plural and vice versa, wherever it appears appropriate from the context.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
NATIONSRENT, INC.
By:
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Name:
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Title:
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OPTIONEE:
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Address:
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