Exhibit 10.3
CORPORATE ROAD XXXX.XXX INC.
2003 OMNIBUS PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the 2003 Omnibus Plan
(the "Plan") shall have the same defined meanings in this Stock Option
Agreement.
1. NOTICE OF STOCK OPTION GRANT
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Name of Optionee
The undersigned Optionee has been granted an Option to purchase Common
Stock of the Company, subject to the terms and conditions of the Plan and this
Stock Option Agreement, as follows:
Grant Number:
Date of Grant:
Vesting Commencement Date:
Exercise Price per Share: $
Total Number of Shares Granted:
Total Exercise Price: $
Type of Option:
Term/Expiration Date:
Vesting Schedule:
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This Option shall be exercisable, in whole or in part, according to the
following vesting schedule:
Year One -
Termination Period:
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Any Options held by Optionee may be exercised, to the extent then
exercisable, for a period of three month after the date of Optionee's
termination of employment; provided, however, that Optionee's termination of
employment is other than for deliberate, willful or gross misconduct. Upon
Optionee's retirement or disability, any Options held by the Optionee at the
time of retirement or disability will be exercisable for a period of 12 months
after the date of such termination of employment. Upon Optionee's death after
termination of employment, other than termination of employment for deliberate,
willful or gross misconduct, the person or persons to whom the Optionee's rights
are transferred by will or the laws of descent and distribution shall have a
period of three years from the date of termination of the Optionee's employment
to exercise any Options which the Optionee could have exercised during such
period. Furthermore, in the event of the death of an Optionee while employed,
any Options then held by the Optionee shall become fully and immediately
exercisable and may be exercised by the person or persons to whom the Optionee's
rights are transferred by will or the laws of descent and distribution for a
period of three years after the Optionee's death. In no event may Optionee
exercise this Option after the Term/Expiration Date as provided above.
II. AGREEMENT
1. Grant of Option. Option committee of the Company (the "Committee")
hereby grants to the Optionee named in the Notice of Grant (the "Optionee"), an
option (the "Option") to purchase the number of shares set forth in the Notice
of Grant, at the exercise price per share set forth in the Notice of Grant (the
"Exercise Price"), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 12 of the Plan, in the
event of a conflict between the terms and conditions of the Plan and this Option
Agreement, the terms and conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option as
defined in Section 422 of the Code. Nevertheless, to the extent that it exceeds
the $100,000 rule of Code Section 422(d), this Option shall be treated as a
Nonqualified Stock Option ("NQSO").
2. Exercise of Option.
(a) Right to Exercise. This Option shall be exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
with the applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option shall be exercisable by delivery
of an exercise notice in the form attached as Exhibit A (the "Exercise Notice")
which shall state the election to exercise the Option, the number of shares with
respect to which the Option is being exercised, and such other representations
and agreements as may be required by the Company. The Exercise Notice shall be
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accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by the aggregate Exercise
Price.
No shares shall be issued pursuant to the exercise of an Option unless
such issuance and such exercise complies with applicable laws. Assuming such
compliance, for income tax purposes the shares shall be considered transferred
to the Optionee on the date on which the Option is exercised with respect to
such shares.
3. Optionee's Representations. In the event the Shares have not been
registered under the Securities Act of 1993, as amended, at the time this Option
is exercised, the Optionee shall, if required by the Company, concurrently with
the exercise of all or any portion of this Option, deliver to the Company his or
her Investment Representation Statement in the form attached hereto as Exhibit
B.
4. Lock-Up Period.
(a) Optionee hereby agrees that, if so requested by the Company or any
representative of the underwriters (the "Managing Underwriter") in connection
with any registration of the offering of any securities of the Company under the
Securities Act, Optionee shall not sell or otherwise transfer any Shares or
other securities of the Company during the 180-day period (or such other period
as may be requested in writing by the Managing Underwriter and agreed to in
writing by the Company) (the "Market Standoff Period") following the effective
date of a registration statement of the Company filed under the Securities Act.
Such restriction shall apply only to the first registration statement of the
Company to become effective under the Securities Act that includes securities to
be sold on behalf of the Company to the public in an underwritten public
offering under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such Market Standoff Period;
(b) Optionee hereby agrees that Optionee will not exercise this Option
and sell, assign, or transfer an amount of shares of Common Stock equal to or
greater than 10% of the total shares of Common Stock represented by the Option,
without obtaining the written consent of the Company.
5. Method of Payment. Payment of the aggregate Exercise Price shall be by
any of the following, or combination thereof, at the election of the Optionee:
(a) cash or check;
(b) consideration received by the Company under a formal cashless
exercise program adopted by the Company in connection with the Plan; or
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(c) surrender of other shares which, (i) in the case of shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.
6. Restrictions on Exercise. This Option may not be exercised until such
time as the Plan has been approved by the shareholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
law.
7. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by Optionee. The terms of the
Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
8. Terms of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
9. Tax Consequences. Set forth below is a brief summary as of the date of
this Option of some of the federal tax consequences of exercise of this Option
and disposition of the shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE
TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A
TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of NQSO. There may be a regular federal income tax
liability upon the exercise of an NQSO. The Optionee 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 Optionee is an employee or a former employee,
the Company will be required to withhold from Optionee's
compensation or collect from Optionee and pay to the applicable
taxing authorities an amount in cash equal to a percentage of
this compensation income at the time of exercise, and may refuse
to honor the exercise and refuse to deliver shares if such
withholding amounts are not delivered at the time of exercise.
(b) Exercise of ISO. If this Option qualifies as an ISO, there will
be no regular federal income tax liability upon the exercise of
the Option, although the excess, if any, of the Fair Market Value
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of the shares on the date of exercise over the Exercise Price
will be treated as an adjustment to the alternative minimum tax
in the year of exercise.
(c) Disposition of Shares. In the case of an NQSO, if Shares are held
for at least one year, any gain realized on disposition of the
shares will be treated as long-term capital gain for federal
income tax purposes. In the case of an ISO, if shares transferred
pursuant to the Option are held for at least one year after
exercise and of at least two years after the Date of Grant, any
gain realized on disposition of the shares will also be treated
as long-term capital gain for federal income tax purposes. If
shares purchased under an ISO are disposed of within one year
after exercise or two years after the Date of Grant, any gain
realized on such disposition will be treated as compensation
income (taxable at ordinary income rates) to the extent of the
difference between the Exercise Price and the lesser of (1) the
Fair Market Value of the Shares on the date of exercise, or (2)
the sale price of the shares. Any additional gain will be taxed
as capital gain, short-term or long-term depending on the period
that the ISO Shares were held.
(d) Notice of Disqualifying Disposition of ISO Shares. If the Option
granted to Optionee herein is an ISO, and if Optionee sells or
otherwise disposes of any of the shares acquired pursuant to the
ISO on or before the later of (1) the date two years after the
Date of Grant, or (2) the date one year after the date of
exercise, the Optionee shall immediately notify the Company in
writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the Company on the
compensation income recognized by the Optionee.
10. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws but not
the choice of law rules of New York.
11. No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH
THE ACT OF BEING HIRED, BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING
SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT,
THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH
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HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT
AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND
SHALL NOT INTERFERE IN ANY WAY AND SHALL NOT INTERFERE IN ANY WAY WITH
OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP AS
A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee
upon any questions arising under the Plan or this Option. Optionee further
agrees to notify the Company upon any change in the residence address indicated
below.
OPTIONEE CORPORATE ROAD XXXX.XXX INC.
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Signature Xxxxx Xxxxxxx, President
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Print Name
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Residence Address
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EXHIBIT A
EXERCISE NOTICE
CORPORATE ROAD XXXX.XXX INC.
00 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxx Xxxx 00000
Attn: Omnibus Committee
Re: ___________ Option Grant dated ______________
Attention Omnibus Chairman:
Pursuant to CORPORATE ROAD XXXX.XXX INC.'s ("Company") Stock Option
Agreement dated ______, whereby the Omnibus Committee granted me an option to
purchase _____________ shares of common stock of the Company, I hereby notify
you that I am exercising my right to purchase ______________ shares of common
stock at $_____ per share. I have enclosed a check in the amount of $__________
to cover the exercise price for the entire amount of shares that I am
purchasing.
Please have the Company's transfer agent issue the shares to
___________________, and send them to the following address:
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IN WITNESS WHEREOF, I hereto have caused this Exercise Notice to be
executed as of _______, 2003.
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Name:
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EXHIBIT B
___________, ________
CORPORATE ROAD XXXX.XXX INC.
00 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, President
Re: Investment Letter Dated ____________________
Dear Omnibus Committee:
In accordance with CORPORATE ROAD XXXX.XXX INC.'s ("Company") Stock Option
Agreement dated _________, whereby the Company's Omnibus Committee granted me an
option to purchase _______ shares of common stock at an exercise price of
$________, pursuant to which I exercised to purchase _____ shares
("Securities"), I hereby represent to the Company that:
1. The Securities which were acquired by me were acquired for my own
account and for investment and not with a view for the resale or
distribution to the public thereof.
2. The Undersigned acknowledges and understands that the Securities have
not been registered pursuant to any federal or state securities laws
and therefore may not be resold unless the Securities are subsequently
registered under the Securities Act of 1933, as amended ("Act"), or an
exemption from such registration is available. The Securities are thus
"restricted securities" as that term is defined in Rule 144 (the
"Rule") promulgated under the Act, which Rule addresses the resale of
unregistered securities.
3. The Undersigned agrees not to sell, transfer or otherwise dispose of
the Securities unless, in the opinion of Company's counsel, such
disposition conforms with applicable securities laws requirements.
4. The Undersigned further acknowledges that it is fully aware of the
applicable limitations on the resale of the Securities. These
restrictions for the most part are set forth in the Rule. If and when
the Rule is available to the Undersigned, it may only make sales of
the Securities in accordance with the terms and conditions of the
Rule.
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5. Any and all certificates representing the Securities, and any and all
securities issued in replacement thereof or in exchange therefor,
shall bear a restrictive legend.
6. The Undersigned further agrees that Company shall have the right to
issue stop-transfer instructions to its transfer agent until such time
as sale is permitted under the Act and acknowledge that Company hereby
informs the Undersigned of its intention to issue such instructions.
Very truly yours,
By:________________________________
Name:______________________________
Title:_____________________________
Date:_____________________
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