NONQUALIFIED STOCK OPTION GRANT AGREEMENT
Exhibit
10.2(c)
[EMPLOYEE
NAME]
Employee
ID Number:
Grant
Number:
ECHELON
CORPORATION
Echelon
Corporation (the “Company”) hereby grants you, [NAME OF EMPLOYEE] (the
“Employee”), an option under the Company’s 1997 Stock Plan (the “Plan”) to
purchase shares of common stock of the Company. The date of this Agreement
is
[DATE] (the “Grant Date”). In general, the latest date this option will expire
is the expiration date indicated on this Notice of Grant (the “Expiration
Date”). However, as provided in this Agreement, this option may expire earlier
than the Expiration Date. Subject to the provisions of Appendix A (attached
to
this Agreement) and of the Plan, the principal features of this option are
as
follows:
| Maximum Number of Shares | ||
| Purchasable with this Option: | [NUMBER] | Exercise Price per Share: US $______ |
| Vesting Commencement Date: | [DATE] | |
| Scheduled Vesting Dates: | Number of Shares | |
| [DATE] |
[NUMBER]
|
|
| [DATE] |
[NUMBER]
|
|
| [DATE] |
[NUMBER]
|
|
| [DATE] |
[NUMBER]
|
Expiration
Date: Five
Years from the Grant Date; provided, however, this option may terminate
earlier
than the Expiration Date, as set in Appendix A.
IMPORTANT:
By
your
signature and the signature of the Company’s representative below, you and the
Company agree that this Option is granted under and governed by the terms
and
conditions of the Plan and this Agreement. Optionee has reviewed the Plan
and
this Agreement in their entirety, has had an opportunity to obtain the
advice of
counsel prior to executing this Agreement and fully understands all provisions
of the Plan and Agreement. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator
upon
any questions relating to the Plan and Agreement. Optionee further agrees
to
notify the Company upon any change in the residence address indicated
below.
| OPTIONEE: | ECHELON CORPORATION | |
| Signature | By | |
| Print Name | Title | |
| Residence Address | ||
APPENDIX
A - TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTION GRANT
1. Vesting
Schedule.
The
right to exercise this option will vest as to 25% of the total shares at
each
one year anniversary of the date of grant, until the right to exercise this
option shall have vested with respect to one hundred percent (100%) of such
Shares. Shares scheduled to vest on any such date actually will vest only
if the
Employee has not incurred a Termination of Service prior to such
date.
2. Termination
of Option.
In the
event of the Employee’s Termination of Service for any reason other than
Disability or death, the Employee may, within thirty (30) days after the
date of
such Termination of Service, or prior to the Expiration Date, whichever shall
first occur, exercise any then vested but unexercised portion of this option.
In
the event of the Employee’s Termination of Service due to Disability, the
Employee may, within one (1) year after the date of Termination of Service
due
to Disability, or prior to the Expiration Date, whichever shall first occur,
exercise any then vested but unexercised portion of this option.
For
purposes of this Agreement, the Employee shall be deemed to have incurred
a
Termination of Service prior to any period of notice for termination of
employment mandated under applicable law. The Employee’s date of Termination of
Service shall mean the date upon which the Employee ceases active performance
of
services following the provision of a notification of termination or resignation
from employment or service, and shall be determined solely by this Agreement
and
without reference to any other agreement, written or oral, express or implied,
including the Employee’s contract of employment, if any.
3. Death
of Employee.
In the
event that the Employee dies while an Employee or during the thirty (30)
days or
one (1) year periods referred to in Paragraph 2 above, the Employee’s designated
beneficiary, or if no beneficiary survives the Employee, the administrator
or
executor of the Employee’s estate (the “Transferee”), may, within one (1) year
after the date of death, exercise any unexercised portion of the option that
was
vested prior to the Employee’s Termination of Service. Any such Transferee must
furnish the Company (a) written notice of his or her status as a
Transferee, (b) evidence satisfactory to the Company to establish the validity
of the transfer of this option and compliance with any laws or regulations
pertaining to such transfer, and (c) written acceptance of the terms and
conditions of this option as set forth in this Agreement.
4. Persons
Eligible to Exercise Option.
Except
as provided in Paragraph 3 above or as otherwise determined by the Committee
in
its discretion, this option shall be exercisable during the Employee’s lifetime
only by the Employee.
5. Option
is Not Transferable.
Except
as provided in Paragraph 3 above, this option and the rights and privileges
conferred hereby shall not be transferred, assigned, pledged or hypothecated
in
any way (whether by operation of law or otherwise) and shall not be subject
to
sale under execution, attachment or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this option,
or of
any right or privilege conferred hereby, or upon any attempted sale under
any
execution, attachment or similar process, this option and the rights and
privileges conferred hereby immediately shall become null and void.
6. Exercise
of Option.
This
option may be exercised by the person then entitled to do so as to any shares
which may then be purchased by (a) giving notice in such form or manner as
the
Company may designate, (b) providing full payment of the Exercise Price (and
the
amount of any income tax the Company determines is required to be withheld
by
reason of the exercise of this option or as is otherwise required under
Paragraph 8 below), and (c) giving satisfactory assurances in the form or
manner
requested by the Company that the shares to be purchased upon the exercise
of
this option are being purchased for investment and not with a view to the
distribution thereof. Notwithstanding any contrary provision of this Agreement,
if the expiration date of this option falls on a Saturday, Sunday or California
holiday, the Employee may exercise any then vested but unexercised portion
of
this option at any time prior to the close of business on the first business
day
following that Saturday, Sunday or California holiday.
7. Conditions
to Exercise.
Except
as provided in Paragraph 6 above or as otherwise required as a matter of
law,
the (i) Exercise Price for this option and (ii) minimum federal, state and
local
income, employment and any other applicable taxes required to be withheld
by the
Company as a result of the exercise of this option shall be made by “net
exercise” unless the person entitled to exercise otherwise elects to pay such
amounts by cash, personal check, cashier’s check or money order. For this
purpose, “net exercise” means a procedure by which such person will be issued a
number of Shares determined in accordance with a formula X = Y(A - (B+C))
/ A
(rounded up to the nearest whole Share), where:
X
= the
number of Shares to be issued upon exercise of the option;
Y
= the
total number of Shares with respect to which the person has elected to exercise
the option;
A
= the
Fair Market Value of one (1) Share;
B
= the
exercise price per share;
C
= the
minimum federal, state and local income, employment and any other applicable
taxes attributable to one (1) Share which are required to be withheld by
the
Company as a result of the exercise of the option.
8. Tax
Withholding and Payment Obligations.
The
Company will assess its requirements regarding tax, social insurance and
any
other payroll tax withholding and reporting in connection with this option,
including the grant, vesting or exercise of this option or sale of shares
acquired pursuant to the exercise of this option (“tax-related items”). These
requirements may change from time to time as laws or interpretations change.
Regardless of the Company’s actions in this regard, the Employee hereby
acknowledges and agrees that the ultimate liability for any and all tax-related
items is and remains his or her responsibility and liability and that the
Company (a) makes no representations or undertaking regarding treatment of
any
tax-related items in connection with any aspect of this option grant, including
the grant, vesting or exercise of this option and the subsequent sale of
shares
acquired pursuant to the exercise of this option; and (b) does not commit
to
structure the terms of the grant or any aspect of this option to reduce or
eliminate the Employee’s liability regarding tax-related items. In the event the
Company determines that it and/or an affiliate must withhold any tax-related
items as a result of the Employee’s participation in the Plan, the Employee
agrees as a condition of the grant of this option to make arrangements
satisfactory to the Company to enable it to satisfy all withholding
requirements. The Employee authorizes the Company and/or an affiliate to
withhold all applicable withholding taxes from the Employee’s wages.
Furthermore, the Employee agrees to pay the Company and/or an affiliate any
amount of taxes the Company and/or an affiliate may be required to withhold
as a
result of the Employee’s participation in the Plan that cannot be satisfied by
deduction from the Employee’s wages or other cash compensation paid to the
Employee by the Company and/or an affiliate. The Employee acknowledges that
he
or she may not exercise this option unless the tax withholding obligations
of
the Company and/or any affiliate are satisfied. Notwithstanding the foregoing,
upon exercise of the option, the Company will withhold a portion of the Shares
with respect to which the Employee (or such other authorized person) has elected
to exercise the option that have an aggregate market value sufficient to
pay the
minimum
federal, state and local income, employment and any other applicable taxes
required to be withheld by the Company
as a
result of the exercise of the option. No fractional Shares will be withheld
or
issued pursuant to the issuance of Shares; any additional withholding necessary
for this reason will be done by the Company through the Employee’s paycheck.
With respect to its executive officers (as determined by the Company), the
Company will withhold an amount equal to the fair market value of two (2)
Shares
from the last paycheck due to such executive prior to the exercise of the
option. With respect to other Employees, the Company, in its discretion,
may
withhold an amount equal to the fair market value of two (2) Shares from
the
first paycheck due to the Employee following the exercise of the option.
In the
event that the cash amounts withheld by the Company exceed the withholding
taxes
that are due after the automatic withholding of whole Shares, the Company
will
reimburse the Employee for the excess amounts. In the event the withholding
requirements are not satisfied through the withholding of Shares (or, through
the Employee’s paycheck, as indicated above), no Shares will be issued to the
Employee (or his or her estate) unless and until satisfactory arrangements
(as
determined by the Administrator) have been made by the Employee with respect
to
the payment of any income and other taxes which the Company determines must
be
withheld or collected with respect to the exercise of the option. By accepting
this option, the Employee expressly consents to the withholding of Shares
and to
any additional cash withholding as provided for in this
paragraph 8.
9. Suspension
of Exercisability.
If at
any time the Company shall determine, in its discretion, that the listing,
registration or qualification of the shares upon any securities exchange
or
under any applicable law, or the consent or approval of any governmental
regulatory authority, is necessary or desirable as a condition of the purchase
of shares hereunder, this option may not be exercised, in whole or in part,
unless and until such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable
to
the Company. The Company shall make reasonable efforts to meet the requirements
of any applicable law or securities exchange and to obtain any required consent
or approval of any governmental authority.
10. Address
for Notices.
Any
notice to be given to the Company under the terms of this Agreement shall
be
addressed to the Company, in care of Human Resources Department, at Echelon
Corporation, 000 Xxxxxxxx Xxxxxx., Xxx Xxxx, XX 00000, or at such other address
as the Company may hereafter designate in writing.
11. No
Rights of Stockholder.
Neither
the Employee (nor any transferee) shall be or have any of the rights or
privileges of a stockholder of the Company in respect of any of the shares
issuable pursuant to the exercise of this option, unless and until certificates
representing such shares shall have been issued, recorded on the records
of the
Company or its transfer agents or registrars, and delivered to the Employee
(or
transferee). Nothing in the Plan or this option shall create an obligation
on
the part of the Company to repurchase any shares purchased
hereunder.
12. No
Effect on Employment.
The
Employee's employment with the Company and its affiliates is on an at-will
basis
only, subject to the provisions of applicable law. Accordingly, the terms
of the
Employee's employment with the Company and its affiliates shall be determined
from time to time by the Company or the affiliate employing the Employee
(as the
case may be), and the Company or the affiliate shall have the right, which
is
hereby expressly reserved, to terminate or change the terms of the employment
of
the Employee at any time for any reason whatsoever, with or without good
cause
(subject to the provisions of applicable law).
13. Other
Benefits.
Except
as provided below, nothing contained in this Agreement shall affect the
Employee’s right to participate in and receive benefits under and in accordance
with the then current provisions of any pension, insurance or other employee
welfare plan or program of the Company or any affiliate. Notwithstanding
any
contrary provision of this Agreement, in the event that the Employee receives
a
hardship withdrawal from his or her pre-tax account under the Company’s 401(k)
Plan (the “401(k) Plan”), this option may not be exercised during the six (6)
month period following the receipt of such withdrawal, unless the Company
determines that such exercise (or a particular manner of exercise) would
not
adversely affect the continued tax qualification of the 401(k)
Plan.
14. Plan
Governs.
This
Agreement is subject to all terms and provisions of the Plan. In the event
of a
conflict between one or more provisions of this Agreement and one or more
provisions of the Plan, the provisions of the Plan shall govern. Terms used
and
not defined in this Agreement shall have the meaning set forth in the Plan.
This
option is not an incentive stock option as defined in Section 422 of the
Internal Revenue Code. The Company may, in its discretion; issue newly issued
shares or treasury shares pursuant to this option.
15. Maximum
Term of Option.
Except
as provided in Paragraph 3 above, this option is not exercisable after the
Expiration Date.
16. Binding
Agreement.
Subject
to the limitation on the transferability of this option contained herein,
this
Agreement shall be binding upon and inure to the benefit of the heirs, legatees,
legal representatives, successors and assigns of the parties
hereto.
17. Committee
Authority.
The
Committee shall have the power to interpret the Plan and this Agreement and
to
adopt such rules for the administration, interpretation and application of
the
Plan as are consistent therewith and to interpret or revoke any such rules.
All
actions taken and all interpretations and determinations made by the Committee
in good faith shall be final and binding upon the Employee, the Company and
all
other interested persons. The Committee shall not be personally liable for
any
action, determination or interpretation made in good faith with respect to
the
Plan or this Agreement.
18. Captions.
Captions provided herein are for convenience only and are not to serve as
a
basis for interpretation or construction of this Agreement.
19. Agreement
Severable.
In the
event that any provision in this Agreement shall be held invalid or
unenforceable, such provision shall be severable from, and such invalidity
or
unenforceability shall not be construed to have any effect on, the remaining
provisions of this Agreement.
20. Modifications
to the Agreement.
This
Agreement constitutes the entire understanding of the parties on the subjects
covered. The Employee expressly warrants that he or she is not accepting
this
Agreement in reliance on any promises, representations, or inducements other
than those contained herein. Modifications to this Agreement or the Plan
can be
made only in an express written contract executed by a duly authorized officer
of the Company.
21. Amendment,
Suspension, Termination.
By
accepting this option, the Employee expressly warrants that he or she has
received an option to purchase stock under the Plan, and has received, read
and
understood a description of the Plan. The Employee understands that the Plan
is
discretionary in nature and may be modified, suspended or terminated by the
Company at any time.
22. Labor
Law.
By
accepting this option, the Employee acknowledges that: (a) the grant of this
option is a one-time benefit which does not create any contractual or other
right to receive future grants of options, or benefits in lieu of options;
(b)
all determinations with respect to any future grants, including, but not
limited
to, the times when the stock options shall be granted, the number of shares
subject to each stock option, the Exercise Price, and the time or times when
each stock option shall be exercisable, will be at the sole discretion of
the
Company; (c) the Employee’s participation in the Plan is voluntary; (d) the
value of this option is an extraordinary item of compensation which is outside
the scope of the Employee’s employment contract, if any; (e) this option is not
part of the Employee’s normal or expected compensation for purposes of
calculating any severance, resignation, redundancy, end of service payments,
bonuses, long-service awards, pension or retirement benefits or similar
payments; (f) the vesting of this option ceases upon termination of employment
for any reason except as may otherwise be explicitly provided in the Plan
or
this Agreement; (g) the future value of the underlying shares is unknown
and
cannot be predicted with certainty; (h) if the underlying shares do not increase
in value, this option will have no value; (i) this option has been granted
to
the Employee in the Employee’s status as an employee of the Company or its
affiliates; (j) any claims resulting from this option shall be enforceable,
if
at all, against the Company; and (k) there shall be no additional obligations
for any affiliate employing the Employee as a result of this
option.
23. Disclosure
of Employee Information.
By
accepting this option, the Employee consents to the collection, use and transfer
of personal data as described in this paragraph. The Employee understands
that
the Company and its affiliates hold certain personal information about him
or
her, including his or her name, home address and telephone number, date of
birth, social security or identity number, salary, nationality, job title,
any
shares of stock or directorships held in the Company, details of all stock
options or any other entitlement to shares of stock awarded, canceled,
exercised, vested, unvested or outstanding in his or her favor, for the purpose
of managing and administering the Plan (“Data”). The Employee further
understands that the Company and/or its affiliates will transfer Data amongst
themselves as necessary for the purpose of implementation, administration
and
management of his or her participation in the Plan, and that the Company
and/or
any of its affiliates may each further transfer Data to any third parties
assisting the Company in the implementation, administration and management
of
the Plan. The Employee authorizes the Company to receive, possess, use, retain
and transfer the Data in electronic or other form, for the purposes of
implementing, administering and managing his or her participation in the
Plan,
including any requisite transfer to a broker or other third party with whom
he
or she may elect to deposit any shares of stock acquired upon exercise of
this
option of such Data as may be required for the administration of the Plan
and/or
the subsequent holding of shares of stock on his or her behalf. The Employee
understands that he or she may, at any time, view the Data, require any
necessary amendments to the Data or withdraw the consent herein in writing
by
contacting the human resources department and/or the stock option administrator
for his or her employer.
24. Notice
of Governing Law.
This
option shall be governed by, and construed in accordance with, the laws of
the
State of California without
regard to principles of conflict of laws.
