EXHIBIT 10.4
IT IS UNLAWFUL TO
CONSUMMATE A SALE OR
TRANSFER OF THIS SECURITY,
OR ANY INTEREST THEREIN, OR
TO RECEIVE ANY
CONSIDERATION THEREFOR,
WITHOUT THE PRIOR WRITTEN
CONSENT OF THE COMMISSIONER
OF CORPORATIONS OF THE
STATE OF CALIFORNIA, EXCEPT
AS PERMITTED IN THE
COMMISSIONER'S RULES.
NONSTATUTORY STOCK OPTION
____________________________________, Optionee:
Endgate Technology Corporation (the "Company"), pursuant to its 1992 Stock
Option Plan (the "Plan") has this day granted to you, the optionee named above,
an option to purchase shares of the common stock of the Company ("Common
Stock"). This option is not intended to qualify and will not be treated as an
"incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's employees
(including officers), directors or consultants and 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").
The details of your option are as follows:
1. The total number of shares of Common Stock subject to this option is
_________________ (________________). Subject to the limitations contained
herein, this option shall be exercisable with respect to each installment shown
below on or after the date of vesting applicable to such installment, as
follows:
NUMBER OF SHARES DATE OF EARLIEST EXERCISE
(INSTALLMENT) (VESTING)
(At least 20% per year)
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2. (a) The exercise price of this option is _____________($___________)
per share, being not less than the fair market value of the Common Stock on the
date of grant of this option.
(b) Payment of the exercise price per share is due in full in cash
(including check) upon exercise of all or any part of each installment which has
become exercisable by you. Notwithstanding the foregoing, this option may be
exercised pursuant to a program developed under Regulation T as promulgated by
the Federal Reserve Board which results in the receipt of cash (or check) by the
Company prior to the issuance of Common Stock.
3. The minimum number of shares with respect to which this option may
be exercised at any one time is one hundred (100), except (a) as to an
installment subject to exercise, as set forth in paragraph 1, which mounts to
fewer than one hundred (100) shares, in which case, as to the exercise of that
installment, the number of such shares in such installment shall be the minimum
number of shares, and (b) with respect to the final exercise of this option this
minimum shall not apply. In no event may this option be exercised for any number
of shares which would require the issuance of anything other than whole shares.
4. 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.
5. The term of this option commences on the date hereof and, unless
sooner terminated as set forth below or in the Plan, terminates on (which date
shall be no more than ten (10) years from the date this option is granted). In
no event may this option be exercised on or after the date on which it
terminates. This option shall terminate prior to the expiration of its term as
follows: thirty (30) days after the termination of your employment with the
Company or an affiliate of the Company (as defined in the Plan) for any reason
or for no reason unless:
(a) such termination of employment is due to your permanent and total
disability (within the meaning of Section 422(c)(6) of the Code), in which event
the option shall terminate on the earlier of the termination date set forth
above or twelve (12) months following such termination of employment;
(b) such termination of employment is due to your death, in which
event the option shall terminate on the earlier of the termination date set
forth above or twelve (12) months after your death; or
(c) during any part of such thirty (30) day period the option is not
exercisable solely because of the condition set forth in paragraph 4 above, in
which event the option shall not terminate until the earlier of the termination
date set forth above or until it shall have been exercisable for an aggregate
period of thirty (30) days after the termination of employment; or
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(d) exercise of the option within thirty (30) days after termination
of your employment with the Company or with an affiliate would result in
liability under section 16(b) of the Securities Exchange Act of 1934, in which
case the option will terminate on the earlier of (i) the termination date set
forth above, (ii) the tenth (10th) day after the last date upon which exercise
would result in such liability or (iii)six (6) months and ten (10) days after
the termination of your employment with the Company or an affiliate.
However, this option may be exercised following termination of
employment only as to that number of shares as to which it was exercisable on
the date of termination of employment under the provisions of paragraph 1 of
this option.
6. (a) This option may be exercised, to the extent specified above,
by delivering a notice of exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require pursuant
to subparagraph 6(f) of the Plan.
(b) By exercising this option you agree that:
(i) the Company may require you to enter an arrangement
providing for the cash payment by you to the Company of any tax withholding
obligation of the Company arising by reason of: (1) the exercise of this 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 Company (or a representative of the underwriters)
may, in connection with the first underwritten registration of the offering of
any securities of the Company under the Act, require that you not sell or
otherwise transfer or dispose of any shares of Common Stock or other securities
of the Company during such period (not to exceed one hundred eighty (180) days)
following the effective date (the "Effective Date") of the registration
statement of the Company filed under the Act as may be requested by the Company
or the representative of the underwriters; provided, however, that such
restriction shall apply only if, on the Effective Date, you are an officer,
director, or owner of more than one percent (1%) of the outstanding securities
of the Company. For purposes of this restriction you will be deemed to own
securities which (i) are owned directly or indirectly by you, including
securities held for your benefit by nominees, custodians, brokers or pledgees;
(ii) may be acquired by you within sixty (60) days of the Effective Date;
(iii)are owned directly or indirectly, by or for your brothers or sisters
(whether by whole or half blood) spouse, ancestors and lineal descendants; or
(iv) are owned, directly or indirectly, by or for a corporation, partnership,
estate or trust of which you are a shareholder, partner or beneficiary, but only
to the extent of your proportionate interest therein as a shareholder, partner
or beneficiary thereof. You further agree that the Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such period.
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7. This option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only
by you.
8. This option is not an employment contract and nothing in
this option shall be deemed to create in any way whatsoever any obligation on
your part to continue in the employ of the Company, or of the Company to
continue your employment with the Company. In the event that this option is
granted to you 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.
9. Any notices provided for in this option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in the
case of notices delivered by the Company to you, five (5) days after deposit in
the United States mail, postage prepaid, addressed to you at the address
specified below or at such other address as you hereafter designate by written
notice to the Company.
10. This option is subject to all the provisions of the Plan, a
copy of which is attached hereto and its provisions are hereby made a part of
this option, including without limitation the provisions of paragraph 6 of the
Plan relating to option provisions, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time
be promulgated and adopted pursuant to the Plan. In the event of any conflict
between the provisions of this option and those of the Plan, the provisions of
the Plan shall control.
Dated the __________ day of ____________________________, 1992.
Very truly yours,
ENDGATE TECHNOLOGY CORPORATION
By.___________________________________________
Duly authorized on behalf of the
Board of Directors
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The undersigned:
(a) Acknowledges receipt of the foregoing option and the
attachments referenced therein and understands that all rights and liabilities
with respect to this option are set forth in the option and the Plan;
(b) Acknowledges that as of the date of grant of this option, it
sets forth the entire understanding between the undersigned optionee and the
Company and its affiliates regarding the acquisition of stock in the Company and
supersedes all prior oral and written agreements on that subject with the
exception of the following agreements only:
NONE
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(Initial)
OTHER
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(c) Acknowledges receipt of a copy of Section 260.141.11 of Title 10
of the California Code of Regulations.
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Optionee
Address: ----------------------------------
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ATTACHMENTS:
1992 Stock Option Plan
Regulation 260.141.11
Form of Exercise
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