Exhibit 10.3
------------
Grant No._______
XxxxxxxXxxx.xxx, Inc.
1998 Stock Option Plan
(As Amended and Restated March 1, 2000)
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the XxxxxxxXxxx.xxx,
Inc. 1998 Stock Option Plan (As Amended and Restated March 1, 2000) (the "Plan")
shall have the same defined meanings in this Stock Option Agreement (the
"Agreement").
I. NOTICE OF STOCK OPTION GRANT
[OPTIONEE'S NAME AND ADDRESS]
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
Option Agreement, as follows:
Date of Grant ____________________
Vesting Commencement Date ____________________
Exercise Price per Share ____________________
Total Number of Shares Granted ____________________
Type of Option ____ Incentive Stock Option
____ Nonqualified Stock Option
Term/Expiration Date: ____________________
Vesting Schedule See Paragraph 3 below.
II. AGREEMENT
1. Grant of Option. XxxxxxxXxxx.xxx, Inc., a Delaware corporation (the
---------------
"Company"), 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 14(c) of
the Plan (Effect of Amendment or Termination), 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 $100,000
during any calendar year, this Option shall be treated as a Nonqualified Stock
Option ("NQO").
2. Exercise Price. The exercise price per Share for the Optioned Stock
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shall be as set forth in Section I.
3. Vesting Schedule. The period or periods of time only after which the
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Option, or portions thereof, become "vested" (i.e., may be acquired by
exercising that portion of the Option) shall be: [(i) twenty-five percent (25%)
of the shares subject to the Option shall vest and may be acquired upon exercise
on the first anniversary of the vesting commencement date, provided that
Optionee remains an Employee, Director or Consultant through and including such
date (ii) twenty-five percent (25%) of the Shares subject to the Option shall
vest and may be
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acquired upon exercise on the second anniversary of the vesting commencement
date, provided that Optionee remains an Employee, Director or Consultant through
and including such date (iii) twenty-five percent (25%) of the Shares subject to
the Option shall vest and may be acquired upon exercise on the third anniversary
of the vesting commencement date, provided that Optionee remains an Employee,
Director or Consultant through and including such date and (iv) twenty-five
percent (25%) of the Shares subject to the Option shall vest and may be acquired
upon exercise on the fourth anniversary of the vesting commencement date,
provided that Optionee remains an Employee, Director or Consultant through and
including such date.]
4. Exercise of Option. The Options shall be exercisable during their term
------------------
in accordance with the vesting schedule described in Section 3 above and with
the provisions of Section 9 of the Plan as follows:
(a) Right to Exercise.
-----------------
(i) Options may not be exercised for a fraction of a Share.
(ii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Options are
governed by Sections 9, 10, 11 and 12 below, subject to the limitation
contained in subsection 4(a)(iii).
(iii) In no event may Options be exercised after the date of
expiration of the term of the respective Option as provided in Section
13 hereof.
(b) Method of Exercise. This Option shall be exercisable by delivery
------------------
of written notice in the form attached as Exhibit A (the "Exercise Notice")
which shall state the election to exercise an 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. This
Option shall be deemed to be exercised upon receipt by the Company of such
written notice accompanied by payment in the amount of the applicable
Exercise Price.
No Shares shall be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all 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.
5. Optionee's Representations. In the event the Shares purchasable
--------------------------
pursuant to the exercise of this Agreement have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, if required by the Company, concurrently with the exercise of
this Option, deliver to the Company his Investment Representation Statement in
the form attached hereto as Exhibit B (the "Investment Representation
Statement").
6. Method of Payment. Payment of the applicable Exercise Price shall be
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by cash or, at the election of the Administrator, by any of the following:
(a) cash, check or cash equivalent;
(b) promissory note;
(c) consideration received by the Company under a cashless exercise
program;
(d) surrender of other shares of Common Stock of the Company which
(i) in the case of Shares acquired pursuant to the 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, as determined by the
Administrator
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(but without regard to any restrictions on transferability applicable to
such stock by reason of federal or state securities laws or agreements with
an underwriter for the Company), of not less than the option price of the
Shares as to which such Option shall be exercised (provided such tender of
stock would not constitute a violation of the provisions of any law,
regulation and/or agreement restricting the redemption of the Company's
stock);
(e) authorization for the Company to retain from the total number of
Shares as to which the Option is exercised that number of Shares having a
Fair Market Value on the date of exercise equal to the exercise price for
the total number of Shares as to which the Option is exercised; or
(f) such other consideration and method of payment for the issuance
of Shares that may be permitted under Applicable Laws.
7. 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
Laws. As a condition to the exercise of an Option, the Company may require
Optionee to make any representation and warranty to the Company as may be
required by any Applicable Law.
8. Termination of Relationship. In the event of termination of Optionee's
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status as an Employee, Director or Consultant for any reason, Optionee may, but
only within three (3) months after the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth herein),
exercise Optionee's Options to the extent that Optionee was entitled to exercise
them at the date of such termination. To the extent that Optionee was not
entitled to exercise an Option at the date of such termination, or if Optionee
does not exercise an Option within the time specified herein, the Options shall
terminate, and the Shares covered by such Option shall revert to the Plan.
9. Disability of Optionee. Notwithstanding the provisions of Section 8
----------------------
above, in the event of termination of Optionee's status as an Employee, Director
or Consultant as a result of his or her disability, Optionee may, but only
within six (6) months from the date of termination of employment (but in no
event later than the date of expiration of the term of the Option as set forth
herein), exercise Optionee's Options to the extent otherwise so entitled at the
date of such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such Option to the extent so entitled within the time specified herein, the
Options shall terminate, and the Shares covered by such Option shall revert to
the Plan.
10. Death of Optionee. Notwithstanding the provisions of Section 8 above,
-----------------
in the event of the death of Optionee while such Optionee was an Employee,
Director or Consultant, Optionee's Options may be exercised at any time within
six (6) months following the date of death (but in no event later than the date
of expiration of the term of the Options as set forth herein), by Optionee's
estate or by a person who acquired the right to exercise the Options at the date
of death. To the extent that Optionee was not entitled to exercise the Options
at the date of death or termination, as the case may be, or if Optionee does not
exercise the Options to the extent so entitled within the time specified herein,
the Options shall terminate, and the Shares covered by such Option shall revert
to the Plan.
11. Non-Transferability of Option. No right or interest in this
-----------------------------
Agreement, nor any Option granted hereby, may be assigned, transferred or
disposed of 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 such
Optionee. The terms of the Plan and this Option Agreement and the Options shall
be binding upon the executors, administrators, heirs, successors and assigns of
the Optionee.
12. Term of Option. This Option may be exercised only within ten (10)
--------------
years after the date of grant of such Option, and may be exercised during such
term only in accordance with the Plan and the terms of this Option Agreement.
Notwithstanding the foregoing, the limitations set forth in Section 7 of the
Plan regarding
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Options designated as Incentive Stock Options and Options granted to Ten Percent
Stockholders shall apply to all Options granter hereunder.
13. Tax Consequences. Optionee acknowledges that he or she has been given
----------------
the opportunity to consult with his or her own tax advisor with respect to the
tax consequences of the Options and the exercise thereof and the disposition of
Shares, and that Optionee is not relying upon the Company for any tax advice.
14. Tax Withholding for Nonqualified Stock Options.
----------------------------------------------
The following shall apply with respect to any Nonqualified Stock
Options or if for any other reason Optionee is required to satisfy a withholding
obligation arising upon exercise of an Option:
(a) Methods. Optionee shall satisfy his or her tax withholding
--------
obligation arising upon the exercise of an Option by one of the following
methods: (i) by cash payment; (ii) out of Optionee's current compensation;
or (iii) if permitted by the Administrator, in its discretion, by
surrendering to the Company Shares which (A) in the case of Shares
previously acquired from the Company, have been owned by the Optionee for
more than six (6) months on the date of surrender, and (B) have a Fair
Market Value on the date of surrender equal to or less than Optionee's
marginal tax rate times the ordinary income recognized; or (iv) by electing
to have the Company withhold from the Shares to be issued upon exercise of
the Option that number of Shares having a Fair Market Value equal to the
amount required to be withheld.
(b) Rule 16b-3. If the Optionee is subject to Section 16 of the
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Exchange Act (an "Insider"), any surrender of previously owned Shares to
satisfy tax withholding obligations arising upon exercise of an Option must
comply with the applicable provisions of Rule 16b-3 promulgated under the
Exchange Act ("Rule 16b-3") and shall be subject to such additional
conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
(c) Procedures. All elections by an Optionee to have Shares withheld
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to satisfy tax withholding obligations shall be made in writing in a form
acceptable to the Administrator and shall be subject to the following
restrictions: (i) the election must be made on or prior to the applicable
tax withholding date; (ii) once made, the election shall be irrevocable as
to the particular Shares of the Option as to which the election is made;
(iii) all elections shall he subject to the consent or disapproval of the
Administrator; (iv) if the Optionee is a Reporting Person, the election
must comply with the applicable provisions of Rule 16b-3 and shall be
subject to such additional conditions or restrictions as may be required
thereunder to qualify for the maximum exemption from Section 16 of the
Exchange Act with respect to Plan transactions.
15. 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 a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws but not
the choice of law rules of the State of Illinois.
16. No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES
---------------------------------
THAT THE VESTING OF OPTIONS PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS AN EMPLOYEE, DIRECTOR OR CONSULTANT AT THE WILL OF THE
COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED ANY OPTIONS OR
ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
4
ENGAGEMENT AS AN EMPLOYEE, DIRECTOR OR CONSULTANT FOR THE VESTING PERIOD, FOR
ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT
OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP WITH THE COMPANY 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 Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Option Agreement. Optionee
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator upon any questions arising under the Plan,
this Agreement or any Option.
XXXXXXXXXXX.XXX, INC.,
a Delaware corporation
By: __________________________________
Title: _______________________________
***OPTIONEE SIGNATURE PAGE FOLLOWS***
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OPTIONEE:
Dated as of: ______________, 1999 _____________________________________
(sign name)
______________________________
(print name)
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EXHIBIT A
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XxxxxxxXxxx.xxx, Inc.
1998 Stock Option Plan
(As Amended and Restated March 1, 2000)
---------------------------------------
EXERCISE NOTICE
XxxxxxxXxxx.xxx, Inc.
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Stock Option Plan Administrator
1. Exercise of Option. Effective as of today, _______________, ____, the
------------------
undersigned ("Optionee") hereby elects to exercise pursuant to this Exercise
Notice (this "Agreement") Optionee's option to purchase _____ shares of the
Common Stock (the "Shares") of XxxxxxxXxxx.xxx, Inc., a Delaware corporation
(the "Company") under and pursuant to the XxxxxxxXxxx.xxx, Inc. 1998 Stock
Option Plan (As Amended and Restated March 1, 2000) (the "Plan") and the Stock
Option Agreement dated as of _________, ____ (the "Option Agreement").
2. Representations of Optionee. Optionee acknowledges that Optionee has
---------------------------
received, read and understood the Plan and Option Agreement and agrees to abide
by and be bound by their terms and conditions. Optionee represents that
Optionee is purchasing the Shares for Optionee's own account for investment and
not with a view to, or for sale in connection with, a distribution of any of
such Shares.
3. Rights as Shareholder. Until the stock certificate evidencing such
---------------------
Shares is issued, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 11 of the
Plan.
Optionee shall enjoy rights as a shareholder until such time as
Optionee disposes of the Shares or the Option on Termination of Employment
hereunder and delivers payment for such Shares. Upon such exercise, Optionee
shall forthwith cause the certificate(s) evidencing the Shares so purchased to
be surrendered to the Company for transfer or cancellation upon delivery of
payment thereafter, after which transfer or cancellation Optionee shall have no
further rights as a holder of the Shares.
4. Company's Option Upon Certain Events.
------------------------------------
The Company shall have the right to purchase all, but not less than all, of
the Shares owned by Optionee, if during the two year period following the
termination of the employment (for any reason or no reason) of Optionee,
Optionee:
(a) owns, manages, operates, controls, or participates in, or becomes
associated in any manner whatsoever, directly or indirectly, with, or
becomes connected as an officer, employee, manager, partner, director,
consultant, or otherwise with, or has any financial interest in, or aids or
assists anyone in the conduct of, or otherwise engages in, any business
(whether it be a sole proprietorship, partnership, corporation, limited
liability company, or any other entity), that provides services that are
similar to those provided by the Company, including, but not limited to,
insurance agencies, brokerage offices or
1
prospective policy lead referral services (by way of clarification and not
in limitation to the foregoing, "similar" products or services as used in
this paragraph would be the provision, via electronic means such as the
Internet or other networks, of services or products relating to insurance
quotes or policies or substantially similar or competing financial or other
services and products) (provided, however, that, ownership of not more than
one percent of the voting securities of any publicly-held corporation, in
and of itself, shall not constitute a violation of this paragraph);
(b) solicits or otherwise encourages any employee or independent
contractor of the Company to (a) terminate his or her employment or other
relationship with the Company, or (b) with respect to employees of the
Company, enter into employment with any other person or entity;
(c) in any way slanders, libels, or through any other means, takes
any action that is intended to be detrimental to the Company or its
personnel, operations, or products and services; or
(d) without limitation to the foregoing, breaches any obligation
similar to the foregoing and then effective agreement between Optionee and
the Company.
In the event that the Company becomes aware that Optionee has engaged in
any of the foregoing activities, the Company may elect to redeem all, but not
less than all, of the Shares owned by Optionee by delivering written notice of
such election to Optionee. The purchase price shall be equal to the applicable
Exercise Price for each of such Shares. Such right shall be effective for a
period of ninety (90) days from the date the Company became aware of such
activities. The redemption shall be consummated within thirty (30) days of the
date of the Company's election notice, at a time and place reasonably determined
by the Company.
5. Tax Consultation. Optionee understands that Optionee may suffer
----------------
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
6. Successors and Assigns. The Company may assign any of its rights under
----------------------
this Agreement to single or multiple assignees, and this Agreement shall inure
to the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
Optionee and his or her heirs, executors, administrators, successors and
assigns.
7. Interpretation. Any dispute regarding the interpretation of this
--------------
Agreement shall be submitted by Optionee or by the Company forthwith to the
Administrator of the Plan, which shall review such dispute at its next regular
meeting. The resolution of such a dispute by the Administrator shall be final
and binding on the Company and on Optionee.
8. Governing Law; Severability. This Agreement is governed by the
---------------------------
internal substantive laws but not the choice of law rules of the State of
Illinois.
9. Entire Agreement. The Plan and Option Agreement are incorporated
----------------
herein by reference. This Agreement, the Plan, the Option Agreement and the
Investment Representation Statement 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 a writing signed by the Company and
Optionee.
2
Submitted by: Accepted by:
XXXXXXXXXXX.XXX, INC.
___________________________
(print name)
By:_______________________________
(sign name)
___________________________ _______________________________
(signature) (print name)
Its: ________________________
Address: _______________________
_______________________
_______________________
3
EXHIBIT B
---------
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE: __________________________
COMPANY: XXXXXXXXXXX.XXX, INC.
SECURITY: COMMON STOCK
AMOUNT: ___________________________
DATE: ___________________________
In connection with the purchase of the above-listed Securities, I, the
Optionee, represent to XxxxxxxXxxx.xxx, Inc., a Delaware corporation (the
"Company") the following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Securities. I
am purchasing these Securities for my own account for investment purposes
only and not with a view to, or for the resale in connection with, any
"distribution" thereof for purposes of the Securities Act of 1933, as
amended (the "Securities Act").
(b) I understand that the Securities have not been registered under
the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of my
investment intent as expressed herein. In this connection, I understand
that, in the view of the Securities and Exchange Commission (the "SEC"),
the statutory basis for such exemption may be unavailable if my
representation was predicated solely upon a present intention to hold these
Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other
fixed period in the future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or
unless an exemption from registration is otherwise available. Moreover, I
understand that the Company is under no obligation to register the
Securities. In addition, I understand that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of
the Securities unless they are registered or such registration is not
required in the opinion of counsel for the Company.
(d) I am familiar with the provisions of Rule 701 and Rule 133, each
promulgated under the Securities Act, which, in substance, permit limited
public resale of "restricted securities" acquired, directly or indirectly,
from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of issuance of the Securities, such
issuance will be exempt from registration under the Securities Act. In the
event the Company later becomes subject to the reporting requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90)
days thereafter the securities exempt under Rule 701 may be resold, subject
to the satisfaction of certain of the conditions specified by Rule 144,
including among other things: (1) the sale being made through a broker in
an unsolicited "broker's transaction" or in transaction directly with a
case of an affiliate, (2) the availability of certain public information
about the Company, and the amount of securities being sold during any three
month period not exceeding the limitations specified in Rule 144(e), if
applicable. Notwithstanding this paragraph (d), I acknowledge and agree to
the restrictions set forth in paragraph (e) hereof.
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In the event that the Company does not qualify under Rule 701 at
the time of issuance of the Securities, then the Securities may be resold
in certain limited circumstances subject to the provisions of Rule 144,
which requires among other things: (1) the availability of certain public
information about the Company, (2) the resale occurring not less than one
year after the party has purchased, and made full payment for, within the
meaning of Rule 144, the securities to be sold; and, in the case of an
Affiliate, or of a non-affiliate who has held the securities less than two
years, (3) the sale being made through a broker in an unsolicited "broker's
transaction" or in transaction directly with a market maker (as said term
is defined under the Securities Exchange Act of 1934) and the amount of
securities being sold during any three month period not exceeding the
specified limitations stated therein, if applicable.
(e) I further understand that in the event all of the applicable
requirements of Rule 144 or Rule 701 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other
registration exemption will be required; and that, notwithstanding the fact
that Rule 144 and Rule 701 are not exclusive, the Staff of the SEC has
expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant
to Rule 144 or Rule 701 will have a substantial burden of proof in
establishing that an exemption from registration is available for such
offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.
Signature of Optionee:
____________________________________
(sign name)
____________________________________
(print name)
5
