EXHIBIT 4.5
XXXXXXX.XXX
STOCK OPTION AGREEMENT
[FORM]
This Xxxxxxx.xxx Stock Option Agreement (the "Agreement"), by and between
Xxxxxxx.xxx, a Nevada corporation (the "Company"), and _______________
("Optionee"), is made effective as of this day of _____________, 199__.
RECITALS
1. Pursuant to the Xxxxxxx.xxx 1999 Stock Option Plan (the "Plan"), the
Board of Directors of the Company (the "Board") has authorized the grant of an
option to purchase common stock of the Company ("Common Stock") to Optionee,
effective on the date indicated above, thereby allowing Optionee to acquire a
proprietary interest in the Company in order that Optionee will have further
incentive for continuing his or her employment by, and increasing his or her
efforts on behalf of, the Company or an Affiliate of the Company.
2. The Company desires to issue a stock option to Optionee and
Optionee desires to accept such stock option on the terms and conditions set
forth below.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
AGREEMENT
1. Option Grant. The Company hereby grants to the Optionee, as a
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separate incentive and not in lieu of any fees or other compensation for his or
her services, an option to purchase, on the terms and conditions hereinafter set
forth, all or any part of an aggregate of ____________________
(________________) shares of authorized but unissued shares of Common Stock, at
the Purchase Price set forth in paragraph 2 of this Agreement.
2. Purchase Price. The Purchase Price per share (the "Option Price")
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shall be $__________, which is not less than ___________________ percent (____%)
of the fair market value per share of Common Stock on the date hereof. The
Option Price shall be payable in the manner provided in paragraph 9 below.
3. Adjustment. The number and class of shares specified in paragraph 1
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above, and the Option Price, are subject to appropriate adjustment in the event
of certain changes in the capital structure of the Company such as stock splits,
recapitalizations and other events which alter the per share value of Common
Stock or the rights of holders thereof. In connection with (i) any merger,
consolidation, acquisition, separation, or reorganization in which more than
fifty percent (50%) of the shares of the Company outstanding immediately before
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such event are converted into cash or into another security, (ii) any
dissolution or liquidation of the Company or any partial liquidation involving
fifty percent (50%) or more of the assets of the Company, (iii) any sale of more
than fifty percent (50%) of the Company's assets, or (iv) any like occurrence in
which the Company is involved, the Company may, in its absolute discretion, do
one or more of the following upon ten days' prior written notice to the
Optionee: (a) accelerate any vesting schedule to which this option is subject;
(b) cancel this option upon payment to the Optionee in cash, to the extent this
option is then exercisable, of any amount which, in the absolute discretion of
the Company, is determined to be equivalent to any excess of the market value
(at the effective time of such event) of the consideration that the Optionee
would have received if this option had been exercised before the effective time
over the Option Price; (c) shorten the period during which this option is
exercisable (provided that this option shall remain exercisable, to the extent
otherwise exercisable, for at least ten days after the date the notice is
given); or (d) arrange that new option rights be substituted for the option
rights granted under this option, or that the Company's obligations under this
option be assumed, by an employer corporation other than the Company or by a
parent or subsidiary of such employer corporation. The actions described in
this paragraph 3 may be taken without regard to any resulting tax consequence to
the Optionee.
4. Option Exercise. Commencing on the date of this Agreement the right
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to exercise this option will accrue as to __________ ( ) of the number of
shares subject to this option. Thereafter, the right to exercise the remainder
of this option will accrue in ______ (__) equal quarterly installments. Shares
entitled to be, but not, purchased as of any accrual date may be purchased at
any subsequent time, subject to paragraphs 5 and 6 below. The number of shares
which may be purchased as of any such anniversary date will be rounded up to the
nearest whole number. No partial exercise of the option may be for an aggregate
exercise price of less than One Hundred Dollars ($100). In order to exercise
any part of this option, Optionee must agree to be bound by the Company's
Shareholder Buy-Sell Agreement, if any, existing at the time of the exercise of
this Option.
5. Termination of Option. The right to exercise this option will lapse
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in four (4) equal installments of the number of shares subject to this option on
each of the sixth, seventh, eighth, and ninth anniversaries of the effective
date of this Agreement. Notwithstanding any other provision of this Agreement,
this option may not be exercised after, and will completely expire on, the close
of business on the date ten (10) years after the effective date of this
Agreement, unless terminated sooner pursuant to paragraph 6 below.
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6. Termination of Employment. In the event of termination of
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Optionee's employment with the Company for any reason, this option will
terminate three (3) months after the date of the termination of Optionee's
employment, unless terminated earlier pursuant to paragraph 5 above. However,
(i) if termination is due to the death of Optionee, the Optionee's estate or a
legal representative thereof, may at any time within and including six (6)
months after the date of death of Optionee, exercise the option to the extent it
was exercisable at the date of termination; or (ii) if termination is due to
Optionee's "disability" (as determined in accordance with Section 22(e)(3) of
the Internal Revenue Code), Optionee may, at any time, within one (1) year
following the date of this Agreement, exercise the option to the extent it was
exercisable at the date of termination. If the Optionee or his or her legal
representative fails to exercise the option within the time periods specified in
this paragraph 6, the option shall expire. The Optionee or his or her legal
representative may, on or before the close of business on the earlier of the
date for exercise set forth in paragraph 5 or the dates specified in paragraph 4
above, exercise the option only to the extent Optionee could have exercised the
option on the date of such termination of employment pursuant to paragraphs 4
and 5 above.
7. Repurchase Option of Company. Pursuant to Section 6.1.8 of the
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Plan, in the event of termination of Optionee's employment with the Company for
any reason, the Company shall have an option to repurchase ("Repurchase Option")
any Common Stock owned by the Optionee or his or her heirs, legal
representatives, successors or assigns at the time of termination, or acquired
thereafter by any of them at any time, by way of an option granted hereunder.
The Repurchase Option must be exercised, if at all, by the Company within ninety
(90) days after the date of termination upon notice ("Repurchase Notice") to the
Optionee or his or her heirs, legal representatives, successors or assigns, in
conformance with paragraph 13 below. The purchase price to be paid for the
shares subject to the Repurchase Option shall be One Hundred Fifteen Percent
(115%) of their book value. For the purposes of this paragraph, the Company's
book value shall be determined in accordance with generally accepted accounting
principles applied on a basis consistent with those previously applied by the
Company. The book value shall be fixed under this paragraph by the accountants
of the Company and shall be computed as of the last day of the Company's fiscal
quarter most recently preceding the Repurchase Notice. Any shares issued
pursuant to an exercise of an option hereunder shall contain the following
legend condition in addition to any other applicable legend condition:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO REPURCHASE
PROVISIONS IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF THE COMPANY.
8. Transferability. This option will be exercisable during Optionee's
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lifetime only by Optionee. Except as otherwise set forth in the Plan, this
option will be non-transferable.
9. Method of Exercise. Subject to paragraph 10 below, this option may
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be exercised by the person then entitled to do so as to any shares which may
then be purchased by delivering to the Company an exercise notice in the form
attached hereto as Exhibit A and:
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(a) full payment of the Option Price thereof (and the amount of
any tax the Company is required by law to withhold by reason of such exercise)
in the form of:
(i) cash or readily available funds; or
(ii) delivery of a promissory note in the amount of the
aggregate Option Price of the exercised shares (the "Note") in a form acceptable
to the Company in its sole discretion together with delivery by the Optionee of
a Security Agreement in a form acceptable to the Company in its sole discretion;
or
(iii) a written request to Net Exercise, as defined in this
paragraph 9(a)(iii). In lieu of exercising this Option via cash payment or
promissory note, Optionee may elect to receive shares equal to the value of this
Warrant (or portion thereof being canceled) by surrender of this Option at the
principal office of the Company together with notice of election to exercise by
means of a Net Exercise in which event the Company shall issue to Optionee a
number of shares of the Company computed using the following formula:
X = Y (A-B)
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A
where X is the number of shares of stock to be issued to Optionee; Y is the
number of shares purchasable under this Option; A is the fair market value of
the stock determ8ined in accordance with Section 6.1.12 of the Plan; and B is
the Option Price as adjusted to the date of such calculation.
(b) payment of any withholding or employment taxes, if any;
(c) an executed Shareholders Buy-Sell Agreement, if any, binding
the Company's shareholders and restricting the transfer of their shares,
executed appropriately by the Optionee and his or her spouse, if any.
The Company will issue a certificate representing the shares so purchased within
a reasonable time after its receipt of such notice of exercise, payment of the
Option Price and withholding or employment taxes, and execution of any existing
Shareholders Buy-Sell Agreement, with appropriate certificate legends.
10. Securities Laws. The issuance of shares of Common Stock upon the
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exercise of the option will be subject to compliance by the Company and the
person exercising the option with all applicable requirements of federal and
state securities and other laws relating thereto. No person may exercise the
option at any time when, in the opinion of counsel to the Company, such exercise
is permitted under applicable federal or state securities laws. Nothing herein
will be construed to require the Company to register or qualify any securities
under applicable federal or state securities laws, or take any action to secure
an exemption from such registration and qualification for the issuance of any
securities upon the exercise of this option.
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11. No Rights as Shareholder. Neither Optionee nor any person claiming
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under or through Optionee will be, or have any of the rights or privileges of, a
shareholder of the Company in respect of any of the shares issuable upon the
exercise of the option, unless and until this option is properly and lawfully
exercised.
12. No Right to Continued Employment. Nothing in this Agreement will
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be construed as granting Optionee any right to continued employment. EXCEPT AS
THE COMPANY AND OPTIONEE WILL HAVE OTHERWISE AGREED IN WRITING, OPTIONEE'S
EMPLOYMENT WILL BE TERMINABLE BY THE COMPANY, AT WILL, WITH OR WITHOUT CAUSE FOR
ANY REASON OR NO REASON. Except as otherwise provided in the Plan, the Board in
its sole discretion will determine whether any leave of absence or interruption
in service (including an interruption during military service) will be deemed a
termination of employment for the purpose of this Agreement.
13. Notices. Any notice to be given to the Company under the terms of
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this Agreement will be addressed to the Company, in care of its Secretary, at
its executive offices, or at such other address as the Company may hereafter
designate in writing. Any notice to be given to Optionee will be in writing and
delivered or mailed by registered or certified mail, return receipt requested,
postage prepaid, addressed to Optionee at the address set forth beneath
Optionee's signature in writing. Any such notice will be deemed to have been
duly given where deposited in a United States post office in compliance with the
foregoing.
14. Non-Transferrable. Except as otherwise provided in the Plan or in
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this Agreement, the option herein granted and the rights and privileges
conferred hereby will not be transferred, assigned, pledged or hypothecated in
any way (whether by operation of law or otherwise). Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this option, or of
any right or upon any attempted sale under any execution, attachment or similar
process upon the rights and privileges conferred hereby, this option will
immediately become null and void.
15. Successor. Subject to the limitation on the transferability of the
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option contained herein, this Agreement will be binding upon and inure to the
benefit of the heirs, legal representatives, successors and assigns of the
parties hereto.
16. California Law. This Agreement will be governed by and construed
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in accordance with the laws of the State of California.
17. Type of Option. The option granted in this Agreement:
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[ ] Is intended to be an Incentive Stock Option ("ISO") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as
amended.
[ ] Is a non-qualified Option and is not intended to be an ISO.
18. Plan Provisions Incorporated by Reference. A copy of the Plan is
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attached hereto as Exhibit "A" and incorporated herein by this reference. In
the case of conflict between any provision in this Agreement and any provision
in the Plan or a Shareholder Buy-Sell Agreement, if any, the terms of this
Agreement shall prevail. In the case of conflict between any provision in the
Plan and a provision in a Shareholders Buy-Sell Agreement, if any, the terms of
the Plan shall prevail.
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19. Term. Capitalized terms used herein, except as otherwise
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indicated, shall have the same meaning as those terms have under the Plan.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year written below.
COMPANY: XXXXXXX.XXX
By:
Its:______________________________
OPTIONEE:
(print name)
(signature)
Address:
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EXHIBIT A
EXERCISE NOTICE
XXXXXXX.XXX
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Secretary
1. Exercise of Option. Effective as of today, ____________________,
the undersigned ("Purchaser") hereby elects to purchase ____________________
shares (the "Shares") of the Common Stock of Xxxxxxx.xxx (the "Company") under
and pursuant to the Xxxxxxx.xxx 1999 Stock Option Plan (the "Plan") and the
Stock Option Agreement dated _______________ (the "Option Agreement"). The
purchase price for the Shares shall be $_______, as required by the Option
Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares in the form of:
[ ] Cash or readily available funds;
[ ] Promissory Note and Security Agreement;
[ ] Formal Request to Net Exercise;
3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions. Additionally, in
connection with the purchase of the Shares, Purchaser represents to the Company
the following:
(a) Investment Intent. Purchaser is purchasing the Shares solely
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for his own account for investment. Purchaser has no present intention to resell
or distribute the Shares or any portion thereof. The entire legal and beneficial
interest of the Shares is being purchased, and will be held, for Purchaser's
account only, and neither in whole or in part for any other person.
(b) Information Concerning Company. Purchaser has significant prior
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experience and knowledge of the affairs of the Company. Purchaser is aware of
the Company's business and financial condition and has acquired sufficient
information about the Company to make an informed and acknowledgeable decision
to purchase the Shares.
(c) Economic Risk. Purchaser realizes that the purchase of the
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Shares will be a highly speculative investment and involves a high degree of
risk. Purchaser is able, without impairing his financial condition, to hold the
Shares for an indefinite period of time and to suffer a complete loss of
Purchaser's investment.
(d) Restriction of Transfer. Purchaser understands that the Shares
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must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Purchaser
understands that the certificate evidencing the Shares will be imprinted with a
legend that prohibits the transfer of the Securities unless they are registered
or unless the Company receives an opinion of counsel reasonably satisfactory to
the Company that such registration is not required.
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(e) Sales Under Rule 144. Purchaser is aware of the adoption of
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rule 144 by the Securities and Exchange Commission (the "Commission")
promulgated under the Securities Act, which permits limited public resale of
securities acquired in a non-public offering subject to the satisfaction of
certain conditions, including among other things: (i) the availability of
certain current public information about the Company, (ii) the resale occurring
not less than one (1) year after the party has purchased and paid for the
securities to be sold, (iii) the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a "market
maker," and (iv) the amount of securities sold during any three-month period not
exceeding specified limitations (generally 1% of the total shares outstanding).
(f) Limitation on Rule 144 Sales. Purchaser further acknowledges
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and understands that the Company is not now and at the time he wishes to sell
the Shares may not be satisfying the current public information requirement of
Rule 144, and, in such case, Purchaser could be precluded from selling the
Shares under Rule 144 even if the one-year minimum holding period has been
satisfied.
(g) Sales Not Under Rule 144. Purchaser further acknowledges that, if
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all or the requirements of Rule 144 are not met, then registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, although Rule 144 is not exclusive, the
staff of the Commission has expressed its opinion (i) that persons proposing to
sell private placement securities other than in a registered offering and other
than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and (ii) that such persons and the brokers who participate in the
transactions do so at their own risk.
4. Rights as Stockholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a stockholder shall exist with respect to the Option,
notwithstanding the exercise of the Option. The Shares so acquired shall be
issued to the Optionee as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date of issuance, except as provided in the Plan.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the 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 Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the law of the State of California.
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Submitted by: Accepted by:
PURCHASER: XXXXXXX.XXX
________________________________ By ______________________
Signature
________________________________ Its________________________
Print Name
Address: ______________________
Date
Received:_______________________
________________________________
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