STARVOX COMMUNICATIONS, INC.
Exhibit 10.1.1
STARVOX COMMUNICATIONS, INC.
2007 STOCK PLAN
Unless otherwise defined herein, the terms defined in the 2007 Stock Plan (the “Plan”) shall
have the same defined meanings in this Stock Option Agreement (the “Option Agreement”).
| I. | NOTICE OF STOCK OPTION GRANT |
| Name: | ||
| 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 | ||||||||
| Total Exercise Price | $ | |||||||
| Type of Option: | Incentive Stock Option | |||||||
| Nonstatutory Stock Option | ||||||||
| Term/Expiration Date: | ||||||||
| Vesting Schedule: | ||||||||
This Option shall be exercisable, in whole or in part, according to the following vesting
schedule:
[Twenty-five percent (25%) of the Shares subject to the Option shall vest on the one (1) year
anniversary of the Vesting Commencement Date, and one forty-eighth (1/48) of the Shares subject to
the Option shall vest each month thereafter on the same day of the month as the Vesting
Commencement Date (and if there is no corresponding day, on the last day of the month), subject to
Optionee continuing to be a Service Provider through each such date.]
Termination Period:
This Option shall be exercisable for three (3) months after Optionee ceases to be a Service
Provider, unless such termination is due to Optionee’s death or Disability, in which case this
Option shall be exercisable for twelve (12) months after Optionee ceases to be a Service Provider.
Notwithstanding the foregoing sentence, in no event may this Option be exercised after the
Term/Expiration Date as provided above and may be subject to earlier termination as provided in
Section [11(c)] of the Plan.
| II. | AGREEMENT |
1. Grant of Option. The Administrator of the Company hereby grants to the Optionee
named in the Notice of Stock Option Grant in Part I of this Agreement (the “Optionee”), an option
(the “Option”) to purchase the number of Shares set forth in the Notice of Stock Option Grant, at
the exercise price per Share set forth in the Notice of Stock Option Grant (the “Exercise Price”),
and subject to the terms and conditions of the Plan, which is incorporated herein by reference.
Subject to Section [19(c)] 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 Stock Option 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 Nonstatutory Stock Option (“NSO”).
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 Stock Option 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”) or in a manner and
pursuant to such procedures as the Administrator may determine, 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 accompanied by payment of the aggregate Exercise Price as to all Exercised Shares,
together with any applicable tax withholding. 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, together with any applicable tax withholding.
No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such
exercise comply 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 1933, as amended, at the time this Option is exercised, the Optionee shall,
if
-2-
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. Optionee hereby agrees that Optionee shall not offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any Common Stock (or other securities) of the Company or enter into any
swap, hedging or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of any Common Stock (or other securities) of the Company held by
Optionee (other than those included in the registration) for a period specified by the
representative of the underwriters of Common Stock (or other securities) of the Company not to
exceed one hundred eighty (180) days following the effective date of any registration statement of
the Company filed under the Securities Act (or such other period as may be requested by the Company
or the underwriters to accommodate regulatory restrictions on (i) the publication or other
distribution of research reports and (ii) analyst recommendations and opinions, including, but not
limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any
successor provisions or amendments thereto).
Optionee agrees to execute and deliver such other agreements as may be reasonably requested by
the Company or the underwriter which are consistent with the foregoing or which are necessary to
give further effect thereto. In addition, if requested by the Company or the representative of the
underwriters of Common Stock (or other securities) of the Company, Optionee shall provide, within
ten (10) days of such request, such information as may be required by the Company or such
representative in connection with the completion of any public offering of the Company’s securities
pursuant to a registration statement filed under the Securities Act. The obligations described in
this Section 4 shall not apply to a registration relating solely to employee benefit plans on Form
S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating
solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in
the future. The Company may impose stop-transfer instructions with respect to the shares of Common
Stock (or other securities) subject to the foregoing restriction until the end of said one hundred
eighty (180) day (or other) period. Optionee agrees that any transferee of the Option or shares
acquired pursuant to the Option shall be bound by this Section 4.
5. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:
(a) cash;
(b) check;
(c) consideration received by the Company under a formal cashless exercise program adopted by
the Company in connection with the Plan; or
(d) surrender of other Shares which (i) if acquired either directly or indirectly from the
Company, have been owned by Optionee for at least the period required to avoid a charge to
the Company’s reported earnings, (ii) shall be valued at its fair market value on the date of
-3-
exercise, and (iii) must be owned free and clear of any liens, claims, encumbrances or security
interests, if accepting such Shares, in the sole discretion of the Administrator, shall not result
in any adverse accounting consequences to the Company.
6. Restrictions on Exercise. This Option may not be exercised until such time as the
Plan has been approved by the stockholders 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. Term of Option. This Option may be exercised only within the term set out in the
Notice of Stock Option Grant, and may be exercised during such term only in accordance with the
Plan and the terms of this Option.
9. Tax Obligations.
(a) Withholding Taxes. Optionee agrees to make appropriate arrangements with the
Company (or the Parent or Subsidiary employing or retaining Optionee) for the satisfaction of all
Federal, state, local and foreign income and employment tax withholding requirements applicable to
the Option exercise. Optionee acknowledges and agrees that the Company may refuse to honor the
exercise and refuse to deliver the Shares if such withholding amounts are not delivered at the time
of exercise.
(b) 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 (i) the date two (2) years after the Date of
Grant, or (ii) the date one (1) 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.
(c) Code Section 409A. Under Code Section 409A, an Option that vests after December
31, 2004 that was granted with a per Share exercise price that is determined by the Internal
Revenue Service (the “IRS”) to be less than the Fair Market Value of a Share on the date of grant
(a “discount option”) may be considered “deferred compensation.” An Option that is a “discount
option” may result in (i) income recognition by the Optionee prior to the exercise of the Option,
(ii) an additional twenty percent (20%) tax, and (iii) potential penalty and interest charges.
Optionee acknowledges that the Company cannot and has not guaranteed that the IRS will agree that
the per Share exercise price of this Option equals or exceeds the fair market value of a Share on
the date of grant in a later examination. Optionee agrees that if the IRS determines that the
Option was granted with a per Share exercise price that was less than the Fair Market Value of a
Share on the
date of grant, Optionee shall be solely responsible for Optionee’s costs related to such a
determination.
-4-
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 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 California.
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 (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING OPTIONEE)
AND NOT THROUGH THE ACT OF 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 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 WITH OPTIONEE’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT
OR SUBSIDIARY EMPLOYING OR RETAINING OPTIONEE) 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 Administrator 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
|
STARVOX COMMUNICATIONS, INC. | |||
Signature
|
By | |||
Print Name
|
Print Name | |||
| Title | ||||
Residence Address |
-5-
EXHIBIT A
2007 STOCK PLAN
EXERCISE NOTICE
StarVox Communications, Inc.
0000 Xxxxxxx Xxxxxxx
Xxx Xxxx, XX 00000
0000 Xxxxxxx Xxxxxxx
Xxx Xxxx, XX 00000
Attention: _______________
1. Exercise of Option. Effective as of today, ______, ___, the undersigned
(“Optionee”) hereby elects to exercise Optionee’s option to purchase ___ shares of the Common
Stock (the “Shares”) of StarVox Communications, Inc. (the “Company”) under and pursuant to the 2007
Stock Plan (the “Plan”) and the Stock Option Agreement dated ______, ___(the “Option
Agreement”).
2. Delivery of Payment. Optionee herewith delivers to the Company the full purchase
price of the Shares, as set forth in the Option Agreement, and any and all withholding taxes due in
connection with the exercise of the Option.
3. Representations of Optionee. Optionee acknowledges that Optionee has received,
read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their
terms and conditions.
4. Rights as Stockholder. Until the issuance of the Shares (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Shares shall
be issued to the Optionee as soon as practicable after the Option is exercised in accordance with
the Option Agreement. No adjustment shall be made for a dividend or other right for which the
record date is prior to the date of issuance except as provided in Section [11] of the Plan.
5. Company’s Right of First Refusal. Before any Shares held by Optionee or any
transferee (either being sometimes referred to herein as the “Holder”) may be sold or otherwise
transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall
have a right of first refusal to purchase the Shares on the terms and conditions set forth in this
Section 5 (the “Right of First Refusal”).
(a) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the
Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or
otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee
(“Proposed Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee;
and (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer
the
Shares (the “Offered Price”), and the Holder shall offer the Shares at the Offered Price to
the Company or its assignee(s).
(b) Exercise of Right of First Refusal. At any time within thirty (30) days after
receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the
Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to
any one or more of the Proposed Transferees, at the purchase price determined in accordance with
subsection (c) below.
(c) Purchase Price. The purchase price (“Purchase Price”) for the Shares purchased by
the Company or its assignee(s) under this Section 5 shall be the Offered Price. If the Offered
Price includes consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in good faith.
(d) Payment. Payment of the Purchase Price shall be made, at the option of the
Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an
assignee, to the assignee), or by any combination thereof within thirty (30) days after receipt of
the Notice or in the manner and at the times set forth in the Notice.
(e) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be
transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s)
as provided in this Section 5, then the Holder may sell or otherwise transfer such Shares to that
Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within one hundred twenty (120) days after the date of the Notice, that any
such sale or other transfer is effected in accordance with any applicable securities laws and that
the Proposed Transferee agrees in writing that the provisions of this Section 5 shall continue to
apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the
Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be
given to the Company, and the Company and/or its assignees shall again be offered the Right of
First Refusal before any Shares held by the Holder may be sold or otherwise transferred.
(f) Exception for Certain Family Transfers. Anything to the contrary contained in
this Section 5 notwithstanding, the transfer of any or all of the Shares during the Optionee’s
lifetime or on the Optionee’s death by will or intestacy to the Optionee’s immediate family or a
trust for the benefit of the Optionee’s immediate family shall be exempt from the provisions of
this Section 5. “Immediate Family” as used herein shall mean spouse, lineal descendant or
antecedent, father, mother, brother or sister. In such case, the transferee or other recipient
shall receive and hold the Shares so transferred subject to the provisions of this Section 5, and
there shall be no further transfer of such Shares except in accordance with the terms of this
Section 5.
(g) Termination of Right of First Refusal. The Right of First Refusal shall terminate
as to any Shares upon the earlier of (i) the first sale of Common Stock of the Company to the
general public, or (ii) a Change in Control in which the successor corporation has equity
securities that are publicly traded.
-2-
6. 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.
7. Restrictive Legends and Stop-Transfer Orders.
(a) Legends. Optionee understands and agrees that the Company shall cause the legends
set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s)
evidencing ownership of the Shares together with any other legends that may be required by the
Company or by state or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT
OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS
ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE
ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST
REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER FOR A PERIOD OF TIME FOLLOWING THE EFFECTIVE DATE OF
THE UNDERWRITTEN PUBLIC OFFERING OF THE COMPANY’S SECURITIES SET FORTH IN AN
AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES AND MAY NOT
BE SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER PRIOR TO THE EXPIRATION OF SUCH
PERIOD WITHOUT THE CONSENT OF THE COMPANY OR THE MANAGING UNDERWRITER.
(b) Stop-Transfer Notices. Optionee agrees that, in order to ensure compliance with
the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions
to its transfer agent, if any, and that, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of
-3-
this Exercise Notice, or (ii) to treat as owner of such Shares or to accord the right to vote
or pay dividends to any purchaser or other transferee to whom such Shares shall have been so
transferred.
8. Successors and Assigns. The Company may assign any of its rights under this
Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the
benefit of the successors and assigns of the Company. Subject to the restrictions on transfer
herein set forth, this Exercise Notice shall be binding upon Optionee and his or her heirs,
executors, administrators, successors and assigns.
9. Interpretation. Any dispute regarding the interpretation of this Exercise Notice
shall be submitted by Optionee or by the Company forthwith to the Administrator 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 all parties.
10. Governing Law; Severability. This Exercise Notice is governed by the internal
substantive laws but not the choice of law rules, of California. In the event that any provision
hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Exercise Notice shall continue in full force and effect.
11. Entire Agreement. The Plan and Option Agreement are incorporated herein by
reference. This Exercise Notice, 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.
Submitted by:
|
Accepted by: | |
OPTIONEE
|
STARVOX COMMUNICATIONS, INC. | |
Signature
|
By | |
Print Name
|
Print Name | |
| Title | ||
Address:
|
Address: | |
| 0000 Xxxxxxx Xxxxxxx | ||
| Xxx Xxxx, XX 00000 | ||
| Date Received |
-4-
EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE: |
||
COMPANY:
|
STARVOX COMMUNICATIONS, INC. | |
SECURITY:
|
COMMON STOCK | |
AMOUNT: |
||
DATE: |
In connection with the purchase of the above-listed Securities, the undersigned Optionee
represents to the Company the following:
(a) Optionee is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and knowledgeable decision
to acquire the Securities. Optionee is acquiring these Securities for investment for Optionee’s
own account only and not with a view to, or for resale in connection with, any “distribution”
thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).
(b) Optionee acknowledges and understands that the Securities constitute “restricted
securities” under the Securities Act and 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 Optionee’s investment intent as expressed herein. In this connection, Optionee
understands that, in the view of the Securities and Exchange Commission, the statutory basis for
such exemption may be unavailable if Optionee’s 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. Optionee further
understands that the Securities must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to register the Securities.
Optionee understands that the certificate evidencing the Securities shall be imprinted with any
legend required under applicable state securities laws.
(c) Optionee is familiar with the provisions of Rule 701 and Rule 144, 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 the grant of the Option to the Optionee, the exercise shall be exempt from
registration under the Securities Act. In the event the Company becomes subject to the reporting
requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or
such
longer period as any market stand-off agreement may require) the Securities exempt under Rule
701 may be resold, subject to the satisfaction of certain of the conditions specified by Rule 144,
including: (1) the resale being made through a broker in an unsolicited “broker’s transaction” or
in transactions directly with a market maker (as said term is defined under the Securities Exchange
Act of 1934); and, in the case of an affiliate, (2) the availability of certain public information
about the Company, (3) the amount of Securities being sold during any three month period not
exceeding the limitations specified in Rule 144(e), and (4) the timely filing of a Form 144, if
applicable.
In the event that the Company does not qualify under Rule 701 at the time of grant of the
Option, then the Securities may be resold in certain limited circumstances subject to the
provisions of Rule 144, which requires the resale to occur not less than one (1) year after the
later of the date the Securities were sold by the Company or the date the Securities were sold by
an affiliate of the Company, within the meaning of Rule 144; and, in the case of acquisition of the
Securities by an affiliate, or by a non-affiliate who subsequently holds the Securities less than
two (2) years, the satisfaction of the conditions set forth in sections (1), (2), (3) and (4) of
the paragraph immediately above.
(d) Optionee further understands that in the event all of the applicable requirements of Rule
701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A,
or some other registration exemption shall be required; and that, notwithstanding the fact that
Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has
expressed its opinion that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rules 144 or 701 shall 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. Optionee understands that no assurances can be given that any such other
registration exemption shall be available in such event.
| OPTIONEE | ||
| Signature | ||
| Print Name | ||
| Date |
-2-
