EXHIBIT 4.8
STOCK OPTION AGREEMENT
[Benefit Plan for Non-Employee Directors]
AGREEMENT, made as of _________ __, _____ by and between WORLDS INC., a
New Jersey corporation (the "Company"), and ____________________ (the
"Director").
WHEREAS, on _________ __, ______ ("Grant Date"), the Board of Directors
of the Company authorized the grant to the Director of an option to purchase an
aggregate of ___ shares of the authorized but unissued common stock of the
Company, $.001 par value ("Common Stock"), conditioned upon the Director's
acceptance thereof upon the terms and conditions set forth in this Agreement;
and
WHEREAS, the Director desires to acquire the option on the terms and
conditions set forth in this Agreement.
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants to the Director the
right and option ("Option") to purchase all or any part of an aggregate of ___
shares of Common Stock ("Option Shares") on the terms and conditions set forth
herein.
2. Non-Incentive Stock Option. The Option represented hereby is not
intended to be an Option which qualifies as an "Incentive Stock Option" under
Section 422 of the Internal Revenue Code of 1986, as amended ("Code").
3. Exercise Price. The exercise price ("Exercise Price") of the Option
shall be $____ per share, [cannot be less than 100% of Fair Market Value]
subject to proportionate adjustment for any increase or decrease in the number
of issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock.
4. Exercisability. This Option shall become exercisable, subject to the
terms and conditions of this Agreement, as follows: (i) the right to purchase
331/3% of the Option Shares shall be exercisable on and after _______ __, ____
[First Anniversary of Date of Grant], (ii) the right to purchase an additional
331/3% of the Option Shares shall be exercisable on and after _______ __, ____
[Second Anniversary of Date of Grant], and (iii) the right to purchase the
remaining 331/3% of the Option Shares shall be exercisable on and after _______
__, ____ [Third Anniversary of Date of Grant]. After a portion of the Option
exercisable, it shall remain exercisable except as otherwise provided herein,
until the close of business on __________ __, ____ [Tenth Anniversary from Date
of Grant] (the "Exercise Period").
5. Effect of Termination of Directorship.
5.1 Termination Due to Death. If Director ceases to be a
director of the Company by reason of death, the portion of the Option, if any,
that was exercisable as of the date of death may thereafter be exercised by the
legal representative of the estate or by the legatee of the Director under the
will of the Director, for a period of one year from the date of such death or
until the expiration of the Exercise Period, whichever period is shorter. The
portion of the Option, if any, that was not exercisable as of the date of death
shall immediately expire.
5.2 Termination Due to Disability. If Director ceases to be a
director of the Company by reason of disability, the portion of the Option, if
any, that was exercisable as of the date of disability may thereafter be
exercised by the Director for a period of one year from the date of such
termination or until the expiration of the Exercise Period, whichever period is
shorter. The portion of the Option, if any, that was not exercisable as of the
date of termination shall immediately expire.
5.3 Termination Due to Failure to be Re-Elected. If Director
ceases to be a director of the Company because he failed to win enough
shareholder votes, then the portion of the Option which has vested by the date
of termination of his directorship may be exercised for a period of three months
from termination of his directorship or until the expiration of the Exercise
Period, whichever is shorter. The portion of the Option, if any, not yet
exercisable on the date of termination of his directorship shall immediately
expire.
5.4 Other Termination. If Director ceases to be a director of
the Company for any other reason (including, but not limited to, Director's
resignation or the Company's failure to nominate Director for re-election), the
Option shall expire on the date of termination of his directorship.
6. Withholding Tax. Not later than the date as of which an amount first
must be included in the gross income of the Director for Federal income tax
purposes with respect to the Option, the Director shall pay to the Company (or
other entity identified by the Board), or make arrangements satisfactory to the
Company (or other entity identified by the Board) regarding the payment of, any
Federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount ("Withholding Tax"). Unless otherwise
determined by the Board, withholding obligations may be settled with Common
Stock, including Common Stock underlying the subject option, provided that any
applicable requirements under Section 16 of the Exchange Act are satisfied so as
to avoid liability thereunder. The obligations of the Company pursuant
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to this Agreement shall be conditioned upon such payment or arrangements with
the Company and the Company shall, to the extent permitted by law, have the
right to deduct any Withholding Tax from any payment of any kind otherwise due
to the Director from the Company.
7. Method of Exercise.
7.1 Notice to the Company. The Option may be exercised in
whole or in part by written notice in the form attached hereto as Exhibit A
directed to the Company at its principal place of business accompanied by full
payment as hereinafter provided of the exercise price for the number of Option
Shares specified in the notice and of the Withholding Taxes, if any.
7.2 Delivery of Option Shares. The Company shall deliver a
certificate for the Option Shares to the Director as soon as practicable after
payment therefor.
7.3 Payment of Purchase Price.
7.3.1 Cash Payment. The Director shall make cash
payments by wire transfer, certified or bank check or personal check, in each
case payable to the order of the Company. The Company shall not be required to
deliver certificates for Option Shares until the Company has confirmed the
receipt of good and available funds in payment of the purchase price thereof.
7.3.2 Promissory Note. The Committee, in its sole
discretion, may allow Director to issue a personal interest bearing full
recourse promissory note with such terms and provisions as the Committee may
authorize.
7.3.3 Stock Payment. The Committee, in its sole
discretion, may allow Director to use Common Stock of the Company owned by him
to make any required payments by delivery of stock certificates in negotiable
form which are effective to transfer good and valid title thereto to the
Company, free of any liens or encumbrances. Shares of Common Stock used for this
purpose shall be valued at the Fair Market Value. The "Fair Market Value" of the
Common Stock shall be determined by the Board in its discretion; provided, that
if the Common Stock is listed on a stock exchange, the Fair Market Value per
share shall be the closing price on such exchange on the date of grant of the
Option as reported in the Wall Street Journal (or, (i) if not so reported, as
otherwise reported by the exchange, and (ii) if not reported on the date of
grant, then on the last prior date on which a sale of the Common Stock was
reported); or if not listed on an exchange but traded on Nasdaq, the Fair Market
Value per share shall be the closing price per share of the Common Stock for the
date of grant, as reported in the Wall Street Journal (or, (i) if not so
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reported, as otherwise reported by Nasdaq, and (ii) if not reported on the date
of grant, then on the last prior date on which a sale of the Common Stock was
reported); or, if the Common Stock is otherwise publicly traded, the mean of the
closing bid price and asked price for the last known sale or as otherwise
reasonably determined by the Board.
7.3.4 Payment of Withholding Tax. Any required
Withholding Tax may be paid in cash or with Common Stock in accordance with
Sections 7.3.1 and 7.3.2, respectively, and Section 6.
7.3.5 Exchange Act Compliance. Notwithstanding
the foregoing, the Company shall have the right to reject payment in the form of
Common Stock if in the opinion of counsel for the Company, (i) it could result
in an event of "recapture" under Section 16(b) of the Securities Exchange Act of
1934; (ii) such shares of Common Stock may not be sold or transferred to the
Company; or (iii) such transfer could create legal difficulties for the Company.
8. Nonassignability. The Option shall not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner, except by will or by the
laws of descent and distribution in the event of the death of the Director. No
transfer of the Option by the Director by will or by the laws of descent and
distribution shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and a copy of the will and/or
such other evidence as the Company may deem necessary to establish the validity
of the transfer and the acceptance by the transferee or transferees of the terms
and conditions of the Option.
9. Company Representations. The Company hereby represents and warrants
to the Director that:
(i) the Company, by appropriate and all required
action, is duly authorized to enter into this Agreement and consummate
all of the transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by
the Company to the Director in accordance with the terms and conditions
hereof, will be duly and validly issued and fully paid and
non-assessable.
10. Director Representations. The Director hereby represents and
warrants to the Company that:
(i) he or she is acquiring the Option and shall
acquire the Option Shares for his own account and not with a view
towards the distribution thereof;
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(ii) he or she has received a copy of all reports and
documents required to be filed by the Company with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as
amended, within the last 24 months and all reports issued by the
Company to its stockholders;
(iii) he or she understands that he or she is subject
to the Company's xxxxxxx xxxxxxx policy and has received a copy of such
policy as of the date of this Agreement;
(iv) he or she understands that he or she must bear
the economic risk of the investment in the Option Shares, which cannot
be sold by him unless they are registered under the Securities Act of
1933 (the "1933 Act") or an exemption therefrom is available thereunder
and that the Company is under no obligation to register the Option
Shares for sale under the 1933 Act;
(v) in his or her position with the Company, he or
she has had both the opportunity to ask questions and receive answers
from the officers and directors of the Company and all persons acting
on its behalf concerning the terms and conditions of the offer made
hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it
without unreasonable effort or expense necessary to verify the accuracy
of the information obtained pursuant to clause (iii) above;
(vi) he or she is aware that the Company shall place
stop transfer orders with its transfer agent against the transfer of
the Option Shares in the absence of registration under the 1933 Act or
an exemption therefrom as provided herein; and
(vii) if, at the time of issuance of the Option
Shares, the issuance of such shares have not been registered under the
1933 Act, the certificates evidencing the Option Shares shall bear the
following legend:
"The shares represented by this certificate have been
acquired for investment and have not been registered under
the Securities Act of 1933. The shares may not be sold or
transferred in the absence of such registration or an
exemption therefrom under said Act."
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11. Restriction on Transfer of Option Shares.
11.1 Anything in this Agreement to the contrary
notwithstanding, Director hereby agrees that he shall not sell, transfer by any
means or otherwise dispose of the Option Shares acquired by him without
registration under the 1933 Act, or in the event that they are not so
registered, unless (i) an exemption from the 1933 Act registration requirements
is available thereunder, and (ii) the Director has furnished the Company with
notice of such proposed transfer and the Company's legal counsel, in its
reasonable opinion, shall deem such proposed transfer to be so exempt.
11.2 Anything in this Agreement to the contrary
notwithstanding, Director hereby agrees that he shall not sell, transfer by any
means or otherwise dispose of the Option Shares acquired by him (i) prior to six
months after the Grant Date and (ii) except in accordance with Company's Xxxxxxx
Xxxxxxx Policy regarding the sale and disposition of securities owned by
employees and/or directors of the Company.
12. Miscellaneous.
12.1 Notices. All notices, requests, deliveries, payments,
demands and other communications which are required or permitted to be given
under this Agreement shall be in writing and shall be either delivered
personally or sent by registered or certified mail, or by private courier to the
parties at their respective addresses set forth herein, or to such other address
as either shall have specified by notice in writing to the other. Notice shall
be deemed duly given hereunder when delivered or mailed as provided herein.
12.2 Director and Stockholder Rights. The Director shall not
have any of the rights of a stockholder with respect to the Option Shares until
such shares have been issued after the due exercise of the Option. Nothing
contained in this Agreement shall be deemed to confer upon Director any right to
continue to be a director of the Company or any subsidiary thereof, nor shall it
interfere in any way with the right of the Company to either terminate his
directorship (if authorized to do so under the Company's by-laws and New Jersey
corporate law), or not nominate him for re-election.
12.3 Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other or subsequent breach.
12.4 Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
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and supercedes any and all prior agreements with respect to the Option. This
Agreement may not be amended except by writing executed by the Director and the
Company.
12.5 Binding Effect; Successors. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and, to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives any rights, remedies,
obligations or liabilities.
12.6 Governing Law; Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of New Jersey
(without regard to choice of law provisions). Director (i) agrees that any legal
suit, action or proceeding arising out of or relating to this Agreement shall be
instituted exclusively in New York State Supreme Court, County of New York, or
in the United States District Court for the Southern District of New York, (ii)
waives any objection to the venue of any such suit, action or proceeding and the
right to assert that such forum is not a convenient forum, and (iii) irrevocably
consents to the jurisdiction of the New York State Supreme Court, County of New
York, and the United States District Court for the Southern District of New York
in any such suit, action or proceeding. Director further agrees to accept and
acknowledge service of any and all process which may be served in any such suit,
action or proceeding in the New York State Supreme Court, County of New York, or
in the United States District Court for the Southern District of New York and
agrees that service of process upon him mailed by certified mail to its address
shall be deemed in every respect effective service of process upon him in any
such suit, action or proceeding.
12.7 Headings. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this
Agreement.
12.8 Director's Options. Director acknowledges that the Option
and the stock options referred to below are the only stock options granted to
him by the Company.
Date of Grant Number of Shares Exercise Price
------------- ----------------- --------------
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IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the day and year first above written:
WORLDS INC. Address: 00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
By: ___________________________
Xxxxxx X. Xxxxxx, Chairman
of the Board
DIRECTOR: Address:
________________________________
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
----------------------------
DATE
WORLDS INC.
00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Stock Option Committee of
the Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of
_________ __ ____ with Worlds Inc. (the "Company"), I hereby irrevocably elect
to exercise the right to purchase _________ shares of the Company's common
stock, par value $.001 per share ("Common Stock").
As payment for my shares, enclosed is (check and complete
applicable box[es]):
|_| a [personal check] [certified check] [bank check]
payable to the order of the Company in the sum of
$_________;
|_| confirmation of wire transfer in the amount of
$_____________;
|_| with the consent of the Company, a certificate for
__________ shares of the Company's Common Stock, free
and clear of any encumbrances, duly endorsed, having
a Fair Market Value (as such term is defined my Stock
Option Agreement) of $_________; and/or
|_| with the consent of the Company, a personal interest
bearing full recourse promissory note in the amount
of $__________.
I hereby represent and warrant to, and agree with, the Company
that:
(i) I am acquiring the Option and shall acquire the
Option Shares for my own account, for investment, and not with a view
towards the distribution thereof;
(ii) I have received copies of all reports and
documents required to be filed by the Company with the Commission
pursuant to the Exchange Act within the last 24 months and all reports
issued by the Company to its stockholders;
(iii) I understand that I must bear the economic risk
of the investment in the Option Shares, which cannot be sold by me
unless they are registered under the Securities Act of 1933 (the "1933
Act") or an exemption therefrom is available thereunder and that the
Company is under no obligation to register the Option Shares for sale
under the 1933 Act;
(iv) I understand I am subject to the Company's
xxxxxxx xxxxxxx policy and have received a copy of such policy as of
the date of this Agreement;
(v) I agree that I will not sell, transfer by any
means or otherwise dispose of the Option Shares acquired by me hereby
except in accordance with Company's policy, if any, regarding the sale
and disposition of securities owned by employees and/or directors of
the Company;
(vi) in my position with the Company, I have had both
the opportunity to ask questions and receive answers from the officers
and directors of the Company and all persons acting on its behalf
concerning the terms and conditions of the offer made hereunder and to
obtain any additional information to the extent the Company possesses
or may possess such information or can acquire it without unreasonable
effort or expense necessary to verify the accuracy of the information
obtained pursuant to clause (ii) above;
(vii) I am aware that the Company shall place stop
transfer orders with its transfer agent against the transfer of the
Option Shares in the absence of registration under the 1933 Act or an
exemption therefrom as provided herein; and
(viii) if, at the time of issuance of the Option
Shares, the issuance of such shares have not been registered under the
1933 Act, the certificates evidencing the Option Shares shall bear the
following legend:
"The shares represented by this certificate have been
acquired for investment and have not been registered under
the Securities Act of 1933. The shares may not be sold or
transferred in the absence of such registration or an
exemption therefrom under said Act."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
--------------------------- ----------------------------------------
(Signature) (Address)
--------------------------- ----------------------------------------
(Print Name)
----------------------------------------
(Social Security Number)
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