Exhibit 10.7
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
TRACK 'N TRAIL
1996 STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
Track 'n Trail, a Delaware corporation (the "Company"), hereby grants an
option to purchase Shares of its common stock to the optionee named below. The
terms and conditions of the option are set forth in this cover sheet, in the
attachment and in the Company's 1996 Stock Option Plan (the "Plan").
Date of Option Grant: __________, 199__
Name of Optionee: _____________________________________________________________
Optionee's Social Security Number: _____-____-_____
Number of Shares of Common Stock Covered by Option: __________________________
Exercise Price per Share: $___________________________________________________
Vesting Start Date: __________, 199__
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY
OF WHICH IS ALSO ENCLOSED.
Optionee:
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(Signature)
Company:
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(Signature)
Title:
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Attachment
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TRACK 'N TRAIL
1996 STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
NONSTATUTORY This option is not intended to be an incentive stock
STOCK OPTION option under section 422 of the Internal Revenue Code and
will be interpreted accordingly.
VESTING Your right to exercise this option vests as to 25% of
the shares covered by this option on each one-year
anniversary of the Vesting Start Date, as shown on the
cover sheet. The number of Shares which may be
purchased under this option by you at the Exercise
Price shall be equal to the difference between (i) the
product of the number of one-year anniversaries of
your continuous employment with the Company (including
all days of any approved leaves of absence) from the
Vesting Starting Date times the number of Shares
covered by this option times .25 minus (ii) the number
of Shares purchased pursuant to this Option prior to
such exercise. The resulting number of Shares will be
rounded to the nearest whole number. No additional
Shares will vest after your Company service has
terminated for any reason.
TERM Your option will expire in any event at the close of
business at Company headquarters on the day before the
10th anniversary of the Date of Grant, as shown on the
cover sheet. (It will expire earlier if your Company
service terminates, as described below.)
TERMINATION If you terminate employment for cause, the option will
FOR CAUSE immediately cease to be exercisable.
REGULAR If your service as an employee of the Company (or any
TERMINATION subsidiary) terminates for any reason except for cause,
death or Disability, then your option will expire at the
close of business at Company headquarters on the 90th day
after your termination date.
Notwithstanding anything else in this Agreement to the
contrary, in the event that you cease to be employed by
the Company within one year from the Date of Grant for
any reason all rights to purchase shares under this
Option shall immediately terminate.
DEATH If you die as an employee of the Company (or any
subsidiary), then your option will expire at the close
of business at Company headquarters on the date 12
months after the date of death. During that 12-month
period, your estate or heirs may exercise the vested
portion of your option.
DISABILITY If your service as an employee of the Company (or any
subsidiary) terminates because of your Disability, then
your option will expire at the close of business at
Company headquarters on the date 12 months after your
termination date.
"Disability" means that you are unable to engage in any
substantial gainful cativity by reason of any medically
edterminable physical or mental impairment.
LEAVES OF For purposes of this option, your service does not
ABSENCE terminate when you go on a military leave, a sick leave
or another BONA FIDE leave of absence, if the leave was
approved by the Company in writing. And your service
terminates in any event when the approved leave ends,
unless you immediately return to active work.
The Company determines which leaves count for this
purpose, and when your service terminates for all
purposes under the Plan.
RESTRICTIONS ON The Company will not permit you to exercise this option
EXERCISE if the issuance of Shares at that time would violate any
law or regulation.
NOTICE OF When you wish to exercise this option, you must notify
EXERCISE the Company by filing the proper "Notice of Exercise"
form at the address given on the form. Your notice must
specify how many Shares you wish to purchase. Your
notice must also specify how your Shares should be
registered (in your name only or in your and your
spouse's names as community property or as joint tenants
with right of survivorship). The notice will be
effective when it is received by the Company.
If someone else wants to exercise this option after your
death, that person must prove to the Company's
satisfaction that he or she is entitled to do so.
PERIODS OF Any other provision of this Agreement notwithstanding,
NONEXERCISABILITY the Company shall have the right to designate one or
more periods of time, each of which shall not exceed 180
days in length, during which this option shall not be
exercisable if the Company determines (in its sole
discretion) that such limitation on exercise could in
any way facilitate a lessening of any restriction on
transfer pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), or any state securities
laws with respect to any issuance of securities by the
Company, facilitate the registration or qualification
of any securities by the Company under the Securities
Act or any state securities laws, or facilitate the
perfection of any exemption from the registration or
qualification requirements of the Securities Act or any
applicable state securities laws for the issuance or
transfer of any securities.
Such limitation on exercise shall not alter the vesting
schedule set forth in this Agreement other than to limit
the periods during which this option shall be exercisable.
FORM OF PAYMENT When you submit your notice of exercise, you must include
payment of the option price for the Shares you are
purchasing. Payment may be made in one (or a
combination) of the following forms:
- A cashier's check or a money order.
- Common Shares which have already been owned by you
any time period specified by the Committee and
which are surrendered to the Company. The value
of the Shares, determined as of the effective date
of the option exercise, will be applied to the
option price.
- To the extent that a public market for the Shares
exists as determined by the Company, by delivery
(on a form prescribed by the Committee) of an
irrevocable direction to a securities broker to
sell Shares and to deliver all or part of the sale
proceeds to the Company in payment of the aggregate
Exercise Price.
WITHHOLDING TAXES You will not be allowed to exercise this option unless
you make acceptable arrangements to pay any withholding
or other taxes that may be due as a result of the
option exercise or the sale of shares acquired upon
exercise of this option.
RESTRICTIONS ON By signing this Agreement, you agree not to sell any
RESALE option Shares at a time when applicable laws,
regulations or Company or underwriter trading policies
prohibit a sale. In connection with any underwritten
public offering by the Company of its equity securities
pursuant to an effective registration statement filed
under the Securities Act, including the Company's initial
public offering, you agree not to sell, make any short
sale of, loan, hypothecate, pledge, grant any option for
the purchase of, or otherwise dispose or transfer for
value or agree to engage in any of the foregoing
transactions with respect to any shares without the prior
written consent of the Company or its underwriters, for
such period of time after the effective date of such
registration statement as may be requested by the
Company or such underwriters.
In order to enforce the provisions of this paragraph,
the Company may impose stop-transfer instructions with
respect to the shares until the end of the applicable
stand-off period.
You represent and agree that the Shares to be acquired
upon exercising this option will be acquired for
investment, and not with a view to the sale or
distribution thereof.
In the event that the sale of Shares under the Plan is
not registered under the Securities Act but an
exemption is available which requires an investment
representation or other representation, you shall
represent and agree at the time of exercise that the
Shares being acquired upon exercising this option are
being acquired for investment, and not with a view to
the sale or distribution thereof, and shall make such
other representations as are deemed necessary or
appropriate by the Company and its counsel.
THE COMPANY'S In the event that you propose to sell, pledge or
RIGHT OF FIRST otherwise transfer to a third party any Shares acquired
REFUSAL under this Agreement, or any interest in such Shares, the
Company shall have the "Right of First Refusal" with
respect to all (and not less than all) of such Shares.
If you desire to transfer Shares acquired under this
Agreement, you must give a written "Transfer Notice" to
the Company describing fully the proposed transfer,
including the number of Shares proposed to be
transferred, the proposed transfer price and the name
and address of the proposed transferee. The Transfer
Notice shall be signed both by you and by the
proposed new transferee and must constitute a binding
commitment of both parties to the transfer of the Shares.
The Company shall have the right to purchase all, and not
less than all, of the Shares on the terms of the proposal
described in the Transfer Notice (subject, however, to
any change in such terms permitted in the next paragraph)
by delivery of a notice of exercise of the Right of First
Refusal within 30 days after the date when the Transfer
Notice was received by the Company. The Company's rights
under this Subsection shall be freely assignable, in
whole or in part. If the Company fails to exercise its
Right of First Refusal within 30 days after the date when
it received the Transfer Notice, you may, not later than
90 days following receipt of the Transfer Notice by the
Company,conclude a transfer of the Shares subject to the
Transfer Notice on the terms and conditions described in
the Transfer Notice. Any proposed transfer on terms
and conditions different from those described in the
Transfer Notice, as well as any subsequent proposed
transfer by you, shall again be subject to the Right of
First Refusal and shall require compliance with the
procedure described in the paragraph above. If the
Company exercises its Right of First Refusal, the parties
shall consummate the sale of the Shares on the terms set
forth in the Transfer Notice within 60 days after the
date when the Company received the Transfer Notice (or
within such longer period as may have been specified in
the Transfer Notice); provided, however, that in the
event the Transfer Notice provided that payment for the
Shares was to be made in a form other than
lawful money paid at the time of transfer, the Company
shall have the option of paying for the Shares with
lawful money equal to the present value of the
consideration described in the Transfer Notice.
The Company's Right of First Refusal shall inure to the
benefit of its successors and assigns and shall be
binding upon any transferee of the Shares.
The Company's Right of First Refusal shall terminate in
the event that Stock is listed on an established stock
exchange or is quoted regularly on the Nasdaq National
Market.
RIGHT OF Following termination of your employment for any reason,
REPURCHASE the Company shall have the right to purchase all of those
Shares that you have or will acquire under this option.
If the Company exercises its right to purchase such
Shares, the purchase price shall be the higher of the
Fair Market Value of those Shares on the date of
purchase or the aggregate Exercise Price for those Shares
and shall be paid in cash. The Company will notify you
of its intention to purchase such shares, and will
consummate the purchase within the period established by
applicable law. The Company's rights of repurchase shall
terminate in the event that Stock is listed on an
established stock exchange or is quoted regularly on the
Nasdaq National Market.
TRANSFER OF Prior to your death, only you may exercise this option.
OPTION You cannot transfer or assign this option. For instance,
you may not sell this option or use it as security for a
loan. If you attempt to do any of these things, this
option will immediately become invalid. You may, however,
dispose of this option in your will.
Regardless of any marital property settlement
agreement, the Company is not obligated to honor a
notice of exercise from your spouse or former spouse,
nor is the Company obligated to recognize such
individual's interest in your option in any other way.
RETENTION RIGHTS Your option or this Agreement do not give you the right
to be retained by the Company (or any subsidiaries) in
any capacity. The Company (and any subsidiaries)
reserve the right to terminate your service at any time
and for any reason.
SHAREHOLDER You, or your estate or heirs, have no rights as a
RIGHTS shareholder of the Company until a certificate for your
option Shares has been issued. No adjustments are made
for dividends or other rights if the applicable record
date occurs before your stock certificate is issued,
except asdescribed in the Plan.
ADJUSTMENTS In the event of a stock split, a stock dividend or a
similar change in the Company stock, the number of
Shares covered by this option and the exercise price
per share may be adjusted pursuant to the Plan. Your
option shall be subject to the terms of the agreement
of merger, liquidation or reorganization in the event
the Company is subject to such corporate activity.
LEGENDS All certificates representing the Shares issued upon
exercise of this option shall, where applicable, have
endorsed thereon the following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND
OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED
HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A
COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON
WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY
THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY
THIS CERTIFICATE."
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION
OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
APPLICABLE LAW This Agreement will be interpreted and enforced under the
laws of the State of California.
THE PLAN AND The text of the Plan is incorporated in this Agreement by
OTHER AGREEMENTS reference. Certain capitalized terms used in this
Agreement are defined in the Plan.
This Agreement and the Plan constitute the entire
understanding between you and the Company regarding this
option. Any prior
agreements, commitments or negotiations concerning this
option are superseded.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS
AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.
