EXHIBIT 4.7
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EMPLOYEE STOCK OPTION GRANT AGREEMENT
UNDER THE
XXXXXX.XXX, INC. 2004 STOCK OPTION PLAN
This Grant Agreement (the "Agreement") is entered into by and between
XXXxxx.xxx, Inc., a Delaware corporation (the "Company"), and the individual
(the "Optionee") specified on the Notice of Grant of Stock Options attached
hereto and incorporated by reference herein (the "Notice of Grant of Stock
Options"), effective as of May 24, 2004 (the "Grant Date").
1. Grant of Option. The Company hereby grants to the Optionee, pursuant
to the XXXxxx.xxx, Inc. 2004 Stock Option and Restricted Stock Plan (the
"Plan"), an option (the "Option") to purchase the number of Shares set forth in
the Notice of Grant attached hereto as Exhibit 1, 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 15(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.
(a) This Option is not intended to qualify as an Incentive Stock
Option as defined in Section 422 of the Code and shall be treated as a
Nonqualified Stock Option ("NQO"). The Notice of Grant of Stock Options sets
forth the following terms of the Option: (i) the Optionee, (ii) the number of
shares of Stock subject to the Option, (iii) the Strike Price per share, and
(iv) the date as of which the Option shall expire (the "Expiration Date"), at
5:00 p.m. Eastern Time, unless fully exercised or earlier terminated. The
information provided on the Notice of Grant of Stock Options is in all respects
subject to the terms of this Agreement.
2. Terminology. Unless stated otherwise in this Agreement, capitalized
terms in this Agreement shall have the meaning set forth in the Plan. Except
where the context otherwise requires, the term "Company" shall mean XXXxxx.xxx,
Inc., a Delaware corporation.
3. Exercise of Option.
(a) Right to Exercise. Except as otherwise provided in this Agreement,
this Option may be exercised as to its vested portion at any time and from time
to time, in whole or in part, on or before the Expiration Date or earlier
termination of the Option by executing the exercise notice in the form of
Exhibit 2. To the extent not exercised, vested shares shall accumulate and be
exercisable, in whole or in part, at any time after becoming exercisable, but
not later than the Expiration Date or other termination of the Option. In the
event of the Optionee's death, disability, or other termination of employment,
the exercisability is governed by Section 4 below.
(b) Vesting. Unless the Option has earlier terminated, Optionee shall
vest in accordance with the vesting schedule set forth in the Notice of Grant.
(c) Exercise Procedure. Subject to the conditions set forth in this
Agreement, including without limitation the execution of a Stock Restriction
Agreement as required by Section 3(e) hereof, this Option shall be exercised by
delivery of written notice of exercise on any business day to the Corporate
Secretary of the Company in such form as the Administrator may require from time
to time. Such notice shall specify the number of shares in respect of
which the Option is being exercised and shall be accompanied by full payment of
the Strike Price for such shares in accordance with Section 3(d) of this
Agreement. The exercise shall be effective upon receipt by the Corporate
Secretary of the Company of such written notice accompanied by the required
payment. The Option may be exercised only in multiples of whole vested shares
and may not be exercised at any one time as to fewer than one hundred (100)
shares (or such lesser number of shares as to which the Option is then
exercisable). No fractional shares shall be issued pursuant to this Option.
(d) Method of Payment. Payment of the Strike Price shall be by any of
the following, or a combination thereof, as determined by the Administrator in
its discretion at the time of exercise:
i. By delivery of cash, certified or cashier's check, or money
order;
ii. By any other method approved by the Administrator.
Subject to such limitations as the Administrator may determine, at any time
during which the Stock is publicly traded on a national securities exchange or
NASDAQ, the Strike Price shall be deemed to be paid, in whole or in part, if the
Optionee delivers a properly executed exercise notice, together with irrevocable
instructions: (A) to a brokerage firm approved by the Company to deliver
promptly to the Company the aggregate amount of sale or loan proceeds to pay the
Strike Price and any withholding tax obligations that may arise in connection
with the exercise, and (B) to the Company to deliver the certificates for such
purchased shares directly to such brokerage firm.
(e) Issuance of Shares upon Exercise. Upon due exercise of the Option,
in whole or in part, in accordance with the terms of this Agreement, the Company
shall issue to the Optionee, or such other person exercising the Option, as the
case may be, the number of shares of Stock so paid for, in the form of fully
paid and nonassessable stock and shall deliver certificates therefor as soon as
practicable thereafter. The stock certificates for any shares of Stock issued
hereunder shall, unless such shares are registered or an exemption from
registration is available under applicable federal and state law, bear a legend
restricting transferability of such shares, and if such shares are subject to a
Stock Restriction Agreement pursuant to Section 3(e) hereof, shall bear a legend
referencing the Stock Restriction Agreement.
4. Termination of Employment.
(a) Exercise Period Following Termination of Employment. Unless the
Option has earlier terminated, if the Optionee's employment with the Company is
terminated, other than as a result of the causes set forth in clauses (b), (c)
or (d) below: (i) this Option shall terminate immediately upon such termination
of employment to the extent of any unvested shares, and all unvested shares
shall be forfeited, and (ii) this Option shall be exercisable during the 30-day
period following such termination of employment with respect to any vested
shares, but in no event after the Expiration Date. Unless sooner terminated,
this Option shall terminate in its entirety upon the expiration of the
applicable exercise period noted above in this Section 4(a).
(b) Permanent Disability of Optionee. Notwithstanding the provisions
of Section 4(a) above, if the Optionee's employment with the Company terminates
as a result of his Permanent Disability (as defined herein), (i) this Option
shall terminate immediately upon such termination of employment to the extent of
any unvested shares, and all unvested shares shall be forfeited,
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and (ii) this Option shall be exercisable during the six-month period following
such termination of employment with respect to any vested shares, but in no
event after the Expiration Date. Unless sooner terminated, this Option shall
terminate in its entirety upon the expiration of such six-month period.
"Permanent Disability" shall have the meaning set forth in Optionee's existing
Employment Agreement with the Company. If no such Employment Agreement is in
effect, then such term shall have the same meaning as set forth in the last
existing employment agreement between Optionee and the Company or otherwise in
accordance with the definition set forth in the Plan.
(c) Death of Optionee. If the Optionee dies before the Expiration Date
or other termination of the Option, (i) this Option shall terminate immediately
upon the Optionee's death to the extent of any unvested shares, and all unvested
shares shall be forfeited, and (ii) this Option shall be exercisable during the
six-month period following the date of death of the Optionee with respect to any
vested shares, but in no event after the Expiration Date, by the Optionee's
executor, personal representative, or the person(s) to whom this Option is
transferred by will or the laws of descent and distribution. Unless sooner
terminated, this Option shall terminate in its entirety upon the expiration of
such six-month period.
(d) Discharge for Cause. Notwithstanding anything to the contrary
herein, this Option shall terminate in its entirety, regardless of whether the
Option is vested in whole or in part, immediately upon the Optionee's discharge
of employment for Cause. For purposes of this Section, the term "Cause" shall
have the meaning set forth in existing Employment Agreement with the Company. If
no such Employment Agreement is in effect, then such term shall have the same
meaning as set forth in the last existing employment agreement between Optionee
and the Company or as set forth in the Plan.
5. Adjustments and Business Combinations.
(a) Adjustments for Events Affecting Stock. In the event of changes in
the Stock of the Company by reason of any stock dividend, spin-off, split-up,
recapitalization, merger, consolidation, business combination or exchange of
shares and the like, the Administrator shall, in its discretion, make
appropriate adjustments to the number, kind, and price of shares covered by this
Option, and shall, in its discretion and without the consent of the Optionee,
make any other adjustments in this Option, including but not limited to reducing
the number of shares subject to the Option or providing or mandating alternative
settlement methods such as settlement of the Option in cash or in shares of
Stock or other securities of the Company or of any other entity, or in any other
matters which relate to the Option as the Administrator shall, in its sole
discretion, determine to be necessary or appropriate.
(b) Pooling of Interests Transaction. Notwithstanding anything in the
Plan or this Agreement to the contrary and without the consent of the Optionee,
the Administrator, in its sole discretion, may make any modifications to the
Option, including but not limited to cancellation, forfeiture, surrender, or
other termination of the Option in whole or in part regardless of the vested
status of the Option, in order to facilitate any business combination that is
authorized by the Board to comply with requirements for treatment as a pooling
of interests transaction for accounting purposes under generally accepted
accounting principles.
(c) Adjustments for Unusual Events. The Administrator is authorized to
make, in its discretion and without the consent of the Optionee, adjustments in
the terms and conditions of, and the criteria included in, the Option in
recognition of unusual or nonrecurring events affecting
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the Company, or the financial statements of the Company or any Affiliate, or of
changes in applicable laws, regulations, or accounting principles, whenever the
Administrator determines that such adjustments are appropriate to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Option or the Plan.
(d) Binding Nature of Adjustments. Adjustments under this Section 5
will be made by the Administrator, whose determination as to what adjustments,
if any, will be made and the extent thereof will be final, binding, and
conclusive. No fractional shares will be issued pursuant to this Option on
account of any such adjustments.
6. Confidential Information. In consideration of the Option granted to
the Optionee pursuant to this Agreement, the Optionee agrees and covenants that,
except as specifically authorized by the Company, the Optionee will keep
confidential any trade secrets or confidential or proprietary information of the
Company which are now or which hereafter may become known to the Optionee as a
result of the Optionee's employment by the Company, and shall not at any time,
directly or indirectly, disclose any such information to any person, firm,
Company, or other entity, or use the same in any way other than in connection
with the business of the Company, at all times during and after the Optionee's
employment. The provisions of this Section 6 shall not narrow or otherwise limit
the obligations and responsibilities of the Optionee set forth in any agreement
of similar import entered into between the Optionee and the Company.
7. Non-Guarantee of Employment. Nothing in the Plan or this Agreement
shall alter the at-will or other employment, consultant, or director status of
the Optionee, nor be construed as a contract of employment between the Company
and the Optionee, or as a contractual right of Optionee to continue in the
employ of, the Company, or as a limitation of the right of the Company to
discharge the Optionee at any time with or without cause or notice.
8. No Rights as a Stockholder. The Optionee shall not have any of the
rights of a stockholder with respect to the shares of Stock that may be issued
upon the exercise of the Option until such shares of Stock have been issued to
him or her upon the due exercise of the Option. No adjustment shall be made for
dividends or distributions or other rights for which the record date is before
the date such certificate or certificates are issued.
9. Nonstatutory Nature of the Option. The Optionee acknowledges that,
upon exercise of this Option, the Optionee will recognize taxable income in an
amount equal to the excess of the then Fair Market Value of the shares over the
Strike Price and must comply with the provisions of Section 10 of this Agreement
with respect to any tax withholding obligations that arise as a result of such
exercise.
10. Withholding of Taxes. At the time the NSO Option is exercised, in
whole or in part, or at any time thereafter as requested by the Company, the
Optionee hereby authorizes withholding from payroll or any other payment of any
kind due the Optionee and otherwise agrees to make adequate provision for
foreign, federal, state, and local taxes required by law to be withheld, if any,
which arise in connection with the Option. The Company may require the Optionee
to make a cash payment to cover any withholding tax obligation as a condition of
exercise of the Option. If the Optionee does not make such payment when
requested, the Company may refuse to issue any Stock certificate under the Plan
until arrangements satisfactory to the Administrator for such payment have been
made. The Administrator may, in its sole discretion, permit the Optionee to
satisfy, in whole or in part, any withholding tax obligation which may arise in
connection with the Option either by electing to have the Company withhold from
the shares to be issued upon
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exercise that number of shares, or by electing to deliver to the Company
already-owned shares, in either case having a Fair Market Value equal to the
amount necessary to satisfy the statutory minimum withholding amount due.
11. The Company's Rights. The existence of this Option shall not affect in
any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations, or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred, or
other stocks with preference ahead of or convertible into, or otherwise
affecting the Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of the Company's assets
or business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
12. Optionee. Whenever the word "Optionee" is used in any provision of
this Agreement under circumstances where the provision should logically be
construed, as determined by the Administrator, to apply to the estate, personal
representative, or beneficiary to whom this Option may be transferred by will or
by the laws of descent and distribution, the word "Optionee" shall be deemed to
include such person.
13. Nontransferability of Option. This Option is nontransferable otherwise
than by will or the laws of descent and distribution and during the lifetime of
the Optionee, the Option may be exercised only by the Optionee or, during the
period the Optionee is under a legal disability, by the Optionee's guardian or
legal representative. Except as provided above, the Option may not be assigned,
transferred, pledged, hypothecated, or disposed of in any way (whether by
operation of law or otherwise) and shall not be subject to execution,
attachment, or similar process.
14. Notices. All notices and other communications made or given pursuant
to this Agreement shall be in writing and shall be sufficiently made or given if
hand-delivered or mailed by certified mail, addressed to the Optionee at the
address contained in the records of the Company, or addressed to the
Administrator, care of the Company for the attention of its Corporate Secretary
at its principal office or, if the receiving party consents in advance,
transmitted and received via telecopy or via such other electronic transmission
mechanism as may be available to the parties.
15. Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the stock option granted hereunder. Any oral or
written agreements, representations, warranties, written inducements, or other
communications made before the execution of this Agreement with respect to the
stock option granted hereunder shall be void and ineffective for all purposes.
16. Amendment. This Agreement may not be modified, except as provided in
the Plan or in a written document signed by each of the parties hereto.
17. Conformity with Plan. This Agreement is intended to conform in all
respects with, and is subject to all applicable provisions of, the Plan, which
is incorporated herein by reference. Inconsistencies between this Agreement and
the Plan shall be resolved in accordance with the terms of the Plan. In the
event of any ambiguity in this Agreement or any matters as to which this
Agreement is silent, the Plan shall govern. A copy of the Plan is available upon
request to the Administrator.
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18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, other than the conflict of
laws principles thereof. All actions to enforce or interpret this Agreement
shall be brought in an exclusive forum in New Jersey determined by the
Administrator.
19. Headings. The headings in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer as of the date first above written.
XXXXXX.XXX, INC.
By: _______________________
Xxxxxx X. Xxxxxxxx, CEO
The undersigned hereby acknowledges that he/she has carefully read this
Agreement and the Plan and agrees to be bound by all of the provisions set forth
in such documents.
OPTIONEE:
_______________________________
Date: As of ____________, 200__
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EXHIBIT 1
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NOTICE OF GRANT OF STOCK OPTIONS
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OPTIONEE: __________________
GRANT DATE: MAY 24, 2004
NUMBER OF SHARES SUBJECT
TO THE OPTION: _____________ (NSOS)
STRIKE PRICE PER SHARE: $.01
VESTING: 50% ON NOVEMBER 24, 2004
BALANCE ON MAY 24, 2005
EXPIRATION DATE: MAY 23, 2008
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EXHIBIT 2
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FORM OF NOTICE OF EXERCISE
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Administrator of 2004 Stock Option and Restricted Stock Plan
c/o Office of the Corporate Secretary
XXXxxx.xxx, Inc.
000 XX Xxxxxxx 00
Xxxxx Xxxxxxxxxx, XX 00000
Gentlemen:
I hereby exercise the Stock Option granted to me on May 24, 2004, by
XXXxxx.xxx, Inc. (the "Company"), subject to all the terms and provisions
thereof and of the XXXxxx.xxx, Inc. 2004 Stock Option and Restricted Stock Plan
(the "Plan"), and notify you of my desire to purchase ____________ shares of
Common Stock of the Company at a price of $___________ per share pursuant to the
exercise of said Option. This will confirm my understanding with respect to the
shares to be issued to me by reason of this exercise of the Option (the shares
to be issued pursuant hereto shall be collectively referred to hereinafter as
the "Shares"), unless such exercise occurs after a registration statement is
filed and effective, as follows:
(a) I am acquiring the Shares for my own account for investment with
no present intention of dividing my interest with others or of reselling or
otherwise disposing of any of the Shares.
(b) The Shares are being issued without registration under the
Securities Act of 1933, as amended (the "Act"), in reliance upon one or more
exemptions contained in the Act, and such reliance is based in part on the above
representation.
(c) The certificates for the Shares to be issued to me will bear a
legend substantially as follows:
"The securities represented by this stock certificate have not
been registered under the Securities Act of 1933 (the "Act") or applicable state
securities laws (the "State Acts"), and shall not be sold, pledged,
hypothecated, donated, or otherwise transferred (whether or not for
consideration) by the holder except upon the issuance to the Company of a
favorable opinion of its counsel and/or submission to the Company of such other
evidence as may be satisfactory to counsel for the Company, to the effect that
any such transfer shall not be in violation of the Act and the State Acts.
"The shares of stock represented by this certificate are subject
to restrictions on transfer and an option to purchase set forth in a certain
Stock Restriction Agreement between the Company and the registered owner of this
certificate (or his predecessor in interest), and no transfer of such shares may
be made without compliance with that Agreement. A copy of that Agreement is
available for inspection at the office of the Company upon appropriate request
and without charge."
Appropriate stop transfer instructions will be issued by the issuer to its
transfer agent.
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(d) Since the Shares have not been registered under the Act, they must
be held indefinitely until an exemption from the registration requirements of
the Act is available or they are subsequently registered, in which event the
representation in Paragraph (a) hereof shall terminate. As a condition to any
transfer of the shares, I understand that the issuer will require an opinion of
counsel satisfactory to the issuer to the effect that such transfer does not
require registration under the Act or any state securities law.
(e) The issuer is not obligated to comply with the registration
requirements of the Act or with the requirements for an exemption under
Regulation A or Regulation D under the Act for my benefit.
I am a party to a Stock Restriction Agreement with the Issuer,
pursuant to which I have agreed to certain restrictions on the transferability
of the Shares and other matters relating thereto.
Total Amount Enclosed: $__________
Date:________________________ ____________________________________
(Optionee)
XXXxxx.xxx, Inc.
By: ________________________________
Xxxxxx X. Xxxxxxxx, CEO
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