FLUX POWER HOLDINGS, INC. NON-QUALIFIED STOCK OPTION AGREEMENT
Exhibit
4.10
________________,
201__
[NAME
OF PARTICIPANT]
[Address
of Participant]
Dear
Participant:
Pursuant
to the terms and conditions of the Flux Power Holdings, Inc. 2014
Equity Incentive Plan (the “Plan”) and this
Non-Qualified Stock Option Agreement, together with the attached
Terms and Conditions, which are incorporated herein by reference
(the “Agreement”), you have been granted an
Non-Qualified Stock
Option to purchase shares of common stock (this
“Option”) as outlined below.
Granted
To:
_____________________
Grant
Date:
_____________________
Options
Granted:
_____________________
Exercise Price per
Share:
_____________________
Total Cost to
Exercise:
_____________________
Expiration
Date:
_____________________
Vesting
Schedule:
____% per year for
__ years
___% on
__________
___% on
__________
___% on
__________
___% on
__________
Subject
to the terms of the Plan and this Agreement, any portion of this
Option not exercised prior to the Expiration Date will become null
and void. The capitalized terms used in this Option will have the
same meanings as set
forth in the Plan. A
copy of the Plan is provided herewith.
By:
____________________________
Xxx
Xxxx, Chief Executive Officer
Accepted and Agreed
To By Participant:
By:_______________________________
Print
Name:________________________
Date:______________________________
Notice: All notices to be given by either party to the other will
be in writing and may be transmitted by overnight courier; or mail,
registered or certified, postage prepaid with return receipt
requested; or personal delivery; or facsimile transmission,
provided,
however,
that notices of change of address
or facsimile number will be effective only upon actual receipt by
the other party. Notices will be delivered to Flux
Power Holdings, Inc., 000 Xxxxxxxxxx Xxxxxx, Xxxxx X, Xxxxx,
Xxxxxxxxxx 00000, Attn: CEO, and to the Participant at the last
known address of the Participant as provided to Flux Power
Holdings, Inc.
1
Term And Conditions Of
Flux Power Holdings, Inc. is referred to as "Company" and
Individual granted option is referred to as
"Participant".
1.
Plan Controls. The terms
contained in the Plan are incorporated into and made a part of the
Option and this Agreement and the Options will be governed by and
construed in accordance with the Plan. In the event of any actual
or alleged conflict between the provisions of the Plan and the
provisions of this Agreement, the provisions of the Plan will be
controlling and determinative. Capitalized terms used but not
defined herein shall have the meanings given such terms in the
Plan.
3.
Stockholder Approval. The Plan
is subject to approval of the stockholders of the Company
(excluding Shares issued pursuant to the Plan), consistent with
applicable laws and the applicable requirements of any securities
exchange or similar entity, within twelve (12) months before or
after the date on which the Board has approved the Plan (the
“Effective Date”). No Option may be exercised prior to
initial stockholder approval of the Plan and in the event that
initial stockholder approval is not obtained within the required
time period all of the Options will be canceled, and any Shares
issued pursuant to any Options shall be rescinded.
4.
Manner of Exercise. Subject to
the Plan and this Agreement, the Vested Portion of this Option may
be exercised from time to time, in whole or in part, but not as to less than 1,000 shares of Stock (unless the remaining shares then
constituting the Vested Portion of this Option is less than
1,000 shares of Stock) at any time, by delivery to the
Company at its principal office of a stock option exercise notice,
substantially in the form attached hereto as Exhibit A(the
“Notice”), which need not
be the same for each Participant, stating the number of Shares
being purchased, the restrictions imposed on the Shares purchased
hereunder, if any, and such representations and agreements
regarding the Participant’s investment intent and access to
information and other matters, if any, as may be required or
desirable by the Company to comply with applicable securities laws.
The Notice must be duly executed by Participant and be
accompanied by payment in cash, or by check payable to the Company,
in full for the Exercise Price for the
number of Shares being purchased. Alternatively, but only if the
Administrator authorizes at the time of exercise at its sole
discretion, and where permitted by law (i) by surrender of shares
of Stock of the Company that have been owned by the Participant for
more than six (6) months or lesser period if the surrender of
Shares is otherwise exempt from Section 16 of the Exchange Act and
if such shares were purchased from the Company by use of a
promissory note, such note has been fully paid with respect to such
shares, (ii) by forfeiture of Shares equal to the value of the
exercise price pursuant to a “deemed net-stock
exercise” as provided for in the Plan, (iii) by broker sale
by following the required instructions therefore including as so
authorized by the Administrator and its sole discretion
instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds necessary to pay the exercise price
and the amount of any required tax or other withholding
obligations, or (iv) by any combination of the foregoing methods of
payment or any other consideration or method of payment.
Participant may exercise this Vested Portion of this Option for
only for whole Shares.
3.
Privileges Of Stock Ownership.
Participant will not have any of the rights of a stockholder with
respect to any Shares until the Shares are issued to Participant.
The Company will issue (or cause to be issued) such stock
certificate promptly upon exercise of this Option. All certificates
for Shares or other securities delivered will be subject to such
stock transfer orders, legends and other restrictions as the
Administrator may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign
securities law, or any rules, regulations and other requirements of
the SEC or any stock exchange or automated quotation system upon
which the Shares may be listed or quoted. No adjustment will be
made for a dividend or other right for which the record date is
prior to the date the stock certificate is issued.
4.
Notification of Disposition.
Participant agrees to notify the Company in writing within 30 days
of any disposition of Shares acquired pursuant to the exercise of
this Option.
2
5.
Withholding. The Company may
require the Participant to remit to the Company by cash or check
payable to the Company, an amount sufficient to satisfy federal,
state and local taxes and FICA withholding requirements whenever
Shares are to be issued upon exercise of this Option or Shares are
forfeited pursuant to the “deemed net-stock exercise”,
or when under applicable tax laws, Participant incurs tax liability
in connection with the exercise or vesting of this Option. In lieu
thereof, the Company may withhold the amount of such taxes from any
other sums due or to become due from the Company as the
Administrator will prescribe. Any such payment must be made, or any
such withholding may be made, promptly when the amount of such
obligation becomes determinable.
To the
extent permissible by law, and at its sole discretion, the
Administrator may permit the Participant to satisfy any such
withholding tax at the time of exercise, in whole or in part, with
shares of Stock up to an amount not greater than the
Company’s minimum statutory withholding rate for federal and
state tax purposes, including payroll taxes. The Administrator may
exercise its discretion, by (i) directing the Company to apply
shares of Stock to which the Participant is entitled as a result of
the exercise of this Option, or (ii) delivering to the Company
shares of Stock owned by the Participant for more than six (6)
months, unless the delivery of the Shares is otherwise exempt from
Section 16 of the Exchange Act; but Participant may only satisfy
his or her withholding obligation with shares of Stock that are not
subject to any repurchase, forfeiture, unfulfilled vesting or other
similar requirements.
6.
Exercise After Certain
Events.
6.1.
Termination of All Services. If
for any reason other than Retirement, Disability or death, a
Participant terminates employment with the Company (including
employment as an Officer), vested Non-Qualified Stock Options held
at the date of such Termination may be exercised, in whole or in
part, at any time within three (3) months of the date of such
Termination or such lesser period specified in this Agreement (but
in no event after the earlier of (i) the expiration date of the
Option as set forth in this Agreement, and (ii) ten (10) years from
the Grant Date).
6.2
Continuation of Services as
Consultant. If a Participant Terminates employment but
continues as a Consultant or in a similar capacity to the Company
or any of its Subsidiaries, the Participant need not exercise the
Non-Qualified Stock Option within three (3) months of Termination
but will be entitled to exercise within three (3) months of
Termination of services to the Company (one (1) year in the event
of Disability or death) or such lesser or greater period specified
in this Agreement (but in no event after the earlier of (i) the
expiration date of the Option as set forth in this Agreement, and
(ii) ten (10) years from the Grant Date).
6.3
Retirement. If a Participant
ceases to be an employee of the Company (including as an Officer)
as a result of Retirement, the Participant need not exercise the
Option within three (3) months of Termination of employment but
will be entitled to exercise the Option within the maximum term of
the Option to the extent the Option was otherwise exercisable at
the date of Retirement.
6.4
Permanent Disability and Death.
If a Participant becomes Disabled while employed by the Company
(including as an Officer), dies while employed by the Company
(including as an Officer) or dies within three (3) months after
Termination, vested Options then held may be exercised by the
Participant, the Participant’s personal representative, or by
the person to whom the Option is transferred by will or the laws of
descent and distribution, in whole or in part, at any time within
one (1) year after the Termination of employment because of the
Disability or death or any lesser period specified in this
Agreement (but in no event after the expiration date of the Option
as set forth in this Agreement)
6.5
Cancellation of Options. In the
event Participant’s services to the Company have been
terminated for “Cause”, Participant will immediately
forfeit all rights to this Option. The determination by the Board
that termination was for Cause will be final and conclusive. In
making its determination, the Board will give Participant an
opportunity to appear and be heard at a hearing before the full
Board and present evidence on the Participant's
behalf.
3
7.
Restrictions on Transfer of
Option. This Option will not be transferable by Participant
other than by will or by the laws of descent and distribution and
during the lifetime of Participant, only Participant, his guardian
or legal representative may exercise this Option except that
Participant may transfer this Option to a Spouse pursuant to a
property settlement, agreement, or court order incident to a
divorce. At its discretion, the Administrator may provide for
transfer of the Option without payment of consideration, to the
following family members of the Participant, including adoptive
relationships: a child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, sister-in-law, niece,
nephew, former spouse (whether by gift or pursuant to a domestic
relations order), any person sharing the employee’s household
(other than a tenant or employee), a family-controlled partnership,
corporation, limited liability company and trust, or a foundation
in which family members heretofore described control the management
of assets (collectively “Family Member”). The assigned
portion may only be exercised by the person or persons who acquire
a proprietary interest in the Option pursuant to the assignment.
The terms applicable to the assigned portion will be the same as
those in effect for the Option immediately prior to such assignment
and will be set forth in such documents issued to the assignee as
the Administrator may deem appropriate. A request to assign an
Option may be made only by delivery to the Company of a written
stock option assignment request in a form approved by the
Administrator, stating the number of Options and Shares underlying
Options requested for assignment, that no consideration is being
paid for the assignment, identifying the proposed transferee, and
containing such other representations and agreements regarding the
Participant’s investment intent and access to information and
other matters, if any, as may be required or desirable by the
Company to comply with applicable securities laws.
Notwithstanding
anything to the contrary in the Plan, this Agreement or any
charter, by-laws or other instrument or document governing or
applicable to the Options or shares of Common Stock, if and to the
extent the Administrator determines that it is necessary to rely on
the 12h-1(f) Exemption with respect to the Options outstanding
under the Plan, and this Option will be further restricted in the
manner set forth in the Plan.
8.
No Obligation To Employ.
Nothing in the Plan or this Option will confer or be deemed to
confer on any Participant any right to continue in the employ of,
or to continue any other relationship with, the Company or a
Subsidiary, or to limit in any way the right of the Company or a
Subsidiary, to terminate Participant's employment or other
relationship at any time, with or without cause.
9.
Compliance With Code Section
162(m). Notwithstanding any provision of the Plan to the
contrary, if the Administrator determines that compliance with
Section 162(m) of the Code is required or desired, all Options
granted under the Plan to Named Executive Officers will comply with
the requirements of Section 162(m) of the Code. In addition, in the
event that changes are made to Section 162(m) of the Code to permit
greater flexibility with respect to any Options under the Plan, the
Administrator may make any adjustments it deems
appropriate.
10.
Compliance With Code
Section 409A. All Options under
the Plan are intended to constitute awards of equity-based
compensation that do not provide for the deferral of compensation
in accordance with Treasury Regulation 1.409A-1(b)(5).
Notwithstanding any provision of the Plan to the contrary, if any
provision of the Plan or this Agreement contravenes any regulations
or Treasury guidance promulgated under Section 409A of the Code or
could cause the Options to be subject to the interest and penalties
under Section 409A of the Code, such provision of the Plan or this
Agreement will be modified to maintain, to the maximum extent
practicable, the original intent of the applicable provision
without violating the provisions of Section 409A of the Code. In
addition, in the event that changes are made to Section 409A of the
Code to permit greater flexibility with respect to any Options
under the Plan, the Administrator may make any adjustments it deems
appropriate.
11.
Code Section
280G. Notwithstanding any other
provision of the Plan to the contrary, unless expressly provided
otherwise in this Agreement, if the right to receive or benefit
from the Options under the Plan, either alone or together with
payments that a Participant has a right to receive from the
Company, would constitute a “parachute payment” (as
defined in Section 280G of the Code), all such payments will be
reduced to the largest amount that will result in no portion being
an “excess parachute payment” (as defined in Section
280G of the Code) that is subject to the limitations on
deductibility under Section 280G of the Code or the excise tax
imposed by Section 4999 of the Code.
4
12.
Securities Law And Other Regulatory
Compliance. The Company will not be obligated to issue any
Shares upon exercise of this Option unless such Shares are at that
time effectively registered or exempt from registration under the
federal securities laws and the offer and sale of the Shares are
otherwise in compliance with all applicable securities laws.
The Company will be under no
obligation to register the Shares with the SEC or to effect
compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or
automated quotation system, and the Company will have no liability
for any inability or failure to do so. Upon exercising all
or any portion of this Option, Participant may be required to
furnish representations or undertakings deemed appropriate by the
Company to enable the offer and sale of the Shares or subsequent
transfers of any interest in such Shares to comply with applicable
securities laws. Evidences of ownership of Shares acquired upon
exercise of this Option will bear any legend required by, or useful
for purposes of compliance with, applicable securities laws, the
Plan or this Option. The exercise of this Option also must comply
with other applicable laws and regulations governing the Option,
and the Participant may not exercise the Option if the Company
determines that such exercise would not be in material compliance
with such laws and regulations.
13.
Tax Effect. The federal and
state tax consequences of stock options are complex and subject to
change. Each person should consult with his or her tax advisor
before exercising this Option or disposing of any Shares acquired
upon the exercise of this Option.
14.
Entire Agreement. This
Agreement and the Plan constitute the entire contract between the
Company and Participant hereto with regard to the subject matter
hereof. They supersede any other agreements, representations or
understandings (whether oral or written and whether express or
implied), which relate to the subject matter hereof.
15.
Severability. In the event that
any portion of this Agreement is found to be unenforceable, the
remaining portions of this Agreement will remain valid and in full
force and effect.
16.
Choice of Law; Venue. This
Agreement will be governed by the laws of the State of
California.
17.
Compliance by Participant of Local
Laws. As a condition to the exercise of the Option,
Participant hereby represents and agrees that the exercise of the
Option hereunder will not violate any securities laws, exchange
control laws, or any laws or regulations in which the Participant
resides.
18.
Binding Effect. This Agreement
will inure to the benefit of, and be binding upon, the parties
hereto and their respective heirs, executors, and
successors.
[INTENTIONALLY LEFT
BLANK]
5
Notice of Intent to Exercise Non-Qualified Stock
Options
To: Stock Administrator
I
hereby give notice to
of
my intent to exercise the following Non-Qualified Stock Options on
______________, 201__:
|
(A)
|
(B)
|
(C)
|
(B X
C)
|
|
Grant Date
|
#Options
|
Exercise Price
|
Payment Due
|
Method of Payment
_____
Personal Check or
Cash
_____
Exchange of
Previously Owned Shares
_____
Deemed Net-Stock
Exercise
_____
Broker Check (Same
Day Sale)
Brokerage Company
_________________________
Your method of payment may result in a tax liability including
alternative minimum tax. You are strongly urged to consult your tax
advisor before exercising your options.
By this
exercise, the undersigned Participant agree(s) (i) that Participant
is bound by terms and conditions set forth in the Non-Qualified
Stock Option Agreement and is exercising the Options in compliance
with the terms set forth therein and (ii) that Participant will
provide and/or execute and deliver to the Company such additional
documents as the Company may require pursuant to the terms of the
Flux Power Holdings, Inc. 2014 Equity Incentive Plan
(“Plan”).
____________________________________
_____________________
Signature
Date
____________________________________
Participant
Name
