EXHIBIT 99.2
FORM OF STOCK OPTION AGREEMENT
VERVE, INCORPORATED (the "Company"), desiring to afford an opportunity to the
Grantee named below to purchase certain shares of common stock without par
value, of VERVE, INCORPORATED OF CALIFORNIA, to provide the Grantee with an
added incentive as an employee or specified plan participant of the Company or
of one or more of its subsidiaries, hereby grants to Grantee, and the Grantee
hereby accepts, an option to purchase the number of such shares optioned as
specified below, during the term ending at midnight (prevailing local time at
the Company's principal offices) on the expiration date of this Option specified
below, at the option exercise price specified below, subject to and upon the
following terms and conditions:
1. IDENTIFYING PROVISIONS.
As used in this Option, the following terms shall have the following respective
meanings:
(A) Grantee:
(B) Date of grant:
(C) Number of shares optioned:
(D) Option exercise price per share:
(E) Expiration date:
(F) _____ Employee; _____Non-Employee
This Option is not intended to be and shall not be treated as an incentive stock
option under Section 422A of the Internal Revenue Code unless this sentence has
been manually lined out and its deletion is followed by the signature of the
corporate officer who signed this Option on behalf of the
Company:__________________________
2. TIMING OF PURCHASES.
Options granted under this plan are not exercisable in any part under this plan
until grantee has completed 1 year of full-time or part-time employment or
association with Company. Options granted under this plan are not exercisable in
any part until one (1) year after the date of grant. Upon the expiration of one
(1) year after the date of grant and subject to the provisions for termination
and acceleration herein, this Option shall become exercisable in installments as
follows:
This Option may not in the aggregate be exercised as to more than one third
(1/3) of the total number of shares optioned until 1 year after the date of
grant.
This Option may not in the aggregate be exercised as to more than two thirds
(2/3) of the total number of shares optioned until 2 years after the date of
grant, in each case to the nearest whole share.
Upon the expiration of three (3) years after the date of grant, this Option may
be exercised as to all option shares for which it had not previously been
exercised. In no event shall this option be exercised more than thirty-six (36)
months from the date of vesting whereupon this Option shall expire and may
thereafter no longer be exercised.
3. RESTRICTIONS ON EXERCISE.
The following additional provisions shall apply to the exercise of this Option:
(A) Termination of Employment or Association. If the Grantee's employment by or
association with the Company or any of its subsidiaries is terminated for any
reason, this Option shall terminate upon such termination of employment or
association.
(B) Death of Grantee. If the Grantee shall die during the term of this Option,
unvested Options shall terminate upon such death; vested options shall pass as
otherwise provided for according to this plan.
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(C) Continuity of Employment or Association. This Option shall not be
exercisable by the Grantee in any part unless at all times beginning with the
date of grant and ending at the date of exercise, the Grantee has, except for
military service leave, sick leave or other bona fide leave of absence (such as
temporary employment by the Government) been in the continuous employ of or
association with the Company or a parent or subsidiary thereof.
(D) Non-Employee participants in this plan may not own any Shares issued
pursuant hereto. Non-Employee participants may participate in equity value
increases only pursuant to the sections hereunder regarding Stock Appreciation
Rights.
4. NON-TRANSFERABLE.
The Grantee may only transfer this Option by will or the laws of descent and
distribution. This Option shall not be transferred, assigned, pledged,
hypothecated or disposed of in any other way, whether by operation of law or
otherwise, and shall vest only during the Grantee's lifetime. This Option may be
exercised only by the Grantee during the term of optionee's employment or
association with Company or by optionee's descendents when optionee fulfilled
all plan obligations during his or her lifetime.
5. ADJUSTMENTS AND CORPORATE REORGANIZATIONS.
Subject to the provisions of the Company's Stock Option Plan under which this
Option is granted, if the outstanding shares of the class then subject to this
Option are increased or decreased, or are changed into or exchanged for a
different number or kind of shares or securities, as a result of one or more
reorganizations, recapitalizations, stock splits, reverse stock splits, stock
dividends or the like, appropriate adjustments shall be made in the number
and/or kind of shares or securities for which the unexercised portions of this
Option may thereafter be exercised, all without any change in the aggregate
exercise price applicable to the unexercised portions of this Option, but with a
corresponding adjustment in the exercise price per share or other unit.
No fractional share of stock shall be issued under this Option or in connection
with any such adjustment. Such adjustments shall be made by or under authority
of the Company's board of directors whose determinations as to what adjustments
shall be made, and the extent thereof, shall be final, binding and conclusive.
Upon the dissolution or liquidation of the Company, or upon a reorganization,
merger or consolidation of the Company as a result of which the outstanding
securities of the class then subject to this Option are changed into or
exchanged for cash or property or securities not of the Company's issue, or upon
a sale of substantially all the property of the Company to, or the acquisition
of stock representing more than eighty percent (80%) of the voting power of the
stock of the Company then outstanding by, another corporation or person, this
Option shall terminate, unless provision be made in writing in connection with
such transaction for the assumption of options theretofore granted under the
Stock Option Plan under which this Option was granted, or the substitution for
such options of any options covering the stock of a successor employer
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices, in which event this Option shall
continue in the manner and under the terms so provided. If this Option shall
terminate pursuant to the foregoing sentence, the Grantee shall have the right,
at such time prior to the consummation of the transaction causing such
termination as the Company shall designate, to exercise the unexercised portions
of this Option, including the portions thereof which would, but for this Section
entitled "Adjustments and Corporate Reorganizations," not yet be exercisable.
6. CHANGES IN CONTROL.
Notwithstanding any other provisions hereof, this Option shall accelerate so
that the Grantee shall have the right, at all times until the expiration or
earlier termination of the Option, including the portions thereof which would,
but for this Section entitled "Changes in Control," not yet be exercisable, to
exercise all options granted, from and after any Involuntary Termination within
six (6) months after a Change in Control that occurs while the Grantee is an
employee of or in association with the Company or any of its subsidiaries after
such six (6) month period said option shall terminate.
7. EXERCISE; PAYMENT FOR AND DELIVERY OF STOCK:
This Option may be exercised by the Grantee or other person then entitled to
exercise it by giving written notice of exercise thirty (30) business days prior
to the start of the following quarter to the Company specifying the number of
shares to be purchased and total purchase price, accompanied by cash or cash
equivalent payable to the order of the
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Company in payment of such price. All such notices must given to Company within
thirty-six (36) months of vesting after such period said option shall terminate.
If the Company is required to withhold on account of any present or future tax
imposed as a result of such exercise, the notice of exercise shall be
accompanied by a check to the order of the Company in payment of the amount of
such withholding.
8. ALTERNATIVE PAYMENT WITH STOCK:
Notwithstanding the foregoing provisions requiring payment by cash or cash
equivalent, payment of such purchase price or any portion thereof may be made
with shares of stock of the same class as the shares then subject to this
Option, if shares of that class are then publicly traded, the stock certificates
evidencing the shares so to be used shall accompany the notice of exercise and
shall be duly endorsed or accompanied by duly executed stock powers to transfer
the same to the Company; provided, however, that such payment in stock instead
of cash shall not be effective and shall be rejected by the Company if (i) the
Company is then prohibited from purchasing or acquiring shares of the class of
its stock thus tendered to it, or (ii) the right or power of the person
exercising the Option to deliver such shares in payment of said purchase price
is subject to the prior interests of any other person (excepting the Company),
as indicated by legends upon the certificate(s) or as known to the Company.
For purposes of this paragraph:
For credit toward the purchase price, shares so surrendered
shall be valued as of the trading day immediately preceding the delivery to the
Company of the certificate(s) evidencing such shares, on the basis of the
closing price of stock of the class as reported with respect to the market in
which such shares are then traded, or if no such closing prices are reported the
lowest independent offer quotation reported therefor or if no such quotations
are reported on the basis of the most nearly comparable valuation method
acceptable to the Company.
If the Company rejects the payment in stock, the tendered
notice of exercise shall not be effective hereunder unless, promptly after being
notified of such rejection, the person exercising the Option pays the purchase
price in acceptable form. If and while payment of the purchase price with stock
is permitted in accordance with the foregoing provisions, the person then
entitled to exercise this Option may, in lieu of using previously outstanding
shares therefor, use some of the shares as to which this Option is then being
excised, in which case the notice of exercise shall include a statement
directing the Company to withhold so many of the shares that would otherwise
have been delivered upon that exercise of this Option as equals the number of
shares that would have been transferred to the Company if the purchase price had
been paid with previously issued stock.
9. RIGHTS IN SHARES BEFORE ISSUANCE AND DELIVERY.
No person shall be entitled to the privileges of stock ownership in respect of
any shares issuable upon exercise of this Option, unless and until such shares
have been issued to such person as fully paid shares.
10. REQUIREMENTS OF LAW AND OF STOCK EXCHANGES.
By accepting this Option, the Grantee represents and agrees for himself and his
transferees by will or the laws of descent and distribution that, unless a
registration statement under the Securities Act 1933 is in effect as to shares
purchased upon any exercise of this Option, (i) any and all shares so purchased
shall be acquired for his personal account and not with a view to or for sale in
connection with any distribution, and (ii) each notice of the exercise of any
portion of this Option shall be accompanied by a representation and warranty in
writing, signed by the person entitled to exercise the same, that the shares are
being so acquired in good faith for his personal account and not with a view to
or for sale in connection with any distribution.
No certificate or certificates for shares of stock purchased upon exercise of
this Option shall be issued and delivered prior to the admission of such shares
to listing or notice of issuance on any stock exchange on which shares of that
class are then listed, nor unless and until, in the opinion of counsel for the
Company, such securities may be issued and delivered without causing the Company
to be in violation of or incur any liability under any federal, state or other
securities law, any requirement of any securities exchange listing agreement to
which the Company may be a party, or any other requirement of law or of any
regulatory body having jurisdiction over the Company.
11. STOCK APPRECIATION RIGHTS.
The Grantee or other person entitled to exercise this Option is further hereby
granted the right ("Stock Appreciation Right") in lieu of exercising this option
or any portion thereof to receive an amount equal to the excess of the Fair
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Market Value (defined below) of the shares subject to this Option or such
portion thereof over the aggregate exercise price for such shares hereunder as
of the date the Stock Appreciation Right is exercised, which in no event shall
be more than nine (9) months after the vesting of such right. Non-employee plan
participants are eligible for equity value increases only pursuant to this
section. The amount payable upon exercise of such Stock Appreciation Right may
be settled by payment in cash or cash equivalent or in shares of the class then
subject to this Option (valued on the basis of their Fair Market Value on the
date the Stock Appreciation Right is exercised), or in a combination of cash or
cash equivalent and such shares so valued.
The Company shall have sole discretion to determine the form of settlement of
such Stock Appreciation Right, upon exercise thereof, although the Grantee or
other person exercising it may, in connection with his exercise thereof,
indicate his preferences subject to the consent or disapproval of the Company.
Notwithstanding the foregoing, no Stock Appreciation Right may be exercised, in
whole or in part:
(A) other than in connection with the contemporaneous surrender without
exercise of this Option or of the portion hereof that corresponds to the
portion of the Stock Appreciation Right being exercised, or
(B) except to the extent that this Option or such portion thereof is
exercisable on the date of the exercise of the Stock Appreciation Right by
the person exercising the Stock Appreciation Right, or
(C) more than 9 months after vesting of the corresponding option, or
(D) unless the class of stock then subject to the corresponding option is
then "publicly traded."
Fair Market Value of shares shall be calculated on the basis of a private
valuation utilizing a generally approved and accepted valuation model as
implemented by the Company for setting the exercise price and the then current
Fair Market Value.
12. RESTRICTED STOCK PROVISIONS.
Shares of stock issued on exercise of this Option shall upon issuance be subject
to the following restrictions:
(A) Such shares of restricted stock may not be sold or otherwise transferred or
hypothecated;
(B) If the employment or association of the Grantee with the Company or a
subsidiary of the Company is terminated for any reason, the Company (or any
subsidiary designated by it) shall have the option for ninety (90) days after
such termination of employment or association to purchase for cash all or any
part of his restricted stock at the Fair Market Value of the restricted stock on
the date of such termination of employment or association (Fair Market Value
shall have the same meaning as it has under paragraph 10 above). The
restrictions imposed under this paragraph shall apply as well to all shares or
other securities issued in respect of restricted stock in connection with any
stock split, reverse stock split, stock dividend, recapitalization,
reclassification, spin-off, split-off, merger, consolidation or reorganization,
but such restrictions shall expire or terminate on the earliest to occur of the
following:
(1) The ninetieth (90th) day after the date on which shares of the same
class of stock as such restricted stock first become Publicly Traded (which
term for this purpose has the same meaning as it has under paragraph 10
above).
(2) The sixth (6th) anniversary of the date of grant hereof.
(3) As to any shares for which the Company's (or a subsidiary's) ninety
(90) day option to purchase upon termination of employment or association
shall have become exercisable but shall expire without having been
exercised, on the first business day of the calendar month next following
the expiration of such ninety (90) day option period.
(4) The occurrence of any event or transaction upon which this Option
terminates by reason of the provisions of paragraph 5 hereof.
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Any certificates evidencing shares of restricted stock may contain such legends
as the Company may deem necessary or advisable to reflect and give effect to the
restrictions imposed thereon hereunder.
13. STOCK OPTION PLAN.
This Option is subject to, and the Company and the Grantee agree to be bound by,
all of the terms and conditions of the Company's Stock Option Plan under which
this Option was granted, as the same shall have been amended from time to time
in accordance with the terms thereof, provided that no such amendment shall
deprive the Grantee, without his consent, of this Option or any of his rights
hereunder. Pursuant to said Plan, the board of directors of the Company is
vested with final authority to interpret and construe the Plan and this Option,
and is authorized to adopt rules and regulations for carrying out the Plan. A
copy of the Plan in its present form is available for inspection during business
hours by the Grantee or other persons entitled to exercise this Option at the
Company's principal office.
14. NOTICES.
Any notice to be given to the Company shall be addressed to the Company in care
of its Secretary at its principal office, and any notice to be given to the
Grantee shall be addressed to him at the address given beneath is signature
hereto or at such other address as the Grantee may hereafter designate in
writing to the company. Any such notice shall be deemed duly given when enclosed
in a properly sealed envelope or wrapper addressed as aforesaid, registered or
certified, and deposited, postage and registry or certification fee prepaid, in
a post office or branch post office.
15. LAWS APPLICABLE TO CONSTRUCTION.
This Agreement has been executed and delivered by the Company in California, and
this Agreement shall be construed and enforced in accordance with the laws of
said State.
IN WITNESS WHEREOF, the Company has granted this Option on the day of grant
specified above.
VERVE, INCORPORATED
By ___________________________________
Title ________________________________
ACCEPTED:
______________________________________
Grantee
______________________________________
Street Address
______________________________________
City, State, Zip
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