EXHIBIT 10.l7
LOYALTYPOINT, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is entered into as of the
___ day of ____________, 200__ (the "Grant Date") between LoyaltyPoint, Inc.
(the "Company") and ____________ (the "Employee").
WHEREAS, by action taken by the board of directors of the Company (the
"Board"), it has adopted the LoyaltyPoint, Inc. 2004 Stock Plan (the "Plan");
and
WHEREAS, by action taken by the Board or Plan Committee, it has been
determined that in order to enhance the ability of the Company to attract and
retain qualified employees, it has granted the Employee the right to purchase
common stock of the Company pursuant to stock options.
NOW THEREFORE, in consideration of the mutual covenants and promises
hereafter set forth and for other good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereto agree as follows:
1. Grant of Non-Qualified Stock Options.
(a) The Company irrevocably grants to the Employee, as a matter of
separate agreement and not in lieu of salary or other compensation for services,
the right and option (the "Options") to purchase all or any part of an aggregate
of ____________ shares of authorized but unissued or treasury common stock of
the Company (the "Shares") on the terms and conditions herein set forth. The
Shares shall be unregistered unless the Company voluntarily files a registration
statement covering such Shares with the Securities and Exchange Commission.
(b) The Options are not intended to qualify as Incentive Stock
Options within the meaning of the Plan or Section 422 of the Internal Revenue
Code of 1986 (the "Code").
(c) This Agreement shall be construed in accordance and consistent
with, and subject to, the provisions of the Plan (the provisions of which are
incorporated herein by reference); provided, however, in the event of any
conflict between the terms of this Agreement and the Plan, the terms of this
Agreement shall govern.
2. Price. The exercise price of the Shares subject to the Options
shall be $___ per share.
3. Vesting-When Exercisable/ Term.
(a) The Options shall vest and become exercisable with respect to
twenty-five percent (25%) of the Shares on the one-year anniversary of the
Option's Grant Date, and thereafter, with respect to six and one-quarter percent
(6.25%) of the Shares on each successive three (3) month anniversary following
the one-year anniversary of the Option's Grant Date (each, a "Vesting Date");
provided, however, the Employee remains employed by the Company or any of its
subsidiaries on each applicable Vesting Date. In lieu of fractional vesting, the
number of Options shall be rounded up each time until fractional Options are
eliminated.
(b) The Options shall be exercisable (subject to the vesting
provisions provided for herein) for a period of five (5) years from the Grant
Date, unless sooner terminated pursuant to this Agreement.
(c) However, notwithstanding any other provision of this Agreement,
all Options, whether vested or unvested shall be immediately forfeited in the
event of:
(1) Termination for cause under any written agreement, or if
there is none, for wrongdoing relating to the Company or any of its subsidiaries
including fraud, theft, dishonesty or violation of Company policy;
(2) Purchasing or selling securities of the Company without
written authorization if required by the Company's inside information guidelines
then in effect or otherwise violating the guidelines;
(3) Breaching any duty of confidentiality to the Company;
(4) Competing with the Company;
(5) Being unavailable for consultation after leaving the
Company's employ if such availability is a condition of any agreement between
the Company and the Employee;
(6) Recruitment of Company personnel after termination of
employment, whether such termination is voluntary or for cause; or
(7) Failure to assign any invention or technology to the
Company if such assignment is a condition of employment or any other agreements
between the Company and the Employee.
4. Termination of Relationship.
(a) If for any reason, except death or disability as provided
below, the Employee ceases to act as an employee of the Company or any of its
subsidiaries, all rights granted hereunder shall terminate effective three (3)
months from the date the Employee ceases to act as an employee, except as
otherwise provided for herein.
(b) If the Employee shall die while an employee of the Company or
any of its subsidiaries, his or her estate or any Transferee, as defined herein,
shall have the right within three (3) months from the date of the Employee's
death to exercise the Employee's vested Options, subject to Section 3(c). For
the purpose of this Agreement, "Transferee" shall mean a person to whom such
Shares are transferred by will or by the laws of descent and distribution.
(c) No transfer of the Options by the Employee 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 letters testamentary or such other evidence as the Board may deem necessary
to establish the authority of the estate and the acceptance by the Transferee or
Transferees of the terms and conditions of the Options.
(d) If the Employee becomes disabled while employed by the Company
within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, the
three (3) month period referred to in Section 4(a) of this Agreement shall be
extended to one year.
(e) Notwithstanding anything contained in this Section 4, an Option
may not be exercised later than the Option's expiration date set forth in
Section 3(b).
5. Profits on the Sale of Certain Shares; Redemption. If any of the
events specified in Section 3(c) of this Agreement occur within one (1) year
from the last date of employment (the "Termination Date") (or such longer period
required by any written employment agreement), all profits earned from the sale
of the Company's securities, including the sale of Shares underlying the
Options, during the two-year period prior to the Termination Date shall be
forfeited and forthwith paid by the Employee to the Company. Further, in such
event, the Company may at its option redeem any Shares acquired upon exercise of
Options which have not been sold. The Company's rights under this Section 5 do
not lapse one (1) year from the Termination Date but are a contract right
subject to any appropriate statutory limitation period.
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6. Method of Exercise. The Options shall be exercisable by a written
notice which shall:
(a) state the election to exercise the Options, the number of
Shares for which the Options are being exercised, the person in whose name the
stock certificate or certificates for such Shares is to be registered, his or
her address and social security number (or if more than one, the names,
addresses and social security numbers of such persons);
(b) contain such representations and agreements as to the holder's
investment intent with respect to such Shares as set forth in Section 11 hereof;
(c) be signed by the person or persons entitled to exercise the
Options and, if the Options are being exercised by any person or persons other
than the Employee, be accompanied by proof, satisfactory to counsel for the
Company, of the right of such person or persons to exercise the Options; and
(d) be accompanied by full payment of the purchase or exercise
price therefore in United States dollars by check or wire transfer.
The certificate or certificates for Shares as to which the Options
shall be exercised shall be registered in the name of the person or persons
exercising the Options.
7. Sale of Shares Acquired Upon Exercise of Options. Any Shares
acquired pursuant to Options granted hereunder can be publicly sold by the
Employee in compliance with the Securities Act of 1933 (the "Securities Act"),
subject to effectiveness of a Form S-8 which is anticipated to be filled with
the Securities Exchange Commission on or after the filing of the Form 10-KSB for
the year ended December 31, 2004.
8. Anti-Dilution Provisions. The Options granted hereunder shall have
the anti-dilution rights set forth in the Plan.
9. Necessity to Become Holder of Record. Neither Employee nor his or
her estate, as provided in Section 4(c), shall have any rights as a stockholder
with respect to any Shares covered by the Options until such person shall have
become the holder of record of such Shares. No adjustment shall be made for cash
dividends or cash distributions, ordinary or extraordinary, in respect of such
Shares for which the record date is prior to the date on which he or she shall
become the holder of record thereof.
10. Reservation of Right to Terminate Relationship. Nothing contained
in this Agreement shall restrict the right of the Company to terminate the
relationship of the Employee at any time, with or without cause. The termination
of the relationship of the Employee by the Company, regardless of the reason
therefor, shall have the results provided for in Sections 4 and 5 of this
Agreement.
11. Conditions to Exercise of Options. In order to enable the Company
to comply with the Securities Act and relevant state law, the Company may
require the Employee, his or her estate, or any Transferee, as a condition of
the exercising of the Options granted hereunder, to give written assurance
satisfactory to the Company that the Shares subject to the Options are being
acquired for his or her own account, for investment only, with no view to the
distribution of same, and that any subsequent resale of any such Shares either
shall be made pursuant to a registration statement under the Securities Act and
applicable state law which has become effective and is current with regard to
the Shares being sold, or shall be pursuant to an exemption from registration
under the Securities Act and applicable state law.
The Options are subject to the requirement that, if at any time the
Board shall determine, in its discretion, that the listing, registration, or
qualification of the Shares subject to the Options upon any securities exchange
or trading market or under any state or federal law, or the consent or approval
of any governmental regulatory body, is necessary as a condition of, or in
connection with the issue of Shares underlying the Options, the Options may not
be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected.
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12. Acceleration of Vesting. Notwithstanding anything contained herein
to the contrary, the Employee shall fully vest in and have the right to exercise
the Options in the event of a Change in Control. For purposes of this Section, a
"Change in Control" is the sale, conveyance or disposition (in one or a series
of related transactions) of all or substantially all of the assets of the
Company, or a direct or indirect consolidation or merger of the Company with or
into any other corporate entity or corporate entities; provided, however, that a
consolidation or merger of the Company shall not be deemed to be a Change in
Control if (i) the other party (or, if more than one, one of the other parties)
to such transaction is a controlled affiliate of the Company or (ii) following
completion of the transaction, the holders of capital stock of the Company
immediately prior to the transaction own shares of the surviving corporate
entity, which represent a majority of the voting power of the surviving
corporate entity (it being understood that for purposes of this Section 12, the
phrase "majority of the voting power" of a corporate entity shall mean a
majority of all of the then outstanding capital stock of the corporate entity
having voting power).
13. Duties of Company. The Company shall at all times during the term
of Options:
(a) Reserve and keep available for issue such number of shares of
its authorized and unissued Shares as will be sufficient to satisfy the
requirements of this Agreement;
(b) Pay all original issue taxes with respect to the issue of
Shares pursuant hereto and all other fees and expenses necessarily incurred by
the Company in connection therewith;
(c) Use its best efforts to comply with all laws and regulations
which, in the opinion of counsel for the Company, shall be applicable thereto.
14. Parties Bound by Plan. The Plan and each determination,
interpretation or other action made or taken pursuant to the provisions of the
Plan shall be final and shall be binding and conclusive for all purposes on the
Company and the Employee and his or her respective successors in interest. This
Agreement may be amended by the Board or Plan Committee, in its sole discretion,
to provide more favorable terms to the Employee, subject to the terms and
conditions of the Plan.
15. Severability. In the event any parts of this Agreement are found to
be void, the remaining provisions of this Agreement shall nevertheless be
binding with the same effect as though the void parts were deleted.
16. Arbitration. Any controversy, dispute or claim arising out of or
relating to this Agreement, or its interpretation, application, implementation,
breach or enforcement which the parties are unable to resolve by mutual
agreement, shall be settled by submission by either party of the controversy,
claim or dispute to binding arbitration in Atlanta, Georgia (unless the parties
agree in writing to a different location), before a single arbitrator in
accordance with the rules of the American Arbitration Association then in
effect. The decision and award made by the arbitrator shall be final, binding
and conclusive on all parties hereto for all purposes, and judgment may be
entered thereon in any court having jurisdiction thereof.
17. Benefit. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their legal representatives, successors and
assigns.
18. Notices and Addresses. All notices, offers, acceptance and any
other acts under this Agreement (except payment) shall be in writing, and shall
be sufficiently given if delivered to the addressees in person, by Federal
Express or similar receipted delivery, or by facsimile delivery as follows:
The Employee:
--------------------------
--------------------------
--------------------------
Facsimile:
---------------
The Company: LoyaltyPoint, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
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or to such other address as either of them, by notice to the other may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be evidence of successful facsimile delivery. Time shall
be counted to, or from, as the case may be, the delivery in person or by
mailing.
19. Attorney's Fees. In the event that there is any controversy or
claim arising out of or relating to this Agreement, or to the interpretation,
breach or enforcement thereof, and any action or proceeding is commenced to
enforce the provisions of this Agreement, the prevailing party shall be entitled
to a reasonable attorney's fee, costs and expenses.
20. Governing Law. This Agreement and any dispute, disagreement, or
issue of construction or interpretation arising hereunder whether relating to
its execution, its validity, the obligations provided herein or performance
shall be governed or interpreted according to the internal laws of the State of
Delaware without regard to choice of law considerations.
21. Oral Evidence. This Agreement constitutes the entire Agreement
between the parties and supersedes all prior oral and written agreements between
the parties hereto with respect to the subject matter hereof. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, except by a statement in writing signed by the party or
parties against which enforcement or the change, waiver discharge or termination
is sought.
22. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Agreement may be by actual or facsimile signature.
23. Additional Documents. The parties hereto shall execute such
additional instruments as may be reasonably required by their counsel in order
to carry out the purpose and intent of this Agreement and to fulfill the
obligations of the parties hereunder.
24. Section or Paragraph Headings. Section headings herein have been
inserted for reference only and shall not be deemed to limit or otherwise
affect, in any matter, or be deemed to interpret in whole or in part any of the
terms or provisions of this Agreement.
IN WITNESS WHEREOF the parties hereto have set their hand and seals the
day and year first above written.
WITNESSES: LOYALTYPOINT, INC.
By:
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Xxxx Xxxxxxxx,
Chief Executive Officer
EMPLOYEE
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