STOCK OPTION AGREEMENT
AGREEMENT made as of this 7th day of May, 2001 (the "Date of Grant")
between iJoin Systems, Inc., a Delaware corporation (the "Company"), and
_______________________ (the "Optionee").
W I T N E S S E T H:
WHEREAS, since April 20, 2001, the Optionee has made himself or
herself available to the Company, as an independent contractor and at his or her
election, to perform such services as may be reasonably requested by the Company
from time to time in connection with its business operations (collectively, the
"Services");
WHEREAS, in recognition of and in full and complete compensation for
the performance of any Services rendered or to be rendered by the Optionee to
the Company from time to time in his or her capacity as an independent
contractor, the Company wishes to grant to the Optionee, and the Optionee agrees
to receive as payment in full by the Company for the performance of any such
Services, an option to purchase up to an aggregate of ___________ shares of the
common stock, $.0001 par value, of the Company (the "Common Stock"), in
accordance with the Company's 2001 Stock Option Plan (the "Plan") and upon the
terms and conditions set forth herein.
NOW, THEREFORE, for and in consideration of the performance of
Services as well as the premises, mutual covenants herein set forth and other
good and valuable consideration, the Company and the Optionee hereby agree as
follows:
1. Confirmation of Grant of Option. Pursuant to a determination by the
Committee, the Company, subject to the terms of the Plan and this Agreement,
hereby grants to the Optionee, as compensation for the Services, the right to
purchase (the "Option") an aggregate of __________ shares of Common Stock,
subject to adjustment as provided in the Plan (such shares, as adjusted,
hereinafter being referred to as the "Shares"). The Option is not intended to
qualify as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), and accordingly, the Optionee is urged to
consult with its individual tax advisor prior to exercising the Option since the
exercise of the Option may result in adverse tax consequences including the
payment of additional federal and/or state income taxes.
2. Purchase Price. The purchase price of shares of Common Stock
covered by the Option will be $_____ per share, subject to adjustment as
provided in the Plan.
3. Exercise of Option. Subject to all of the terms and conditions of
this Agreement and the Plan, the right to purchase shares under the Option shall
vest as to all of the Shares as of the Date of Grant. The Option may be
exercised pursuant to the provisions of this Section 3, by notice and payment to
the Company as provided in Sections 9 and 17 hereof.
4. Term of Option. The term of the Option shall be a period of ten
(10) years (minus one day) from the Date of Grant, subject to earlier
termination or cancellation as provided
in this Agreement. This Option, to the extent unexercised, shall expire on the
day immediately prior to the tenth (10th) anniversary of the Date of Grant. The
holder of the Option shall not have any rights to dividends or any other rights
of a stockholder with respect to any shares of Common Stock subject to the
Option until such shares shall have been issued to him (as evidenced by the
appropriate entry on the books of the Company or a duly authorized transfer
agent of the Company) provided that the date of issuance shall not be earlier
than the date this Option is exercised and payment of the full purchase price of
the shares of Common Stock (with respect to which this Option is exercised) is
made to the Company.
5. Non-transferability of Option. The Option shall not be assigned,
transferred or otherwise disposed of, or pledged or hypothecated in any way, and
shall not be subject to execution, attachment or other process, except as may be
provided in the Plan. Any assignment, transfer, pledge, hypothecation or other
disposition of the Option attempted contrary to the provisions of the Plan, or
any levy of execution, attachment or other process attempted upon the Option,
will be null and void and without effect. Any attempt to make any such
assignment, transfer, pledge, hypothecation or other disposition of the Option
will cause the Option to terminate immediately upon the happening of any such
event; provided, however, that any such termination of the Option under the
foregoing provisions of this Section 5 will not prejudice any rights or remedies
which the Company or any Parent or Subsidiary may have under this Agreement or
otherwise.
6. Exercise Upon Cessation of Service. If the Optionee at any time
ceases to be an Employee or director of or Consultant to the Company and of any
Parent or Subsidiary by reason of his discharge for Good Cause, then the Option
shall, at the time of such termination of service, terminate and the Optionee
shall forfeit all rights hereunder. If, however, the Optionee ceases to be an
Employee, director or Consultant for any reason other than as provided in the
immediately preceding sentence, the Option may, subject to the provisions of
Section 5 hereof, be exercised by the Optionee to the same extent the Optionee
would have been entitled under Section 3 hereof to exercise the Option
immediately prior to such cessation provided, at any time within three (3)
months after such cessation of service, at the end of which period the Option,
to the extent not then exercised, shall terminate and the Optionee shall forfeit
all rights hereunder, even if the Optionee subsequently returns as an Employee,
director or Consultant of the Company or any Parent or Subsidiary. In no event,
however, may the Option be exercised after the expiration of the term provided
in Section 4 hereof.
7. Exercise Upon Death or Disability. (a) If the Optionee dies while
the Optionee is providing services and on or after the first date upon which the
Optionee would have been entitled to exercise the Option under the provisions of
Section 3 hereof, the Option may, subject to the provisions of Section 5 hereof,
be exercised (to the same extent the Optionee would have been entitled under
Section 3 hereof to exercise the Option immediately prior to the Optionee's
death), by the estate of the Optionee (or by the person or persons who acquire
the right to exercise the Option by written designation of the Optionee) at any
time within one (1) year after the death of the Optionee, at the end of which
period the Option, to the extent not then exercised, shall terminate and the
estate or other beneficiaries shall forfeit all rights hereunder. In no event,
however, may the Option be exercised after the expiration of the term provided
in Section 4 hereof.
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(b) In the event that the Optionee is terminated by the Company
and any Parent or Subsidiary due to the Disability of the Optionee, the Option
may, subject to the provisions of Section 5 hereof, be exercised (to the same
extent the Optionee would have been entitled under Section 3 hereof to exercise
the Option immediately prior to his termination due to Disability) by the
Optionee within the period ending one (1) year after the date of such
termination, at the end of which period the Option, to the extent not then
exercised, shall terminate and the Optionee shall forfeit all rights hereunder
even if the Optionee subsequently provides services to the Company. In no event,
however, may the Option be exercised after the expiration of the term provided
in Section 4 hereof.
8. Registration. At the time of issuance, the shares of Common Stock
subject hereto and issuable upon the exercise hereof may not be registered under
the Securities Act of 1933, as amended, and, if required upon the request of
counsel to the Company, the Optionee will give a representation as to his
investment intent with respect to such shares prior to their issuance as set
forth in Section 9 hereof. The Company may register or qualify the shares
covered by the Option for sale pursuant to the Securities Act of 1933, as
amended, at any time prior to or after the exercise in whole or in part of the
Option.
9. Method of Exercise of Option. (a) Subject to the terms and
conditions of this Agreement, the Option shall be exercisable by notice in the
manner set forth in Exhibit A hereto (the "Notice") and provision for payment to
the Company in accordance with the procedure prescribed herein. Each such Notice
shall:
(i) state the election to exercise the Option and the number of
Shares with respect to which it is being exercised;
(ii) contain a representation and agreement as to investment
intent, if required by counsel to the Company with respect to such Shares, in a
form satisfactory to counsel to the Company;
(iii) reaffirm the release provisions contained in Section 15
hereof as true and correct as of the exercise date of the Option;
(iv) be signed by the Optionee or the person or persons entitled
to exercise the Option and, if the Option is being exercised by any person or
persons other than the Optionee, be accompanied by proof, satisfactory to
counsel to the Company, of the right of such other person or persons to exercise
the Option;
(v) include payment of the full purchase price for the shares of
Common Stock to be purchased pursuant to such exercise of the Option; and
(vi) be received by the Company on or before the date of the
expiration of this Option. In the event the date of expiration of this Option
falls on a day which is not a regular business day at the Company's executive
office, then such written Notice must be received at such office on or before
the last regular business day prior to such date of expiration.
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(b) Payment of the purchase price of any shares of Common Stock,
in respect of which the Option shall be exercised, shall be made by the Optionee
or such person or persons at the place specified by the Company on the date the
Notice is received by the Company (i) by delivering to the Company a certified
or bank cashier's check payable to the order of the Company or (ii) if consented
to by the Company in writing, by delivering to the Company properly endorsed
certificates of shares of Common Stock (or certificates accompanied by an
appropriate stock power) with signature guaranties by a bank or trust company,
or (iii) if consented to by the Company in writing, by a concurrent sale of a
portion of the shares of Common Stock to be acquired upon the exercise of this
Option to the extent permitted upon delivery by the Optionee of a properly
executed notice, together with a copy of the Optionee's irrevocable instructions
to a broker acceptable to the Company to sell all or a portion of such shares of
Common Stock and deliver promptly to the Company the amount of sale or loan
proceeds sufficient to pay such exercise price; provided, that, in connection
therewith, the Company may enter into agreements for coordinated procedures with
one or more brokerage firms, or (iv) by any combination of the foregoing. For
purposes of the immediately preceding sentence, an exercise effected by the
tender of Common Stock (or deemed to be effected by the tender of Common Stock)
may only be consummated with Common Stock held by the Optionee for a period of
six (6) months.
(c) The Option shall be deemed to have been exercised with
respect to any particular shares of Common Stock if, and only if, the preceding
provisions of this Section 9 and the provisions of Section 10 hereof shall have
been complied with, in which event the Option shall be deemed to have been
exercised on the date the Notice and related payment were received by the
Company. Anything in this Agreement to the contrary notwithstanding, any Notice
given pursuant to the provisions of this Section 9 shall be void and of no
effect if all of the preceding provisions of this Section 9 and the provisions
of Section 10 shall not have been complied with.
(d) The certificate or certificates for shares of Common Stock as
to which the Option shall be exercised will be registered in the name of the
Optionee (or in the name of the Optionee's estate or other beneficiary if the
Option is exercised after the Optionee's death), or if the Option is exercised
by the Optionee and if the Optionee so requests in the notice exercising the
Option, will be registered in the name of the Optionee and another person
jointly, with right of survivorship and will be delivered as soon as practical
after the date the Notice is received by the Company (accompanied by full
payment of the exercise price), but only upon compliance with all of the
provisions of this Agreement.
(e) If the Optionee fails to accept delivery of and pay for all
or any part of the number of Shares specified in such Notice, his right to
exercise the Option with respect to such undelivered Shares may be terminated in
the sole discretion of the Committee. The Option may be exercised only with
respect to full Shares.
(f) The Company shall not be required to issue or deliver any
certificate or certificates for shares of its Common Stock purchased upon the
exercise of any part of the Option prior to the payment to the Company, upon its
demand, of any amount requested by the Company for the purpose of satisfying its
liability, if any, to withhold federal, state or local income or earnings tax or
any other applicable tax or assessment (plus interest or penalties
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thereon, if any, caused by a delay in making such payment) incurred by reason of
the exercise of this Option or the transfer of shares thereupon. Such payment
shall be made by the Optionee in cash or, with the written consent of the
Company, by tendering to the Company shares of Common Stock equal in value to
the amount of the required withholding. In the alternative, the Company may, at
its option, satisfy such withholding requirements by withholding from the shares
of Common Stock to be delivered to the Optionee pursuant to an exercise of the
Option a number of shares of Common Stock equal in value to the amount of the
required withholding.
10. Approval of Counsel. The exercise of the Option and the issuance
and delivery of shares of Common Stock pursuant thereto shall be subject to
approval by the Company's counsel of all legal matters in connection therewith,
including, but not limited to, compliance with the requirements of the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, and the requirements of any
stock exchange or automated trading medium upon which the Common Stock may then
be listed or traded.
11. Resale of Common Stock. (a) If so requested by the Company, upon
any sale or transfer of the Common Stock purchased upon exercise of the Option
(subject to the provisions of Section 11(c) hereof), the Optionee shall deliver
to the Company an opinion of counsel satisfactory to the Company to the effect
that either (i) the Common Stock to be sold or transferred has been registered
under the Securities Act of 1933, as amended, and that there is in effect a
current prospectus meeting the requirements of Section 10(a) of said Act which
is being or will be delivered to the purchaser or transferee at or prior to the
time of delivery of the certificates evidencing the Common Stock to be sold or
transferred, or (ii) such Common Stock may then be sold pursuant to an exemption
from registration requirements or otherwise without violating Section 5 of said
Act.
(b) The Common Stock issued upon exercise of the Option shall
bear the following (or similar) legend if required by counsel for the Company:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES
LAWS AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF UNLESS (i) REGISTERED UNDER
SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES
LAWS OR (ii) iJOIN SYSTEMS, INC., A DELAWARE
CORPORATION (THE "COMPANY"), SHALL HAVE RECEIVED FROM
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, AN
OPINION, IN FORM, SCOPE AND SUBSTANCE REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION OF SUCH
SHARES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.
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(c) The Optionee hereby agrees that, if so requested by the
Company or any representatives of the underwriters (the "Managing Underwriter")
in connection with any registration of the offering of any securities of the
Company under the Securities Act, the Optionee shall not sell or otherwise
transfer any shares of Common Stock or other securities of the Company during
the six (6) month period (or such longer or shorter period as may be requested
in writing by the Managing Underwriter and agreed to in writing by the Company )
(the "Market Standoff Period") following the effective date of a registration
statement of the Company filed under the Securities Act. Such registration shall
apply only to the first registration statement of the Company to become
effective under the Securities Act that includes securities to be sold on behalf
of the Company to the public in an underwritten public offering under the
Securities Act. The Company may impose stop-transfer instructions with respect
to securities subject to the foregoing restrictions until the end of such Market
Standoff Period.
12. Reservation of Shares. The Company shall at all times during the
term of the Option reserve and keep available such number of shares of the
Common Stock as will be sufficient to satisfy the requirements of this
Agreement.
13. Independent Contractor. Nothing contained in this Agreement shall
constitute the Optionee as an employee or agent of the Company; it being
acknowledged and agreed by the parties that the Optionee shall perform the
Services as an independent contractor and shall not have the authority to
obligate, commit or act on behalf of the Company in any manner whatsoever. The
Company shall make no deductions or withholdings from any payments due to the
Optionee hereunder for federal, state or local income tax purposes and the
Optionee shall be responsible for any and all taxes and other payments due on
the Option and the underlying Shares granted under this Agreement.
14. Continuation of Services. Nothing contained in this Agreement
shall be construed as (a) a contract of employment between the Optionee and the
Company or any Parent or Subsidiary, (b) as a right of the Optionee to be
engaged or continued as a Service provider by the Company or by any Parent or
Subsidiary, or (c) as a limitation of the right of the Company or of any Parent
or Subsidiary to discharge or not engage the Optionee as a Service provider at
any time, with or without cause.
15. Release. As an additional incentive to the Company to grant
fully-vested Options and to engage the Optionee from time to time as a Service
provider, the Optionee hereby fully and forever waives, releases, discharges and
promises never to assert against the Company and its predecessors, subsidiaries,
parent and related entities, officers, directors, shareholders, agents,
attorneys, employees, successors or assigns, any and all claims for liability,
obligations, damages or losses (collectively "Claims"), whether presently known
or unknown, that the Optionee ever had, might have had or now have or hereafter
can, shall or may, have arising from or by reason of any relationship between
the Company and the Optionee at, and/or the performance of the Services from,
any time prior to the date of this Agreement or the date of any subsequent
reaffirmation of this release pursuant to Section 9 hereof. These Claims
include, but are not limited to, (i) any Claims for wages, severance pay,
bonuses, accrued vacation, personal days, holidays, sick days, stock, stock
options, attorneys fees, costs or expenses; (ii) all Claims arising under any
agreement, understanding, promise or contract (express or implied, oral or
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written) between the Optionee and the Company; and (iii) all Claims arising
under any federal, state and local statutory or common law and the laws of
contract and tort.
16. Limitation of Action. The Optionee and the Company each
acknowledges that every right of action accruing to him or it, as the case may
be, and arising out of or in connection with this Agreement against the Company
or a Parent or Subsidiary, on the one hand, or against the Optionee, on the
other hand, shall, irrespective of the place where an action may be brought,
cease and be barred by the expiration of three years from the date of the act or
omission in respect of which such right of action arises.
17. Notices. Each notice relating to this Agreement shall be in
writing and delivered in person, by recognized overnight courier or by certified
mail to the proper address. All notices to the Company or the Committee shall be
addressed to them at 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000,
Attn: President, or to such other address as may be designated for such purpose
by the Company from time to time by notice given in the manner herein provided.
All notices to the Optionee shall be addressed to the Optionee or such other
person or persons at the Optionee's address above specified. Anyone to whom a
notice may be given under this Agreement may designate a new address by notice
to that effect.
18. Benefits of Agreement. This Agreement shall inure to the benefit
of the Company, the Optionee and their respective heirs, executors,
administrators, personal representatives, successors and assigns.
19. Severability. In the event that any one or more provisions of this
Agreement shall be deemed to be illegal or unenforceable, such illegality or
unenforceability shall not affect the validity and enforceability of the
remaining legal and enforceable provisions hereof, which shall be construed as
if such illegal or unenforceable provision or provisions had not been inserted.
If one or more of the provisions contained in this Agreement is held to be
excessively broad as to duration, scope or subject, such provisions will be
construed by limiting them so as to be enforceable to the maximum extent
compatible with applicable law.
20. Governing Law. This Agreement will be construed and governed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of law rules thereof.
21. Definitions. Unless otherwise defined herein, all capitalized
terms used in this Agreement shall have the same definitions as set forth in the
Plan.
22. Incorporation of Recitals. The recitals contained in this
Agreement are hereby incorporated and made a part of this Agreement; it being
acknowledged and agreed by the parties hereto that the Company, in granting the
Option, has relied upon (and it is of the essence of this Agreement) that the
Optionee is an independent contractor and accepts the Options in full and
complete consideration for the Services.
23. Incorporation of Terms of Plan. This Agreement shall be
interpreted under, and subject to, all of the terms and provisions of the Plan,
which are incorporated herein
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by reference. In the event of any conflict between the provisions of this
Agreement and the express requirements of the Plan, the requirements of the Plan
shall control. This Agreement and the Plan together constitute the entire
understanding between the Optionee and the Company regarding the Option, and any
prior agreements, commitments or negotiations concerning the Option are hereby
superseded. No provision of this Option may be amended, modified or waived,
except in writing signed by all of the parties hereto.
24. Entire Agreement. This Agreement (a) contains the entire agreement
of the parties, and supersedes all prior agreements and understandings, oral or
otherwise, between the parties, with respect to the granting of Options to
Optionee and other matters contained herein
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Date of Grant set forth above.
iJoin Systems, Inc.
By:________________________________
Name:
Title:
___________________________________
[Name of Optionee]
Address: __________________________
___________________________________
___________________________________
___________________________________
(Social Security Number)
EXHIBIT A
STOCK OPTION EXERCISE FORM
[DATE]
iJoin Systems, Inc.
___________________
___________________
Attn: ________________
Dear Sirs:
Pursuant to the provisions of the Stock Option Agreement dated May 7,
2001 (the "Agreement"), whereby you have granted to me a non-qualified option
(the "Option") to purchase up to [ ] shares of the Common Stock of iJoin
Systems, Inc. (the "Company") subject to the terms of the Agreement, I hereby
notify you that (a) I elect to exercise my option to purchase [ ] of the shares
of Common Stock covered by such Option at the $1.00 per share price specified
therein and (b) I reaffirm as of the date hereof the release provisions set
forth in Section 15 of the Agreement. In full payment of the price for the
shares being purchased hereby, I am delivering to you herewith (i) certified or
bank cashier's check payable to the order of the Company in the amount of
$____________,1 or (ii) a certificate or certificates for [ ] shares of Common
Stock of the Company, and which have a fair market value as of the date hereof
of $___________, [and a certified or bank cashier's check, payable to the order
of the Company, in the amount of $________________].2 Any such stock certificate
or certificates are endorsed, or accompanied by an appropriate stock power, to
the order of the Company, with my signature guaranteed by a bank or trust
company or by a member firm of the New York Stock Exchange. I hereby acknowledge
that I am purchasing these shares for investment purposes only and not for
resale in violation of any federal or state securities laws.
Very truly yours,
----------------------------------------
[Address]
(For notices, reports, dividend checks
and other communications to
stockholders.)
----------------
1 $____________ of this amount is the purchase price of the shares, and the
balance represents payment of withholding taxes as follows: Federal
$____________, State $___________ and Local $___________
2 $___________ of this amount is at least equal to the current market value
of one share of Common Stock of the Company, and the balance represents
payment of withholding taxes as follows: Federal $___________, State
$___________ and Local $___________.
