Exhibit 10.4(a)
XXXXXXXX ADVISORS, INC.
2001 OMNIBUS PLAN
OPTION AWARD AGREEMENT FOR KEY EMPLOYEES
THIS AGREEMENT is made and entered into as of the date set
forth on the signature page hereof by and between XXXXXXXX ADVISORS, INC., a
California corporation ("Company"), and the Key Employee of the Company whose
signature is set forth on the signature page hereof (the "Key Employee").
W I T N E S S E T H
WHEREAS, the Company has adopted the Xxxxxxxx Advisors, Inc.
2001 Omnibus Plan ("Plan"), the terms of which, to the extent not stated herein,
are specifically incorporated by reference in this Agreement;
WHEREAS, the purpose of the Plan is to permit Awards under the
Plan to be granted to certain Key Employees of the Company and its Affiliates
and to further specify the terms and conditions under which such individuals may
receive such Awards;
WHEREAS, the Key Employee is now employed or engaged by the
Company or an Affiliate in a key employee capacity and the Company desires him
or her to remain in such capacity, and to secure or increase his or her
ownership of Shares in order to increase his or her incentive and personal
interest in the success and growth of the Company; and
WHEREAS, defined terms used herein and not otherwise defined
herein shall have the meanings set forth in the Plan.
NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements herein set forth, the parties hereby mutually covenant
and agree as follows:
1. Option Grant.
(a) Grant. Subject to the terms and conditions set
forth herein, the Company hereby grants to the Key Employee an option (the
"Option") to purchase from the Company all or any part of the aggregate number
of Shares (hereinafter referred to as the "Option Stock") set forth on the
signature page hereof, at the purchase price per Share set forth on the
signature page hereof.
(b) Term. The Option may not be exercised prior to
the Initial Exercise Date set forth on the signature page hereof or after the
Expiration Date set forth thereon, except that other than as provided herein,
the Option shall not be exercisable after the termination of the Key Employee's
employment with the Company and all Affiliates. Absence of the Key Employee on
leave approved by a duly appointed and acting officer of the
Company, other than the Key Employee, shall not be considered a termination of
employment during the period of such leave.
(c) Exercise Amount. The Option may be exercised in
whole or in part (but no exercise shall be for fewer than 25 Shares or all of
the Shares subject to the Option, if fewer) by notice in writing to the Company.
(d) Payment for Shares. The aggregate purchase price
for the Shares for which the Option is exercised shall be paid to the Company at
the time of exercise in cash, Shares registered in the name of the Key Employee,
or by a combination thereof, all as provided on the signature page hereof,
however, Board approval shall be required in order for shares held by a
participant for fewer than six months to be used in payment of the exercise
price of an Option. If the purchase price may be paid wholly or partly in
Shares, any Shares tendered in payment thereof shall be free of all adverse
claims and duly endorsed in blank by the Key Employee or accompanied by stock
powers duly endorsed in blank. Shares tendered shall be valued at Fair Market
Value on the date on which the Option is exercised. As used herein, "Fair Market
Value" means the per Share closing price on the date in question in the
principal market in which the Shares are then traded or, if no sales of Shares
have taken place on such date, the closing price on the most recent date on
which selling prices were quoted; provided, however, that for any Option that is
not an Incentive Stock Option, the Committee in its discretion may elect to
determine Fair Market Value with respect to such Shares, based on the average of
the closing prices, as of the date of determination and a period of up to 20
trading days immediately preceding such date. If such proviso is to be
applicable, the signature page hereof sets forth the number of trading days in
such period.
(e) ISO/NSO. Unless otherwise provided on the
signature page hereof, the Option shall not be an Incentive Stock Option for
purposes of Section 422 of the Code.
(f) Reload Feature. Unless otherwise provided on
the signature page hereof, the Option shall not have the "reload feature"
described in Section 6.1 of the Plan, as of the date of grant.
2. Nontransferability of Option. This Option is not
transferable other than by will or by the laws of descent and distribution. The
Option may be exercised during the life of the Key Employee only by the Key
Employee, except as otherwise expressly set forth in Section 4(b) below.
3. Securities Law Restrictions. The Key Employee agrees and
acknowledges for himself/herself and his/her heirs, legatees and legal
representatives, with respect to all Option Stock (or any shares of stock issued
pursuant to a stock dividend or stock split thereon or any securities issued in
lieu thereof or in substitution or exchange therefor), that he/she and his/her
heirs, legatees and legal representatives will not sell or otherwise dispose of
such shares except pursuant to an effective registration statement under the
Securities Act of 1933 (the "Act") and applicable state securities laws, or
except in a transaction which, in the opinion of counsel for the Company, is
exempt from registration under the Act and applicable state securities laws.
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As further conditions to the issuance of the Option Stock, the Key Employee
agrees for himself/herself, and his/her heirs, legatees and legal
representatives, prior to such issuance, to (i) execute and deliver to the
Company such investment representations and warranties, and to take such other
actions, as counsel for the Company determines may be necessary or appropriate
for compliance with the Act and any applicable state securities laws, and
(ii) execute and thereby become a party to any stock restriction agreement then
in effect among the Company and its other shareholders. The Key Employee agrees
that any certificate representing Option Stock shall bear the following legend
(or such other legend of similar effect as Company may determine):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR QUALIFIED UNDER THE APPLICABLE STATE SECURITIES
LAWS, AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
THE ACT, PURSUANT TO RULE 144 OR PURSUANT TO AN OPINION OF
COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT, AND SUCH
QUALIFICATION IS NOT REQUIRED UNDER APPLICABLE STATE
SECURITIES LAWS.
4. Exercise of Option.
(a) Except as provided herein, the Option shall be
exercisable only (i) prior to the Expiration Date, and (ii) after the date that
escrow is first released with respect to completion of an initial public
offering of a minimum offering amount of 450,000 of the Company's shares of
common stock.
(b) If the Key Employee's employment with the
Company and all Affiliates is terminated because of death, Retirement or Total
Disability (as such terms are defined below) on or after the Initial Exercise
Date, the Key Employee or, in the case of his death, his Beneficiary (as defined
herein) shall be entitled to exercise the Option, in the full amount granted
until the Expiration Date.
(c) As used herein, (i) "Retirement" means
termination of employment with the Company and all Affiliates as defined by
Company policies as in effect from time to time, except that if the Key
Employee's employment is terminated for Cause (as hereinafter defined) or
because of death or Total Disability, such termination shall not be "Retirement"
for purposes hereof, and (ii) "Total Disability" means permanent and total
disability within the meaning of Code Section 22(e)(3).
(d) If the Key Employee's employment with the
Company is terminated on or after the Initial Exercise Date for any reason other
than Cause (as defined below), the Key
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Employee shall be entitled to exercise the Option, to the extent exercisable
pursuant to paragraph (a), above (i) until 6 months after such termination of
employment if due to death or Total Disability and (ii) until 3 months after
such termination of employment if such termination is not due to death or Total
Disability. If such a termination of employment occurs prior to the Initial
Exercise Date, the Key Employee shall be entitled to exercise the Option to the
extent, if any, as the Committee may determine.
(e) As used herein, "Cause" means, as determined by
the Committee, the Key Employee's failure to perform his duties or intentional
dishonest or illegal conduct in connection with his performance of services for
the Company or any Affiliate.
(f) If the Key Employee's employment with the
Company is terminated for Cause, the Key Employee shall have no right to
exercise any portion of any Option not yet exercised as of the date of such
termination for Cause.
5. Beneficiary.
(a) The person whose name appears on the signature
page hereof after the caption "Beneficiary" or any successor designated by the
Key Employee in accordance herewith (the person who is the Key Employee's
Beneficiary at the time of his death herein referred to as the "Beneficiary")
shall be entitled to exercise the Option, to the extent it is exercisable, after
the death of the Key Employee. The Key Employee may from time to time revoke or
change his Beneficiary without the consent of any prior Beneficiary by filing a
new designation with the Committee. The last such designation received by the
Committee shall be controlling; provided, however, that no designation, or
change or revocation thereof, shall be effective unless received by the
Committee prior to the Key Employee's death, and in no event shall any
designation be effective as of a date prior to such receipt.
(b) If no such Beneficiary designation is in effect
at the time of a Key Employee's death, or if no designated Beneficiary survives
the Key Employee or if such designation conflicts with law, the Key Employee's
estate shall be entitled to exercise the Option, to the extent it is exercisable
after the death of the Key Employee. If the Committee is in doubt as to the
right of any person to exercise the Option, the Company may refuse to recognize
such exercise, without liability for any interest or dividends on the Option
Stock, until the Committee determines the person entitled to exercise the
Option, or the Company may apply to any court of appropriate jurisdiction and
such application shall be a complete discharge of the liability of the Company
therefor.
6. No Rights As Stockholder.
The Key Employee shall have no rights as a holder of the
Option Stock until the issuance of a certificate for the Option Stock.
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7. Tax Withholding.
(a) It shall be a condition of the obligation of the
Company to issue Option Stock to the Key Employee or the Beneficiary, and the
Key Employee agrees, that the Key Employee shall pay to the Company upon its
demand, such amount as may be requested by the Company for the purpose of
satisfying its liability to withhold federal, state, or local income or other
taxes incurred by reason of the exercise of the Option.
(b) If the Option is not an Incentive Stock Option,
the Key Employee may elect to have the Company withhold that number of Shares of
Option Stock otherwise issuable to the Key Employee upon exercise of the Option
or to deliver to the Company a number of Shares, in each case, having a Fair
Market Value on the Tax Date (as defined below) equal to the minimum amount
required to be withheld as a result of such exercise. The election must be made
in writing and, if the Key Employee is an Insider (as defined below), must be
delivered to the Company 6 months or more prior to the Tax Date and shall not be
effective until at least 6 months after the Grant Date, provided, however, that
this restriction shall not apply in the event death of the Key Employee occurs
prior to the expiration of such 6 month period. If the Key Employee is not an
Insider, the election must be delivered to the Company prior to the Tax Date. If
the Key Employee is an Insider, the full number of shares of Option Stock
issuable on exercise of the Option may be issued to the Key Employee, and in
such event the Key Employee shall be unconditionally obligated to tender back to
the Company, as soon as practicable after the Tax Date, a number of shares of
the minimum amount required to be withheld. If the number of shares so
determined shall include a fractional share, the Key Employee shall deliver cash
in lieu of such fractional share. All elections shall be made in a form approved
by the committee and shall be subject to disapproval, in whole or in part by the
Committee. Any election under this paragraph (b) by an Insider shall be
irrevocable and may not be changed until another irrevocable election is
effective. As used herein, (i) Tax Date means the date on which the Key Employee
must include in his gross income for federal income tax purposes the fair market
value of the Option Stock over the purchase price therefor and (ii) "Insider"
means an officer or director of the Company or a beneficial owner of more than
10 percent of the Shares.
8. Adjustments in Event of Change in Shares.
In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
reclassification, repurchase, or exchange of securities of the Company, or other
similar corporate transaction or event affects the Shares issuable on exercise
of the Option, such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust the number and
type of Shares awarded pursuant to this Agreement, or the terms, conditions, or
restrictions of this Agreement; provided, however, that with respect to Awards
of Incentive Stock Options no such adjustment shall be authorized to the extent
that such authority would cause the Plan to violate Section 422(b)(1) of the
Code
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or any successor provision thereto; and provided further, however, that the
number of Shares subject to any Award payable or denominated in Shares shall
always be a whole number.
9. Powers of Company Not Affected. The existence of the
Option shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any combinations, subdivision or
reclassification of the Shares or any reorganization, merger, consolidation,
business combination, exchange of Shares, or other change in the Company's
capital structure or its business, or any issue of bonds, debentures or stock
having rights or preferences equal, superior or affecting the Option Stock or
the rights thereof or dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise. Nothing in this
Agreement shall confer upon the Key Employee any right to continue in the
employment of the Company or any Affiliate, or interfere with or limit in any
way the right of the Company or any Affiliate to terminate the Key Employee's
employment at any time.
10. Interpretation by Committee. The Key Employee agrees
that any dispute or disagreement which may arise in connection with this
Agreement shall be resolved by the Committee, in its sole discretion, and that
any interpretation by the Committee of the terms of this Agreement or the Plan
and any determination made by the Committee under this Agreement or the Plan may
be made in the sole discretion of the Committee and shall be final, binding, and
conclusive. Any such determination need not be uniform and may be made
differently among Key Employees awarded Option Stock.
11. Financial Statements. The Company shall deliver to Key
Employee annually copies of the Company's annual financial statements.
12. Miscellaneous.
(a) This Agreement shall be governed and construed
in accordance with the laws of the State of California applicable to contracts
made and to be performed therein between residents thereof.
(b) This Agreement may not be amended or modified
except by the written consent of the parties hereto.
(c) The captions of this Agreement are inserted for
convenience of reference only and shall not be taken into account in construing
this Agreement.
(d) Any notice, filing or delivery hereunder or with
respect to Option Stock shall be given to the Key Employee at either his usual
work location or his home address as indicated in the records of the Company,
and shall be given to the Committee or the Company at 000 Xxxxx Xxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxxxx 00000, Attention Corporate Secretary. All such notices
shall be given by first class mail, postage prepaid, or by personal delivery.
(e) This Agreement shall be binding upon and inure
to the benefit of the Company and its successors and assigns and shall be
binding upon and inure to the personal
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benefit of the Key Employee, the Beneficiary and the personal representative(s)
and heirs of the Key Employee.
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IN WITNESS WHEREOF, the Company has caused this instrument to
be executed by its duly authorized officer and its corporate seal hereunto
affixed, and the Key Employee has hereunto affixed his hand and seal, all on the
day and year set forth below.
XXXXXXXX ADVISORS, INC.
[CORPORATE SEAL] By: _____________________________________
Its: ________________________________
___________________________________(Seal)
Key Employee
[Print Name]: ___________________________
No. of Shares of Option Stock: _____ Incentive Stock Option: All Options
granted by this Agreement are
Incentive Stock Options provided,
however, if the Purchase Price per
Share multiplied by the number of
Shares as to which Options are
exercisable for the first time by the
Key Employee in any calendar year
exceeds $100,000, then the Options
with regard to the number of Shares
determined by dividing such excess
amount over $100,000 by the Purchase
Price per Share shall be Nonqualified
Stock Options.
Reload Feature: ____________________ Purchase Price
Per Share: $10.00
------------------------
Payment of Purchase Price: _________ Number of Days to Determine
Fair Market Value: _______________
Date of Agreement: _________________ Grant Date: __________________________
Initial Exercise Date: _____________ Expiration Date: _____________________
Beneficiary: _______________________ Address of Beneficiary:
Beneficiary Tax Identification No.: ______________________________________
____________________________________ ______________________________________
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