EXHIBIT 4.09
Certificate Number ___
THE KERNEL GROUP, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Agreement and Plan is executed this ___ day of _______, 1998, but effective
for all purposes as of the ____ day of ____, 1997 by and between The Kernel
Group, Inc. ("TKG"), and ______________ ("Employee").
RECITALS
X. XXX has adopted the 1997 Incentive Equity Plan (the "Plan") in
order that officers, employees and consultants of TKG may acquire a proprietary
interest in TKG on favorable terms.
B. The Administrator of the Plan has selected Employee to
participate in the Plan, and desires to grant to employee an option to purchase
shares of the Common Stock of TKG.
NOW, THEREFORE, for and in consideration of the mutual promises
contained herein and other good and valuable consideration, the receipt,
adequacy, and sufficiency of which is hereby acknowledged, the parties agree as
follows:
ARTICLE 1
DEFINITIONS
1.1 Unless the context requires otherwise, all capitalized terms used
in this Agreement and not otherwise defined herein shall have the meaning
assigned to them in the plan, which definitions are incorporated herein by this
reference for all purposes.
ARTICLE 2
OPTION
2.1 Option Grant. Subject to the terms and conditions of the plan and
of this Agreement, TKG hereby grants to the Employee the right and option (the
"Option") to purchase all or any part of an aggregate of ________ shares of the
Common Stock, without par value, of TKG (the "Option Shares") at a price of $___
per share which is no less than 85% of the fair market value.
2.2 Exercise. The Employee may exercise the Option in whole or in
part and from time to time during a period commencing three years from the
effective date of this Agreement and ending eight years from the effective date
of this Agreement unless it is subject to earlier termination as provided in
this Agreement. The Option shall not be exercisable prior to approval of the
Plan by the shareholders of the Company.
2.3 Manner of Exercise. The person entitled to exercise the Option
may do so by delivering notice of exercise in a form approved by TKG to TKG at
its principal office. Such notice shall
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specify the number of shares to be purchased, the purchase price of each share,
and the aggregate purchase price for all shares being purchased under said
notice. Such notice shall be signed by such person and shall be accompanied by
payment in full for such aggregate purchase price. TKG, in the event of exercise
by a person other than the Employee, may require proof of the right of such
person to exercise the Option.
Within 30 days following receipt of the aforementioned notice to
purchase, TKG shall cause to be issued to the person entitled to purchase the
shares subject to option under this Agreement, stock certificates for the number
of shares of TKG's Common Stock, fully paid and non-assessable, specified in
such notice. Until such issuance, the purchaser shall have no rights as a
shareholder of TKG with respect to the unissued shares.
2.4 Transferability. During the Employee's lifetime, the Option, to
the extent not previously exercised, shall terminate and become null and void
immediately upon termination of the Employee's employment by the employee's
choice for any reason or by TKG for Cause as defined herein. "Cause" shall mean
he Employee's fraud, dishonesty, or other willful misconduct, whether within or
without the scope of employment, or failure to satisfactorily perform duties. In
the event of (a) any attempt by the Employee to alienate, assign, pledge,
hypothecate or otherwise dispose of the Option, except as provided herein, or
(b) the levy of any attachment, execution or similar process upon the rights or
interest hereby conferred, TKG may terminate the Option by notice to the
Employee and it shall thereupon become null and void.
2.5 Earlier Termination.
(a) Notwithstanding the provisions of Section 2.2, the Option,
to the extent not previously exercised, shall terminate and become null and void
immediately upon termination of the Employee's employment by the employee's
choice for any reason or by TKG for Cause as defined herein. "Cause" shall mean
the Employee's fraud, dishonesty, or other willful misconduct, whether within or
without the scope of employment, or failure to satisfactorily perform duties. In
the event of termination of employment by the company, the presence of Cause
shall be determined by a committee composed of five employees of TKG, with at
least two of the members being chosen by lottery, and the remainder being
executive officers or members of the board of directors of TKG. If a majority of
the five member committee do not believe the employee was terminated for Cause,
the options shall remain valid and shall vest (if not already vested) as though
the optionholder were still employed by the company.
(b) Upon a termination of employment by reason of retirement,
disability or death, the Option may be exercised during the following periods,
but only to the extent that Option was outstanding and exercisable on any such
date of retirement, Permanent Disability (defined in the Plan) or death, and the
Option shall terminate and become null and void immediately upon the expiration
of the applicable period: (i) the twelve-month period following the date of such
termination of the Employee's employment in the case of a Permanent Disability,
(ii) the twelve-month period following the date of such termination of the
Employee's employment in the case of the Employee's death during his employment
by TKG; and (iii) the three-month period following the date of such termination
in the case of retirement on or after attainment of age 65, or in the case of
disability other than as described in (i) above. In no event, however, shall any
such period extend beyond the Option Term.
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(c) In the event of the death of the Employee, the Option may
be exercised by the Employee's legal representative(s) or by a person who has
acquired the Option through a bequest or inheritance from the Employee, but only
to the extent that the Option would otherwise have been exercisable by the
Employee prior to his or her death. If the Employee dies during the one-year
period provided in subsection (1) of the firs sentence of the previous
paragraph, or during the three-month period provided in subsection (iii) of the
first sentence of the previous paragraph, then the Employee's legal
representative(s) or by a person who has acquired the Option through a bequest
or inheritance from the Employee shall have the right, for an additional
one-year period from the date of death, to exercise the Option, but only to the
extent that the Option would otherwise have been exercisable by the Employee
prior to his or her death.
2.6 Transfer of Options Through Termination of Marital Relationship.
As stated in the Plan, in the event that an Option is transferred to the spouse
of an employee upon termination of the marital relationship of the employee, the
Company shall have the right to repurchase the Option from the ex-spouse of the
employee for $0.01 per each share of stock for which the Option may be
exercised. The Company may exercise its right to repurchase options which have
been transferred upon termination of the marital relationship within thirty (30)
days after it receives written notice of termination of such marital
relationship by delivering payment in full of the repurchase price to the
ex-spouse, or any other party to whom the option has been transferred. Upon
delivery of the repurchase price to the holder of an Option which has been
transferred upon termination of a marital relationship, the Option shall expire
and become void. An option which as been transferred upon termination of a
marital relationship shall not be exercisable until the expiration sixty (60)
days after notice of the transfer has been delivered to the Company by the
person to whom the Option has been transferred.
2.7 Adjustment of Optioned Shares. As stated and further elaborated
upon in the Plan, in the event of a reorganization, change of shares, merger,
consolidation, rights offering, or any other change in the corporate structure
or shares of capital stock of TKG, the Administrator shall make proportionate
adjustment in the number or kind of shares (to the nearest possible full share)
that shall be subject to option hereunder or price per share thereof, or both,
in order to preserve Employee's proportionate interest, or in order to maintain
unchanged the aggregate option price, or both, and such adjustment shall be
effective and binding upon TKG and the Employee.
2.8 Employment Not Affected. The granting of the Option nor its
exercise shall not be construed as granting to the Employee any right with
respect to continuance of employment by TKG. Except as may otherwise be limited
by a written agreement between TKG and the Employee, the right of TKG to
terminate at will the Employee's employment with it at any time (whether by
dismissal, discharge, retirement or otherwise) is specifically reserved by TKG,
as the employer, and acknowledged by the Employee.
2.9 Restriction on Exercise and Resale of Shares. TKG's issuance of
shares of Common Stock upon exercise of the Option is conditioned upon
conformance with all requirements of law, including the Securities Act of 1933
and all other applicable state and federal laws and regulations, and TKG shall
be under no obligation to issue Stock upon exercise of the Option where such
issuance would cause it to be in violation of any such law or regulation. As a
condition of precedent to TKG's transfer to Employee of any shares of Stock or
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any shares of Stock upon exercise of the Option, Employee agrees to the
provisions of this Section 2.8, and makes the representations to TKG contained
herein. The Stock will be, and shares of Stock to be issued upon exercise of
Options under the Plan may be, issued and sold without registration under the
Federal Securities Act of 1933 or the securities laws of any state, in reliance
upon certain exemptive provisions of said acts. The shares cannot be sold or
transferred except if, in the opinion of counsel to TKG, such sale or transfer
would be pursuant to an effective registration statement under Federal Act or
pursuant to an exemption from such registration and in a transaction which is
exempt under applicable securities laws, or pursuant to effective registration
statements under such acts, or in a transaction which is otherwise in compliance
with such acts. Each certificate representing shares of Stock issued upon
exercise of an Option (if such Stock is not registered under the applicable
securities laws) shall be stamped with a legend in substantially the following
form:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or qualified under
applicable state securities laws. They may not be sold, offered for
sale, transferred, pledged or hypothecated in the absence of a
registration statement and/or qualification application, in effect with
respect to the securities under the 1933 Act and applicable state
securities laws; or an opinion of counsel or other evidence satisfactory
to the company that such registration and/or qualification is not
required."
ARTICLE 3
MISCELLANEOUS
3.1 Governing Law
This Plan shall be subject to, and governed by, the laws of the State of
Texas irrespective of the fact that one or more of the parties may work in or be
a resident of a different state.
3.2 Severability
In the event any parts of this Agreement are found to be void, the
remaining provisions of this Plan shall nevertheless be binding with the same
effect as though the void parts were deleted.
3.3 Rules of Construction
Wherever in this Agreement, words including pronouns, are used in the
masculine, they shall be read and construed in the feminine or neuter whenever
they would so apply; and wherever in this Agreement, words, including pronouns
are used in the singular or plural, they shall be read and construed in the
plural or singular, respectively, wherever they would so apply.
3.4 This Agreement shall be binding upon the parties hereto, their
heirs, executors, administrators, successors and assigns. The Corporation agrees
it will not be a party to any merger, consolidation or reorganization, unless
and until its obligations hereunder shall be expressly assumed by its successor
or successors.
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In witness whereof, the parties have hereunto set their hands the day
and year first above written.
Corporation: Employee:
By:_______________________________ ____________________________________
Name
Plan Administrator ____________________________________
By:_______________________________
Name
Plan Administrator
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