XXXX.xxx, INC.
2000 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
This Stock Option Agreement (this "Agreement") is made and entered into
as of the date of grant set forth below (the "Date of Grant") by and between
XXXX.xxx, Inc., a Delaware corporation (the "Company"), and the participant
named below ("Participant"). Capitalized terms not defined herein shall have the
meaning ascribed to them in the Company's 2000 Equity Incentive Plan, as amended
(the "Plan").
Participant: _________________________________________
Social Security Number: _________________________________________
Participant's Address: _________________________________________
_________________________________________
_________________________________________
Total Option Shares: _________________________________________
Exercise Price Per Share: _________________________________________
Date of Grant: _________________________________________
Vesting Start Date: _________________________________________
Expiration Date (7 years from
Date of Grant): _________________________________________
Type of Stock Option: Nonqualified Stock Option
1. GRANT OF OPTION. The Company hereby grants to Participant an option
(this "Option") to purchase up to the total number of shares of Common Stock of
the Company set forth above (collectively, the "Shares") at the Exercise Price
Per Share set forth above (the "Exercise Price"), subject to all of the terms
and conditions of this Agreement and the Plan.
2. VESTING; EXERCISE PERIOD.
2.1 VESTING OF RIGHT TO EXERCISE OPTION. This Option shall become
exercisable as to portions of the Shares as follows: (a) this Option shall not
be exercisable with respect to any of the Shares until _______________________
(the "First Vesting Date"); (b) if Participant has continuously provided
services to the Company or any Subsidiary, Parent or Affiliate of the Company
from the Date of Grant through the First Vesting Date and has not been
Terminated on or before the First Vesting Date, then on the First Vesting Date
this Option shall become exercisable as follows: _______________________________
_______________________________________________________________________________;
PROVIDED that this Option shall in no event ever become exercisable with respect
to more than 100% of the Shares.
2.2 EXPIRATION. This Option shall expire on the Expiration Date set
forth above and must be exercised, if at all, on or before the earlier of the
Expiration Date or the date on which this Option is earlier terminated in
accordance with the provisions of Section 3.
3. TERMINATION.
3.1 TERMINATION FOR ANY REASON EXCEPT DEATH OR DISABILITY. If
Participant is Terminated for any reason, except Participant's death or
Disability, then this Option, to the extent (and only to the extent) that it
would have been exercisable by Participant on the date of Termination, may be
exercised by Participant no later than three (3) months after the date of
Termination (or seven (7) months after the date of Termination if the Company is
then subject to Section 16 of the Exchange Act and Participant's transactions in
securities of the Company were subject to Section 16(b) of the Exchange Act on
the date of Termination), but in any event no later than the Expiration Date.
3.2 TERMINATION BECAUSE OF DEATH OR DISABILITY. If Participant is
Terminated because of death or Disability of Participant, then this Option, to
the extent that it is exercisable by Participant on the date of Termination, may
be exercised by Participant (or Participant's legal representative) no later
than twelve (12) months after the date of Termination, but in any event no later
than the Expiration Date.
3.3 NO OBLIGATION TO EMPLOY. Nothing in the Plan or this Agreement
shall confer on Participant any right to continue in the employ of, or other
relationship with, the Company or any Parent, Subsidiary or Affiliate of the
Company, or limit in any way the right of the Company or any Parent, Subsidiary
or Affiliate of the Company to terminate Participant's employment or other
relationship at any time, with or without cause.
4. MANNER OF EXERCISE.
4.1 STOCK OPTION EXERCISE AGREEMENT. To exercise this Option,
Participant (or in the case of exercise after Participant's death, Participant's
executor, administrator, heir or legatee, as the case may be) must deliver to
the Company an executed stock option exercise agreement in the form attached
hereto as EXHIBIT A, or in such other forms as may be approved by the Company
from time to time (the "Exercise Agreement"), which shall set forth, INTER ALIA,
Participant's election to exercise this Option, the number of Shares being
purchased, any restrictions imposed on the Shares and any representations,
warranties and agreements regarding Participant's investment intent and access
to information as may be required by the Company to comply with applicable
securities laws. If someone other than Participant exercises this Option, then
such person must submit documentation reasonably acceptable to the Company that
such person has the right to exercise this Option.
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4.2 LIMITATIONS OF EXERCISE. This Option may not be exercised unless
such exercise is in compliance with all applicable federal and state securities
laws, as they are in effect on the date of exercise. This Option may not be
exercised as to fewer than 100 Shares unless it is exercised as to all Shares as
to which this Option is then exercisable.
4.3 PAYMENT. The Exercise Agreement shall be accompanied by full
payment of the Exercise Price for the Shares being purchased in cash (by check),
or where permitted by law:
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of shares of the Company's Common Stock that either:
(1) have been owned by Participant for more than six (6) months and
have been paid for within the meaning of SEC Rule 144 (and, if such
shares were purchased from the Company by use of a promissory note,
such note has been fully paid with respect to such shares); or (2)
were obtained by Participant in the open public market; AND (3) are
clear of all liens, claims, encumbrances or security interests;
(c) by waiver of compensation due or accrued to Participant for services
rendered;
(d) provided that a public market for the Company's stock exists: (1)
through a "same day sale" commitment from Participant and a
broker-dealer that is a member of the National Association of
Securities Dealers (an "NASD Dealer") whereby Participant
irrevocably elects to exercise this Option and to sell a portion of
the Shares so purchased to pay for the exercise price and whereby
the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the exercise price directly to the Company; OR (2) through a
"margin" commitment from Participant and a NASD -- Dealer whereby
Participant irrevocably elects to exercise this Option and to pledge
the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the
exercise price, and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the exercise price directly to the
Company; or
(e) by any combination of the foregoing.
4.4 TAX WITHHOLDING. Prior to the issuance of the Shares upon
exercise of this Option, Participant must pay or provide for any applicable
federal or state withholding obligations of the Company. If the Committee
permits, Participant may provide for payment of withholding taxes upon exercise
of this Option by requesting that the Company retain Shares with a Fair Market
Value equal to the minimum amount of taxes required to be withheld. In such
case, the Company shall issue the net number of Shares to the participant by
deducting the Shares retained from the Shares issuable upon exercise.
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4.5 ISSUANCE OF SHARES. Provided that the Exercise Agreement and
payment are in form and substance satisfactory to counsel for the Company, the
Company shall issue the Shares registered in the name of Participant,
Participant's authorized assignee, or Participant's legal representative, and
shall deliver certificates representing the Shares with the appropriate legends
affixed thereto within 21 days of the receipt of the Exercise Agreement and
payment.
5. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of this Option
and the issuance and transfer of Shares shall be subject to compliance by the
Company and Participant with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock exchange on
which the Company's Common Stock may be listed at the time of such issuance or
transfer. Participant understands that the Company is under no obligation to
register or qualify the Shares with the Securities and Exchange Commission, any
state securities commission or any stock exchange to effect such compliance.
6. NONTRANFERABILITY OF OPTION. This Option may not be transferred in
any manner other than by will or by the laws of descent and distribution and may
be exercised during the lifetime of Participant only by Participant. The terms
of this Option shall be binding upon the executors, administrators, successors
and assigns of Participant.
7. TAX CONSEQUENCES. Set forth below is a brief summary as of the Date
of Grant of some of the federal and California tax consequences of exercise of
this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PARTICIPANT
SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING OF THE
SHARES.
8.1 EXERCISE OF NONQUALIFIED STOCK OPTION. Because this Option is an
unqualified stock option, there may be a regular federal and California income
tax liability upon the exercise of this Option. Participant will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the fair market value of the Shares on the date of
exercise over the Exercise Price. The Company will be required to withhold from
Participant's compensation or collect from Participant and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.
8.2 DISPOSITION OF SHARES. If the Shares are held for more than
twelve (12) months after the date of the transfer of the Shares pursuant to the
exercise of this Option, then any gain realized on disposition of the Shares
will be treated as long term capital gain for federal and California income tax
purposes.
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9. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have any of the
rights of a shareholder with respect to any Shares until Participant exercises
this Option and pays the Exercise Price.
10. INTERPRETATION. Any dispute regarding the interpretation of this
Agreement shall be submitted by Participant or the Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and Participant.
11. ENTIRE AGREEMENT. The Plan is incorporated herein by reference.
This Agreement and the Plan and the Exercise Agreement constitute the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersede all prior understandings and agreements with respect
to such subject matter.
12. NOTICES. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Participant shall be in writing and
addressed to Participant at the address indicated above or to such other address
as such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon: personal delivery;
three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1) business day after
transmission by telecopier.
13. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Participant and Participant's heirs, executors, administrators, legal
representative, successors and assigns.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California, without regard to
that body of law pertaining to choice of law or conflict of law.
15. ACCEPTANCE. Participant hereby acknowledges receipt of a copy of
the Plan and this Agreement. Participant has read and understands the terms and
provisions thereof, and accepts this Option subject to all the terms and
conditions of the Plan and this Agreement. Participant acknowledges that there
may be adverse tax consequences upon exercise of this Option or disposition of
the Shares and that the Company has advised Participant to consult a tax advisor
prior to such exercise or disposition.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate by its duly authorized representative and Participant has
executed this Agreement in duplicate as of the Date of Grant.
XXXX.xxx, Inc.: PARTICIPANT:
By:
-------------------------------- --------------------------------
(Signature)
-------------------------------- --------------------------------
(Print Name)
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EXHIBIT A
---------
XXXX.xxx, INC.
2000 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
I hereby elect to purchase the number of shares of Common Stock of XXXX.xxx,
Inc. (the "Company") as set forth below:
Participant______________________________ Number of Purchase Shares:___________
Social Security Number:__________________ Purchase Price per Share:____________
Address:_________________________________ Aggregate Purchase Price:____________
_________________________________ Date of Option Agreement:____________
_________________________________ Exact Name of Title to Shares:_______
Daytime Phone:___________________________ _____________________________________
Facsimile Number:________________________ _____________________________________
Type of Option: Nonqualified Stock Option
1. DELIVERY OF PURCHASE PRICE. Participant hereby delivers to the Company the
Aggregate Purchase price, to the extent permitted in the Option Agreement (the
"Option Agreement") as follows (check as applicable and complete):
[ ] in cash (by check) in the amount of $___________________, receipt of
which is acknowledged by the Company;
[ ] by cancellation of indebtedness of the Company to Participant in the
amount of $___________________;
[ ] by delivery of ___________________ fully-paid, nonassessable and
vested shares of the common stock of the Company owned by Participant
for at least six (6) months prior to the date hereof (and which have
been paid for within the meaning of SEC Rule 144), or obtained by
Participant in the open public market, and owned free and clear of all
liens, claims, encumbrances or security interests, valued at the
current Fair Market Value of $___________________ per share;
[ ] by the waiver hereby of compensation due or accrued to participant
for services rendered in the amount of $___________________ (EXCEPT
THAT the par value of the Shares is tendered in cash (by check) receipt
of which is acknowledged by the Company);
[ ] through a "cashless exercise" commitment, delivered herewith, from
Participant and the NASD Dealer ("Broker") named therein, in the amount
of $___________________; or
[ ] through a "margin" commitment, delivered herewith from Participant
and the Broker named therein, in the amount of $___________________.
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Please complete the following if you elect to exercise your option
through a "cashless exercise" or "margin" commitment:
Exercised shares shall be registered in the name of:
Name of Broker:_____________________ Broker Phone:____________________
Broker Account Number:______________ Broker Fax:______________________
The Broker will remit the exercise price and applicable withholding
taxes directly to the Company.
2. MARKET STANDOFF AGREEMENT. Participant, if requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, agrees not to
sell or otherwise transfer or dispose of any Common Stock (or other securities)
of the Company held by Participant during the period requested by the managing
underwriter following the effective date of a registration statement of the
Company filed under the Securities Act, provided that all officers and directors
of the Company are required to enter into similar agreements. Such agreement
shall be in writing in a form satisfactory to the Company and such underwriter.
The Company may impose stop-transfer instructions with respect to the shares (or
other securities) subject to the foregoing restriction until the end of such
period.
3. TAX CONSEQUENCES. PARTICIPANT UNDERSTANDS THAT PARTICIPANT MAY SUFFER ADVERSE
TAX CONSEQUENCES AS A RESULT OF PARTICIPANT'S PURCHASE OR DISPOSITION OF THE
SHARES. PARTICIPANT REPRESENTS THAT PARTICIPANT HAS CONSULTED WITH ANY TAX
CONSULTANT(S) PARTICIPANT DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND THAT PARTICIPANT IS NOT RELYING ON THE COMPANY FOR
ANY TAX ADVISE.
4. ENTIRE AGREEMENT. The Plan and Option Agreement are incorporated herein by
reference. This Exercise Agreement, the Plan and the Option Agreement constitute
the entire agreement and understanding of the parties and supersede in their
entirety all prior understandings and agreements of the Company and Participant
with respect to the subject matter hereof, and are governed by California law
except for that body of law pertaining to choice of law or conflict of law.
Date:_____________________________ ___________________________________
Signature of Participant
This is to verify our receipt and acceptance of the attached Exercise Agreement
and our agreement to promptly issue and deliver the shares referred to above,
subject to our receipt of the Aggregate Purchase Price, and taxes due, if any.
The shares, when so issued will be fully paid and nonassessable.
XXXX.xxx, Inc.
By:_______________________________ Date:______________________________
_______________________________
(Print Name and Title)
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