EXHIBIT 99.3
1996 STOCK OPTION PLAN
NONQUALIFIED STOCK OPTION CONTRACT
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THIS NONQUALIFIED STOCK OPTION CONTRACT entered into as of
_________, 1998 between SMARTSERV ONLINE, INC., a Delaware corporation (the
"Company"), and ____________________ (the "Optionee").
W I T N E S S E T H:
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1. The Company, in accordance with the allotment made by the committee
of the Company's Board of Directors (the "Committee") and subject to the terms
and conditions set forth herein, grants to the Optionee an option to purchase an
aggregate of ______ shares of the Common Stock, $.01 par value per share, of the
Company ("Common Stock") at an exercise price of $_____ per share, being at
least equal to the fair market value of such shares of Common Stock on the date
hereof. This option is not an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
2. The term of this option shall be ____ years from the date hereof,
subject to earlier termination as provided in section ____ below. However, this
option shall not be exercisable until the first anniversary of the date hereof,
at which time it shall become exercisable in full. The right to purchase shares
of Common Stock under this option shall be cumulative, so that if the full
number of shares purchasable in a period shall not be purchased, the balance may
be purchased at any time or from time to time thereafter, but not after the
expiration of the option. Notwithstanding any of the foregoing, in no event may
a fraction of a share of Common Stock be purchased under this option. The
Company shall at all times during the term of this Contract reserve and keep
available such number of shares of Common Stock as will be sufficient to satisfy
the requirements of this Contract.
3. This option shall be exercised by giving written notice to the
Company at its then principal office, presently Metro Center, Xxx Xxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000 Attn: Chief Financial Officer, stating that the
Optionee is exercising the option hereunder, specifying the number of shares
being purchased and accompanied by payment in full of the aggregate purchase
price therefor (a) in cash or by certified check, (b) with previously acquired
shares of Common Stock which have been held by the Optionee for at least six
months, or (c) a combination of the foregoing. The Company shall not be required
to issue any shares of Common Stock pursuant to any such option until all
required payments, including any required withholding, have been made.
4. The Company may withhold (a) cash, (b) subject to any limitations
under Rule 16b-3, shares of Common Stock to be issued with respect thereto
having an aggregate fair
market value on the exercise date, or (c) any combination thereof, in an amount
equal to the amount which the Committee determines is necessary to satisfy the
Company's obligation to withhold Federal, state and local income taxes or other
amounts incurred by reason of the grant or exercise of an option, its
disposition, or the disposition of the underlying shares of Common Stock.
Alternatively, the Company may require the Optionee to pay the Company such
amount in cash promptly upon demand.
A person entitled to receive Common Stock upon the exercise of an
option shall not have the rights of a stockholder with respect to such shares of
Common Stock until the date of issuance of a stock certificate to him for such
shares; provided, however, that until such stock certificate is issued, any
optionee using previously acquired shares of Common Stock in payment of an
option exercise price shall continue to have the rights of a stockholder with
respect to such previously acquired shares.
Any holder of an Employee Option or Consultant Option whose
relationship with the Company, its Parent and Subsidiaries as an employee or a
consultant has terminated for any reason (other than as a result of the death or
Disability of the optionee) may exercise such option, to the extent exercisable
on the date of such termination, at any time within three months after the date
of termination, but not thereafter and in no event after the date the option
would otherwise have expired; provided, however, that if such relationship is
terminated either (a) for cause, or (b) without the consent of the Company, such
option shall terminate immediately.
For the purposes of this Contract, an employment relationship shall be
deemed to exist between an individual and a corporation if, at the time of the
determination, the individual was an employee of such corporation for purposes
of Section 422(a) of the Code. As a result, an individual on military, sick
leave or other bona fide leave of absence shall continue to be considered an
employee for purposes of this Contract during such leave if the period of the
leave does not exceed 90 days, or, if longer, so long as the individual's right
to reemployment with the Company (or a related corporation) is guaranteed either
by statute or by contract. If the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed by statute or by contract,
the employment relationship shall be deemed to have terminated on the 91st day
of such leave.
Except as may otherwise be expressly provided herein, Employee Options
and Consultant Options granted under this Contract shall not be affected by any
change in the status of the optionee so long as the optionee continues to be an
employee of, or
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a consultant to, the Company, or any of the Subsidiaries or a Parent (regardless
of having changed from one to the other or having been transferred from one
corporation to another).
Except as provided below, a Non-Employee Director Option may be
exercised at any time during its five year term. The Non-Employee Director
Option shall not be affected by the optionee ceasing to be a director of the
Company or becoming an employee of, or consultant to, the Company, any of its
Subsidiaries or a Parent; provided, however, that if (a) he is terminated as a
director of the Company for cause, such option shall terminate immediately, or
(b) he ceases to be a director of the Company because he is not nominated by the
Board of Directors for reelection as a director, such option may be exercised at
any time within one year after he ceases to be a director of the Company, but
not thereafter and in no event after the date the option otherwise would have
expired.
5. Notwithstanding the foregoing, this option shall not be exercisable
by the Optionee unless (a) a Registration Statement under the Securities Act of
1933, as amended (the "Securities Act") with respect to the shares of Common
Stock to be received upon the exercise of this option shall be effective and
current at the time of exercise or (b) there is an exemption from registration
under the Securities Act for the issuance of the shares of Common Stock upon
such exercise. The Optionee hereby represents and warrants to the Company that,
unless such a Registration Statement is effective and current at the time of
exercise of this option, the shares of Common Stock to be issued upon the
exercise of this option will be acquired by the Optionee for his own account,
for investment only and not with a view to the resale or distribution thereof.
In any event, the Optionee shall notify the Company of any proposed resale of
the shares of Common Stock issued to him upon exercise of this option. Any
subsequent resale or distribution of shares of Common Stock by the Optionee
shall be made only pursuant to (x) a Registration Statement under the Securities
Act which is effective and current with respect to the sale of shares of Common
Stock being sold, or (y) a specific exemption from the registration requirements
of the Securities Act, but in claiming such exemption, the Optionee shall, prior
to any offer of sale or sale of such shares of Common Stock, provide the Company
(unless waived by the Company) with a favorable written opinion of counsel, in
form and substance satisfactory to the Company, as to the applicability of such
exemption to the proposed sale or distribution. Such representations and
warranties shall also be deemed to be made by the Optionee upon each exercise of
this option. Nothing herein shall be construed as requiring the Company to
register the shares subject to this option under the Securities Act.
6. Notwithstanding anything herein to the contrary, if at any time the
Committee shall determine, in its discretion, that the listing or qualification
of the shares of Common Stock subject to this option on any securities exchange
or under any applicable law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition to, or in connection
with, the granting of an option or the issue of shares of Common Stock
hereunder, this option may not be exercised in whole or in part unless such
listing, qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee.
7. The Company may affix appropriate legends upon the certificates for
shares of Common Stock issued upon exercise of this option and may issue such
"stop transfer" instructions to its transfer agent in respect of such shares as
it determines, in its discretion, to be necessary or appropriate to (a) prevent
a violation of, or to perfect an exemption from, the registration
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requirements of the Securities Act and any applicable state securities laws or
(b) implement the provisions of this Contract or any other agreement between the
Company and the Optionee with respect to such shares of Common Stock.
The Company shall pay all issuance taxes with respect to the issuance
of shares of Common Stock upon the exercise of an option granted under the Plan,
as well as all fees and expenses incurred by the Company in connection with such
issuance.
8. Nothing herein shall confer upon the Optionee any right to continue
in the employ of the Company, any Parent or any of its Subsidiaries, or
interfere in any way with any right of the Company, any Parent or its
Subsidiaries to terminate such employment at any time for any reason whatsoever
without liability to the Company, any Parent or any of its Subsidiaries.
9. If an optionee dies (a) while he is an employee of, or consultant
to, the Company, any of its Subsidiaries or a Parent, (b) within three months
after the termination of such relationship (unless such termination was for
cause or without the consent of the Company) or (c) within one year following
the termination of such relationship by reason of his Disability, his Employee
Option or Consultant Option may be exercised, to the extent exercisable on the
date of his death, by his Legal Representative (as defined in Paragraph 15 at
any time within one year after death, but not thereafter and in no event after
the date the option would otherwise have expired.
Any optionee whose relationship as an employee of, or consultant to,
the Company, its Parent and Subsidiaries has terminated by reason of such
optionee's Disability may exercise his Employee Option or Consultant Option, to
the extent exercisable upon the effective date of such termination, at any time
within one year after such date, but not thereafter and in no event after the
date the option would otherwise have expired.
The term of a Non-Employee Director Option shall not be affected by the
death or Disability of the optionee. If an optionee holding a Non-Employee
Director Option dies during the term of such option, the option may be exercised
at any time during its term by his Legal Representative.
10. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Notwithstanding any other
provision of the Contract, in the event of a stock dividend, recapitalization,
merger in which the Company is the surviving corporation, spin-off, split-up,
combination or exchange of shares or the like which results in a change in the
number or kind of shares of Common Stock which is outstanding immediately prior
to such event, the aggregate number and kind of shares subject to the Contract,
the aggregate number and kind of shares subject to each outstanding option and
the exercise price thereof, and the number and kind of shares subject to future
Non-Employee Director Options and the 162(m) Maximum shall be appropriately
adjusted by the Board of Directors, whose determination shall be
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conclusive and binding on all parties. Such adjustment may provide for the
elimination of fractional shares which might otherwise be subject to options
without payment therefor.
All outstanding options shall become immediately exercisable in full
upon the occurrence of a "Change in Control". For this purpose, a Change in
Control shall be deemed to have occurred if (a) there has occurred a change in
control as the term "control" is defined in Rule 12b-2 promulgated under the
Act; (b) when any "person" (as such term is defined in Sections 3(a)(9) and
13(d)(3) of the Act), except for an employee stock ownership trust (or any of
the trustees thereof), becomes a beneficial owner, directly or indirectly, of
securities of the Company representing 15% or more of the Company's then
outstanding securities having the right to vote on the election of directors,
unless the transaction in which such person becomes such a beneficial owner was
approved by a vote of at least two-thirds of the directors then still in office
who were directors before such transaction was consummated; (c) during any
period of not more than two consecutive years, individuals who at the beginning
of such period constitute the Board of Directors, and any new director whose
election by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds of the directors then still in
office who were either directors at the beginning of the period or whose
election or nomination for election was previously approved, cease for any
reason to constitute at least 51% of the entire Board of Directors; (d) when a
majority of the directors elected at any annual or special meeting of
stockholders (or by written consent in lieu of a meeting) are not individuals
nominated by the Company's incumbent Board of Directors; (e) if the stockholders
of the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
holders of voting securities of the Company outstanding immediately prior
thereto being the holders of at least 80% of the voting securities of the
surviving entity outstanding immediately after such merger or consolidation; (f)
if the stockholders of the Company approve a plan of complete liquidation of the
Company; or (g) if the stockholders of the Company approve an agreement for the
sale or disposition of all or substantially all of the Company's assets.
11. The Company and the Optionee agree that they will both be subject
to and bound by all of the terms and conditions set forth herein.
12. The Optionee represents and agrees that he will comply with all
applicable laws relating to this Contract and the grant and exercise of this
option and the disposition of the shares of Common Stock acquired upon exercise
of the option, including without limitation, federal and state securities and
"blue sky" laws.
13. This option is not transferable by the Optionee otherwise than by
will or the laws of descent and distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee or the Optionee's legal
representatives. Except to the extent provided above, options may not be
assigned, transferred, pledged, hypothecated or disposed of in any way (whether
by operation of law or otherwise) and shall not be subject to execution,
attachment or
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similar process, and any such attempted assignment, transfer, pledge,
hypothecation or disposition shall be null and void ab initio and of no force or
effect.
14. This Contract shall be binding upon and inure to the benefit of any
successor or assign of the Company and to any heir, distributee, executor,
administrator or legal representative entitled to the Optionee's rights
hereunder.
15. DEFINITIONS. For purposes of the Plan, the following terms shall be
defined as set forth below:
(a) Constituent Corporation. The term "Constituent Corporation"
shall mean any corporation which engages with the Company, any of its
Subsidiaries or a Parent in a transaction to which Section 424(a) of the Code
applies (or would apply if the option assumed or substituted were an ISO), or
any Parent or any Subsidiary of such corporation.
(b) Consultant Option. The term "Consultant Option" shall mean a
NQSO granted pursuant to the Plan to a person who, at the time of grant, is a
consultant to the Company or a Subsidiary of the Company, and at such time is
not a salaried employee of the Company or any of its Subsidiaries.
(c) Disability. The term "Disability" shall mean a permanent and
total disability within the meaning of Section 22(e)(3) of the Code.
(d) Employee Option. The term "Employee Option" shall mean an
option granted pursuant to this Contract to an individual who, at the time of
grant, is a key employee of the Company or any of its Subsidiaries.
(e) Legal Representative. The term "Legal Representative" shall
mean the executor, administrator or other person who at the time is entitled by
law to exercise the rights of a deceased or incapacitated optionee with respect
to an option granted under this Contract.
(f) Non-Employee Director. The term "Non-Employee Director" shall
mean a person who is a director of the Company but who is not a salaried
employee of the Company or any of its Subsidiaries.
(g) Non-Employee Director Option. The term "Non-Employee
Director Option" shall mean a NQSO granted pursuant to this Contract to a person
who, at the time of the grant, is a Non-Employee Director.
(h) Parent. The term "Parent" shall have the same definition as
"parent corporation" in Section 424(e) of the Code.
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(i) Subsidiary. The term "Subsidiary" shall have the same
definition as "subsidiary corporation" in Section 424(f) of the Code.
16. This Contract shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without regard to the
conflicts of law rules thereof.
17. The invalidity, illegality or unenforceability of any provision
herein shall not affect the validity, legality or enforceability of any other
provision.
18. The Optionee agrees that the Company may amend this Contract and
the options granted to the Optionee under the Contract, subject to the
limitations contained in the Contract.
IN WITNESS WHEREOF, the parties hereto have executed this Contract as
of the day and year first above written.
SMARTSERV ONLINE, INC.
By: ________________________________________
_____________________________________________
, Optionee
_____________________________________________
_____________________________________________
Address
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