THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE
OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT
PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND
QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.
VISICOM LABORATORIES, INC.
1997 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
VisiCom Laboratories, Inc., a California corporation (the "Company"), hereby
grants an Option to purchase shares of its common stock ("Shares") to the
Optionee named below. The terms and conditions of the Option are set forth in
this cover sheet, in the attachment and in the Company's 1997 Stock Incentive
Plan (the "Plan").
Stock Option No. Date of Xxxxx:
-------------- ------------------------------
Name of Optionee:
--------------------------------------------------------------
Optionee's Social Security Number:
-------------------------------------------
Number or Shares Covered by Option:
-------------------------------------------
Exercise Price per Share:
------------------------------------------------------
[must be at least 100% fair market value on Date of Grant]
Vesting Start Date:
------------------------------------------------------------
Check here if Optionee is a 10% owner (so that exercise price
---- must be 100% of fair market value).
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS
DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY OF WHICH IS
ALSO ATTACHED.
Optionee:
---------------------------------------------------------------------
(Signature)
Company:
---------------------------------------------------------------------
(Signature)
Title: Corporate Secretary
--------------------------------------------------------------
(Signature)
1
VISICOM LABORATORIES, INC.
1997 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
INCENTIVE STOCK This Option is intended to be an incentive stock option under
OPTION section 422 of the Internal Revenue Code and will be
interpreted accordingly.
VESTING Your right to exercise this Option vests annually over a 4
year period beginning one year after the Vesting Start Date
as shown on the cover sheet. Accordingly, this Option vests
at a rate of 25% of the Shares covered by the Option per
year from the Vesting Start Date. The number of Shares
which may be purchased under this Option by you at the
Exercise Price shall be equal to the difference between (i)
the product (rounded to the nearest integer) of the number of
full years of your continuous employment with the Company
(including all days of any approved leaves of absence) from
the Date of Grant times the number of Shares covered by this
Option times .25 minus (ii) the number of Shares purchased
pursuant to this Option prior to such exercise. The resulting
number of Shares will be rounded to the nearest whole number.
No additional Shares will vest after your Service has
terminated for any reason.
TERM Your Option will expire in any event at the close of business
at Company headquarters on the day before the fifth
anniversary of the Date of Grant, as shown on the cover
sheet. (It will expire earlier if your Service terminates, as
described below.)
REGULAR If your Service terminates for any reason except death or
TERMINATION Disability, your Option will expire at the close of business
at Company Headquarters on the 30th day after your
termination date. During that 30-day period, you may exercise
that portion of your Option that was vested on your
termination date.
DEATH If you die while in Service with the Company, your Option
will expire at the close of business at Company headquarters
on the date six months after the date of death. During that
six-month period, your estate or heirs may exercise that
portion of your Option that was vested on the date of death.
DISABILITY If your Service terminates because of your Disability, your
Option will expire at the close of business at Company
headquarters on
-2-
the date six months after your termination date. (However, if
your Disability is not expected to result in death or to last
for a Continuous period of at least 12 months, your Option
will be eligible for ISO tax treatment only if it is
exercised within three months following the termination of
your Service.) During that six-month period, you may exercise
that portion of your Option that was vested on the date of
your Disability.
"Disability" means that you are unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment.
LEAVES OF ABSENCE For purposes of this Option, your Service does not terminate
when you go on a BONA FIDE leave of absence that was approved
by the Company in writing, if the terms of the leave provide
for continued service crediting, or when continued service
crediting is required by applicable law. However, your
Service will be treated as terminating 90 days after you went
on leave, unless your right to return to active work is
guaranteed by law or by a contract. Your Service terminates
in any event when the approved leave ends unless you
immediately return to active work. The Company determines
which leaves count for this purpose, and when your Service
terminates for all purposes under the Plan. The Company also
determines the extent to which you may exercise the vested
portion of your Option during a leave of absence.
NOTICE OF EXERCISE When you wish to exercise this Option, you must notify the
Company by filing the proper "Notice of Exercise" form at the
address given on the form. Your Notice of Exercise must
specify how many Shares you wish to purchase. Your Notice of
Exercise must also specify how your Shares should be
registered (in your name only, in your and your spouse's
names as community property or as joint tenants with right of
survivorship or in a trust for your benefit). The Notice of
Exercise will be effective when it is received by the
Company. If someone else wants to exercise this Option after
your death, that person must prove to the Company's
satisfaction that he or she is entitled to do so.
FORM OF PAYMENT When you submit your Notice of Exercise, you must include
payment of the Exercise Price for the Shares you are
purchasing. Payment may be made in one (or a combination) of
the following forms:
- Your personal check, a cashier's check or a money order.
-3-
- Shares which you own and which are surrendered to the
Company. The value of the Shares, determined as of the
effective date of the Option exercise, will be applied to the
Exercise Price.
- To the extent that a public market for the Shares exists
as determined by the Company, by delivery (on a form
prescribed by the Committee) of an irrevocable direction to a
securities broker to sell Shares and to deliver all or part
of the sale proceeds to the Company in payment of the
aggregate Exercise Price.
WITHHOLDING You will not be allowed to exercise this Option unless you
TAXES make acceptable arrangements to pay any withholding or other
taxes that may be due as a result of the Option exercise or
the sale of Shares acquired upon exercise of this Option.
RESTRICTIONS ON By signing this Agreement, you agree not to exercise this
EXERCISE AND Option or sell any Shares acquired upon exercise of this
RESALE Option at a time when applicable laws, regulations or Company
or underwriter trading policies prohibit exercise or sale. In
particular, the Company shall have the right to designate one
or more periods of time, each of which shall not exceed 180
days in length, during which this Option shall not be
exercisable if the Company determines (in its sole
discretion) that such limitation on exercise could in any way
facilitate a lessening of any restriction on transfer
pursuant to the Securities Act or any state securities laws
with respect to any issuance of securities by the Company,
facilitate the registration or qualification of any
securities by the Company under the Securities Act or any
state securities laws, or facilitate the perfection of any
exemption from the registration or qualification requirements
of the Securities Act or any applicable state securities laws
for the issuance or transfer of any securities. Such
limitation on exercise shall not alter the vesting schedule
set forth in this Agreement other than to limit the periods
during which this Option shall be exercisable.
-4-
If the sale of Shares under the Plan are not registered under
the Securities Act of 1933, as amended (the "Securities
Act"), but an exemption is available which requires an
investment or other representation, you shall represent and
agree at the time of exercise that the Shares being acquired
upon exercise of this Option are being acquired for
investment, and not with a view to the sale or distribution
thereof, and shall make such other representations as are
deemed necessary or appropriate by the Company and its
counsel.
THE COMPANY'S
RIGHT OF FIRST In the event that you propose to sell, pledge or otherwise
REFUSAL transfer to a third party any Shares acquired under this
Agreement, or any interest in such Shares, the Company shall
have the "Right of First Refusal" with respect to all (and
not less than all) of such Shares. If you desire to transfer
Shares acquired under this Agreement, you must give a written
"Transfer Notice" to the Company describing fully the
proposed transfer, including the number of Shares proposed to
be transferred, the proposed transfer price and the name and
address of the proposed transferee. The Transfer Notice shall
be signed both by you and by the proposed transferee and must
constitute a binding commitment of both parties to the
transfer of the Shares. The Company shall have the right to
purchase all, and not less than all, of the Shares on the
terms described in the Transfer Notice (subject, however, to
any change in such terms permitted in the next paragraph) by
delivery of a Notice of Exercise of the Right of First
Refusal within 30 days after the date when the Transfer
Notice was received by the Company. The Company's rights
under this Subsection shall be freely assignable, in whole or
in part.
If the Company fails to exercise its Right of First Refusal
within 30 days after the date when it received the Transfer
Notice, you may, not later than 90 days following receipt of
the Transfer Notice by the Company, conclude a transfer of
the Shares subject to the Transfer Notice on the terms and
conditions described in the Transfer Notice. Any proposed
transfer on terms and conditions different from those
described in the Transfer Notice, as well as any subsequent
proposed transfer by you, shall again be subject to the Right
of First Refusal and shall require compliance with the
procedure described in the paragraph above. If the Company
exercises its Right of First Refusal, the parties shall
consummate the sale of the Shares on the terms set forth in
the Transfer Notice within 60 days after the date the Company
received the Transfer Notice (or within such longer period as
may have been specified
-5-
in the Transfer Notice); provided, however, that in the event
the Transfer Notice provided that payment for the Shares was
to be made in a form other than lawful money paid at the
time of transfer, the Company shall have the option of paying
for the Shares with lawful money equal to the present value
of the consideration described in the Transfer Notice.
The Company's Right of First Refusal shall inure to the
benefit of Its Successors and assigns and shall be binding
upon any transferee of the Shares.
The Company's Right of First Refusal shall terminate in the
event that Stock is listed or traded on an established stock
exchange.
RIGHT OF Following termination of your Service for any reason, the
REPURCHASE Company shall have the right to purchase all of those Shares
that you have or will acquire under this Option. If the
Company fails to provide you with written notice of its
intention to purchase such Shares before or within 30 days of
the date the Company receives written notice from you of your
termination of Service, the Company's right to purchase such
Shares shall terminate. If the Company exercises its right
to purchase such Shares, the Company will consummate the
purchase of such Shares within 60 days of the date of its
written notice to you. The purchase price for any Shares
repurchased shall be the higher of the Fair Market Value of
such Shares on the date of purchase or the aggregate Exercise
Price for such Shares and shall be paid in cash. The
Company's right of repurchase shall terminate in the event
that Stock is listed on an established stock exchange or is
quoted regularly on the NASDAQ National Market.
TRANSFER OF OPTION Prior to your death, only you may exercise this Option. You
cannot transfer or assign this Option. For instance, you may
not sell this Option or use it as security for a loan. If you
attempt to do any of these things, this Option will
immediately become invalid. You may, however, dispose of this
Option in your will. Regardless of any marital property
settlement agreement, the Company is not obligated to honor a
Notice of Exercise from your spouse or former spouse, nor is
the Company obligated to recognize such individual's interest
in your Option in any other way.
RETENTION RIGHTS This Agreement does not give you the right to be retained by
the Company in any capacity. The Company reserves the right
to terminate your Service at any time and for any reason.
-6-
SHAREHOLDER Neither you, nor your estate or heirs, have any rights as a
RIGHTS Shareholder of the Company until a certificate for the shares
acquired upon exercise of this option has been issued. No
adjustments are made for dividends or other rights if the
applicable record date occurs before your stock certificate
issued, except as described in the Plan.
ADJUSTMENTS In the event of a stock split, a stock dividend or a similar
change in the Company's Stock, the number of Shares covered
by this Option and the Exercise Price per share may be
adjusted pursuant to the Plan. Your Option shall be subject
to the terms of the agreement or merger, liquidation or
reorganization in the event the Company is subject to such
corporate activity.
LEGENDS All certificates representing the Shares issued upon exercise
of this Option shall, where applicable, have endorsed thereon
the following legends:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE SUCH
SHARES SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE
REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A
COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF
THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE
SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE
SHARES REPRESENTED BY THIS CERTIFICATE.
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.
APPLICABLE LAW This Agreement will be interpreted and enforced under the
laws of the State of California (without regard to their
choice of law provisions).
-7-
THE PLAN AND The text of the Plan is incorporated in this Agreement by
OTHER AGREEMENTS reference. Certain capitalized terms used in this Agreement
are defined in the Plan.
This Agreement and the Plan constitute the entire
understanding between you and the Company regarding this
Option. Any prior agreements, commitments or negotiations
concerning this Option are superseded.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE
TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.
-8-
