Exhibit 10.17
0-000-XXXXXXX.XXX, INC.
2003 LONG TERM INCENTIVE AND SHARE AWARD PLAN
NON-STATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of __________, 200_, between 0-000-Xxxxxxx.Xxx,
Inc. (the "Company"), a Delaware corporation, and _______________ (the
"Optionee").
WHEREAS, the Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board or of the
board of directors of any Parent, Subsidiary or Affiliate and consultants and
other independent advisors who provide services to the Company (or any Parent,
Subsidiary or Affiliate);
WHEREAS, the Optionee has been granted the following award under the
Company's 2003 Long Term Incentive and Share Award Plan (the "Plan");
WHEREAS, the Optionee is to render valuable services to the Company (or a
Parent, Subsidiary or Affiliate) and this Agreement is executed pursuant to, and
is intended to carry out the purposes of, the Plan in connection with the
Company's grant of an option to Optionee;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and for other good and valuable consideration, the parties
hereto agree as follows.
1. Grant of Option. The Company has granted to Optionee, on _____________
(the "Grant Date"), an option (the "Option") to purchase up to ____________
Option Shares. The Option Shares shall be purchasable from time to time during
the option term specified in Section 2 at $__________ per share (the "Exercise
Price"). This Option is intended to be a Non-Statutory Option.
2. Option Term. This Option shall have a maximum term of ten (10) years
measured from the Grant Date and shall accordingly expire at the close of
business on the tenth (10th) anniversary of the Grant Date (the "Expiration
Date"), unless sooner terminated in accordance with Section 5.
3. Limited Transferability. Except as otherwise provided in this Section 3,
this Option shall be neither transferable nor assignable by Optionee other than
by will or by the laws of descent and distribution following Optionee's death
and may be exercised, during Optionee's lifetime, only by Optionee. However,
this Option may be assigned in whole or in part during Optionee's lifetime
either as (i) a gift to one or more family members of Optionee's Immediate
Family, to a trust in which Optionee and/or one or more such family members hold
more than fifty percent (50%) of the beneficial interest or an entity in which
more than fifty percent (50%) of the voting interests are owned by Optionee
and/or one or more such family members, or (ii) pursuant to a domestic relations
order. The assigned portion shall be exercisable only by the person or persons
who acquire a proprietary interest in the Option pursuant to such assignment.
The terms applicable to the assigned portion shall be the same as those in
effect for this Option immediately prior to such assignment and shall be set
forth in such documents issued to the assignee as the Plan Administrator may
deem appropriate.
4. Vesting and Exercise. The Option shall vest and become exercisable with
respect to __________ (__%) of the Option Shares upon Optionee's completion of
each year of Service over the ____ (__) year period measured from the Grant
Date. As the Option vests and becomes exercisable in such installments, those
installments shall accumulate, and the Option shall remain exercisable for the
accumulated installments until the earlier of the Expiration Date or the
termination of the Option following termination of Service as set forth in
Section 5 below.
5. Termination of Service. The option term specified in Section 2 shall
terminate (and this Option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
(i) Should Optionee cease to remain in Service for any reason (other
than death, Permanent Disability or Misconduct) while this Option is
outstanding, then the vested portion of this Option (on the date of
termination of Service) shall remain exercisable until the earlier of (i)
the expiration of the three (3)-month period measured from the date of such
cessation of Service or (ii) the Expiration Date.
(ii) Should Optionee die while this Option is outstanding, then the
Optionee's Beneficiary shall have the right to exercise the portion of this
Option vested on the date of the Optionee's death until the earlier of (A)
the expiration of the twelve (12)-month period measured from the date of
Optionee's death or (B) the Expiration Date.
(iii) Should Optionee cease Service by reason of Permanent Disability
while this Option is outstanding, then the vested portion of this Option
(on the date of termination of Service) shall remain exercisable until the
earlier of (i) the expiration of the twelve (12)-month period measured from
the date of such cessation of Service or (ii) the Expiration Date.
(iv) During the applicable post-Service exercise period, this Option
may not be exercised in the aggregate for more than the number of vested
Option Shares for which the Option is exercisable on the date of Optionee's
cessation of Service. Upon the expiration of the applicable exercise period
or (if earlier) upon the Expiration Date, this Option shall terminate and
cease to be outstanding for any vested Option Shares for which the Option
has not been exercised. However, this Option shall, immediately upon
Optionee's cessation of Service for any reason, terminate and cease to be
outstanding to the extent this option is not otherwise at that time vested
and exercisable.
(v) Should Optionee's Service be terminated for Misconduct or should
Optionee engage in Misconduct while this Option is outstanding, then this
Option shall terminate immediately and cease to be outstanding.
6. Special Acceleration of Option.
(a) In the event of a Change of Control, this Option, to the extent
outstanding at that time but not otherwise fully vested and exercisable, shall
automatically become fully vested and exercisable immediately prior to the time
of the Change of Control so that the Option Shares will be entitled to
participate in the Change of Control transaction.
(b) This Agreement shall not in any way affect the right of the Company
to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
2
7. Adjustment in Option Shares. In the event that the Plan Administrator
shall determine that any dividend in Shares, recapitalization, Share split,
reverse split, reorganization, merger, consolidation, spin-off, combination,
repurchase, or share exchange, or other similar corporate transaction or event,
affects the Shares such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of Optionee under this Option, then the
Plan Administrator shall make such equitable changes or adjustments as it deems
appropriate and, in such manner as it may deem equitable, adjust any or all of
(i) the number and kind of shares, other securities or other consideration
issued or issuable in respect of this Option, and (ii) the Exercise Price;
provided, however, that no adjustment shall be made pursuant to this Section 7
that causes the Option to be treated as deferred compensation pursuant to
Section 409A of the Code.
8. Stockholder Rights. The holder of this Option shall not have any
stockholder rights with respect to the Option Shares until such person exercises
the Option, pays the Exercise Price and becomes a holder of record of the
purchased Shares.
9. Manner of Exercising Option.
(a) In order to exercise this Option with respect to all or any part of
the Option Shares for which this Option is at the time exercisable, Optionee (or
any other person or persons exercising the Option) must take the following
actions:
(i)Execute and deliver to the Company a Notice of Exercise for the
Option Shares for which the Option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased shares in one
or more of the following forms:
(A) cash or check made payable to the Company;
(B) apromissory note payable to the Company, but only to the
extent authorized by the Plan Administrator in accordance with Section
13;
(C) shares of Common Stock held by Optionee (or any other person
or persons exercising the Option) for the requisite period necessary
to avoid a charge to the Company's earnings for financial reporting
purposes and valued at Fair Market Value on the Exercise Date; or
(D) to the extent authorized by the Plan Administrator, through a
special sale and remittance procedure pursuant to which Optionee (or
any other person or persons exercising the Option) shall concurrently
provide irrevocable instructions (I) to a brokerage firm to effect the
immediate sale of the purchased shares and remit to the Company, out
of the sale proceeds available on the settlement date, sufficient
3
funds to cover the aggregate Exercise Price payable for the purchased
shares plus all applicable income and employment taxes required to be
withheld by the Company by reason of such exercise and (II) to the
Company to deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the Option exercise, payment of the
Exercise Price must accompany the Notice of Exercise delivered to the
Company in connection with the Option exercise.
(iii) Furnish to the Company appropriate documentation that the
person or persons exercising the Option (if other than Optionee) have the
right to exercise this Option.
(iv) Make appropriate arrangements with the Company (or Parent,
Subsidiary or Affiliate employing or retaining Optionee) for the satisfaction of
all income and employment tax withholding requirements applicable to the Option
exercise.
(b) As soon as practical after the Exercise Date, the Company shall
issue to or on behalf of Optionee (or any other person or persons exercising
this Option) a certificate for the purchased Option Shares, with the appropriate
legends affixed thereto.
(c) In no event may this Option be exercised for any fractional shares.
10. Compliance with Laws and Regulations.
(a) The exercise of this Option and the issuance of the Option Shares
upon such exercise shall be subject to compliance by the Company and Optionee
with all applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange (or the Nasdaq National Market, if applicable)
on which the Common Stock may be listed for trading at the time of such exercise
and issuance.
(b) The inability of the Company to obtain approval from any regulatory
body having authority deemed by the Company to be necessary to the lawful
issuance and sale of any Common Stock pursuant to this Option shall relieve the
Company of any liability with respect to the non-issuance or sale of the Common
Stock as to which such approval shall not have been obtained. The Company,
however, shall use its best efforts to obtain all such approvals.
11. Successors and Assigns. Except to the extent otherwise provided in
Section 3, the provisions of this Agreement shall inure to the benefit of, and
be binding upon, the Company and its successors and assigns and Optionee and
Optionee's assigns and Beneficiaries.
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
Company at its principal corporate offices. Any notice required to be given or
delivered to Optionee shall be in writing and addressed to Optionee at
Optionee's most recent address shown on the Company's corporate records or at
any other address which Optionee may specify in a written notice delivered to
4
the Company. All notices shall be deemed effective upon personal delivery or
upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.
13. Financing. The Plan Administrator may, in its absolute discretion and
without any obligation to do so, permit Optionee to pay the Exercise Price for
the purchased Option Shares by delivering a full-recourse promissory note
payable to the Company. The terms of any such promissory note (including the
interest rate, the requirements for collateral and the terms of repayment) shall
be established by the Plan Administrator in its sole discretion.
14. Construction. This Agreement and the Option evidenced hereby are made
and granted pursuant to the Plan, the terms of which are incorporated herein by
reference, and are in all respects limited by and subject to the terms of the
Plan. All decisions of the Plan Administrator with respect to any question or
issue arising under the Plan or this Agreement shall be conclusive and binding
on all persons having an interest in this Option.
15. Governing Law. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of New York without resort
to that State's conflict-of-laws rules. Each party hereto agrees to submit to
the exclusive jurisdiction of the United States District Court for the Eastern
District of New York or the Supreme Court of the State of New York, County of
Nassau in any action or proceeding arising out of or relating to this Agreement.
16. Excess Shares. If the Option Shares covered by this Agreement exceed,
as of the Grant Date, the number of shares of Common Stock which may without
stockholder approval be issued under the Plan, then this Option shall be void
with respect to those excess shares, unless stockholder approval of an amendment
sufficiently increasing the number of shares of Common Stock issuable under the
Plan is obtained in accordance with the provisions of the Plan.
17. Leave of Absence. The following provisions shall apply upon the
Optionee's commencement of an authorized leave of absence:
(i) The exercise schedule in effect under Section 4 above shall be
frozen as of the first day of the authorized leave, and this Option shall
not become exercisable for any additional installments of the Option Shares
during the period Optionee remains on such leave.
(ii) Should Optionee resume active Employee status within sixty (60)
days after the start date of the authorized leave, Optionee shall, for
purposes of the exercise schedule set forth in Section 4 above, receive
Service credit for the entire period of such leave. If Optionee does not
resume active Employee status within such sixty (60)-day period, then no
Service credit shall be given for the period of such leave.
(iii) In no event shall this Option become exercisable for any
additional Option Shares or otherwise remain outstanding if Optionee does
not resume Employee status prior to the Expiration Date of the option term.
5
18. Terms. Capitalized terms in this Agreement shall have the meaning
assigned to them in this Agreement, the attached Appendix and the Plan. In the
event of any conflict between this Agreement and the Plan, the Plan shall
control.
19. No Employment or Service Contract. Nothing in this Agreement or in the
Plan shall confer upon Optionee any right to continue in Service for any period
of specific duration or interfere with or otherwise restrict in any way the
rights of the Company (or any Parent, Subsidiary or Affiliate employing or
retaining Optionee) or of Optionee, which rights are hereby expressly reserved
by each, to terminate Optionee's Service at any time for any reason, with or
without cause.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
1-800 XXXXXXX.XXX, INC.
By:
-----------------------------
-----------------------------
Optionee
6
A-2
APPENDIX
The following definitions shall be in effect under the Agreement:
A. Agreement shall mean this Stock Option Agreement.
B. Board shall mean the Company's Board of Directors.
C. Change of Control shall mean:
(a) a merger, consolidation or reorganization approved by the Company's
stockholders, unless securities representing more than fifty percent (50%) of
the total combined voting power of the voting securities of the successor
corporation are immediately thereafter beneficially owned, directly or
indirectly and in substantially the same proportion, by the persons who
beneficially owned the Company's outstanding voting securities immediately prior
to such transaction.
(b) any stockholder-approved transfer or other disposition of all or
substantially all of the Company's assets, or
(c) the acquisition after the Effective Date, directly or indirectly,
by any person or related group of persons (other than the Company or a person
that directly or indirectly controls, is controlled by, or is under common
control with, the Company), of beneficial ownership (within the meaning of Rule
13d-3 of the Exchange Act) of securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's outstanding
securities.
D. Code shall mean the Internal Revenue Code of 1986, as amended.
E. Common Stock or Shares shall mean the common stock, $.01 par value per
share, of the Company.
F. Company shall mean 0-000-XXXXXXX.XXX, Inc., a Delaware corporation.
G. Effective Date shall mean December 3, 2003.
H. Employee shall mean an individual who is in the employ of the Company
(or any Parent, Subsidiary or Affiliate), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
I. Exchange Act means the Securities Exchange Act of 1934, as amended from
time to time. References to any provision of the Exchange Act shall be deemed to
include successor provisions thereto and the regulations thereunder.
J. Exercise Date shall mean the date on which the option shall have been
exercised in accordance with Section 9 of the Agreement.
K. Immediate Family of Optionee shall mean Optionee's child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law, including adoptive relationships.
L. Incentive Option shall mean an option which satisfies the requirements
of Code Section 422.
M. Misconduct shall mean the commission of any act of fraud, embezzlement
or dishonesty by Optionee, any unauthorized use or disclosure by Optionee of
confidential information or trade secrets of the Company (or any Parent,
Subsidiary or Affiliate), or any intentional wrongdoing by Optionee, whether by
omission or commission, which adversely affects the business or affairs of the
Company (or any Parent, Subsidiary or Affiliate). The foregoing definition shall
not limit the grounds for the dismissal or discharge of Optionee or any other
individual in the Service of the Company (or any Parent, Subsidiary or
Affiliate).
N. Non-Statutory Option shall mean an option not intended to satisfy the
requirements of Code Section 422.
O. Notice of Exercise shall mean the notice of exercise in the form
prescribed by the Committee, from time to time. Such Notice of Exercise may be
in written or electronic form.
P. Option Shares shall mean the number of shares of Common Stock subject to
the option as specified in Section 1 of this Agreement.
Q. Parent shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, provided each
corporation in the unbroken chain (other than the Company) owns, at the time of
the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
R. Permanent Disability shall mean the inability of Optionee to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.
S. Plan shall mean the Company's 2003 Long Term Incentive and Share Award
Plan.
T. Plan Administrator shall mean the Committee, as defined in the Plan.
U. Service shall mean Optionee's performance of services for the Company
(or any Parent, Subsidiary or Affiliate) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor.
A-2
