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.
GROUP MANAGEMENT CORP.
2001 OMNIBUS SECURITIES PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
Group Management Corp. (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 2002 Omnibus Securities Plan (the "Plan").
Date of Grant: _________________________
Name of Optionee: _________________________
Optionee's Social Security Number: _________________________
Number of Shares Covered by Option: _________________________
Exercise Price per Share: $ _________________________
Vesting Start Date: _________________________
___ Check here if Optionee is a 10% owner (so that exercise price must be
110% of fair market value and term will not exceed 5 years).
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: __________________________________________
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.
GROUP MANAGEMENT CORP.
2001 OMNIBUS SECURITIES PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
NONSTATUTORY STOCK OPTION
This Option is not intended to be an incentive stock option under section 422 of
the Internal Revenue Code and will be interpreted accordingly.
VESTING
No Shares will vest until you have performed _______ (____) months of Service
from the commencement of your employment with the Company. Your Option shall
vest as to _______ of the Shares on the date _______ (____) months from the
Vesting Start Date as shown on the cover sheet. Thereafter, Shares shall vest at
the rate of ________ of the Shares at the end of each full month thereafter.
After you have completed ________ (____) months of Service, the number of Shares
which vest under this Option at the Exercise Price shall be equal to the product
of the number of full months of your continuous employment with the Company
("Service") (including any approved leaves of absence) from the Vesting Start
Date times the number of Shares covered by this Option times ________. 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.
You should note that you may exercise the Option prior to vesting. In that case,
the Company has a right to repurchase the unvested shares at the original
exercise price if you terminate employment before vesting in all shares you
purchased. Also, if you exercise before vesting, you should consider making
an 83(b) election. Please see the attached Tax Summary. The 83(b) election
------------------
must be filed within 30 days of the date you exercise.
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TERM
Your Option will expire in any event at the close of business at Company
headquarters on the day before the tenth anniversary (fifth anniversary for a
10% owner) of the Date of Grant, as shown on the cover sheet. (It will expire
earlier if your Service terminates, as described below.)
REGULAR TERMINATION
If your Service terminates for any reason except death, Disability, or for
"Cause" your Option will expire at the close of business at Company headquarters
on the 30th day after your termination date. During such 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 your 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 the date six months after
your termination date. During that six-month period, you may exercise that
portion of your Option that was vested on your date of 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 30 days after you went on leave, unless your right to
return to 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 Service.
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 execute Exhibit A (and if
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exercise is prior to vesting you must also execute Exhibits B and D). Your
----------------
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 Exhibit A, 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 at the discretion of the committee:
- Your personal check, a cashier's check or a money order.
- Shares which you have owned for six months 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.
- Any other form of legal consideration approved by the Committee.
WITHHOLDING TAXES
You will not be allowed to exercise this Option unless you 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 RESALE
By signing this Agreement, you agree not to exercise this Option or sell any
Shares acquired upon exercise of this 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.
Furthermore, in respect of any underwritten public offering by the Company, you
agree that you will not sell or otherwise transfer or dispose of any Shares
covered by this Option during a reasonable and customary period of time as
agreed to by the Company and the underwriters, not to exceed the greater of (a)
180 days following the effective date of the registration statement of the
Company filed under the Securities Act in respect of such offering and (b) such
other period of time as agreed to by holders of a majority of the then
outstanding Shares. By signing this Agreement you agree to execute and deliver
such other agreements as may be reasonably requested by the Company or the
underwriter which are consistent with the foregoing or which are necessary to
give further effect thereto. The Company may impose stop-transfer instructions
with respect to the Shares subject to the foregoing restriction until the end of
such period.
If the sale of Shares under the Plan is 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 REFUSAL
In the event that you propose to sell, pledge or otherwise 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 and its assignees 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 60 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, you and the Company (or its
assignees) shall consummate the sale of the Shares on the terms set forth in the
Transfer Notice.
The Company's Right of First Refusal shall terminate upon the Company's initial
public offering.
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.
RIGHT OF REPURCHASE
Following termination of your Service for any reason, the Company shall have the
right to purchase all of those vested Shares that you have or will acquire under
this Option (unvested Shares which have been exercised are subject to a
Repurchase Option set forth in Exhibit A). 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 the 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. The fair market value shall be determined by the Board of
Directors in its sole discretion.
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.
SHAREHOLDER RIGHTS
Neither you, nor your estate or heirs, have any rights as a 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 is 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 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 of 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 SECURITIES 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 SUCH XXXXXX'S
PREDECESSOR IN INTEREST. SUCH AGREEMENT IMPOSES CERTAIN TRANSFER RESTRICTIONS
AND GRANTS CERTAIN REPURCHASE RIGHTS TO THE COMPANY (OR ITS ASSIGNS) UPON THE
SALE OF THE SHARES OR UPON TERMINATION OF SERVICE WITH THE COMPANY. 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
SHARES REPRESENTED BY THIS CERTIFICATE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
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 AND ITS COUNSEL, THAT
REGISTRATION AND QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT
REQUIRED."
APPLICABLE LAW
This Agreement will be interpreted and enforced under the laws of the State of
Texas (without regard to their choice of law provisions).
THE PLAN AND OTHER AGREEMENTS
The text of the Plan is incorporated in this Agreement by 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. YOU ALSO ACKNOWLEDGE THAT YOU HAVE
READ SECTION 11, "PURCHASER'S INVESTMENT REPRESENTATIONS" OF ATTACHMENT A AND
THAT YOU CAN AND HEREBY DO MAKE THE SAME REPRESENTATIONS WITH RESPECT TO THE
GRANT OF THIS OPTION.
