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EXHIBIT 4.04
NO. ______
APTEX SOFTWARE INC.
1996 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 Aptex Software Inc., a California 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 1996 Equity
Incentive Plan (the "PLAN").
PARTICIPANT:
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SOCIAL SECURITY NUMBER:
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ADDRESS:
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TOTAL OPTION SHARES:
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EXERCISE PRICE PER SHARE:
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DATE OF GRANT:
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FIRST VESTING DATE:
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EXPIRATION DATE:
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TYPE OF STOCK OPTION
(CHECK ONE): [ ] INCENTIVE STOCK OPTION
[ ] NONQUALIFIED STOCK OPTION
1. GRANT OF OPTION. The Company hereby grants to Participant an
option (this "OPTION") to purchase the total number of shares of Common Stock of
the Company set forth above (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. If designated as an Incentive Stock Option
above, this Option is intended to qualify as an "incentive stock option" ("ISO")
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "CODE").
2. EXERCISE PERIOD.
2.1 EXERCISE PERIOD OF OPTION. Provided Participant
continues to provide services to the Company or any Subsidiary or Parent of the
Company and subject to earlier termination of this Option as provided in Section
8 below or Section 22 of the Plan, this Option will become vested and
exercisable as to portions of the Shares as follows: (a) this Option shall not
vest nor be exercisable with respect to any of the Shares until ___________,
____ (the "FIRST VESTING DATE"); (b) on the First Vesting Date, this Option will
become vested and exercisable as to 25% of the Shares; and (c) thereafter,
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at the end of each full succeeding month, this Option will become vested and
exercisable as to an additional 2.0833% of the Shares until this Option is
vested and exercisable as to 100% of the Shares. If application of the vesting
percentage causes a fractional share, such share shall be rounded up to the
nearest whole share.
2.2 VESTING OF OPTION. Shares that are vested pursuant to
the schedule set forth in Section 2.1 are "VESTED SHARES". Shares that are not
vested pursuant to the schedule set forth in Section 2.1 are "UNVESTED SHARES".
Only Vested Shares may be exercised.
2.3 EXPIRATION. This Option shall expire on the Expiration
Date set forth above and must be exercised, if at all, on or before the
Expiration Date.
3. TERMINATION.
3.1 TERMINATION FOR ANY REASON EXCEPT DEATH OR DISABILITY.
If Participant is Terminated for any reason, except death or Disability, this
Option, to the extent (and only to the extent) that it would have been
exercisable by Participant on the Termination Date, may be exercised by
Participant no later than three (3) months after the Termination Date, 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 (or
Participant dies within three (3) months after Termination other than because of
Participant's death or Disability), this Option, to the extent that it is
exercisable by Participant on the Termination Date, may be exercised by
Participant (or Participant's legal representative or authorized assignee) no
later than twelve (12) months after the Termination Date, but in any event no
later than the Expiration Date. Any exercise beyond three (3) months after the
Termination Date when the Termination is for any reason other than the
Participant's death or disability, within the meaning of Section 22(e)(3) of the
Code is deemed to be the exercise of an NQSO.
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 or
incapacity, 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 form 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, the restrictions imposed on the Shares being
purchased pursuant to the provisions of Section 22 of the Plan and the other
restrictions, if any, imposed on the Shares purchased under such Exercise
Agreement and such representations 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 ON 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 one hundred (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 that the Company does not dispute
to be due or accrued to Participant for services rendered to
the Company;
(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 an 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, state and local 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.
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.
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5. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If this
Option is an ISO, and if Participant sells or otherwise disposes of any of the
Shares acquired pursuant to the ISO on or before the later of (a) the date two
(2) years after the Date of Grant, and (b) the date one (1) year after transfer
of such Shares to Participant upon exercise of this Option, Participant shall
immediately notify the Company in writing of such disposition. Participant
agrees that Participant may be subject to income tax withholding by the Company
on the compensation income recognized by Participant from the early disposition
by payment in cash or out of the current wages or other compensation payable to
Participant.
6. COMPLIANCE WITH LAWS AND REGULATIONS RESTRICTIONS ON SHARES. The
Plan and this Agreement are intended to comply with Section 25102(o) of the
California Corporations Code. Any provision of this Agreement which is
inconsistent with Section 25102(o) shall, without further act or amendment by
the Company or the Board, be reformed to comply with the requirements of Section
25102(o). 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. Participant also
understands that this Agreement imposes: (a) contractual restrictions on
Participant's ability to transfer, pledge or encumber the Shares received on
exercise of this Option and (b) contractual options that may require Participant
to (i) surrender and release this Option and all rights of Participant under
this Option and (ii) sell the Shares back to the Company, HNC or others on terms
and conditions set forth in this Agreement and the Plan.
7. NONTRANSFERABILITY 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.
8. GENERAL REPURCHASE OPTION. Participant agrees with the Company
and with HNC that, as provided in the Plan, at any time during the Repurchase
Period (as that term is defined in Section 22 of the Plan) HNC shall have the
right, at its sole option, (a) to repurchase all (but not less than all) of the
Shares issued under this Option at the Share Repurchase Price (as that term is
defined in Section 22 of the Plan); and (b) to cause and compel Participant to
forever and irrevocably entirely surrender and release this Option and all
rights of Participant under this Option so that this Option and all rights of
Participant under this Option (including without limitation Participant's right
and option to purchase Shares under this Option) shall be fully terminated and
cancelled in consideration of HNC's payment to Participant of the Option
Repurchase Price (as that term is defined in Section 22 of the Plan), all in
accordance with the provisions of this Section 8 and the provisions of the Plan,
specifically including the provisions of Section 22 of the Plan entitled
"General Repurchase Option" (the "GENERAL REPURCHASE OPTION").
8.1 ACKNOWLEDGMENT AND AGREEMENT. PARTICIPANT HEREBY FURTHER
ACKNOWLEDGES AND AGREES THAT:
(a) PARTICIPANT HAS READ AND UNDERSTANDS THE PLAN (INCLUDING
WITHOUT LIMITATION THE PROVISIONS OF SECTION 22 OF THE PLAN
REGARDING THE GENERAL REPURCHASE OPTION, THE DEFINITION OF
THE "REPURCHASE PERIOD" AND THE PROVISIONS OF THE PLAN
REGARDING THE DETERMINATION OF (I) THE "SHARE REPURCHASE
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PRICE" AT WHICH THE SHARES ISSUED UNDER THIS OPTION MAY BE
PURCHASED PURSUANT TO THE GENERAL REPURCHASE OPTION AND (II)
THE "OPTION REPURCHASE PRICE" AT WHICH THE GENERAL
REPURCHASE OPTION MAY BE EXERCISED TO CANCEL AND CAUSE THE
SURRENDER AND RELEASE OF THIS OPTION);
(B) A COPY OF THE PLAN IS ATTACHED AS EXHIBIT 4 TO THE EXERCISE
AGREEMENT, WHICH IS ATTACHED HERETO AS EXHIBIT A TO THIS
AGREEMENT, AND THE PROVISIONS OF THE PLAN (INCLUDING WITHOUT
LIMITATION THE PROVISIONS OF SECTION 22 OF THE PLAN
REGARDING THE GENERAL REPURCHASE OPTION) ARE INCORPORATED BY
REFERENCE IN THIS AGREEMENT AND FORM PART OF THE PROVISIONS
OF THIS AGREEMENT; AND
(C) PARTICIPANT, THIS OPTION AND THE SHARES ISSUED UNDER THIS
OPTION ARE BOUND BY THE GENERAL REPURCHASE OPTION AND THE
PROVISIONS OF THE PLAN (INCLUDING WITHOUT LIMITATION THE
PROVISIONS OF SECTION 22 OF THE PLAN REGARDING THE GENERAL
REPURCHASE OPTION).
8.2 GENERAL REPURCHASE OPTION PREVAILS. In case of any
inconsistency or conflict between the Company's attempted exercise of the Right
of First Refusal under Section 9 hereof, and HNC's attempted exercise of the
General Repurchase Option granted under this Section 8 and under Section 22 of
the Plan, the General Repurchase Option shall supersede, govern and prevail and
the Right of First Refusal may not be exercised to the extent it is inconsistent
or in conflict with HNC's rights or ability to exercise the General Repurchase
Option. The exercise by the Company (but not its assignees) of the Right of
First Refusal that results in the Company's repurchase and reacquisition of
Shares at a time when the General Repurchase Option is not being exercised will
not be deemed inconsistent or in conflict with the General Repurchase Option.
8.3 TERM. The termination of Participant's relationship with
the Company for any reason shall not terminate the General Repurchase Option and
shall have no effect whatsoever on the General Repurchase Option, which shall
remain in full force and effect in accordance with its terms with respect to any
of the Shares.
8.4 CONSTRUCTION. The parties acknowledge and agree that the
provisions of this Section 8 have been included in this Agreement in order to
carry out the provisions of Section 22 of the Plan regarding HNC's General
Repurchase Option (the "PLAN REPURCHASE OPTION PROVISIONS"). Accordingly, in
case of any conflict or inconsistency between the provisions of this Section 8
and the Plan Repurchase Option Provisions, the provisions of this Section 8
shall be construed and interpreted in a manner consistent with the terms,
conditions, construction and interpretation of the Plan Repurchase Option
Provisions.
9. RIGHT OF FIRST REFUSAL. Shares that are subject to the General
Repurchase Option ("OPTION SHARES") may not be transferred by Participant
without HNC's prior written consent unless the transferee who acquires such
Option Shares first agrees, in a writing that is reasonably satisfactory to HNC
and that is signed by HNC and such transferee, that the General Repurchase
Option and the restrictions and provisions of this Section 9 shall continue to
apply to and bind all such Option Shares in the hands of such transferee and its
transferees, successors and assigns. As used herein, the term "TRANSFERABLE
SHARES" means Shares that either (i) are not Option Shares or (ii) are Option
Shares as to
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which HNC has given Participant HNC's prior written consent to transfer in
accordance with the foregoing provisions of this Section. Subject to the
foregoing provisions of this Section and the terms and conditions of this
Agreement and the Plan, before any Transferable Shares held by Participant or
any transferee of such Shares (either being sometimes referred to herein as the
"HOLDER") may be sold or otherwise transferred (including without limitation a
transfer by gift or operation of law), the Company and/or its assignee(s) shall
have a right of first refusal to purchase the Transferable Shares to be sold or
transferred (the "OFFERED SHARES") on the terms and conditions set forth in this
Section (the "RIGHT OF FIRST REFUSAL").
9.1 NOTICE OF PROPOSED TRANSFER. The Holder of the Offered
Shares will deliver to the Company a written notice (the "NOTICE") stating: (i)
the Holder's bona fide intention to sell or otherwise transfer the Offered
Shares; (ii) the name of each proposed purchaser or other transferee of any
Offered Shares ("PROPOSED TRANSFEREE"); (iii) the number of Offered Shares to be
transferred to each Proposed Transferee; (iv) the bona fide cash price or other
consideration for which the Holder proposes to transfer the Offered Shares (the
"OFFERED PRICE"); and (v) that the Holder will offer to sell the Offered Shares
to the Company and/or its assignee(s) at the Offered Price as provided in this
Section.
9.2 EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within
thirty (30) days after the date of the Notice, the Company and/or its
assignee(s) may, by giving written notice to the Holder, elect to purchase all
(but not less than all) of the Offered Shares proposed to be transferred to any
one or more of the Proposed Transferees named in the Notice, at the purchase
price determined in accordance with subsection 9.3 below.
9.3 PURCHASE PRICE. The purchase price for the Offered
Shares purchased under this Section will be the Offered Price. If the Offered
Price includes consideration other than cash, then the value of the non-cash
consideration as determined in good faith by the Company's Board of Directors
will conclusively be deemed to be the cash equivalent value of such non-cash
consideration.
9.4 PAYMENT. Payment of the purchase price for Offered
Shares will be payable, at the option of the Company and/or its assignee(s) (as
applicable), by check or by cancellation of all or a portion of any outstanding
indebtedness of the Holder to the Company (or to such assignee, in the case of a
purchase of Offered Shares by such assignee) or by any combination thereof. The
purchase price will be paid without interest within sixty (60) days after the
Company's receipt of the Notice, or, at the option of the Company and/or its
assignee(s), in the manner and at the time(s) set forth in the Notice.
9.5 HOLDER'S RIGHT TO TRANSFER. If all of the Offered Shares
proposed in the Notice to be transferred to a given Proposed Transferee are not
purchased by the Company and/or its assignee(s) as provided in this Section,
then the Holder may sell or otherwise transfer such Offered Shares to that
Proposed Transferee at the Offered Price or at a higher price, provided that
such sale or other transfer is consummated within 120 days after the date of the
Notice, and provided further, that: (i) any such sale or other transfer is
effected in compliance with all applicable securities laws; and (ii) the
Proposed Transferee agrees in writing that the provisions of this Section will
continue to apply to the Offered Shares in the hands of such Proposed
Transferee. If the Offered Shares described in the Notice are not transferred to
the Proposed Transferee within such 120 day period, then a new Notice must be
given to the Company, and the Company will again be offered the Right of First
Refusal before any Shares held by the Holder may be sold or otherwise
transferred.
9.6 EXEMPT TRANSFERS. Notwithstanding anything to the
contrary in this Section, the following transfers of Shares will be exempt from
the Right of First Refusal: (i) the transfer of any or all of the Shares during
Participant's lifetime by gift or on Participant's death by will or
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intestacy to Participant's "immediate family" (as defined below) or to a trust
for the benefit of Participant or Participant's immediate family, provided that
each transferee or other recipient agrees in a writing satisfactory to the
Company and HNC that the General Repurchase Option set forth in Section 8 (if
such General Repurchase Option has not expired by its terms) and the provisions
of this Section will continue to apply to the transferred Shares in the hands of
such transferee or other recipient; (ii) any transfer of Shares made pursuant to
a statutory merger or statutory consolidation of the Company with or into
another corporation or corporations (except that the Right of First Refusal will
continue to apply thereafter to such Shares, in which case the surviving
corporation of such merger or consolidation shall succeed to the rights or the
Company under this Section unless the agreement of merger or consolidation
expressly otherwise provides); or (iii) any transfer of Shares pursuant to the
winding up and dissolution of the Company. As used herein, the term "IMMEDIATE
FAMILY" will mean Participant's spouse, lineal descendant or antecedent, father,
mother, brother or sister, adopted child or grandchild, or the spouse of any
child, adopted child, grandchild or adopted grandchild of Participant.
9.7 TERMINATION OF RIGHT OF FIRST REFUSAL. The Right of
First Refusal will terminate as to all Shares on the effective date of the first
sale of Common Stock of the Company to the general public pursuant to a
registration statement filed with and declared effective by the SEC under the
1933 Act (other than a registration statement relating solely to the issuance of
Common Stock pursuant to a business combination or an employee incentive or
benefit plan).
9.8 ENCUMBRANCES ON TRANSFERABLE SHARES. Participant may
xxxxx x xxxx or security interest in, or pledge, hypothecate or encumber
Transferable Shares only with the prior written consent of the Company and (if
the General Repurchase Option has not terminated) HNC, and only if each party to
whom such lien or security interest is granted, or to whom such pledge,
hypothecation or other encumbrance is made, agrees in a writing satisfactory to
the Company and (so long as the General Repurchase Option has not terminated)
HNC that (i) such lien, security interest, pledge, hypothecation or encumbrance
will not apply to such Transferable Shares after they are acquired by the
Company and/or its assignees pursuant to the Right of First Refusal set forth in
this Section or by HNC pursuant to the General Repurchase Option set forth in
Section 8; and (ii) the provisions of this Section and Section 8 will continue
to apply to such Transferable Shares in the hands of such party and any
transferee of such party. Participant may not xxxxx x xxxx or security interest
in, or pledge, hypothecate or encumber, any Shares that are not Transferable
Shares.
10. TAX CONSEQUENCES. Set forth below is a brief summary as of the
Effective Date of the Plan 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 ADVISER BEFORE EXERCISING THE OPTION
OR DISPOSING OF THE SHARES.
10.1 EXERCISE OF ISO. If this Option qualifies as an ISO,
there will be no regular federal or California income tax liability upon the
exercise of this Option, although the excess, if any, of the Fair Market Value
of the Shares on the date of exercise over the Exercise Price will be treated as
a tax preference item for federal income tax purposes and may subject the
Participant to the alternative minimum tax in the year of exercise.
10.2 EXERCISE OF NONQUALIFIED STOCK OPTION. If this Option
does not qualify as an ISO, 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
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from Participant and pay to the applicable taxing authorities an amount equal to
a percentage of this compensation income at the time of exercise.
10.3 DISPOSITION OF SHARES. If the Shares are held for more
than twelve (12) months after the date of issuance of the Shares pursuant to the
exercise of this Option and, in the case of an ISO, are disposed of more than
two years after the Date of Grant, any gain realized on disposition of the
Shares will be treated as long term capital gain for federal and California
income tax purposes. If Shares purchased under an ISO are disposed of within the
applicable one year or two year period, any gain realized on such disposition
will be treated as compensation income (taxable at ordinary income rates) to the
extent of the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price. The Company may 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.
11. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have any
of the rights of a shareholder with respect to any Shares until the Shares are
issued to Participant.
12. 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.
13. ENTIRE AGREEMENT. The Plan is incorporated herein by reference.
This Agreement and the Plan constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.
14. 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 facsimile, rapifax or telecopier.
15. SUCCESSORS AND ASSIGNS. The Company may assign any of its
rights under this Agreement, including its rights to repurchase Shares under the
Right of First Refusal. Such rights may be assigned, without limitation, to HNC.
This Agreement will be binding upon and inure to the benefit of the successors
and assigns of the Company and (to the extent applicable) HNC. Subject to the
restrictions on transfer herein set forth, this Agreement will be binding upon
Participant and Participant's heirs, executors, administrators, successors and
assigns. HNC's rights under the General Repurchase Option may be assigned to any
corporation with whom HNC is merged or consolidated with or into in any
consolidation, merger or similar business combination or to whom HNC sells or
transfers all or substantially all its assets.
16. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California as such laws
are applied to agreements between California residents entered into and to be
performed entirely within California. If any provision of this Agreement is
determined by a court of law to be illegal or unenforceable, then such provision
will be
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enforced to the maximum extent possible and the other provisions will remain
fully effective and enforceable.
17. AMENDMENT; WAIVER. This Agreement may be amended and modified
only by a writing executed by the Company and Participant; provided, however,
that no provision of this Agreement affecting (or potentially affecting) the
General Repurchase Option or any other rights (or potential rights) of HNC
hereunder in any manner may be amended or modified in any respect without the
prior written consent of HNC, which may be withheld in HNC's sole discretion. No
rights of the Company, Participant or HNC may be waived except by a writing
executed by the party against whom such waiver is asserted.
18. HNC THIRD PARTY BENEFICIARY STATUS. The parties acknowledge and
agree that the provisions of this Agreement are being made for the benefit of
HNC and that HNC is an intended third party beneficiary of this Agreement,
entitled to enforce all the terms and conditions of this Agreement (including
but not limited to the provisions of Section 8, Section 9, Section 15, Section
17, this Section 18 and any other provisions related thereto) against the
Company and Participant and their respective successors and assigns, to the same
extent that HNC could if HNC were a party and signatory to this Agreement.
19. 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 issued under this Option and that Participant should consult a tax
adviser prior to such exercise or disposition.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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 set forth below.
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COMPANY PARTICIPANT
Aptex Software Inc.
By:
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(Signature)
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(Please print name) (Please print name)
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(Please print title)
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(Date)
[SIGNATURE PAGE TO 1996 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT]
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EXHIBIT A
NO. ______
APTEX SOFTWARE, INC.
1996 EQUITY INCENTIVE PLAN
STOCK OPTION EXERCISE AGREEMENT
This Exercise Agreement is made and entered into as of ______________,
_____ (the "EFFECTIVE DATE") by and between Aptex Software, Inc., a California
corporation (the "COMPANY"), and the purchaser named below (the "PURCHASER").
Capitalized terms not defined herein shall have the meaning ascribed to them in
the Company's 1996 Equity Incentive Plan (the "PLAN").
PURCHASER: ----------------------------------
SOCIAL SECURITY NUMBER: ----------------------------------
ADDRESS: ----------------------------------
TOTAL NUMBER OF SHARES: ----------------------------------
EXERCISE PRICE PER SHARE: ----------------------------------
TOTAL EXERCISE PRICE: ----------------------------------
OPTION NO. ___ DATE OF GRANT: ----------------------------------
TYPE OF OPTION: [ ] INCENTIVE STOCK OPTION
[ ] NONQUALIFIED STOCK OPTION
1. EXERCISE OF OPTION.
1.1 EXERCISE. Pursuant to exercise of that certain option
("OPTION") granted to Purchaser under the Plan and subject to the terms and
conditions of this Agreement, Purchaser hereby purchases from the Company, and
the Company hereby sells to Purchaser, the total number of shares set forth
above ("SHARES") of the Company's Common Stock at the Exercise Price Per Share
set forth above ("EXERCISE PRICE"). As used in this Agreement, the term "SHARES"
refers to the Shares purchased under this Exercise Agreement and includes all
securities received (a) in replacement of the Shares, (b) as a result of stock
dividends or stock splits with respect to the Shares, and (c) all securities
received in replacement of the Shares in a merger, recapitalization,
reorganization or similar corporate transaction.
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1.2 TITLE TO SHARES. The exact spelling of the name(s) under
which Purchaser will take title to the Shares is:.
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Purchaser desires to take title to the Shares as follows:
[ ] Individual, as separate property
[ ] Husband and wife, as community property
[ ] Joint Tenants
[ ] Alone or with spouse as trustee(s) of the following trust (including date):
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[ ] Other; please specify:
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1.3 PAYMENT. Purchaser hereby delivers payment of the
Exercise Price in the manner permitted in the Stock Option Agreement as follows
(check and complete as appropriate):
[ ] in cash in the amount of $____________, receipt of which is
acknowledged by the Company;
[ ] by cancellation of indebtedness of the Company to Purchaser
in the amount of $__________;
[ ] by delivery of _________ fully-paid, nonassessable and
vested shares of the Common Stock of the Company owned by
Purchaser for at least six (6) months prior to the date
hereof which have been paid for within the meaning of SEC
Rule 144, (if purchased by use of a promissory note, such
note has been fully paid with respect to such vested
shares), or obtained by Purchaser 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 for
services rendered in the amount of $_________.
2. DELIVERY.
2.1 DELIVERIES BY PURCHASER. Purchaser hereby delivers to
the Company (i) this Exercise Agreement, (ii) two (2) copies of a blank Stock
Power and Assignment Separate from Stock Certificate in the form of Exhibit 1
attached hereto (the "STOCK POWERS"), both executed by Purchaser (and
Purchaser's spouse, if married), (iii) if Purchaser is married, a Consent of
Spouse in the form of Exhibit 2 attached hereto (the "SPOUSE CONSENT") executed
by Purchaser's spouse, and (iv) the Exercise Price.
2.2 DELIVERIES BY THE COMPANY. Upon its receipt of the
Exercise Price and all the documents to be executed and delivered by Purchaser
to the Company under Section 2.1, the Company will issue a duly executed stock
certificate evidencing the Shares in the name of Purchaser, to be placed in
escrow as provided in Section 11 until expiration or termination of the
Company's Right of First Refusal and HNC's General Repurchase Option described
in Sections 9 and 8, respectively.
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3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to the Company that:
3.1 AGREES TO TERMS OF THE PLAN. Purchaser has received a
copy of the Plan and the Stock Option Agreement, has read and understands the
terms of the Plan, the Stock Option Agreement and this Exercise Agreement, and
agrees to be bound by their terms and conditions. Purchaser acknowledges that
there may be adverse tax consequences upon exercise of the Option or disposition
of the Shares, and that Purchaser should consult a tax adviser prior to such
exercise or disposition.
3.2 PURCHASE FOR OWN ACCOUNT FOR INVESTMENT. Purchaser is
purchasing the Shares for Purchaser's own account for investment purposes only
and not with a view to, or for sale in connection with, a distribution of the
Shares within the meaning of the Securities Act of 1933, as amended (the
"SECURITIES ACT"). Purchaser has no present intention of selling or otherwise
disposing of all or any portion of the Shares and no one other than Purchaser
has any beneficial ownership of any of the Shares.
3.3 ACCESS TO INFORMATION. Purchaser has had access to all
information regarding the Company and its present and prospective business,
assets, liabilities and financial condition that Purchaser reasonably considers
important in making the decision to purchase the Shares, and Purchaser has had
ample opportunity to ask questions of the Company's representatives concerning
such matters and this investment.
3.4 UNDERSTANDING OF RISKS. Purchaser is fully aware of: (i)
the highly speculative nature of the investment in the Shares; (ii) the
financial hazards involved; (iii) the lack of liquidity of the Shares and the
restrictions on transferability of the Shares (e.g., that Purchaser may not be
able to sell or dispose of the Shares or use them as collateral for loans); (iv)
the qualifications and backgrounds of the management of the Company; and (v) the
tax consequences of investment in the Shares. Purchaser is capable of evaluating
the merits and risks of this investment, has the ability to protect Purchaser's
own interests in this transaction and is financially capable of bearing a total
loss of this investment.
3.5 NO GENERAL SOLICITATION. At no time was Purchaser
presented with or solicited by any publicly issued or circulated newspaper,
mail, radio, television or other form of general advertising or solicitation in
connection with the offer, sale and purchase of the Shares.
4. COMPLIANCE WITH SECURITIES LAWS.
4.1 COMPLIANCE WITH FEDERAL SECURITIES LAWS. Purchaser
understands and acknowledges that the Shares have not been registered with the
Securities and Exchange Commission ("SEC") under the Securities Act and that,
notwithstanding any other provision of the Stock Option Agreement to the
contrary, the exercise of any rights to purchase any Shares is expressly
conditioned upon compliance with the Securities Act and all applicable state
securities laws. Purchaser agrees to cooperate with the Company to ensure
compliance with such laws. The Shares are being issued under the Securities Act
pursuant to the exemption provided by SEC Rule 701.
4.2 COMPLIANCE WITH CALIFORNIA SECURITIES LAWS. THE PLAN,
THE STOCK OPTION AGREEMENT, AND THIS AGREEMENT ARE INTENDED TO COMPLY WITH
SECTION 25102(O) OF THE CALIFORNIA CORPORATIONS CODE. ANY PROVISION OF THIS
AGREEMENT WHICH IS INCONSISTENT WITH SECTION 25102(O) SHALL, WITHOUT
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FURTHER ACT OR AMENDMENT BY THE COMPANY OR THE BOARD, BE REFORMED TO COMPLY WITH
THE REQUIREMENTS OF SECTION 25102(O). THE SALE OF THE SECURITIES THAT ARE THE
SUBJECT OF THIS EXERCISE AGREEMENT, IF NOT YET QUALIFIED WITH THE CALIFORNIA
COMMISSIONER OF CORPORATIONS AND NOT EXEMPT FROM SUCH QUALIFICATION, IS SUBJECT
TO SUCH QUALIFICATION, AND THE ISSUANCE OF SUCH SECURITIES, AND THE RECEIPT OF
ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL
UNLESS THE SALE IS EXEMPT. THE RIGHTS OF THE PARTIES TO THIS EXERCISE AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION
BEING AVAILABLE.
5. RESTRICTED SECURITIES.
5.1 NO TRANSFER UNLESS REGISTERED OR EXEMPT. Purchaser
understands that Purchaser may not transfer any Shares unless such Shares are
registered under the Securities Act or qualified under applicable state
securities laws or unless, in the opinion of counsel to the Company, exemptions
from such registration and qualification requirements are available. Purchaser
understands that only the Company may file a registration statement with the SEC
and that the Company is under no obligation to do so with respect to the Shares.
Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit Purchaser to transfer all
or any of the Shares in the amounts or at the times proposed by Purchaser.
Purchaser also understands that, in addition to the above securities law
restrictions, this Agreement imposes: (i) contractual restrictions on
Purchaser's ability to transfer, pledge or encumber the Shares, and (ii)
contractual options that may require Purchaser to sell the Shares back to the
Company, HNC or others on the terms and conditions set forth in this Agreement
and in the Plan.
5.2 SEC RULE 144. In addition, Purchaser has been advised
that SEC Rule 144 promulgated under the Securities Act, which permits certain
limited sales of unregistered securities, is not presently available with
respect to the Shares and, in any event, requires that the Shares be held for a
minimum of two years, and in certain cases three years, after they have been
purchased and paid for (within the meaning of Rule 144). Purchaser understands
that Rule 144 may indefinitely restrict transfer of the Shares if and for so
long as Purchaser remains an "affiliate" of the Company or if "current public
information" about the Company (as defined in Rule 144) is not publicly
available.
5.3 SEC RULE 701. Under the currently effective provisions
of Rule 701 promulgated by the SEC under the 1933 Act, the Shares will become
freely tradable by Purchaser (if Purchaser not then an affiliate of the
Company), subject to limited conditions regarding the method of sale, ninety
(90) days after the first sale of Common Stock of the Company to the general
public pursuant to a registration statement filed with and declared effective by
the SEC, subject to the lengthier market standoff agreement contained in this
Agreement or in any other agreement entered into by Purchaser. Under such Rule
701, if Purchaser is an affiliate of the Company, then Purchaser must comply
with the provisions (other than the holding period requirements) of Rule 144 in
reselling Shares.
6. RESTRICTIONS ON TRANSFERS.
6.1 DISPOSITION OF SHARES. Purchaser hereby agrees that
Purchaser shall make no disposition of the Shares (other than as permitted by
this Agreement) unless and until:
(a) Purchaser shall have notified the Company of the
proposed disposition and provided a written summary of
the terms and conditions of the proposed disposition;
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(b) Purchaser shall have complied with all requirements of
this Exercise Agreement applicable to the disposition
of the Shares;
(c) Purchaser shall have provided the Company with written
assurances, in form and substance satisfactory to
counsel for the Company, that (i) the proposed
disposition does not require registration of the
Shares under the Securities Act or (ii) all
appropriate action necessary for compliance with the
registration requirements of the Securities Act or of
any exemption from registration available under the
Securities Act (including Rule 144) has been taken;
and
(d) Purchaser shall have provided the Company with written
assurances, in form and substance satisfactory to the
Company, that the proposed disposition will not result
in the contravention of any transfer restrictions
applicable to the Shares pursuant to the provisions of
the Commissioner Rules identified in Section 4.2.
6.2 RESTRICTION ON TRANSFER. Purchaser shall not transfer,
assign, xxxxx x xxxx or security interest in, pledge, hypothecate, encumber or
otherwise dispose of any of the Shares which are subject to the Company's Right
of First Refusal or HNC's General Repurchase Option, except as permitted by this
Agreement.
6.3 TRANSFEREE OBLIGATIONS. Each person (other than the
Company) to whom the Shares are transferred by means of one of the permitted
transfers specified in this Agreement must, as a condition precedent to the
validity of such transfer, acknowledge in writing to the Company that such
person is bound by the provisions of this Exercise Agreement and that the
transferred shares are subject to: (i) both Company's Right of First Refusal and
HNC's General Repurchase Option granted hereunder and (ii) the market stand-off
provisions of Section 7, to the same extent such shares would be so subject if
retained by the Purchaser.
7. MARKET STANDOFF AGREEMENT. Purchaser agrees in connection with
any registration of the Company's securities that, upon the request of the
Company or the underwriters managing any public offering of the Company's
securities, Purchaser will not sell or otherwise dispose of any Shares without
the prior written consent of the Company or such underwriters, as the case may
be, for such period of time (not to exceed 180 days) after the effective date of
such registration requested by such managing underwriters and subject to all
restrictions as the Company or the underwriters may specify.
8. GENERAL REPURCHASE OPTION. Purchaser agrees with the Company and
with HNC that, as provided in the Plan (and in addition to the Right of First
Refusal), at any time during the Repurchase Period, HNC shall have the right, at
its sole option, to repurchase all (but not less than all) of the Shares at the
Share Repurchase Price in accordance with the provisions of this Section 8 and
the provisions of the Plan, specifically including the provisions of Section 22
of the Plan entitled "General Repurchase Option" (the "GENERAL REPURCHASE
OPTION").
8.1 ACKNOWLEDGMENT AND AGREEMENT. PURCHASER HEREBY FURTHER
ACKNOWLEDGES AND AGREES THAT:
(a) PURCHASER HAS READ AND UNDERSTANDS THE PLAN (INCLUDING
WITHOUT LIMITATION THE PROVISIONS OF SECTION 22 OF THE
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PLAN REGARDING THE GENERAL REPURCHASE OPTION, THE
DEFINITION OF THE "REPURCHASE PERIOD" AND THE PROVISIONS
OF THE PLAN REGARDING THE DETERMINATION OF THE "SHARE
REPURCHASE PRICE" AT WHICH THE SHARES MAY BE PURCHASED
PURSUANT TO THE GENERAL REPURCHASE OPTION);
(b) A COPY OF THE PLAN IS ATTACHED AS EXHIBIT 1 TO THIS
AGREEMENT AND THE PROVISIONS OF THE PLAN (INCLUDING
WITHOUT LIMITATION THE PROVISIONS OF SECTION 22 OF THE
PLAN REGARDING THE GENERAL REPURCHASE OPTION) ARE
INCORPORATED BY REFERENCE IN THIS AGREEMENT AND FORM PART
OF THE PROVISIONS OF THIS AGREEMENT; AND
(c) PURCHASER AND THE SHARES ARE BOUND BY THE GENERAL
REPURCHASE OPTION AND THE PROVISIONS OF THE PLAN
(INCLUDING WITHOUT LIMITATION THE PROVISIONS OF SECTION 22
OF THE PLAN REGARDING THE GENERAL REPURCHASE OPTION).
8.2 GENERAL REPURCHASE OPTION PREVAILS. In case of any
inconsistency or conflict between the Company's attempted exercise of the Right
of First Refusal under Section 9 hereof, and HNC's attempted exercise of the
General Repurchase Option granted under this Section 8 and under Section 22 of
the Plan, the General Repurchase Option shall supersede, govern and prevail and
the Right of First Refusal may not be exercised to the extent it is inconsistent
or in conflict with HNC's rights or ability to exercise the General Repurchase
Option. The exercise by the Company (but not its assignees) of a right of first
refusal that results in the Company's repurchase and reacquisition of Shares at
a time when the General Repurchase Option is not being exercised will not be
deemed inconsistent or in conflict with the General Repurchase Option.
8.3 TERM. The termination of Purchaser's employment with the
Company for any reason shall not terminate the General Repurchase Option and
shall have no effect whatsoever on the General Repurchase Option, which shall
remain in full force and effect in accordance with its terms with respect to any
of the Shares.
8.4 CONSTRUCTION. The parties acknowledge and agree that the
provisions of this Section 6 have been included in this Agreement in order to
carry out the provisions of Section 22 of the Plan regarding HNC's General
Repurchase Option (the "PLAN REPURCHASE OPTION PROVISIONS"). Accordingly, in
case of any conflict or inconsistency between the provisions of this Section 8
and the Plan Repurchase Option Provisions, the provisions of this Section 8
shall be construed and interpreted in a manner consistent with the terms,
conditions, construction and interpretation of the Plan Repurchase Option
Provisions.
9. COMPANY'S RIGHT OF FIRST REFUSAL. Shares that are subject to the
General Repurchase Option ("OPTION SHARES") may not be transferred by Purchaser
without HNC's prior written consent unless the transferee who acquires such
Option Shares first agrees, in a writing that is reasonably satisfactory to HNC
and that is signed by HNC and such transferee, that the General Repurchase
Option and the restrictions and provisions of this sentence shall continue to
apply to and bind all such Option Shares in the hands of such transferee and its
transferees, successors and assigns. As used herein, the term "TRANSFERABLE
SHARES" means Shares that either (i) are not Option Shares, or (ii) are Option
Shares as to which HNC has given Purchaser HNC's prior written consent to
transfer in accordance with the foregoing provisions of this Section. Subject to
the foregoing provisions of this Section and the terms
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and conditions of this Agreement and the Plan, before any Transferable Shares
held by Purchaser or any transferee of such Shares (either being sometimes
referred to herein as the "HOLDER") may be sold or otherwise transferred
(including without limitation a transfer by gift or operation of law), the
Company and/or its assignee(s) shall have a right of first refusal to purchase
the Transferable Shares to be sold or transferred (the "OFFERED SHARES") on the
terms and conditions set forth in this Section (the "RIGHT OF FIRST REFUSAL").
9.1 NOTICE OF PROPOSED TRANSFER. The Holder of the Offered
Shares will deliver to the Company a written notice (the "NOTICE") stating: (i)
the Holder's bona fide intention to sell or otherwise transfer the Offered
Shares; (ii) the name of each proposed purchaser or other transferee of any
Offered Shares ("PROPOSED TRANSFEREE"); (iii) the number of Offered Shares to be
transferred to each Proposed Transferee; (iv) the bona fide cash price or other
consideration for which the Holder proposes to transfer the Offered Shares (the
"OFFERED PRICE"); and (v) that the Holder will offer to sell the Offered Shares
to the Company and/or its assignee(s) at the Offered Price as provided in this
Section.
9.2 EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within
thirty (30) days after the date of the Notice, the Company and/or its
assignee(s) may, by giving written notice to the Holder, elect to purchase all
(but not less than all) of the Offered Shares proposed to be transferred to any
one or more of the Proposed Transferees named in the Notice, at the purchase
price determined in accordance with subsection (c) below.
9.3 PURCHASE PRICE. The purchase price for the Offered
Shares purchased under this Section will be the Offered Price. If the Offered
Price includes consideration other than cash, then the value of the non-cash
consideration as determined in good faith by the Company's Board of Directors
will conclusively be deemed to be the cash equivalent value of such non-cash
consideration.
9.4 PAYMENT. Payment of the purchase price for Offered
Shares will be payable, at the option of the Company and/or its assignee(s) (as
applicable), by check or by cancellation of all or a portion of any outstanding
indebtedness of the Holder to the Company (or to such assignee, in the case of a
purchase of Offered Shares by such assignee) or by any combination thereof. The
purchase price will be paid without interest within sixty (60) days after the
Company's receipt of the Notice, or, at the option of the Company and/or its
assignee(s), in the manner and at the time(s) set forth in the Notice.
9.5 HOLDER'S RIGHT TO TRANSFER. If all of the Offered Shares
proposed in the Notice to be transferred to a given Proposed Transferee are not
purchased by the Company and/or its assignee(s) as provided in this Section,
then the Holder may sell or otherwise transfer such Offered Shares to that
Proposed Transferee at the Offered Price or at a higher price, provided that
such sale or other transfer is consummated within 120 days after the date of the
Notice, and provided further, that: (i) any such sale or other transfer is
effected in compliance with all applicable securities laws; and (ii) the
Proposed Transferee agrees in writing that the provisions of this Section will
continue to apply to the Offered Shares in the hands of such Proposed
Transferee. If the Offered Shares described in the Notice are not transferred to
the Proposed Transferee within such 120 day period, then a new Notice must be
given to the Company, and the Company will again be offered the Right of First
Refusal before any Shares held by the Holder may be sold or otherwise
transferred.
9.6 EXEMPT TRANSFERS. Notwithstanding anything to the
contrary in this Section, the following transfers of Shares will be exempt from
the Right of First Refusal: (i) the transfer of any or all of the Shares during
Purchaser's lifetime by gift or on Purchaser's death by will or intestacy to
Purchaser's "immediate family" (as defined below) or to a trust for the benefit
of Purchaser or Purchaser's immediate family, provided that each transferee or
other recipient agrees in a writing satisfactory to the Company and HNC that the
General Repurchase Option set forth in Section 8 (if such
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General Repurchase Option has not expired by its terms) and the provisions of
this Section will continue to apply to the transferred Shares in the hands of
such transferee or other recipient; (ii) any transfer of Shares made pursuant to
a statutory merger or statutory consolidation of the Company with or into
another corporation or corporations (except that the Right of First Refusal will
continue to apply thereafter to such Shares, in which case the surviving
corporation of such merger or consolidation shall succeed to the rights or the
Company under this Section unless the agreement of merger or consolidation
expressly otherwise provides); or (iii) any transfer of Shares pursuant to the
winding up and dissolution of the Company. As used herein, the term "IMMEDIATE
FAMILY" will mean Purchaser's spouse, lineal descendant or antecedent, father,
mother, brother or sister, adopted child or grandchild, or the spouse of any
child, adopted child, grandchild or adopted grandchild of Purchaser.
9.7 TERMINATION OF RIGHT OF FIRST REFUSAL. The Right of
First Refusal will terminate as to all Shares on the effective date of the first
sale of Common Stock of the Company to the general public pursuant to a
registration statement filed with and declared effective by the SEC under the
1933 Act (other than a registration statement relating solely to the issuance of
Common Stock pursuant to a business combination or an employee incentive or
benefit plan).
9.8 ENCUMBRANCES ON TRANSFERABLE SHARES. Purchaser may xxxxx
x xxxx or security interest in, or pledge, hypothecate or encumber Transferable
Shares only with the prior written consent of the Company and (if the General
Repurchase Option has not terminated) HNC, and only if each party to whom such
lien or security interest is granted, or to whom such pledge, hypothecation or
other encumbrance is made, agrees in a writing satisfactory to the Company and
(so long as the General Repurchase Option has not terminated) HNC that (i) such
lien, security interest, pledge, hypothecation or encumbrance will not apply to
such Transferable Shares after they are acquired by the Company and/or its
assignees pursuant to the Right of First Refusal set forth in this Section or by
HNC pursuant to the General Repurchase Option set forth in Section 8; and (ii)
the provisions of this Section 9 will continue to apply to such Transferable
Shares in the hands of such party and any transferee of such party. Purchaser
may not xxxxx x xxxx or security interest in, or pledge, hypothecate or
encumber, any Shares that are not Transferable Shares.
10. RIGHTS AS SHAREHOLDER. Subject to the terms and conditions of
this Agreement and the Plan, Purchaser will have all of the rights of a
shareholder of the Company with respect to the Shares from and after the date
that Purchaser delivers payment of the Exercise Price to the Company until such
time as Purchaser disposes of the Shares or the Company and/or its assignee(s)
or HNC exercise(s) the General Repurchase Option or the Right of First Refusal
with respect to such Shares. Upon an exercise of the General Repurchase Option
or the Right of First Refusal, Purchaser will have no further rights as a holder
of the Shares so purchased upon such exercise, except the right to receive
payment for the Shares so purchased in accordance with the provisions of this
Agreement and the Plan, and Purchaser will promptly surrender the stock
certificate(s) evidencing the Shares so purchased to the Company or HNC, as
applicable, for transfer or cancellation.
11. ESCROW. As security for Purchaser's faithful performance of
this Agreement, Purchaser agrees, immediately upon receipt of the stock
certificate(s) evidencing the Shares, to deliver such certificate(s), together
with the Stock Powers executed by Purchaser and by Purchaser's spouse, if
married (with the date and number of Shares left blank), to the Secretary of the
Company or other designee of the Company ("ESCROW HOLDER"), who is hereby
appointed to hold such certificate(s) and Stock Powers in escrow and to take all
such actions and to effectuate all such transfers and/or releases of such Shares
as are in accordance with the terms of this Agreement. Purchaser and the Company
agree that Escrow Holder will not be liable to any party to this Exercise
Agreement (or to any other party) for any actions or omissions unless Escrow
Holder is grossly negligent or intentionally fraudulent in carrying
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out the duties of Escrow Holder under this Exercise Agreement. Escrow Holder may
rely upon any letter, notice or other document executed by any signature
purported to be genuine and may rely on the advice of counsel and obey any order
of any court with respect to the transactions contemplated by this Agreement.
The Shares will be released from escrow only upon termination of both the
General Repurchase Option and the Right of First Refusal provided that Shares
shall be released from escrow to HNC (or its successors or assigns) upon
exercise of the General Repurchase Option.
12. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
12.1 LEGENDS. Purchaser understands and agrees that the
Company will place the legends set forth below or similar legends on any stock
certificate(s) evidencing the Shares, together with any other legends that may
be required by state or federal securities laws, the Company's Articles of
Incorporation or Bylaws, any other agreement between Purchaser and the Company
or any agreement between Purchaser and any third party (including without
limitations HNC):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON PUBLIC RESALE AND TRANSFER, A REPURCHASE OPTION
HELD BY HNC SOFTWARE INC. ("HNC") AND A RIGHT OF FIRST REFUSAL
OPTION HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET FORTH IN A
STOCK OPTION EXERCISE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL
HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. SUCH PUBLIC SALE AND TRANSFER
RESTRICTIONS, REPURCHASE OPTION AND RIGHT OF FIRST REFUSAL ARE
BINDING ON TRANSFEREES OF THESE SHARES.
The California Commissioner of Corporations may require that the
following legend also be placed upon the share certificate(s) evidencing
ownership of the Shares:
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY,
OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR,
WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE
COMMISSIONER'S RULES.
12.2 STOP-TRANSFER INSTRUCTIONS. Purchaser agrees that, to
ensure compliance with the restrictions imposed by this Agreement, the Company
may issue appropriate "stop-transfer"
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instructions to its transfer agent, if any, and if the Company transfers its own
securities, it may make appropriate notations to the same effect in its own
records.
12.3 REFUSAL TO TRANSFER. The Company will not be required
(i) to transfer on its books any Shares that have been sold or otherwise
transferred in violation of any of the provisions of this Agreement or (ii) to
treat as owner of such Shares, or to accord the right to vote or pay dividends
to any purchaser or other transferee to whom such Shares have been so
transferred.
13. TAX CONSEQUENCES. PURCHASER UNDERSTANDS THAT PURCHASER MAY
SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PURCHASER'S PURCHASE OR
DISPOSITION OF THE SHARES. PURCHASER REPRESENTS THAT PURCHASER HAS CONSULTED
WITH ANY TAX ADVISER PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE
OR DISPOSITION OF THE SHARES AND THAT PURCHASER IS NOT RELYING ON THE COMPANY
FOR ANY TAX ADVICE. IN PARTICULAR, IF THE SHARES ARE SUBJECT TO REPURCHASE BY
THE COMPANY, PURCHASER REPRESENTS THAT PURCHASER HAS CONSULTED WITH PURCHASER'S
TAX ADVISER CONCERNING THE ADVISABILITY OF FILING AN 83(b) ELECTION WITH THE
INTERNAL REVENUE SERVICE.
Set forth below is a brief summary as of the date of this Exercise Agreement of
some of the federal and California tax consequences of exercise of the Option
and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE
TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PURCHASER SHOULD CONSULT A TAX
ADVISER BEFORE EXECUTING THIS OPTION OR DISPOSING OF THE SHARES.
13.1 EXERCISE OF INCENTIVE STOCK OPTION. If the Option
qualifies as an incentive stock option, there will be no regular federal income
tax liability or California income tax liability upon the exercise of the
Option, although the excess, if any, of the Fair Market Value of the Shares on
the date of exercise over the Exercise Price will be treated as a tax preference
item for federal income tax purposes and may subject Purchaser to the
alternative minimum tax in the year of exercise.
13.2 EXERCISE OF NONQUALIFIED STOCK OPTION. If the Option
does not qualify as an incentive stock option, there may be a regular federal
income tax liability and a California income tax liability upon the exercise of
the Option. Purchaser 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 Purchaser's compensation or collect
from Purchaser and pay to the applicable taxing authorities an amount equal to a
percentage of this compensation income at the time of exercise.
13.3 DISPOSITION OF SHARES. If the Shares are held for more
than twelve (12) months after the date of acquisition of the Shares pursuant to
the exercise of the Option and, in the case of an ISO, are disposed of more than
two years after the Date of Grant, any gain realized on disposition of the
Shares will be treated as long term capital gain for federal and California
income tax purposes. If Shares purchased under an ISO are disposed of within the
applicable one year or two year period, any gain realized on such disposition
will be treated as compensation income (taxable at ordinary income rates) to the
extent of the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price. The Company may be required to withhold
from Purchaser's compensation or collect from Purchaser and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
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14. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer
of the Shares will be subject to and conditioned upon compliance by the Company
and Purchaser with all applicable state and federal laws and regulations and
with all applicable requirements of any stock exchange or automated quotation
system on which the Company's Common Stock may be listed or quoted at the time
of such issuance or transfer.
15. SUCCESSORS AND ASSIGNS. The Company may assign any of its
rights under this Agreement, including its rights to repurchase Shares under the
Right of First Refusal. Such rights may be assigned, without limitation, to HNC.
This Agreement will be binding upon and inure to the benefit of the successors
and assigns of the Company and (to the extent applicable), HNC. Subject to the
restrictions on transfer herein set forth, this Agreement will be binding upon
Purchaser and Purchaser's heirs, executors, administrators, successors and
assigns. HNC's rights under the General Repurchase Option may be assigned to any
corporation with whom HNC is merged or consolidated with or into in any
consolidation, merger or similar business combination or to whom HNC sells or
transfers all or substantially all its assets.
16. GOVERNING LAW; SEVERABILITY. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of California
as such laws are applied to agreements between California residents entered into
and to be performed entirely within California. If any provision of this
Agreement is determined by a court of law to be illegal or unenforceable, then
such provision will be enforced to the maximum extent possible and the other
provisions will remain fully effective and enforceable.
17. AMENDMENT; WAIVER. This Agreement may be amended and modified
only by a writing executed by the Company and Purchaser; provided, however, that
no provision of this Agreement affecting (or potentially affecting) the General
Repurchase Option or any other rights (or potential rights) of HNC hereunder in
any manner may be amended or modified in any respect without the prior written
consent of HNC, which may be withheld in HNC's sole discretion. No rights of the
Company, Purchaser or HNC may be waived except by a writing executed by the
party against whom such waiver is asserted.
18. HNC THIRD PARTY BENEFICIARY STATUS. The parties acknowledge
and agree that the provisions of this Agreement are being made for the benefit
of HNC and that HNC is an intended third party beneficiary of this Agreement,
entitled to enforce all the terms and conditions of this Agreement (including
but not limited to the provisions of Section 8, Section 9, Section 17, this
Section 18 and any other provisions related thereto) against the Company and
Purchaser and their respective successors and assigns, to the same extent that
HNC could if HNC were a party and signatory to this Agreement.
19. NOTICES. Any notice required to be given or delivered to the
Company 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 Purchaser shall be in writing and addressed to Purchaser at the
address indicated above or to such other address as Purchaser may designate in
writing from time to time to the Company. All notices shall be deemed
effectively given 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 its deposit with any return receipt express courier
(prepaid), or one (1) business day after transmission by rapifax or telecopier.
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20. FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
21. HEADINGS. The captions and headings of this Agreement are
included for ease of reference only and will be disregarded in interpreting or
construing this Agreement. All references herein to Sections will refer to
Sections of this Agreement.
22. ENTIRE AGREEMENT. The Plan, the Stock Option Agreement and this
Exercise Agreement, together with all its Exhibits, constitute the entire
agreement and understanding of the parties with respect to the subject matter of
this Agreement, and supersede all prior understandings and agreements, whether
oral or written, between the parties hereto with respect to the specific subject
matter hereof.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate by its duly authorized representative and Purchaser has
executed this Agreement in duplicate as of the Effective Date.
COMPANY PURCHASER
Aptex Software Inc.
By:
------------------------------- -----------------------------------------
(Signature)
---------------------------------- -----------------------------------------
(Please print Name) (Please print name)
---------------------------------- -----------------------------------------
(Please print title) (Please print title)
[SIGNATURE PAGE TO APTEX SOFTWARE INC.
STOCK OPTION EXERCISE AGREEMENT]
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LIST OF EXHIBITS
Exhibit 1: Stock Power and Assignment Separate from Stock Certificate
Exhibit 2: Spouse Consent
Exhibit 3: Copy of Purchaser's Check or Other Evidence of Payment
25
EXHIBIT 1
STOCK POWER AND ASSIGNMENT
SEPARATE FROM STOCK CERTIFICATE
26
STOCK POWER AND ASSIGNMENT
SEPARATE FROM STOCK CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Stock Option
Exercise Agreement No. ___ dated as of _______________, ____ (the "Agreement"),
the undersigned hereby sells, assigns and transfers unto
_______________________________, _______ shares of the Common Stock of Aptex
Software Inc., a California corporation (the "Company"), standing in the
undersigned's name on the books of the Company represented by Certificate No(s).
______ delivered herewith, and does hereby irrevocably constitute and appoint
the Secretary of the Company as the undersigned's attorney-in-fact, with full
power of substitution, to transfer said stock on the books of the Company. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND ANY EXHIBITS
THERETO AND THE COMPANY'S 1996 EQUITY INCENTIVE PLAN.
Dated: _______________, ______
PURCHASER
-----------------------------------------
(Signature)
-----------------------------------------
(Please Print Name)
-----------------------------------------
(Spouse's Signature, if married)
-----------------------------------------
(Please Print Spouse's Name)
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this Stock Power and Assignment is to enable the Company and/or
its assignee(s) to acquire the shares upon exercise of its "Right of First
Refusal" set forth in the Agreement or to enable HNC Software Inc. to acquire
the shares upon exercise of its "General Repurchase Option" set forth in the
Agreement, without requiring additional signatures on the part of the Purchaser
or Purchaser's Spouse.
27
EXHIBIT 2
SPOUSE CONSENT
28
SPOUSE CONSENT
I, the undersigned, ________________, am the spouse of
___________________ ("PURCHASER"). I have read, understood, and hereby approve
the Stock Option Exercise Agreement between Purchaser and the Company (the
"AGREEMENT").
In consideration of the Company granting my spouse, the
Purchaser, the right to purchase the Shares under the Agreement, I hereby agree
with the Company and its successors and assigns, and with HNC Software Inc., and
its successors and assigns, to be irrevocably bound by all the terms and
conditions of the Agreement (including, but not limited to the General
Repurchase Option, the Right of First Refusal and the market standoff agreements
contained therein) and further agree that any community property interest or
other interest I may have in or to the Shares will be irrevocably bound by the
Agreement.
I hereby appoint Purchaser as my attorney-in-fact, to act in my
name, place and stead with respect to any amendment of the Agreement or any
actions in connection therewith.
Date:
----------------------------- -----------------------------------------
Signature of Purchaser's Spouse
Address:
---------------------------------
---------------------------------
29
EXHIBIT 3
COPY OF PURCHASER'S CHECK OR OTHER EVIDENCE OF PAYMENT
