Exhibit 4.10
XXXXXXXX.XXX, INC.
STOCK OPTION AGREEMENT
RECITALS
A. 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 or Subsidiary and consultants and other
independent advisors who provide services to the Corporation (or any Parent or
Subsidiary).
B. Optionee is to render valuable services to the Corporation (or a Parent
or Subsidiary), and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Corporation's grant
of an option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning assigned
to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of
the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The option shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.
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 day immediately preceding the Expiration Date, unless sooner
terminated in accordance with Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option shall be neither
transferable nor assignable by Optionee other than to a Beneficiary following
Optionee's death and may be exercised, during Optionee's lifetime, only by
Optionee. However, if this option is designated a Non-Qualified Option in the
Grant Notice, then 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 EXERCISABILITY. This option shall vest and become
exercisable for the Option Shares in one or more installments as specified in
the Grant Notice. As the option becomes exercisable for such installments, those
installments shall accumulate, and the option
shall remain exercisable for the accumulated installments until the Expiration
Date or sooner termination of the option term under Paragraph 5 or 6.
5. CESSATION OF SERVICE. The option term specified in Paragraph 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 this option 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, provided, however that if Optionee, following a
Change in Control, is terminated without Cause, or Optionee resigns
with Good Reason, then this option shall accelerate, vest and become
exercisable in full on the effective date of Optionee's cessation of
Service.
(ii) Should Optionee die while holding this option, then
Optionee's Beneficiary shall have the right to exercise this option
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 this option 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 exercisable for vested shares.
(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 in Control, this option, to the extent
outstanding at that time but not otherwise fully exercisable, shall
automatically accelerate so that this option shall, immediately prior to
the effective date of the Change in Control, become exercisable for all of
the Option Shares at the time subject to this option and may be exercised
for any or all of those Option Shares as fully-vested shares of Common
Stock. Subject to paragraph 7 hereof, no such acceleration of this option,
however, shall occur if and to the extent: (i) this option is, in
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connection with the Change in Control, assumed or otherwise continued in
full force and effect by the successor corporation (or parent thereof)
pursuant to the terms of the Change in Control or (ii) this option is
replaced with a cash incentive program of the successor corporation which
preserves the spread existing at the time of the Change in Control on the
Option Shares for which this option is not otherwise at that time
exercisable (the excess of the Fair Market Value of those Option Shares
over the aggregate Exercise Price payable for such shares) and provides
for subsequent pay-out in accordance with the same option exercise
schedule set forth in the Grant Notice.
(b) Immediately following the consummation of the Change in Control,
this option shall terminate and cease to be outstanding, except to the
extent assumed by the successor corporation (or parent thereof) or
otherwise expressly continued in full force and effect pursuant to the
terms of the Change in Control, in which case it will be subject to
paragraph 7 hereof.
(c) If this option is assumed in connection with a Change in
Control, then this option shall be appropriately adjusted, immediately
after such Change in Control, to apply to the number and class of
securities which would have been issuable to Optionee in consummation of
such Change in Control had the option been exercised immediately prior to
such Change in Control, and appropriate adjustments shall also be made to
the Exercise Price, provided the aggregate Exercise Price shall remain the
same. To the extent the holders of Common Stock receive cash consideration
for their Common Stock in consummation of the Change in Control, the
successor corporation may, in connection with the assumption of this
option, substitute one or more shares of its own common stock with a fair
market value equivalent to the cash consideration paid per share of Common
Stock in such Change in Control.
(d) This Agreement shall not in any way affect the right of the
Corporation 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.
7. ACCELERATION WHEN OPTION IS ASSUMED IN A CHANGE IN CONTROL. In
the event Optionee, at any time following a Change in Control, is terminated
without Cause, or Optionee resigns with Good Reason, this option shall
accelerate, vest and become exercisable in full on the effective date of
Optionee's cessation of Service.
8. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
9. STOCKHOLDER RIGHTS. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
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10. MANNER OF EXERCISING OPTION. 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 Corporation 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 Corporation;
(B) a promissory note payable to the Corporation, but
only to the extent authorized by the Plan Administrator in
accordance with Paragraph 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
Corporation's earnings for financial reporting purposes and
valued at Fair Market Value on the Exercise Date; or
(D) 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 Corporation-approved brokerage firm to
effect the immediate sale of the purchased shares and remit to
the Corporation, out of the sale proceeds available on the
settlement date, sufficient 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 Corporation by reason of such exercise and (II) to the
Corporation 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 Corporation in connection with the option
exercise.
(iii) Furnish to the Corporation 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 Corporation (or
Parent or Subsidiary 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 Corporation
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.
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(c) In no event may this option be exercised for any fractional
shares.
11. 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
Corporation 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 Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary
to the lawful issuance and sale of any Common Stock pursuant to this
option shall relieve the Corporation 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 Corporation, however, shall use its best
efforts to obtain all such approvals.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns
and Optionee and Optionee's assigns and Beneficiaries.
13. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. 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.
14. 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 Corporation. 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.
15. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan 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.
16. 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.
17. 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
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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.
18. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE STOCK OPTION. In the
event this option is designated an Incentive Stock Option in the Grant Notice,
the following terms and conditions shall also apply to the grant:
(i) This option shall cease to qualify for favorable tax
treatment as an Incentive Stock Option if (and to the extent) this
option is exercised for one or more Option Shares: (A) more than
three (3) months after the date Optionee ceases to be an Employee
for any reason other than death or Permanent Disability or (B) more
than twelve (12) months after the date Optionee ceases to be an
Employee by reason of Permanent Disability.
(ii) No installment under this option shall qualify for
favorable tax treatment as an Incentive Stock Option if (and to the
extent) the aggregate Fair Market Value (determined at the Grant
Date) of the Common Stock for which such installment first becomes
exercisable hereunder would, when added to the aggregate value
(determined as of the respective date or dates of grant) of the
Common Stock or other securities for which this option or any other
Incentive Stock Options granted to Optionee prior to the Grant Date
(whether under the Plan or any other option plan of the Corporation
or any Parent or Subsidiary) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000)
in the aggregate. Should such One Hundred Thousand Dollar ($100,000)
limitation be exceeded in any calendar year, this option shall
nevertheless become exercisable for the excess shares in such
calendar year as a Non-Qualified Option.
(iii) Should the exercisability of this option be accelerated
upon a Change in Control, then this option shall qualify for
favorable tax treatment as an Incentive Stock Option only to the
extent the aggregate Fair Market Value (determined at the Grant
Date) of the Common Stock for which this option first becomes
exercisable in the calendar year in which the Change in Control
occurs does not, when added to the aggregate value (determined as of
the respective date or dates of grant) of the Common Stock or other
securities for which this option or one or more other Incentive
Stock Options granted to Optionee prior to the Grant Date (whether
under the Plan or any other option plan of the Corporation or any
Parent or Subsidiary) first become exercisable during the same
calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should the applicable One Hundred Thousand Dollar
($100,000) limitation be exceeded in the calendar year of such
Change in Control, the option may nevertheless be exercised for the
excess shares in such calendar year as a Non-Qualified Option.
(iv) Should Optionee hold, in addition to this option, one or
more other options to purchase Common Stock which become exercisable
for the first time in the same calendar year as this option, then
the foregoing limitations on the exercisability of such options as
Incentive Stock Options shall be applied on the basis of the order
in which such options are granted.
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19. 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 the Grant Notice
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
the Grant Notice, 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) If this option is designated as an Incentive Stock
Option in the Grant Notice, then the following additional provision
shall apply:
(A) If the leave of absence continues for more than
ninety (90) days, then this option shall automatically convert
to a Non-Qualified Option at the end of the three (3)-month
period measured from the ninety-first (91st) day of such
leave, unless Optionee's reemployment rights are guaranteed by
statute or by written agreement. Following any such conversion
of this option, all subsequent exercises of this option,
whether effected before or after Optionee's return to active
Employee status, shall result in an immediate taxable event,
and the Corporation shall be required to collect from Optionee
the income and employment withholding taxes applicable to such
exercise.
(iv) 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.
20. NO RIGHT TO EMPLOYMENT. Nothing in this Agreement or 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 Corporation (or any Parent or Subsidiary 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.
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EXHIBIT I
NOTICE OF EXERCISE
I hereby notify Xxxxxxxx.xxx, Inc. (the "Corporation") that I elect
to purchase _________ shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $ per share (the "Exercise Price")
pursuant to that certain option (the "Option") granted to me under the
Corporation's 2000 Stock Incentive Plan on .
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.
--------------------------
Date
---------------------------------------
Optionee
Address:
-------------------------------
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Print name in exact manner it is to ---------------------------------------
appear on the stock certificate:
---------------------------------------
Address to which certificate is to be ---------------------------------------
sent, if different from address above:
---------------------------------------
Social Security Number:
---------------------------------------
Employee Number
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APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT OR OPTION AGREEMENT shall mean this Stock Option
Agreement.
B. BENEFICIARY shall mean, in the event the Plan Administrator
implements a beneficiary designation procedure, the person designated by
Optionee, pursuant to such procedure, to succeed to Optionee's rights under the
option evidenced by this Agreement to the extent the option is held by Optionee
at the time of death. In the absence of such designation or procedure, the
Beneficiary shall be the personal representative of the estate of Optionee or
the person or persons to whom the option is transferred by will or the laws of
descent and distribution.
C. BOARD shall mean the Corporation's Board of Directors.
D. CAUSE shall have the meaning set forth in paragraph 8 of the
Letter Agreement.
E. CHANGE IN CONTROL shall mean a change in ownership or control of
the Corporation effected through any of the following transactions:
(a) a merger, consolidation or reorganization approved by the
Corporation'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
Corporation's outstanding voting securities immediately prior to
such transaction.
(b) any stockholder-approved transfer or other disposition of
all or substantially all of the Corporation's assets, or
(c) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person
that directly or indirectly controls, is controlled by, or is under
common control with, the Corporation), of beneficial ownership
(within the meaning of Rule 13d-3 of the 0000 Xxx) of securities
possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities pursuant to
a tender or exchange offer made directly to the Corporation's
stockholders which the Board recommends such stockholders to accept.
F. CODE shall mean the Internal Revenue Code of 1986, as amended.
G. COMMON STOCK shall mean the Corporation's common stock.
H. CORPORATION OR COMPANY shall mean Xxxxxxxx.xxx, Inc., a Delaware
corporation.
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I. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), 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.
J. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.
K. EXERCISE PRICE shall mean the exercise price per share as
specified in the Grant Notice.
L. EXPIRATION DATE shall mean the date on which the option expires
as specified in the Grant Notice.
M. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as
the price is reported by the National Association of Securities
Dealers on the Nasdaq National Market or any successor system. If
there is no closing selling price for the Common Stock on the date
in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary
market for the Common Stock, as such price is officially quoted in
the composite tape of transactions on such exchange. If there is no
closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
N. GOOD REASON shall have the meaning set forth in paragraph 9 of
the Letter Agreement.
X. XXXXX DATE shall mean the effective date of grant of the option
as specified in the Grant Notice.
X. XXXXX NOTICE shall mean the Notice of Grant of Stock Options
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
Q. 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.
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R. INCENTIVE OPTION OR INCENTIVE STOCK OPTION shall mean an option
which satisfies the requirements of Code Section 422.
S. LETTER AGREEMENT shall mean the Letter Agreement of Employment,
dated as of June 11, 2002 between the Corporation and Xxxxxxxx Xxxxx.
T. 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 Corporation (or any
Parent or Subsidiary), or any intentional wrongdoing by Optionee, whether by
omission or commission, which adversely affects the business or affairs of the
Corporation (or any Parent or Subsidiary) in a material manner. The foregoing
definition shall not limit the grounds for the dismissal or discharge of
Optionee or any other individual in the Service of the Corporation (or any
Parent or Subsidiary).
U. NON-QUALIFIED OPTION OR NON-STATUTORY OPTION shall mean an option
not intended to satisfy the requirements of Code Section 422.
V. NOTICE OF EXERCISE shall mean the notice of exercise in the form
attached hereto as Exhibit I.
W. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option as specified in the Grant Notice.
X. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
Y. PARENT shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) 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.
Z. 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.
AA. PLAN OR STOCK OPTION PLAN shall mean the Corporation's 2000
Stock Incentive Plan.
BB. PLAN ADMINISTRATOR shall mean either the Board or a committee of
the Board acting in its administrative capacity under the Plan.
CC. SERVICE shall mean Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor.
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DD. STOCK EXCHANGE shall mean the American Stock Exchange or the New
York Stock Exchange.
EE. SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain 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.
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