EXHIBIT 4
RAPTOR NETWORKS TECHNOLOGY, INC.
NON-PLAN NON-QUALIFIED STOCK OPTION AGREEMENT
This Non-Plan Non-Qualified Stock Option Agreement (this "Agreement"),
dated [______________], is made and entered into by and between Raptor Networks
Technology, Inc., a Colorado corporation ("Company"), and [_______________]
("Optionee").
RECITALS
A. The Board of Directors of the Company ("Board of Directors") previously
approved the granting of an option to the Optionee as of [_______________] (the
"Date of Grant") to provide an incentive to the Optionee to focus on the
long-term growth of the Company.
B. The terms of the option were never committed to written form.
C. The parties desire to set forth in writing the current terms of the
option.
AGREEMENT
In consideration of the mutual covenants and conditions hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and the Optionee agree as follows:
1. GRANT OF OPTION. The Company hereby confirms the grant to the Optionee,
effective as of the Date of Grant, the right and option ("Option") to purchase
an aggregate of [____________] shares (such number being subject to adjustment
as provided in Section 10 below) of the Company's Common Stock, par value $0.001
per share ("Stock"), on the terms and conditions herein set forth. This Option
may be exercised in whole or in part and from time to time as hereinafter
provided. The Option granted under this Agreement is not intended to be an
"incentive stock option" as set forth in Section 422 of the Internal Revenue
Code of 1986, as amended ("Code").
2. VESTING OF OPTION. The Optionee may not purchase any shares by exercise
of this Option between the Date of Grant and the first anniversary of the Date
of Grant. Subject to the terms of this Agreement, on and after the following
anniversary dates of the Date of Grant, this Option may be exercised up to the
indicated percentage number of shares covered by this Option:
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Anniversary Date of Percentage Cumulative Percentage
Date of Grant Exercisable Exercisable
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First 33 1/3% 33 1/3%
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Second 33 1/3% 66 2/3%
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Third 33 1/3% 100%
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3. PURCHASE PRICE. The price at which the Optionee shall be entitled to
purchase the Stock covered by the Option shall be $[____] per share.
4. TERM OF OPTION. The Option granted under this Agreement shall expire,
unless otherwise exercised, at 5:00 p.m. Pacific Standard Time ("PST") on the
eight (8) year anniversary of the Date of Grant ("Expiration Date"). In the
event the Expiration Date falls on a Saturday, Sunday or legal holiday in the
State of California, the Expiration Date shall be 5:00 p.m. PST on the next day
that is not a Saturday, Sunday or legal holiday in the State of California (a
"Business Day").
5. EXERCISE OF OPTION. The Option may be exercised by the Optionee as to
all or any part of the Stock then vested and exercisable by delivery to the
Company of written notice of exercise and payment of the purchase price as
provided in Sections 6 and 7 below.
6. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of this
Agreement, the Option may be exercised by timely delivery to the Company of
written notice, which notice shall be effective on the date received if received
by the Company by 5:00 p.m. PST on a Business Day, or the following Business Day
if received by the Company after 5:00 p.m. PST or on a non-Business Day
("Effective Date"). The notice shall state the Optionee's election to exercise
the Option, the number of shares in respect of which an election to exercise has
been made, the method of payment elected (see Section 7 below), the exact name
or names in which the shares will be registered and the taxpayer identification
number of the Optionee. The notice shall be signed by the Optionee and shall be
accompanied by payment of the purchase price of such shares. If the Option is
exercised by a person or persons other than Optionee pursuant to Section 8.2
below, the notice shall be signed by the other person or persons and shall be
accompanied by proof acceptable to the Company of the legal right of the person
or persons to exercise the Option. All shares delivered by the Company upon
exercise of the Option shall be fully paid and nonassessable upon delivery.
7. METHOD OF PAYMENT FOR OPTIONS. Payment for shares purchased upon the
exercise of the Option shall be made by the Optionee in cash or such other
method permitted by the Board of Directors and communicated to the Optionee in
writing prior to the date the Optionee exercises all or any portion of the
Option.
8. TERMINATION OF EMPLOYMENT.
8.1 GENERAL. If the Optionee's employment is terminated for any other
reason than for Cause (as that term is defined below) or voluntary resignation
in violation of any agreement to remain in the employ of the Company, then the
Optionee may at any time within three (3) months after the effective date of
termination of employment exercise the Option to the extent that the Optionee
was entitled to exercise the Option at the date of termination, provided that in
no event shall the Option be exercisable after the Expiration Date. If the
Optionee's employment is terminated for Cause or if Optionee voluntarily resigns
in violation of any agreement to remain in the employ of the Company, then the
Option shall terminate immediately upon termination of employment, and the
Option shall be deemed to have been immediately forfeited by the Optionee.
For purposes of this Agreement, "Cause" shall mean: (i) an act by the
Optionee constituting a felony or misdemeanor involving moral turpitude; (ii) an
act by the Optionee in the performance of the Optionee's duties constituting
fraud or dishonesty; (iii) the Optionee's continued disregard for the
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performance of the Optionee's duties after a written demand for substantial
performance is delivered to the Optionee, which identifies the manner in which
the Optionee had not performed the Optionee's duties, and the Optionee's
failure, after such notice, to cure such nonperformance within a reasonable
time; (iv) gross negligence, insubordination or a material violation by the
Optionee of any duty of loyalty to the Company; or (v) the Optionee's commission
of any act that is detrimental to the Company's reputation, business or
goodwill.
8.2 DEATH OR DISABILITY OF OPTIONEE. In the event of the death or
disability (as that term is defined in Section 22(e)(3) of the Code and subject
to such proof of disability as the Board of Directors may require, "Disability")
of the Optionee within a period during which the Option, or any part thereof,
could have been exercised by the Optionee ("Option Period"), the Option shall
lapse unless it is exercised within the Option Period and in no event later than
twelve months after the date of the Optionee's death or Disability by the
Optionee or the Optionee's legal representative or representatives in the case
of a Disability or, in the case of death, by the person or persons entitled to
do so under the Optionee's last will and testament or if the Optionee fails to
make a testamentary disposition of the Option or shall die intestate, by the
person or persons entitled to receive the Option under the applicable laws of
descent and distribution. An Option may be exercised following the death or
Disability of the Optionee only if the Option was exercisable by the Optionee
immediately prior to his death or Disability. In no event shall the Option be
exercisable after the Expiration Date. The Board of Directors shall have the
right to require evidence satisfactory to it of the rights of any person or
persons seeking to exercise the Option under this Section 8.2 to exercise the
Option.
9. NONTRANSFERABILITY. The Option granted by this Agreement shall be
exercisable only during the term of the Option provided in Section 4 above and,
except as provided in Section 8 above, only by the Optionee (regardless of any
community property interests therein of the Optionee's spouse, if any) during
his lifetime and while an Optionee of the Company. This Option shall not be
transferable by the Optionee or any other person claiming through the Optionee,
either voluntarily or involuntarily, except by will or the laws of descent and
distribution.
10. ADJUSTMENTS IN NUMBER OF SHARES AND OPTION PRICE. In the event of a
stock dividend, or if the Stock is changed into or exchanged for a different
number or class of shares of stock of the Company or of another corporation,
whether through reorganization, recapitalization, stock split-up, combination of
shares, merger or consolidation, there shall be substituted for each remaining
share of Stock then subject to this Option the number and class of shares of
stock into which each outstanding share of Stock is to be so exchanged, all
without any change in the aggregate purchase price for the shares then subject
to the Option.
11. DELIVERY OF SHARES. No shares of Stock shall be delivered upon exercise
of the Option until (i) the purchase price has been paid in full in the manner
herein provided; (ii) applicable taxes required to be withheld have been paid or
withheld in full; (iii) approval of any governmental authority required in
connection with the Option, or the issuance of shares thereunder, has been
received by the Company; and (iv) if required by the Company, the Optionee has
delivered to the Company an Investment Letter in form and content satisfactory
to the Company as provided in Section 12 below.
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12. SECURITIES ACT. The Company shall not be required to deliver any shares
of Stock pursuant to the exercise of all or any part of the Option if, in the
opinion of counsel for the Company, the issuance would violate the Securities
Act of 1933, as amended ("Securities Act"), or any other applicable federal or
state securities laws or regulations. The Company may require that the Optionee,
prior to the issuance of any shares pursuant to exercise of the Option, sign and
deliver to the Company a written statement ("Investment Letter") stating (i)
that the Optionee is purchasing the shares for investment and not with a view to
the sale or distribution thereof; (ii) that the Optionee will not sell any
shares received upon exercise of the Option or any other shares of the Company
that the Optionee may then own or thereafter acquire except either (a) through a
broker on a national securities exchange or (b) with the prior written approval
of the Company; and (iii) containing such other terms and conditions as counsel
for the Company may reasonably require to assure compliance with the Securities
Act or other applicable federal or state securities laws and regulations. The
Investment Letter shall be in form and content acceptable to the Company in its
sole discretion.
13. FEDERAL AND STATE TAXES. Upon exercise of the Option, or any part
thereof, the Optionee may incur certain liabilities for federal, state or local
taxes and the Company may be required by law to withhold taxes for payment to
taxing authorities. Upon determination by the Company of the amount of taxes
required to be withheld, if any, with respect to the shares to be issued
pursuant to the exercise of the Option, the Optionee shall pay all federal state
and local tax withholding requirements to the Company.
14. CONTINUATION OF EMPLOYMENT. This Agreement shall not be construed to
confer upon the Optionee any right to continue in the employ of the Company and
shall not limit the right of the Company, in its sole discretion, to terminate
the employment of the Optionee at any time.
15. OBLIGATION TO EXERCISE. The Optionee shall have no obligation to
exercise any option granted by this Agreement.
16. NO RIGHTS OF SHAREHOLDER. The Optionee shall have no rights as a
shareholder with respect to shares of the Company's Common Stock covered by the
Option until the date of issuance of a stock certificate or stock certificates
representing such shares.
17. ARBITRATION. Any dispute arising under or relating to the Option,
whether based on contract, tort, statute, or other legal or equitable theory,
will be submitted to arbitration in the County of Orange, State of California
before a retired California Superior Court Judge or a retired California
Appellate Court or Supreme Court Justice or before a retired Federal Court Judge
or Justice. If the parties are unable to agree to an arbitrator, the arbitration
shall be submitted before the Judicial Arbitration and Mediation Services, Inc.
("JAMS"). The parties may agree on a retired judge from the selected arbitration
service panel. If they are unable to agree, the selected arbitration service
will provide a list of available judges and each party may strike one. The
arbitration service shall select the arbitrator from the remaining names. The
parties waive their rights to a jury trial. The arbitration shall be held in
accordance with the rules of the selected arbitration service. Each party shall
pay one-half of the arbitration fees. The arbitrator may award costs, including
arbitration fees and attorneys' fees, to the prevailing party. The parties shall
be entitled to only the following limited discovery:
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17.1 each party shall exchange all documents relevant to the subject
matter of the dispute;
17.2 each party shall be entitled to one deposition limited to four
hours;
17.3 each party may serve one set of interrogatories limited to 15
interrogatories including subparts;
17.4 each party may make application to the arbitrator to order the
deposition of a witness to be taken for use as evidence and not for discovery if
(i) the witness cannot be compelled to attend the hearing, or, (ii) if such
exceptional circumstances exist as to make it desirable in the interest of
justice and with due regard to the importance of presenting the testimony of
witnesses at the hearing to allow the deposition to be taken.
18. GOVERNING LAW. The corporate laws of the State of Colorado shall govern
all issues concerning the relative rights of the Company and the Optionee under
the Option. All other questions and obligations under the Option shall be
construed and enforced in accordance with the internal laws of the State of
California, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of California or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of California.
19. JURISDICTION. In the event Section 17 does not apply (as in the case of
an action for injunctive relief) or is otherwise found to be unenforceable with
respect to a certain dispute, action, litigation or other proceeding concerning
the Option, the Company and the Optionee hereby consent to the jurisdiction of
the courts of the State of California, with the County of Orange being the sole
venue for the bringing of any such dispute, action, litigation or other
proceeding.
20. AMENDMENTS. This Agreement may be amended only by a written agreement
executed by the Company and the Optionee. The Company and the Optionee
acknowledge that changes in federal tax laws enacted subsequent to the Date of
Grant, and applicable to stock options, may provide for tax benefits to the
Company or the Optionee. In that event, the Company and the Optionee agree that
this Agreement may be amended as necessary to secure for the Company and the
Optionee any benefits that may result from that legislation. Any amendment shall
be made only upon the mutual consent of the parties, which consent (of either
party) may be withheld for any reason.
21. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
between the parties with regard to the subject matter of this Agreement. All
agreements, covenants, representations and warranties, express or implied, oral
and written, of the parties with regard to the subject matter of this Agreement
are contained in this Agreement. No other agreements, covenants, representations
or warranties, express or implied, oral or written, have been made by either
party to the other with respect to the subject matter of this Agreement. All
prior and contemporaneous conversations, negotiations, covenants and warranties
with respect to the subject matter of this Agreement are waived, merged in this
Agreement and superseded by this Agreement.
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22. NO OTHER OPTIONS. The Optionee hereby acknowledges that, as of the date
first written above, this Agreement represents the Optionee's only option, right
or similar agreement or understanding with the Company to purchase or otherwise
acquire the Common Stock or any other security of the Company; except for other
options, if any, evidenced by substantially similar Non-Plan Non-Qualified Stock
Option Agreements dated on or before the date first written above.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized and the Optionee has hereunto
set his or her hand as of the date first written above.
RAPTOR NETWORKS TECHNOLOGY, INC. OPTIONEE
By: ________________________________ _______________________________
Xxx xxx Xxxxx, [Insert Name]
Chief Financial Officer
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