EXHIBIT 4.2
HERITAGE COMMERCE CORP
2004 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
Capitalized terms used without definition in this Stock Option
Agreement (the "OPTION AGREEMENT") shall have the meanings given such terms in
the Heritage Commerce Corp 2004 Stock Option Plan (the "PLAN").
I.
NOTICE OF STOCK OPTION GRANT
[Name of Optionee]/[Social Security Number]
[Address]
[Address]
1. OPTION. You have been granted an option to purchase shares of common
stock (the "SHARES") of Heritage Commerce Corp, a California corporation (the
"COMPANY"), subject to the terms and conditions of the Plan and this Option
Agreement, as follows:
Date of Grant: [___________ __, 200_]
Exercise Price per Share: $[_____]
Total Number of Shares Granted: [ ]
Total Exercise Price: $[ ]
Type of Option: [Incentive/Non-Statutory Option]
Expiration Date: [___________ __, 20__]
2. VESTING AND EXPIRATION. This Option will vest with respect to [__%]
of the Shares subject to the Option on the Date of Grant, and with respect to an
additional [__%] of the Shares subject to the Option each month thereafter for
the next [__] months, and will therefore be fully vested no later than
[_________ __, _____].
3. TERMINATION. So long as the Optionee maintains Continuous Status as
a Director, Employee or Consultant, this Option may be exercised, in whole or in
part, with respect to any vested Shares, anytime prior to the Expiration Date.
If the Optionee's Continuous Status as a Director, Employee or Consultant
terminates for any reason, the Optionee shall have that amount of time set forth
in Section 9 of the Plan to exercise any vested Shares, after which time this
Option shall expire.
II.
AGREEMENT
1. GRANT OF OPTION. The Company hereby grants to the Optionee (the
"OPTIONEE") named in the Notice of Stock Option Grant set forth above (the
"NOTICE OF GRANT") an option (the "OPTION") to purchase the total number of
Shares set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "EXERCISE PRICE"), subject to the terms,
definitions and provisions of the Plan, which is incorporated herein by
reference.
2. EXERCISE OF OPTION.
(a) RIGHT TO EXERCISE. This Option shall be exercisable prior
to its expiration date only, in accordance with the Vesting Schedule set out in
the Notice of Grant and with the applicable provisions of the Plan and this
Option Agreement.
(b) METHOD OF EXERCISE. This Option shall be exercisable by
written notice which shall state the election to exercise the Option, the number
of Shares with respect to which the Option is being exercised, and such other
representations and agreements as to the Optionee's investment intent with
respect to the Shares as may be required by the Company pursuant to the
provisions of the Plan. Such notice is attached hereto as EXHIBIT A. The written
notice shall be signed by the Optionee and shall be delivered in person or by
certified mail to the Secretary of the Company. The written notice shall be
accompanied by payment of the Exercise Price. This Option shall be deemed to be
exercised upon receipt by the Company of such written notice accompanied by the
Exercise Price.
(c) COMPLIANCE WITH LAW. No Shares will be issued pursuant to
the exercise of any Option unless such issuance and such exercise shall comply
with all relevant provisions of law and the requirements of any stock exchange
upon which the Shares may then be listed. Assuming such compliance, for income
tax purposes the Shares shall be considered transferred to the Optionee on the
date on which the Option is exercised with respect to such shares.
3. METHOD OF PAYMENT. Subject to Section 8, payment of the
Exercise Price shall be paid by (a) cash, (b) check or (c) any combination of
those methods of payment. In addition, if there is a public market for the
Shares, the Optionee may elect to pay the Exercise Price through a special sale
and remittance procedure under which the Optionee provides irrevocable written
instructions to a designated brokerage firm to effect the immediate sale of a
portion of the purchased Shares and remit to the Company, out of the sale
proceeds available on the settlement date, an amount sufficient to cover the
aggregate option price payable for the purchased Shares plus all applicable
Federal and State income and employment taxes required to be withheld by the
Company by reason of such purchase and/or sale. The Optionee must also provide
such irrevocable written instructions to the Company to deliver the certificates
for the purchased Shares directly to such brokerage firm to effect the sale
transaction. Notwithstanding the above, the Company shall not be required to
permit the Optionee to utilize the sale and remittance procedure described above
if the Company's legal counsel advises the Company that the procedure may
violate any applicable law, regulation or regulatory guidance.
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4. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion of this Option, deliver to the Company an investment
representation statement in a form reasonably required by the Company.
5. NON-TRANSFERABILITY OF OPTION; ASSIGNMENT BY COMPANY. This Option
may not be transferred in any manner otherwise than by will or by the laws of
descent or distribution and may be exercised during the lifetime of Optionee
only by Optionee; provided, however, that any Nonstatutory Stock Option may be
transferred by Optionee to any member of Optionee's immediate family, to a
partnership the members of which (other than Optionee) are all members of
Optionee's immediate family, or to a family trust the beneficiaries of which
(other than Optionee) are all members of Optionee's immediate family. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of Optionee. The Company may assign any of its rights
under this Option Agreement to single or multiple assignees, and this Option
Agreement shall inure to the benefit of the successors and assigns of the
Company.
6. RESTRICTIONS ON TRANSFER. All certificates representing Shares
purchased under this Option Agreement may be imprinted with an appropriate
legend with respect to any applicable restriction on transfer. The Company may
issue appropriate stop-transfer instructions to its transfer agent to ensure
compliance with these transfer restrictions. If the Company transfers its own
securities, it may make appropriate notations to the same effect in its own
records. The Company shall not be required to transfer on its books any Shares
that have been sold or transferred in violation of any of the provisions of the
Plan or this Option Agreement, or to treat as the owner of such Shares or to
accord the right to vote or pay dividends to any purchaser or transferee to whom
such Shares has been sold or transferred.
7. MARKET STAND-OFF AGREEMENT. Optionee hereby agrees that if so
requested by the Company or any representative of the underwriters in connection
with the first registration statement of the Company to become effective under
the Securities Act which includes securities to be sold on behalf of the Company
to the public in an underwritten public offering, Optionee shall not sell or
otherwise transfer the Shares or any other securities of the Company during the
180-day period following the effective date of such registration statement. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such 180-day period. Optionee
agrees that the Company may assign his or her obligation hereunder to any
underwriter of the Company's initial public offering.
8. ACKNOWLEDGMENTS OF OPTIONEE.
(a) NO RIGHT OF EMPLOYMENT. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE OPTION IS EARNED ONLY BY CONTINUING
CONSULTANCY OR EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF
BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE
HERITAGE COMMERCE CORP 2004 STOCK OPTION PLAN THAT IS INCORPORATED
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HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO
CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE
IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S
EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.
(b) RECEIPT OF PLAN. Optionee acknowledges receipt of a copy
of the Plan and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts this Option subject to all of the terms
and provisions thereof. Optionee has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Option.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions arising under the
Plan or this Option. Optionee further agrees to notify the Company upon any
change in the residence address indicated above.
9. NOTICE. Any notice required or permitted under this Option Agreement
shall be given in writing and shall be deemed effectively given upon personal
delivery or upon deposit in the United States mail by certified mail, with
postage and fees prepaid, addressed to the party at its address as shown below,
or to such other address as such party may designate in writing from time to
time to the other party.
10. ENTIRE AGREEMENT; GOVERNING LAW. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Optionee
with respect to the subject matter hereof, and may not be modified adversely to
the Optionee's interest except by means of a writing signed by the Company and
Optionee. In case of conflict between the provisions in the Plan and this Option
Agreement, the provisions in the Plan shall prevail. This Option Agreement is
governed by California law except for that body of law pertaining to conflict of
laws.
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Date: ___________ __, 0000 XXXXXXXX XXXXXXXX CORP
By: ______________________________
_______________, President
__________________________________
[Name of Optionee]
__________________________________
__________________________________
__________________________________
[Address of Optionee]
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EXHIBIT A
HERITAGE COMMERCE CORP
2004 STOCK OPTION PLAN
EXERCISE NOTICE
TO: Heritage Commerce Corp
000 Xxxxxxx Xxxxxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
ATTN: __________________
SUBJECT: NOTICE OF EXERCISE OF STOCK OPTION
In respect to the stock option granted to the undersigned on
_____________, to purchase an aggregate of _________ shares of the Company's
Common Stock, this is official notice that the undersigned hereby elects to
exercise such option to purchase shares as follows:
NUMBER OF SHARES: ___________________________________________
DATE OF PURCHASE: ___________________________________________
MODE OF PAYMENT: ___________________________________________
(Certified check, cash or other [specify])
The shares should be issued as follows:
NAME: ___________________________________________
ADDRESS: ___________________________________________
Signed: ___________________________________________
Dated: ___________________________________________
Please send this notice of exercise to:
Heritage Commerce Corp
000 Xxxxxxx Xxxxxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attn: ___________________
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