EXHIBIT 10.39
Grant #______
[FORM OF NONQUALIFIED STOCK OPTION AGREEMENT]
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This NONQUALIFIED STOCK OPTION AGREEMENT (this "Option Agreement"),
dated as of the 28/th/ day of September, 1999 (the "Date of Grant"), by and
between XXXxXXXX.xxx, Inc., a Delaware corporation (the "Company"), and [______]
(the "Optionee").
Pursuant to the Company's 1999 Stock Plan (the "Plan"), the Board of
Directors of the Company (the "Board") or a committee appointed by the Board, as
the Administrator of the Plan, has determined that the Optionee is to be granted
an option (the "Option") to purchase shares of the Company's common stock, par
value $.001 per share (the "Common Stock"), on the terms and conditions set
forth herein, and hereby grants such Option. It is intended that the Option
constitute a "nonqualified stock option" and not an "incentive stock option"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
Any capitalized terms not defined herein shall have their respective
meanings set forth in the Plan.
1. Number of Shares and Exercise Price. The Option entitles the
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Optionee to purchase [____] shares of the Company's Common Stock (the "Option
Shares") at a price of $.75 per share (the "Option Exercise Price").
2. Option Term. The term of the Option and of this Option Agreement
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(the "Option Term") shall commence on the Date of Grant and, unless the Option
is previously terminated pursuant to this Option Agreement, shall terminate upon
the expiration of ten (10) years from the Date of Grant. Upon expiration of the
Option Term, all rights of the Optionee hereunder shall terminate.
3. Conditions of Exercise.
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(a) Subject to the provisions of the Plan and this Agreement,
the Option shall vest and become exercisable
(i) as to twenty percent (20%) of the Option Shares, on
the Date of Grant,
(ii) as to twenty percent (20%) of the Option Shares, on
the first anniversary of the Date of Grant,
(iii) as to the remaining sixty percent (60%) of the Option
Shares, 1/36th on the last date of each calendar month beginning on or after the
first anniversary of the Date of Grant, so that the Option Shares are fully
vested on or about the fourth anniversary of the Date of Grant.
(b) Except as otherwise provided herein, the right of the
Optionee to purchase Option Shares with respect to which this Option has become
exercisable may be exercised in whole or in part at any time or from time to
time prior to expiration of the Option Term.
4. Nontransferability of Option and Option Shares. The Option and
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this Option Agreement shall not be transferable and, during the lifetime of
Optionee, the Option may be exercised only by Optionee. Without limiting the
generality of the foregoing, except as otherwise provided herein, the Option may
not be assigned, transferred, pledged or hypothecated in any way, shall not be
assignable by operation of law, and shall not be subject to execution,
attachment or similar process.
5. Method of Exercise of Option. The Option may be exercised by
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means of written notice of exercise to the Company specifying the number of
Option Shares to be purchased, accompanied by payment in full of the aggregate
Option Exercise Price and any applicable withholding taxes (i) in cash or by
check, (ii) by means of a cashless exercise program adopted by the Company in
connection with the Plan, (iii) in the form of unrestricted Stock already owned
by the Optionee which, (x) in the case of unrestricted Stock acquired upon
exercise of an option, have been owned by the optionee for more than six months
on the date of surrender, and (y) have an aggregate Fair Market Value on the
date of surrender equal to the aggregate Option Exercise Price of the Stock as
to which such Stock Option shall be exercised, or (iv) by any other means of
exercise authorized from time to time in the Plan and/or by the Board or a
committee appointed by the Board.
6. Company's Right of First Refusal. Before any Option Shares held
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by Optionee or any transferee (either being sometimes referred to herein as the
"Holder") may be sold or otherwise transferred (including transfer by gift or
operation of law), the Company or its assignee(s) shall have a right of first
refusal to purchase the Option Shares on the terms and conditions set forth in
this Section (the "Right of First Refusal").
(a) Notice of Proposed Transfer. The Holder of the Option Shares
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shall deliver to the Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer the Option Shares;
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(ii) the name of each proposed purchaser or other transferee (each, a "Proposed
Transferee"); (iii) the number of Option Shares to be transferred to each
Proposed Transferee; and (iv) the bona fide cash price or other consideration
payable by each Proposed Transferee for which the Holder proposes to transfer
the Option Shares (the "Offered Price"), and the Holder shall offer the Option
Shares at the Offered Price to the Company or its assignee(s).
(b) Exercise of Right of First Refusal. At any time within
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thirty (30) days after receipt 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 Option Shares proposed to be transferred to any one or more of
the Proposed Transferees, at the purchase price determined in accordance with
subsection (c) below.
(c) Purchase Price. The purchase price ("Purchase Price") for
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the Option Shares purchased by the Company or its assignee(s) under this Section
shall be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board in good faith.
(d) Payment. Payment of the Purchase Price shall be made, at the
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option of the Company or its assignee(s), in cash or by check, by cancellation
of all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within 30 days after receipt of the Notice or in the manner
and at the times set forth in the Notice.
(e) Holder's Right to Transfer. If all of the Option Shares
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proposed in the Notice to be transferred to one or more Proposed Transferees are
not purchased by the Company and/or its assignee(s) as provided in this Section
6, then the Holder may sell or otherwise transfer such Option Shares to the
Proposed Transferee(s) 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 any such sale or other transfer is effected in
accordance with any applicable securities laws and the Proposed Transferee(s)
agrees in writing that the provision of this Section 6 shall continue to apply
to the Option Shares in the hands of the Proposed Transferee(s). If the Option
Shares described in the Notice are not transferred to the Proposed Transferee(s)
within such 120-day period, a new Notice shall be given to the Company, and the
Company and/or its assignees shall again be offered the Right of First Refusal
before any Option Shares held by the Holder may be sold or otherwise
transferred.
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(f) Exception for Certain Family Transfers. Notwithstanding
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anything to the contrary contained in this Section 6, the transfer of any or all
of the Option Shares during the Optionee's lifetime or on the Optionee's death
by will or intestacy to the Optionee's immediate family or a trust for the
benefit of the Optionee's immediate family shall be exempt from the provisions
of this Section 6. "Immediate Family" as used herein shall mean spouse, lineal
descendant or antecedent, father, mother, brother or sister. In such case, the
transferee or other recipient shall receive and hold the Option Shares so
transferred subject to the provisions of this Section 6, and there shall be no
further transfer of such Option Shares except in accordance with the terms of
this Section 6.
(g) Termination of Right of First Refusal. The Right of First
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Refusal shall terminate as to any Option Shares upon the consummation of an
initial underwritten public offering by the Company of its equity securities
pursuant to an effective registration statement filed under the Securities Act
of 1933, as amended (the "Securities Act").
7. Effect of Termination of Service. Upon the termination of
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Optionee's service with the Company or any Parent or Subsidiary, the Option
shall immediately terminate as to any Option Shares that have not previously
vested as of the date of such termination (the "Termination Date"). Any portion
of the Option that has vested as of the Termination Date shall be exercisable in
whole or in part for a period of 90 days following the Termination Date;
provided, however, that in the event of termination by reason of Optionee's
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death or Disability, such exercise period shall extend until the date that is
twelve months from the Termination Date. Upon expiration of such 90-day or
twelve-month period, as applicable, any unexercised portion of the Option shall
terminate in full.
8. Investment Representation. The Optionee hereby represents and
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warrants to the Company that the Optionee, by reason of the Optionee's business
or financial experience (or the business or financial experience of the
Optionee's professional advisors who are unaffiliated with and who are not
compensated by the Company or any affiliate or selling agent of the Company,
directly or indirectly), has the capacity to protect the Optionee's own
interests in connection with the transactions contemplated under this Option
Agreement.
9. Notices. All notices and other communications under this
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Agreement shall be in writing and shall be given by facsimile or first class
mail, certified or registered with return receipt requested, and shall be deemed
to have been
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duly given three days after mailing or 24 hours after transmission by facsimile
to the respective parties named below:
If to Company: XXXxXXXX.xxx, Inc.
00 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
Facsimile: (626) 817-
with a copy to: Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
If to the Optionee: [Name of Optionee]
[Address]
______________________
Facsimile: __________
Either party hereto may change such party's address for notices by notice duly
given pursuant hereto.
10. Securities Laws Requirements. The Option shall not be
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exercisable to any extent, and the Company shall not be obligated to transfer
any Option Shares to the Optionee upon exercise of such Option, if such
exercise, in the opinion of counsel for the Company, would violate the
Securities Act (or any other federal or state statutes having similar
requirements as may be in effect at that time). Further, the Company may require
as a condition of transfer of any Option Shares pursuant to any exercise of the
Option that the Optionee furnish a written representation that he or she is
purchasing or acquiring the Option Shares for investment and not with a view to
resale or distribution to the public. The Optionee hereby represents and
warrants that he or she understands that the Option Shares are "restricted
securities," as defined in Rule 144 under the Securities Act, and that any
resale of the Option Shares must be in compliance with the registration
requirements of the Securities Act, or an exemption therefrom, and with the
requirements of California "Blue Sky" law. Each certificate representing Option
Shares shall bear the legends set forth below and with any other legends that
may be required by the Company or by any Federal or state securities laws:
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THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE RESTRICTED SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES
THEREUNDER, AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE
ISSUER OR ITS ASSIGNEES(S). SUCH TRANSFER RESTRICTIONS AND RIGHT OF
FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES
Further, if the Company decides, in its sole discretion, that the listing or
qualification of the Option Shares under any securities or other applicable law
is necessary or desirable, the Option shall not be exercisable, in whole or in
part, unless and until such listing or qualification, or a consent or approval
with respect thereto, shall have been effected or obtained free of any
conditions not acceptable to the Company.
11. No Obligation to Register Option Shares. The Company shall be
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under no obligation to register the Option Shares pursuant to the Securities Act
or any other Federal or state securities laws.
12. Protections Against Violations of Agreement. No purported sale,
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assignment, mortgage, hypothecation, transfer, pledge, encumbrance, gift,
transfer in trust (voting or other) or other disposition of, or creation of a
security interest in or lien on, any of the Option Shares by any holder thereof
in violation of the provisions of this Agreement or the Certificate of
Incorporation or the Bylaws of the Company, will be valid, and the Company will
not transfer any of said Option Shares on its books nor will any of said Option
Shares be entitled to vote, nor will any dividends be paid thereon, unless and
until there has been full compliance with said provisions to the satisfaction of
the Company. The foregoing restrictions are in addition to and not in lieu of
any other remedies, legal or equitable, available to enforce said provisions.
13. Withholding Requirements. The Company's obligations under this
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Option Agreement shall be subject to all applicable tax and other withholding
requirements, and the Company shall, to the extent permitted by law, have the
right to deduct any withholding amounts from any payment or transfer of any kind
otherwise due to the Optionee.
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14. Failure to Enforce Not a Waiver. The failure of the Company to
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enforce at any time any provision of this Option Agreement shall in no way be
construed to be a waiver of such provision or of any other provision hereof.
15. Governing Law. This Option Agreement shall be governed by and
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construed according to the laws of the State of California without regard to its
principles of conflict of laws.
16. Incorporation of Plan. The Plan is hereby incorporated by
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reference and made a part hereof, and the Option and this Option Agreement shall
be subject to all terms and conditions of the Plan.
17. Amendments. This Option Agreement may be amended or modified at
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any time only by an instrument in writing signed by each of the parties hereto.
18. Rights as a Stockholder. Neither the Optionee nor any of the
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Optionee's successors in interest shall have any rights as a stockholder of the
Company with respect to any shares of Common Stock subject to the Option until
the date of issuance of a stock certificate for such shares of Common Stock.
19. Agreement Not a Contract of Employment. Neither the Plan, the
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granting of the Option, this Option Agreement nor any other action taken
pursuant to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that the Optionee has a right to continue to
provide services as an officer, director, employee, consultant or advisor of the
Company or any Parent Subsidiary or affiliate of the Company for any period of
time or at any specific rate of compensation.
20. Authority of the Board. The Board, or a committee appointed by
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the Board, shall have full authority to interpret and construe the terms of the
Plan and this Option Agreement. The determination of the Board, or a committee
appointed by the Board, as to any such matter of interpretation or construction
shall be final, binding and conclusive.
21. Market Stand-Off. Optionee agrees that, if so requested by the
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Company or any representative of the underwriter (the "Managing Underwriter") in
connection with any registration of the offering of any securities of the
Company under the Securities Act, Optionee shall not sell or otherwise transfer
any Shares or other securities of the Company during the 180-day period (or such
other period as
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may be requested in writing by the Managing Underwriter and agreed to in writing
by the Company) (the "Market Standoff Period") following the effective date of a
registration statement of the Company filed under the Securities Act. Such
restriction shall apply only to the first registration statement of the Company
to become effective under the Securities Act that includes securities to be sold
on behalf of the Company to the public in an underwritten public offering under
the Securities Act. The Company may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions until the end of
such Market Standoff Period.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Option Agreement on the day and year first above written.
XXXxXXXX.XXX, INC.
By _____________________________
Name ___________________________
Title __________________________
THIS OPTION AGREEMENT SUPERSEDES AND SHALL BE IN LIEU OF ANY PRIOR
AGREEMENT, WHETHER WRITTEN OR ORAL, RELATING TO OPTIONEE'S RIGHT TO PURCHASE
SHARES OF COMMON STOCK OF THE COMPANY, OTHER THAN ANY OPTION AGREEMENT EXECUTED
BY THE COMPANY AND THE OPTIONEE PURSUANT TO THE COMPANY'S 1999 STOCK PLAN. The
undersigned has had the opportunity to read the terms and provisions of the
foregoing Option Agreement and the terms and provisions of the Plan, herein
incorporated by reference. The undersigned hereby accepts and agrees to all the
terms and provisions of the foregoing Option Agreement and to all the terms and
provisions of the Plan, herein incorporated by reference.
________________________________
The Optionee
Address: _______________________
_______________________
_______________________
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