OPTION AGREEMENT TERMS AND CONDITIONS
EXHIBIT
10.37
TERMS
AND CONDITIONS
1. Grant of
Option. The Company hereby grants to the Optionee named on the
Notice of Stock Option Grant (“Optionee”), under the Plan, stock options to
purchase from the Company (the “Options”), on the terms and on conditions set
forth in this agreement (this “Agreement”), the number of shares indicated on
the Notice of Stock Option Grant of the Company’s $0.001 par value common stock,
at the exercise price per share set forth on the Notice of Stock Option
Grant. Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Plan.
2. Vesting of
Options. The Option shall vest (become exercisable) in
accordance with the schedule shown on the Notice of Stock Option
Grant. Notwithstanding the foregoing vesting schedule, upon
Optionee’s death or Disability during his or her Continuous Status as a
Participant, or upon a Change in Control, all Options shall become fully vested
and exercisable.
3. Term of Options and Limitations on
Right to Exercise. The term of the Options will be for a
period of 10 years, expiring at 5:00 p.m., Pacific Time, on the
tenth anniversary of the Grant Date (the “Expiration Date”). To
the extent not previously exercised, the Options will lapse prior to the
Expiration Date upon the earliest to occur of the following
circumstances:
(a) Thirty
(30) days after the termination of Optionee’s Continuous Status as a Participant
for any reason other than by reason of Optionee’s death or
Disability.
(b) Twelve
(12) months after termination of Optionee’s Continuous Status as Participant by
reason of Disability.
(c) Twelve
(12) months after the date of Optionee’s death, if Optionee dies while employed
or during the thirty day period described in subsection (a) above or during the
twelve-month period described in subsection (b) above and before the Options
otherwise lapse. Upon Optionee’s death, the Options may be exercised
by Optionee’s beneficiary designated pursuant to the Plan.
The
Committee may, prior to the lapse of the Options under the circumstances
described in paragraphs (a), (b) or (c) above, extend the time to exercise the
Options as determined by the Committee in writing, but in no event beyond the
Expiration Date. If Optionee returns to service with the Company
during the designated post-termination exercise period, then Optionee shall be
restored to the status Optionee held prior to such termination but no vesting
credit will be earned for any period Optionee was not in Continuous Status as a
Participant. If Optionee or his or her beneficiary exercises an
Option after termination of service, the Options may be exercised only with
respect to the Shares that were otherwise vested on Optionee’s termination of
service.
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EXHIBIT
10.37
4. Exercise of
Option. The Options shall be exercised by (a) written notice
delivered to the Chief Financial Officer of the Company or his or her designee
at the address and in the form specified by the Company from time to time and
(b) payment to the Company in full for the Shares subject to such exercise
(unless the exercise is a broker-assisted cashless exercise, as described
below). If the person exercising an Option is not Optionee, such
person shall also deliver with the notice of exercise appropriate proof of his
or her right to exercise the Option. Payment for such Shares may be, in (a)
cash, (b) Shares previously acquired by the purchaser, (c) withholding of Shares
from the Option, or (d) any combination thereof, for the number of Shares
specified in such written notice. The value of surrendered or withheld Shares
for this purpose shall be the Fair Market Value as of the last trading day
immediately prior to the exercise date. To the extent permitted under Regulation
T of the Federal Reserve Board, and subject to applicable securities laws and
any limitations as may be applied from time to time by the Committee (which need
not be uniform), the Options may be exercised through a broker in a so-called
“cashless exercise” whereby the broker sells the Option Shares on behalf of
Optionee and delivers cash sales proceeds to the Company in payment of the
exercise price. In such case, the date of exercise shall be deemed to
be the date on which notice of exercise is received by the Company and the
exercise price shall be delivered to the Company by the settlement
date.
5. Beneficiary
Designation. Optionee may, in the manner determined by the
Committee, designate a beneficiary to exercise the rights of Optionee hereunder
and to receive any distribution with respect to the Options upon Optionee’s
death. A beneficiary, legal guardian, legal representative, or other
person claiming any rights hereunder is subject to all terms and conditions of
this Agreement and the Plan, and to any additional restrictions deemed necessary
or appropriate by the Committee. If no beneficiary has been
designated or survives Optionee, the Options may be exercised by the legal
representative of Optionee’s estate, and payment shall be made to Optionee’s
estate. Subject to the foregoing, a beneficiary designation may be
changed or revoked by Optionee at any time provided the change or revocation is
filed with the Company.
6. Withholding. The
Company or any employer Affiliate has the authority and the right to deduct or
withhold, or require Optionee to remit to the employer, an amount sufficient to
satisfy federal, state, and local taxes (including Optionee’s FICA obligation)
required by law to be withheld with respect to any taxable event arising as a
result of the exercise of the Options. The withholding requirement may be
satisfied, in whole or in part, at the election of the Company, by withholding
from the Options Shares having a Fair Market Value on the date of withholding
equal to the minimum amount (and not any greater amount) required to be withheld
for tax purposes, all in accordance with such procedures as the Company
establishes.
7. Limitation of
Rights. The Options do not confer to Optionee or Optionee’s
beneficiary designated pursuant to Paragraph 5 any rights of a shareholder of
the Company unless and until Shares are in fact issued to such person in
connection with the exercise of the Options. Nothing in this
Agreement shall interfere with or limit in any way the right of the Company or
any Affiliate to terminate Optionee’s service at any time, nor confer upon
Optionee any right to continue in the service of the Company or any
Affiliate.
8. Restrictions on Transfer and
Pledge. No right or interest of Optionee in the Options may be
pledged, encumbered, or hypothecated to or in favor of any party other than the
Company or an Affiliate, or shall be subject to any lien, obligation, or
liability of Optionee to any other party other than the Company or an
Affiliate. The Options are not assignable or transferable by Optionee
other than by will or the laws of descent and distribution or pursuant to a
domestic relations order that would satisfy Section 414(p)(1)(A) of the Code if
such Section applied to an Option under the Plan; provided, however, that the
Committee may (but need not) permit other transfers. The Options may
be exercised during the lifetime of Optionee only by Optionee or any permitted
transferee.
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EXHIBIT
10.37
9. Restrictions on Issuance of
Shares. If at any time the Committee shall determine in its
discretion, that registration, listing or qualification of the Shares covered by
the Options upon any Exchange or under any foreign, federal, or local law or
practice, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition to the exercise of the Options, the
Options may not be exercised in whole or in part unless and until such
registration, listing, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the
Committee.
10. Amendment. The
Committee may amend, modify or terminate the Award, Notice of Stock Option Grant
and this Agreement without approval of Optionee; provided, however, that such
amendment, modification or termination shall not, without Optionee’s consent,
reduce or diminish the value of this award determined as if it had been fully
vested and exercised on the date of such amendment or termination (with the
per-share value being calculated as the excess, if any, of the Fair Market Value
over the exercise price of the Options).
11. Plan Controls. The
terms and conditions contained in the Plan are incorporated into and made a part
of the Notice of Stock Option Grant and this Agreement, and the Notice of Stock
Option Grant and this Agreement shall be governed by and construed in accordance
with the Plan. In the event of any actual or alleged conflict between
the provisions of the Plan and the provisions of the Notice of Stock Option
Grant or this Agreement, the provisions of the Plan shall be controlling and
determinative.
12. Successors. This
Agreement shall be binding upon any successor of the Company, in accordance with
the terms of this Agreement and the Plan.
13. Severability. If
any one or more of the provisions contained in the Notice of Stock Option Grant
or this Agreement is invalid, illegal or unenforceable, the other provisions of
Notice of Stock Option Grant and this Agreement will be construed and enforced
as if the invalid, illegal or unenforceable provision had never been
included.
14. Notice. Notices and
communications under the Notice of Stock Option Grant and this Agreement must be
in writing and either personally delivered or sent by registered or certified
United States mail, return receipt requested, postage
prepaid. Notices to the Company must be addressed to: Notify
Technology Corporation, 0000 X. Xx Xxxx Xxxxxxxxx, Xxxxx 000, Xxx
Xxxx, XX 00000, Attn: Secretary, or any other address designated by the Company
in a written notice to Optionee. Notices to Optionee will be directed
to the address of Optionee then currently on file with the Company, or at any
other address given by Optionee in a written notice to the
Company.
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