EXHIBIT 10.27
BUY CORP.
STOCK OPTION AGREEMENT
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This Stock Option Agreement (the "Agreement") is made as of
_________________, 199__ by and among BUY CORP., a Delaware corporation (the
"Corporation") and ______________________ (the "Optionee").
RECITALS
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A. The Board of Directors of the Corporation has adopted that
certain 1998 Stock Option/Stock Issuance Plan (the "Plan") for the purpose of
attracting and retaining the services of persons who contribute to the growth
and financial success of the Corporation.
B. Optionee is a person who the Plan Administrator believes has and
will contribute to the growth and financial success of the Corporation, and this
Agreement is executed pursuant to and is intended to carry out the purposes of
the Plan.
AGREEMENT
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NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. Subject to and upon the terms and conditions set
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forth in this Agreement, the Corporation hereby grants to Optionee, as of the
grant date (the "Grant Date") specified in the accompanying Notice of Grant of
Stock Option (the "Notice of Grant"), a stock option (the "Option") to purchase
up to that number of shares of the Corporation's Common Stock (the "Option
Shares") as is specified in the Notice of Grant. The Option Shares shall be
purchasable from time to time during the option term at the option price per
share (the "Option Price") specified in the Notice of Grant. Capitalized terms
used herein which are not otherwise defined shall have the meaning ascribed to
such terms in the Plan.
2. Option Term. This Option shall have a maximum term of ten (10)
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years measured from the Grant Date and shall expire at the close of business on
the expiration date (the "Expiration Date") specified in the Notice of Grant,
unless sooner terminated in accordance with Paragraphs 5, 6 or 18.
3. Limited Transferability. This Option shall be neither
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transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee.
4. Dates of Exercise. This Option may not be exercised in whole or
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in part at any time prior to the time the Plan is approved by the Corporation's
shareholders in accordance with Paragraph 18. Provided such shareholder
approval is obtained, this Option shall thereupon become exercisable for the
Option Shares in one or more installments as is specified
in the Notice of Grant. As the Option becomes exercisable in one or more
installments, the installments shall accumulate and the Option shall remain
exercisable for such installments until the Expiration Date (as set forth in the
Notice of Grant) or the sooner termination of the Option Term under Paragraph 5
or Paragraph 6 of this Agreement.
5. Special Termination of Option Term. The option term (the "Option
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Term") specified in Paragraph 2 shall terminate (and this Option shall cease to
be exercisable) prior to the Expiration Date should any of the following
provisions become applicable:
A. Except as otherwise provided in subparagraph (ii) or (iii) below,
should Optionee cease to remain in Service (as defined below) while this Option
is outstanding, then the period for exercising this Option shall be reduced to a
three (3)-month period commencing with the date of such cessation of Service,
but in no event shall this Option be exercisable at any time after the
Expiration Date. Upon the expiration of such three (3)-month period or (if
earlier) upon the Expiration Date, this Option shall terminate and cease to be
outstanding.
B. Should Optionee die while this Option is outstanding, then the
personal representative of the Optionee's estate or the person or persons to
whom the Option is transferred pursuant to the Optionee's will or in accordance
with the laws of descent and distribution shall have the right to exercise this
Option. Such right shall lapse and this Option shall cease to be exercisable
upon the earlier of (A) the expiration of the twelve (12) month period measured
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from the date of Optionee's death or (B) the Expiration Date. Upon the
expiration of such twelve (12) month period or (if earlier) upon the Expiration
Date, this Option shall terminate and cease to be outstanding.
C. Should Optionee become permanently disabled and cease by reason
thereof to remain in Service while this Option is outstanding, then the Optionee
shall have a period of twelve (12) months (commencing with the date of such
cessation of Service) during which to exercise this Option, but in no event
shall this Option be exercisable at any time after the Expiration Date.
Optionee shall be deemed to be permanently disabled if Optionee is unable to
engage in any substantial gainful activity for the Corporation or the parent or
subsidiary corporation retaining his/her services by reason of any medically
determinable physical or mental impairment, which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months. Upon the expiration of such limited period of
exercisability or (if earlier) upon the Expiration Date, this Option shall
terminate and cease to be outstanding.
D. During the limited period of exercisability applicable under
subparagraphs (i), (ii) or (iii) above, this Option may be exercised for any or
all of the Option Shares for which this Option is, at the time of the Optionee's
cessation of Service, exercisable in accordance with the exercise schedule
specified in the Notice of Grant and the provisions of Paragraph 6 of this
Agreement.
E. For purposes of this Paragraph 5 and for all other purposes under
this Agreement:
(i) The Optionee shall be deemed to remain in "Service" for so long as
the Optionee continues to render periodic services to the Corporation or any
parent or subsidiary corporation, whether as an Employee, a non-employee member
of the board of directors, or an independent contractor or consultant.
(ii) The Optionee shall be deemed to be an "Employee" of the Corporation
and to continue in the Corporation's employ for so long as the Optionee remains
in the employ of the Corporation or one or more of its parent or subsidiary
corporations, 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.
(iii) A corporation shall be considered to be a "subsidiary" corporation
of the Corporation if it is a member of an unbroken chain of corporations
beginning with the Corporation, provided each such corporation in the chain
(other than the last corporation) owns, at the time of determination, stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
(iv) A corporation shall be considered to be a "parent" corporation of the
Corporation if it is a member of an unbroken chain ending with the Corporation,
provided each such corporation in the chain (other than the Corporation) owns,
at the time of determination, stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
6. Effect of Corporate Transaction.
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A. Optionee shall automatically vest in full with respect to all of
the Option Shares in the event of a Corporate Transaction so the Option shall,
immediately prior to the effective date of the Corporate Transaction, may be
exercised for any or all of the Option Shares as fully-vested shares of Common
Stock, provided that the Option Shares shall not automatically vest in full if
and to the extent: (i) this Option is, in connection with the Corporate
Transaction, either to be assumed by the successor corporation (or parent
thereof) or to be replaced with a comparable Option to purchase shares of the
capital stock of the successor corporation (or parent thereof), or (ii) such
Option is to be replaced with a cash incentive program of the successor
corporation which preserves the spread existing on the unvested Option Shares at
the time of the Corporate Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to those Option Shares.
The determination of option comparability under clause (i) above shall be made
by the Plan Administrator (as defined in the Plan), and its determination shall
be final, binding and conclusive.
B. To the extent not previously exercised, this Option shall
terminate and cease to be exercisable upon the consummation of a Corporate
Transaction unless it is expressly assumed by the successor corporation or
parent thereof.
C. Option Shares available under an Option that is assumed or
replaced in the Corporate Transaction and that do not otherwise accelerate at
that time, shall automatically vest in full in the event the Optionee's Service
should subsequently terminated by reason of an Involuntary Termination within
eighteen (18) months following the effective date of such
Corporate Transaction. Any Option so accelerated shall remain exercisable for
fully-vested shares until the earlier of (i) the expiration of the Option Term
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or (ii) the expiration of the one (1)-year period measured from the effective
date of the Involuntary Termination.
D. This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise make changes in 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. Effect of Change in Control
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In the event of any Change in Control, Optionee shall automatically
vest in full with respect to all Option Shares so that the Option shall,
immediately prior to the effective date of the Change in Control, be fully
exercisable for any or all of Option Shares as fully-vested shares of Common
Stock.
8. Adjustment in Option Shares.
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A. In the event any change is made to the Corporation's outstanding
Common Stock by reason of any stock split, stock dividend, combination of
shares, exchange of shares, or other change affecting the outstanding Common
Stock as a class without receipt of consideration, then appropriate adjustments
shall be made to (i) the total number of Option Shares subject to this Option,
(ii) the number of Option Shares for which this Option is to be exercisable from
and after each installment date specified in the Notice of Grant and (iii) the
Option Price payable per share in order to reflect such change and thereby
preclude a dilution or enlargement of benefits hereunder.
B. If this Option is to be assumed in connection with a Corporate
Transaction described in Paragraph 6 or is otherwise to remain outstanding, then
this Option shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply and pertain to the number and class of securities which
would have been issuable to the Optionee in the consummation of such Corporate
Transaction had the Option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to the Option Price
payable per share, provided the aggregate Option Price payable hereunder shall
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remain the same.
9. Privilege of Stock Ownership. The holder of this Option shall not
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have any of the rights of a shareholder with respect to the Option Shares until
such individual shall have exercised the Option and paid the Option Price.
10. Manner of Exercising Option.
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A. 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 in the case of exercise after Optionee's death, the Optionee's executor,
administrator, heir or legatee, as the case may be) must take the following
actions:
(i) Execute and deliver to the Secretary of the Corporation a
stock purchase agreement (the "Stock Purchase Agreement") in substantially the
form of Exhibit B to the Notice of Grant.
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(ii) Pay the aggregate Option Price for the purchased shares in
one or more forms approved under the Plan.
(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.
B. For purposes of this Agreement, the Exercise Date shall be the
date on which the executed Purchase Agreement shall have been delivered to the
Corporation, and the fair market value of a share of Common Stock on any
relevant date shall be determined in accordance with subparagraphs (i) through
(iii) below:
(i) If the Common Stock is not at the time listed or admitted
to trading on any stock exchange but is traded on the NASDAQ National Market
System, the fair market value shall be the closing selling price of one share of
Common Stock on the date in question, as such price is reported by the National
Association of Securities Dealers through its NASDAQ system or any successor
system. If there is no closing selling price for the Common Stock on the date in
question, then the closing selling price on the last preceding date for which
such quotation exists shall be determinative of fair market value.
(ii) If the Common Stock is at the time listed or admitted to
trading 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 reported sale of Common Stock on
such exchange on the date in question, then the fair market value shall be the
closing selling price on the exchange on the last preceding date for which such
quotation exists.
(iii) If the Common Stock at the time is neither listed nor
admitted to trading on any stock exchange nor traded in the over-the-counter
market, or if the Plan Administrator determines that the value determined
pursuant to subparagraphs (i) and (ii) above does not accurately reflect the
fair market value of the Common Stock, then such fair market value shall be
determined by the Plan Administrator after taking into account such factors as
the Plan Administrator shall deem appropriate.
C. As soon after the Exercise Date as practical, the Corporation
shall mail or deliver to Optionee or to the other person or persons exercising
this Option a certificate or certificates representing the shares so purchased
and paid for, with the appropriate legends affixed thereto.
D. In no event may this Option be exercised for any fractional
shares.
11. Compliance with Laws and Regulations.
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A. The exercise of this Option and the issuance of Option Shares
upon such exercise shall be subject to compliance by the Corporation and the
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange on which shares of the
Corporation's Common Stock may be listed at the time of such exercise and
issuance.
B. In connection with the exercise of this Option, Optionee shall
execute and deliver to the Corporation such representations in writing as may be
requested by the Corporation in order for it to comply with the applicable
requirements of Federal and State securities laws.
12. Successors and Assigns. Except to the extent otherwise provided
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in Paragraphs 3 or 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Corporation.
13. Liability of Corporation.
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A. If the Option Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without shareholder
approval be issued under the Plan, then this Option shall be void with respect
to such excess shares, unless shareholder 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 Article IV, Section 3, of the
Plan.
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.
14. Notices. Any notice required to be given or delivered to the
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Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation in care of the Secretary of the Corporation at the
Corporation's 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 Notice of Grant. All
notices shall be deemed to have been given or delivered upon personal delivery
or upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.
15. Loans. The Plan Administrator may, in its absolute discretion
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and without any obligation to do so, assist the Optionee in the exercise of this
Option by (i) authorizing the extension of a loan to the Optionee from the
Corporation or (ii) permitting the Optionee to pay the Option Price for the
purchased Common Stock in installments over a period of years. The terms of any
such loan or installment method of payment (including the interest rate, the
requirements for collateral and the terms of repayment) shall be established by
the Plan Administrator in its sole discretion.
16. Construction. This Agreement and the Option evidenced hereby are
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made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions 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.
17. Governing Law. The interpretation, performance, and enforcement
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of this Agreement shall be governed by the laws of the State of California
without resort to that State's conflict-of-law rules.
18. Shareholder Approval. The grant of this Option is subject to
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approval of the Plan by the Corporation's shareholders within twelve (12) months
after the adoption of the Plan by the Board of Directors. Notwithstanding any
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provision of this Agreement to the contrary, this Option may not be exercised in
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whole or in part until such shareholder approval is obtained. In the event that
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such shareholder approval is not obtained, then this Option shall thereupon
terminate in its entirety and the Optionee shall have no further rights to
acquire any Option Shares hereunder.
19. Additional Terms Applicable to an Incentive Stock Option. In the
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event this Option is designated an Incentive Stock Option in the Notice of
Grant, the following terms and conditions shall also apply to the grant:
A. This Option shall cease to qualify for favorable tax treatment as
an Incentive Stock Option under the Federal tax laws if (and to the extent) this
Option is exercised for one or more Option Shares: (i) more than three (3)
months after the date the Optionee ceases to be an Employee for any reason other
than death or permanent disability (as defined in Paragraph 5) or (ii) more than
one (1) year after the date the Optionee ceases to be an Employee by reason of
permanent disability.
B. Should this Option be designated as immediately exercisable in
the Notice of Grant, then this Option shall not become exercisable in the
calendar year in which granted if (and to the extent) the aggregate fair market
value (determined at the Grant Date) of the Corporation's Common Stock for which
this Option would otherwise first become exercisable in such calendar year
would, when added to the aggregate fair market value (determined as of the
respective date or dates of grant) of the Corporation's Common Stock for which
this Option or one or more other Incentive Stock Options granted to the Optionee
prior to the Grant Date (whether under the Plan or any other Option plan of the
Corporation or its parent or subsidiary corporations) first become exercisable
during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in
the aggregate. To the extent the exercisability of this Option is deferred by
reason of the foregoing limitation, the deferred portion will first become
exercisable in the first calendar year or years thereafter in which the One
Hundred Thousand Dollar ($100,000) limitation of this Paragraph 18.B would not
be contravened.
C. Should this Option be designated as exercisable in installments
in the Notice of Grant, then no installment under this Option (whether annual or
monthly) shall qualify for favorable tax treatment as an Incentive Stock Option
under the Federal tax laws if (and to the extent) the aggregate fair market
value (determined at the Grant Date) of the Corporation's
Common Stock for which such installment first becomes exercisable hereunder
will, when added to the aggregate fair market value (determined as of the
respective date or dates of grant) of the Corporation's Common Stock for which
one or more other Incentive Stock Options granted to the Optionee prior to the
Grant Date (whether under the Plan or any other Option plan of the Corporation
or any parent or subsidiary corporation) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate.
20. Withholding. Optionee hereby agrees to make appropriate
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arrangements with the Corporation or parent or subsidiary corporation employing
Optionee for the satisfaction of all Federal, State or local income tax
withholding requirements and all Federal social security employee tax
requirements applicable to the exercise of this Option.
