Exhibit 10.16
NONQUALIFIED STOCK OPTION AGREEMENT
pursuant to the
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, inc. 1999 NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN
NONQUALIFIED STOCK OPTION AGREEMENT ("Agreement") entered into this ____
day of ___________, 1999, between ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, inc., a Delaware
corporation (the _______"Company"), and ________________________________, a
member of the Board of Directors of the Company (the "Optionee"), effective as
of _________, 1999 (the "Date of Grant").
1. Grant of Option. The Company, acting through its Compensation Committee
(the "Committee"), grants to the Optionee and the Optionee hereby accepts,
subject to the terms and conditions hereof, effective as of the date set forth
above, a nonqualified stock option (the "Option") to purchase up to an aggregate
of ____________ shares of Company's Common Stock, at the price of $____ per
share (the "Option Price") determined in accordance with Section 5 of the Plan.
2. Governing Plan. This Option is granted pursuant to the Company's 1999
Non-employee Director Stock Option Plan (the "Plan"). Capitalized terms used but
not otherwise defined herein have the meanings as set forth in the Plan. The
Optionee agrees to be bound by the terms and conditions of the Plan, which are
incorporated herein by reference and which control in case of any conflict with
this Agreement. A copy of the Plan as in effect on the date hereof has been
provided to the Optionee, and the Optionee by executing this Agreement hereby
acknowledges receipt thereof.
3. Term. The Option shall expire at the end of business on ___________,
200_, _____ (____) years from the Date of Grant of the Option. The Option may
terminate sooner under certain circumstances, including, without limitation,
termination of Optionee's term as a Director, as set forth in Section 7 (death
and termination for other reasons) of the Plan.
4. Vesting; Change of Control; Restrictions on Exercise.
(a) Subject to the provisions of Sections 5 and 8 hereof, and unless
accelerated, as set forth in the Plan or as provided herein, the Option granted
hereunder shall vest and become exercisable for the number of shares set forth
opposite the dates noted below (the "Option Vesting Schedule").
Cumulative
Date(s) Number of Vested Shares
------- -----------------------
(b) Notwithstanding the provisions of Paragraph 4(a) above, upon a Change
in Control:
(i) the Option shall become fully vested and shall become
immediately exercisable with respect to all shares subject to the Option;
(ii) upon exercise of the Option during the 60-day period from and
after the date of a Change of Control, the Optionee may in lieu of the
receipt of Common Stock upon the exercise of the Option, elect by written
notice to the Company to receive an amount in cash equal to the excess of
the aggregate Value (as defined below) of the shares of Common Stock
covered by the Option or portion thereof surrendered determined on the
date the Option is exercised, over the aggregate exercise price of the
Option (such excess is referred to herein as the "Aggregate Spread");
provided, however, if the end of such 60-day period from and after the
date of a Change of Control is within six months of the date of grant of
the Option, the Option shall be cancelled in exchange for a cash payment
to the Optionee equal to the Aggregate Spread on the day which is six
months and one day after the date of grant of the Option. As used in this
Section 3(b)(ii), the term "Value" means the higher of (1) the highest
Fair Market Value during the 60-day period from and after the date of a
Change of Control and (2) if the Change of Control is the result of a
transaction or series of transactions described in paragraphs (i) or (iii)
of the definition of Change of Control, the highest price per share of the
Common Stock paid in such transaction or series of transactions (which in
the case of paragraph (i) shall be the highest price per share of the
Common Stock as reflected in a Schedule 13D filed by the person having
made the acquisition).
(iii) if the Optionee ceases to be a Director regardless of the
reason therefor other than death following a Change of Control, the Option
may be exercised by the Optionee until the earlier of sixty (60) days
after the Optionee ceases to be a Director or the expiration date of the
Option;
(iv) the Option becomes non-cancelable; and
(v) if the Option shall remain exercisable after any such Change of
Control, from and after such Change of Control, the Option shall be
exercisable only for the kind and amount of securities and/or other
property, or the cash equivalent thereof, receivable as a result of such
Change of Control by the holder of a number of shares of stock for which
the Option could have been exercised immediately prior to such Change of
Control.
(c) If the Company shall consummate any merger, consolidation or other
reorganization not involving a Change of Control (a "Reorganization") in which
holders of shares of Common Stock are entitled to receive in respect of such
shares any securities, cash or other consideration (including, without
limitation, a different number of shares of Common Stock), the Option shall
thereafter be exercisable, in accordance with the Plan and this Agreement, only
for the kind and
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amount of securities, cash and/or other consideration receivable upon such
Reorganization by a holder of the same number of shares of Common Stock as are
subject to the Option immediately prior to such Reorganization, and any
adjustments will be made to the terms of the Option in the sole discretion of
the Committee as it may deem appropriate to give effect to the Reorganization.
(d) Subject to the provisions of Sections 5 and 8 hereof, shares as to
which the Option becomes exercisable pursuant to the foregoing provisions may be
purchased at any time thereafter prior to the expiration or termination of the
Option.
5. Procedure for Exercise.
(a) Subject to the requirements of Section 8 hereof, the Option may be
exercised, from time to time, in whole or in part (but for the purchase of a
whole number of shares only), by delivery of a written notice (the "Notice")
from the Optionee to the Secretary of the Company, which Notice shall:
(i) state that the Optionee elects to exercise the Option;
(ii) state the number of shares with respect to which the Option is
being exercised (the "Optioned Shares");
(iii) state the date upon which the Optionee desires to consummate
the purchase of the Optioned Shares (which date must be prior to the
termination of such Option and no later than thirty (30) days after the
date of receipt of such Notice);
(iv) include any representations of the Optionee required under
Section 8(c); and
(v) if the Option shall be exercised pursuant to Section 9 by any
person other than the Optionee, include evidence to the satisfaction of
the Committee of the right of such person to exercise the Option.
(b) Payment of the Option Price for the Optioned Shares shall be made in
U.S. dollars by personal check, bank draft or money order payable to the order
of the Company or by wire transfer.
(c) The Company shall issue a stock certificate in the name of the
Optionee (or such other person exercising the Option in accordance with the
provisions of Section 9) for the Optioned Shares as soon as practicable after
receipt of the Notice and payment of the aggregate Option Price for such shares.
6. No Rights as a Stockholder. The Optionee shall have no rights as a
stockholder of the Company with respect to any Optioned Shares until the date
the Optionee or his nominee (which, for purposes of this Agreement, shall
include any third party agent selected by the Committee to hold such Option
Shares on behalf of the Optionee), guardian or legal representative is the
holder of record of such Optioned Shares.
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7. Adjustments.
(a) If at any time while the Option is outstanding, (1) there shall be any
increase or decrease in the number of issued and outstanding shares of Common
Stock through the declaration of a stock dividend, stock split, combination of
shares or through any recapitalization resulting in a stock split-up, spin-off,
combination or exchange of shares of Common Stock or (2) the value of the
outstanding shares of Common Stock is reduced by reason of an extraordinary cash
dividend, then and in each such event appropriate adjustment shall be made in
the number of shares and the exercise price per share covered by the Option, so
that the same proportion of the Company's issued and outstanding shares of
Common Stock shall remain subject to purchase at the same aggregate exercise
price.
(b) Except as otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any class, either in connection with a direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of or exercise price of shares of Common
Stock covered by the Option.
(c) Without limiting the generality of the foregoing, the existence of the
Option shall not affect in any manner the right or power of the Company to make,
authorize or consummate (i) any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business; (ii) any merger or consolidation of the Company; (iii) any issue by
the Company of debt securities, or preferred or preference stock that would rank
above the shares of Common Stock covered by the Option; (iv) the dissolution or
liquidation of the Company; (v) any sale, transfer or assignment of all or any
part of the assets or business of the Company; or (vi) any other corporate act
or proceeding, whether of a similar character or otherwise.
8. Additional Provisions Related to Exercise.
(a) The Option shall be exercisable only in accordance with this
Agreement, including the provisions regarding the period when the Option may be
exercised and the number of shares of Common Stock that may be acquired upon
exercise.
(b) The Option may not be exercised as to less than one hundred (100)
shares of Common Stock at any one time unless less than one hundred (100) shares
of Common Stock remain to be purchased upon the exercise of the Option.
(c) To exercise the Option, the Optionee shall follow the provisions of
Section 5 hereof. Upon the exercise of the Option at a time when there is not in
effect a registration statement under the Securities Act of 1933, as amended
(the "Securities Act") relating to the shares of Common Stock issuable upon
exercise of the Option, the Committee in its discretion
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may, as a condition to the exercise of the Option, require the Optionee (i) to
represent in writing that the shares of Common Stock received upon exercise of
the Option are being acquired for investment and not with a view to distribution
and (ii) to make such other representations and warranties as are deemed
appropriate by counsel to the Company. No Option may be exercised and no shares
of Common Stock shall be issued and delivered upon the exercise of the Option
unless and until the Company and/or the Optionee shall have complied with all
applicable federal or state registration, listing and/or qualification
requirements and all other requirements of law or of any regulatory agencies
having jurisdiction.
(d) Stock certificates representing shares of Common Stock acquired upon
the exercise of the Option that have not been registered under the Securities
Act shall, if required by the Committee, bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED."
The exercise of each Option and the issuance of shares in connection
with the exercise of an Option shall, in all cases, be subject to each of the
following conditions: (i) the declaration of effectiveness by the Securities and
Exchange Commission ("SEC") of a registration statement relating to a primary
offering of the Common Stock, filed by the Company with the SEC under the
Securities Act, (ii) the satisfaction of withholding tax or other withholding
liabilities, (iii) the listing, registration or qualification of any
to-be-issued shares upon any securities exchange, any NASDAQ or other trading or
quotation system or under any federal or state law, (iv) the consent or approval
of any regulatory body, (v) the execution of a lock-up agreement with one or
more prospective underwriters, or (vi) the execution of a buy-sell or
shareholders agreement with other shareholders of the Company. The Committee
shall in its sole discretion determine whether one or more of these conditions
is necessary or desirable to be satisfied in connection with the exercise of an
Option and prior to the delivery or purchase of shares pursuant to the exercise
of an Option. The exercise of an Option shall not be effective unless and until
such condition(s) shall have been satisfied or the Committee shall have waived
such conditions, in its sole discretion.
9. Restriction on Transfer. The Option shall not be assignable or
transferrable by Optionee except by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order, and may be
exercised during the lifetime of the Optionee only by the Optionee or the
Optionee's guardian(s) or legal representative(s).
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10. Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if (i) personally
delivered, (ii) sent by nationally-recognized overnight courier or (iii) sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Optionee, to the address set forth on the signature page
hereto; and
if to the Company, to:
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered, if
personally delivered, (ii) on the first Business Day (as hereinafter defined)
after dispatch, if sent by nationally-recognized overnight courier and (iii) on
the third Business Day following the date on which the piece of mail containing
such communication is posted, if sent by mail. As used herein, "Business Day"
means a day that is not a Saturday, Sunday or a day on which banking
institutions in the city to which the notice or communication is to be sent are
not required to be open.
11. Administration. The Plan and this Agreement shall be administered and
may be definitively interpreted by the Committee, which administration,
interpretation and modification, however, shall not affect Optionee's rights
under this Agreement. Optionee agrees to accept and abide by the decisions of
the Committee concerning administration and interpretation of the Plan and this
Agreement.
12. No Waiver. No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or condition,
whether of like or different nature.
13. Optionee Undertaking. The Optionee hereby agrees to take whatever
additional actions and execute whatever additional documents the Company or its
counsel may in their reasonable judgment deem necessary or advisable in order to
carry out or effect one or more of the obligations or restrictions imposed on
the Optionee pursuant to the express provisions of this Agreement.
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14. Modification of Rights. The rights of the Optionee are subject to
modification and termination in certain events as provided in this Agreement and
the Plan.
15. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware applicable to contracts made
and to be wholly performed therein.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
17. Entire Agreement. This Agreement and the Plan constitute the entire
agreement between the parties with respect to the subject matter hereof, and
supersede all previously written or oral negotiations, commitments,
representations and agreements with respect thereto.
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By:________________________________
Name:______________________________
Title:_____________________________
OPTIONEE:
___________________________________
Name:______________________________
Address: _________________________
_________________________
_________________________
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Ladies/Gentlemen:
I hereby exercise my Stock Option to purchase _________ shares of Common Stock
of ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, inc. at the option price of $____ per share as
provided in the Nonqualified Stock Option Agreement dated the ___ day of
_______________.
I acknowledge that I previously received a copy of the 1999 Non-Employee
Director Plan of ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, inc. and executed a Nonqualified Stock
Option Agreement, and I have carefully reviewed both documents.
I have considered the federal tax implications of my option. I hereby tender my
personal check, bank draft or money order payable to ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇,
inc. in the amount of $____________ or, I have wire transferred $_______________
to ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, inc. which transfer shall be subject to the
confirmation of receipt of funds by the Company.
_____________________
Optionee
_____________________
Date