EXHIBIT 10.4
Grant No._________
GLOBAL E TUTOR, INC.
STOCK OPTION GRANT
Optionee:
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Address:
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Grant Date:
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Exercise Price: $_______ per share
Number of Option Shares: ________ shares
Expiration Date:
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Type of Option: ______ Incentive Option ______ Non-Statutory Option
This Stock Option Grant is made, as of the Grant Date set forth above,
by and between Global e Tutor, Inc., a Delaware corporation (the "Corporation")
and the Optionee named above. This Stock Option Grant includes the terms of the
Stock Option Exercise Notice and Purchase Agreement attached hereto as Exhibit
A, and is subject to the terms of the Corporation's Stock Option Plan (the
"Plan"), a copy of which is attached hereto as Exhibit B. All capitalized terms
not defined herein shall have the meaning set forth in the Appendix to the Plan.
1. Grant of Option. The Corporation hereby grants to Optionee
named above, as of the Grant Date, an option to purchase up to the total number
of Option Shares specified above. The Option Shares shall be purchasable from
time to time during the option term specified in paragraph 2 below at the
Exercise Price.
2. Option Term. The option term shall be measured from the Grant
Date and shall accordingly expire at the close of business on the Expiration
Date specified above, unless sooner terminated in accordance with paragraph 5
below.
3. Limited Transferability. This option shall be neither
transferable nor assignable, in whole or in part, 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. However, if this option
is designated a Non-Statutory Option above, then this option may also, in
connection with Optionee's estate plan, be assigned in whole or in part during
Optionee's lifetime to one or more members of Optionee's immediate family
(spouse or children) or to a trust established exclusively for the benefit of
one or more such immediate family members. Optionee shall give written notice of
any such assignment during Optionee's lifetime to the Corporation within 20 days
of assignment. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for this option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate.
4. Exercisability. This option shall become vested or exercisable
for the Option Shares 1/3 upon grant, 1/3 one year after grant and the final 1/3
two years after grant.
5. Cessation of Service. The option term specified in paragraph 2
above shall terminate, and this option shall cease to be outstanding prior to
the Expiration Date, upon Optionee's ceasing to be in the Service of the
Corporation. In such event, the following provisions shall apply:
a. Should Optionee cease to remain in Service for any reason
(other than death, Permanent Disability or Misconduct) while this option is
outstanding, then Optionee shall have a period of three (3) months (commencing
with the date of such cessation of Service) during which to exercise this option
as to vested Option Shares.
b. Should Optionee die while this option is outstanding, then
the personal representative of Optionee's estate (or the person or persons to
whom the option is transferred pursuant to Optionee's will or in accordance with
the laws of descent and distribution) shall have a period of twelve (12) months
(commencing with the date of such cessation of service) during which to exercise
this option as to vested Option Shares.
c. Should Optionee cease Service by reason of Permanent
Disability while this option is outstanding, then Optionee shall have a period
of twelve (12) months (commencing with the date of such cessation of Service)
during which to exercise this option as to vested Option Shares.
d. Should Optionee's Service be terminated for Misconduct,
then this option shall terminate immediately and cease to remain outstanding.
e. During the limited post-Service exercise period, this
option may not be exercised in the aggregate for more than the number of vested
Option Shares for which the option is exercisable on the date of the Optionee's
cessation of Service. Upon the expiration of such limited post-Service exercise
period or upon the Expiration Date (if earlier), this option shall terminate and
cease to be outstanding for any vested Option Shares for which the option has
not been exercised. In no event shall this option be exercisable at any time
after the Expiration Date. To the extent this option is not otherwise
exercisable for vested Option Shares at the time of Optionee's cessation of
Service, this option shall immediately terminate and cease to be outstanding
with respect to those shares.
6. Adjustment in Option Shares. Should any change be made to the
Common Stock by reason of any split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option, and (ii) the Exercise Price,
in order to reflect such change and thereby preclude a dilution or enlargement
of benefits hereunder.
7. Stockholder Rights. The holder of this option shall not have
any stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price, and become a holder of
record of the Purchased Shares.
8. Manner of Exercising Options
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 any other person or persons exercising this option) must take the
following actions:
(1) Execute and deliver to the Corporation a
Stock Option Exercise Notice and Purchase Agreement (Exhibit A) for the
Option Shares for which the option is exercised.
(2) Pay the aggregate Exercise Price for the
Purchased Shares in one or more of the following forms:
(a) Cash or check made payable to the
Corporation; or
(b) A promissory note payable to the
Corporation, but only to the extent authorized by the Plan
Administrator in accordance with paragraph 13.
Upon prior written approval of the Plan Administrator, the
Exercise Price may also be paid as follows:
(c) In shares of Common Stock held by
Optionee (or any other person or persons exercising the
option) for the requisite period necessary to avoid a charge
to the Corporation's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date; or
(d) Through a special sale and remittance
procedure pursuant to which Optionee (or any other person or
persons exercising the option) shall concurrently provide
irrevocable written instructions (1) to a
Corporation-designated brokerage firm to effect the immediate
sale of the Purchased Shares and remit to the Corporation, out
of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price payable
for the Purchased Shares plus all applicable federal, state
and local income and employment taxes required to be withheld
by the Corporation by reason of such exercise and (2) to the
Corporation to deliver the certificates for the Purchased
Shares directly to such brokerage firm in order to complete
the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the Exercise Price
must accompany the Stock Option Exercise Notice and Purchase Agreement delivered
to the Corporation in connection with the option exercise.
(3) 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.
(4) Execute and deliver to the Corporation such
written representations as may be
requested by the Corporation in order for it to comply with the applicable
requirements of federal and state securities laws.
(5) Make appropriate arrangements with the
Corporation (or Parent or Subsidiary
employing or retaining Optionee) for the satisfaction of all federal, state and
local income and employment tax withholding requirements applicable to the
option exercise.
b. As soon as practical after the Exercise Date, the
Corporation shall issue to, or, on behalf of Optionee (or any other person or
persons exercising this option), a share certificate for the Purchased Shares,
with the appropriate legends affixed thereto.
c. In no event may this option be exercised for any fractional
shares.
9. Compliance with Laws and Regulations
a. The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or Nasdaq, if applicable) on which
the Common Stock may be listed for trading at the time of such exercise and
issuance.
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.
10. Successors and Assigns. Except to the extent otherwise
provided in paragraph 3 above, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's permitted assigns and the legal
representatives, heirs and legatees of Optionee's estate.
11. Notices. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its 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 on the Stock Option Grant. All notices shall be deemed
effective upon personal delivery or upon deposit in the U.S. mail, postage
prepaid and properly addressed to the party to be notified.
12. Financing. The Plan Administrator may, in its absolute
discretion and without any obligation to do so, permit Optionee to pay the
Exercise Price for the purchase Option Shares by delivering a full-recourse
promissory note payable to the Corporation. The terms of any such promissory
note (including the interest rate, the requirements for collateral and the terms
of repayment) shall be established by the Plan Administrator in its sole
discretion.
13. Construction. This Agreement and the option evidenced hereby
are made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan and the Stock Option Exercise Notice and
Purchase Agreement. 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.
14. Governing Law. The interpretation, performance and enforcement
of this Agreement shall be governed by the laws of the State of Delaware without
resort to its conflict-of-laws rules.
15. Additional Terms Applicable to an Incentive Option. In the
event this option is designated an Incentive Option above, 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 Option if (and to the extent) this option is exercised
for one or more Option Shares: (1) more than three (3) months after the date
Optionee ceases to be an Employee or in the Service of the Corporation for any
reason other than death or Permanent Disability or (2) more than twelve (12)
months after the date Optionee ceases to be an Employee by reason of death or
Permanent Disability.
b. No installment under this option shall qualify for
favorable tax treatment as an Incentive Option if (and to the extent) the
aggregate Fair Market Value (determined at the Grant Date) of the Common
Stock for which such installment first becomes exercisable hereunder would,
when added to the aggregate value (determined as of the respective date or
dates of grant) of any earlier installments of the Common Stock and any other
securities for which this option or any other Incentive Options granted to
Optionee prior to the Grant Date (whether under the Plan or any other option
plan of the Corporation or any Parent or Subsidiary) first become exercisable
during the same calendar year, exceed One Hundred Thousand Dollars ($100,000)
in the aggregate. Should such One Hundred Thousand Dollar ($100,000)
limitation be exceeded in any calendar year,
this option shall nevertheless become exercisable for the excess shares in such
calendar year as a Non-Statutory Option.
c. Should the Board elect to accelerate the
exercisability of this option upon a Corporate Transaction, then this option
shall qualify as an Incentive Option only to the extent the aggregate Fair
Market Value (determined at the Grant Date) of the Common Stock for which this
option first becomes exercisable in the calendar year in which the Corporate
Transaction occurs does not, when added to the aggregate value (determined as of
the respective date or dates of grant) of the Common Stock or other securities
for which this option or one or more other Incentive Options granted to Optionee
prior to the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should the applicable One Hundred Thousand Dollar ($100,000)
limitation be exceeded in the calendar year of such Corporate Transaction, the
option may nevertheless be exercised for the excess shares in such calendar year
as a Non-Statutory Option.
d. Should Optionee hold, in addition to this option, one
or more other options to purchase Common Stock which become exercisable for the
first time in the same calendar year as this option, then the foregoing
limitations on the exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are granted.
e. The grant of this option is subject to approval of
the Plan by Corporation's stockholders within twelve (12) months after the
adoption of the Plan by the Board. In the event that such stockholder approval
is not obtained, then this option shall not qualify as an Incentive Option.
f. If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval be issued under the Plan, then this option shall
cease to qualify as an Incentive Option unless stockholder 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 the Plan.
g. If Optionee is a 10% Stockholder, then the Exercise
Price shall not be less than one hundred ten percent (110%) of the Fair Market
Value per share of Common Stock on the Grant Date, and the option term shall not
exceed five (5) years measured from the Grant Date.
h. ▇▇▇▇▇▇ purchased pursuant to this option shall cease
to qualify for favorable tax treatment as Incentive Option shares if and to the
extent Optionee disposes of such shares within two (2) years from the Grant Date
or within one (1) year of Optionee's purchase of said shares.
i. Optionee acknowledges that the rules regarding
Incentive Options as contained in the Internal Revenue Code are subject to
amendment in the future. Optionee should consult his or her tax advisor prior to
taking any action with respect to this option or the shares purchased hereunder.
IN WITNESS WHEREOF, this Agreement is executed as of the Grant Date
first noted above.
GLOBAL E TUTOR, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
ACKNOWLEDGEMENT
Optionee understands and agrees that the option is granted subject to
and in accordance with the terms of the Corporation's Stock Option Plan (the
"Plan"). Optionee further agrees to be bound by the terms of the Plan and the
terms of the option as set forth in this Agreement. Optionee understands that
any Option Shares purchased under the option shall be subject to the terms set
forth in the Stock Option Exercise Notice and Purchase Agreement attached hereto
as Exhibit A.
Optionee hereby acknowledges receipt of a copy of the Plan in the form
attached hereto as Exhibit B, and represents that Optionee has read and
understands the Plan, and accepts this option subject to all terms and
provisions of the Plan and the Plan documents. Optionee hereby agrees to accept
as binding, conclusive and final, all decisions and interpretations of the Board
of Directors upon any questions arising under the Plan. Optionee acknowledges
that there may be adverse tax consequences upon exercise of this option and/or
upon disposition of the Purchased Shares, and that Optionee should consult a tax
advisor prior to such exercise or disposition.
OPTIONEE
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Optionee
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Date
EXHIBIT A
STOCK OPTION EXERCISE NOTICE AND PURCHASE AGREEMENT
EXHIBIT B
STOCK OPTION PLAN
SCHEDULE OF OPTION HOLDERS
Number Exercise Type of
Grant No Name of Shares Price Option
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1 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 400,000 $0.25 Incentive
2 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 185,000 $0.25 Incentive
3 ▇▇▇▇ ▇▇▇▇▇▇▇ 185,000 $0.25 Incentive
4 ▇▇▇▇▇ ▇▇▇▇▇▇ 185,000 $0.25 Incentive
5 ▇▇▇▇ ▇▇▇▇▇▇ 185,000 $0.25 Incentive
6 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 400,000 $0.25 Non-Statutory
7 ▇▇▇▇▇ ▇▇▇▇▇▇ 185,000 $0.25 Non-Statutory
8 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 185,000 $0.25 Non-Statutory
9 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 185,000 $0.25 Non-Statutory
10 ▇▇▇▇▇ ▇▇▇▇▇▇ 185,000 $0.25 Non-Statutory
11 ▇▇▇▇▇ ▇▇▇▇▇▇ 185,000 $0.25 Incentive
12 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 62,174 $0.275 Incentive
13 ▇▇▇▇▇▇ ▇▇▇▇▇ 185,000 $0.25 Incentive
14 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 185,000 $0.25 Incentive
15 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 185,000 $0.25 Incentive
16 ▇▇▇▇▇ ▇▇▇▇▇ 482,000 $0.25 Incentive and
Non-Statutory
17 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 400,000 $0.25 Non-Statutory