EXHIBIT 4.4
EVOLVE SOFTWARE, INC.
NON-PLAN
STOCK OPTION AGREEMENT
I. NOTICE OF STOCK OPTION GRANT
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You have been granted a Nonstatutory Stock Option to purchase Common Stock
of the Company, subject to the terms and conditions of this Agreement, as
follows:
Date of Grant August 10, 2000
Vesting Period Commencement Date August ___, 2000
Exercise Price per Share $9.00
Total Number of Shares Granted _________
Total Exercise Price $_______
Term/Expiration Date: August 10, 2010
This Option may be exercised, in whole or in part, in accordance with the
following schedule and the terms set out in the Agreement:
The number of shares designated as vesting "Annually" in the Vest Type
column in the Notice of Grant will become exercisable in a single installment on
the date listed in the Full Vest column in the Notice of Grant (the "Initial
Vest Date").
1/36th of the shares designated as vesting "Monthly" in the Vest Type
column in the Notice of Grant will become exercisable at the end of each month
following the Initial Vest Date.
Termination Period:
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This Option may be exercised in respect of any shares at any time between
the date of vesting and the date ninety (90) days after Optionee ceases to be a
Service Provider in accordance with Section 9 of this Agreement. Upon the death
or Disability of the Optionee, this Option may be exercised at any time between
the date of vesting and the date one year after Optionee ceased to be a Service
Provider in accordance with Section 9 of this Agreement. In no event shall this
Option be exercised later than the Term/Expiration Date stated above.
II. AGREEMENT
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1. Definitions. As used herein, the following definitions shall apply:
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(a) "Agreement" means this stock option agreement between the Company
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and Optionee evidencing the terms and conditions of this Option.
(b) "Applicable Laws" means the requirements relating to the
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administration of stock options under U. S. state corporate laws, U.S. federal
and state securities laws, the Code, any stock exchange or quotation system on
which the Common Stock is listed or quoted and the applicable laws of any
foreign country or jurisdiction that may apply to this Option.
(c) "Board" means the Board of Directors of the Company or any
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committee of the Board which has been designated by the Board to administer this
Agreement.
(d) "Code" means the U.S. Internal Revenue Code of 1986, as amended.
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(e) "Common Stock" means the common stock of the Company.
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(f) "Company" means Evolve Software, Inc., a Delaware corporation.
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(g) "Consultant" means any person, including an advisor, engaged by
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the Company or a Parent or Subsidiary to render services to such entity.
(h) "Director" means a member of the Board.
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(i) "Disability" means total and permanent disability as defined in
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Section 22(e)(3) of the Code.
(j) "Employee" means any person, including Officers and Directors,
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employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
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amended.
(l) "Fair Market Value" means, as of any date, the value of Common
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Stock determined, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The
Nasdaq Stock Market for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other source as
the Board deems reliable.
(m) "Nonstatutory Stock Option" means an Option not intended to
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qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
(n) "Notice of Grant" means a written notice, in Part I of this
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Agreement, evidencing certain the terms and conditions of this Option grant.
The Notice of Grant is part of the Option Agreement.
(o) "Officer" means a person who is an officer of the Company within
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the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(p) "Option" means this stock option.
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(q) "Optioned Stock" means the Common Stock subject to this Option.
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(r) "Optionee" means the person named in the Notice of Grant or such
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person's successor.
(s) "Parent" means a "parent corporation," whether now or hereafter
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existing, as defined in Section 424(e) of the Code.
(t) "Service Provider" means an Employee, Director or Consultant.
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(u) "Share" means a share of the Common Stock, as adjusted in
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accordance with Section 10 of this Agreement.
(v) "Subsidiary" means a "subsidiary corporation", whether now or
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hereafter existing, as defined in Section 424(f) of the Code.
2. Grant of Option. The Board hereby grants to the Optionee named in the
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Notice of Grant attached as Part I of this Agreement the Option to purchase the
number of Shares, as set forth in the Notice of Grant, at the exercise price per
share set forth in the Notice of Grant (the "Exercise Price"), subject to the
terms and conditions of this Agreement.
3. Exercise of Option.
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(a) Right to Exercise. This Option is exercisable during its term in
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accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of this Agreement.
(b) Method of Exercise. This Option is exercisable by delivery of an
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exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company.
The Exercise Notice shall be completed by the Optionee and delivered to
Secretary of the Company. The Exercise Notice shall be accompanied by payment
of the aggregate Exercise Price as to all Exercised Shares. This Option shall
be deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price.
(c) Legal Compliance. No Shares shall be issued pursuant to the
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exercise of this Option unless such issuance and exercise complies with
Applicable Laws. Assuming such compliance, for income tax purposes the
Exercised Shares shall be considered transferred to the Optionee on the date the
Option is exercised with respect to such Exercised Shares.
(d) Buyout Provisions. The Board may at any time offer to buy out for
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a payment in cash or Shares an Option previously granted based on such terms and
conditions as the Board shall establish and communicate to the Optionee at the
time that such offer is made.
4. Method of Payment. Payment of the aggregate Exercise Price shall be by
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any of the following, or a combination thereof, at the election of the Optionee:
(a) cash; or
(b) check; or
(c) consideration received by the Company under a cashless exercise
program implemented by the Company; or
(d) surrender of other Shares which (i) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
(6) months on the date of
surrender, and (ii) have a Fair Market Value on the date of surrender equal to
the aggregate Exercise Price of the Exercised Shares.
5. Optionee's Representations. In the event the Shares have not been
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registered under the Securities Act of 1933, as amended, at the time this Option
is exercised, the Optionee shall, if required by the Company, concurrently with
the exercise of all or any portion of this Option, deliver to the Company his or
her Investment Representation Statement in the form attached hereto as Exhibit
B, and shall read the applicable rules of the Commissioner of Corporations
attached to such Investment Representation Statement.
6. Lock-Up Period. In the event that the Option is exercised prior to the
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expiration of the 180-day period (the "Market Standoff Period") following the
effective date of the registration statement of the Company filed under the
Securities Act with respect to its initial public stock offering, the Optionee
shall execute and deliver a lock-up agreement in the form requested by the
managing underwriters of such offering. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such Market Standoff Period.
7. Non-Transferability of Option. This Option may not be transferred in
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any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The
terms of this Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
8. Term of Option. This Option may be exercised only within the term set
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out in the Notice of Grant, and may be exercised during such term only in
accordance with the terms of this Agreement.
9. Termination of Relationship as a Service Provider.
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(a) Disability of Optionee. If an Optionee ceases to be a Service
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Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within twelve (12) months following the Optionee's termination to
the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Notice
of Grant). If, on the date of termination, the Optionee is not vested as to his
or her entire Option, the Shares covered by the unvested portion of the Option
shall terminate. If, after termination of the Service Provider relationship,
the Optionee does not exercise his or her Option within the time specified
herein, the Option shall terminate.
(b) Death of Optionee. If an Optionee dies while a Service Provider,
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the Option may be exercised within twelve (12) months following the Optionee's
death to the extent that the Option is vested on the date of termination (but in
no event later than the expiration of the term of such Option as set forth in
the Notice of Grant), by the Optionee's estate or by a person who acquires the
right to exercise the Option by bequest or inheritance, but only to the extent
that the Option is vested on the date of death. If, at the time of death, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall terminate. The Option may
be exercised by the executor or administrator of the Optionee's estate or, if
none, by the person(s) entitled to exercise the Option under the Optionee's will
or the laws of descent or distribution. If the Option is not so exercised within
the time specified herein, the Option shall terminate.
(c) Other Termination of Relationship as a Service Provider. If an
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Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability (as described above in Sections 9(a) and (b)), the Optionee may
exercise his or her Option within three (3) months following the Optionee's
termination to the extent that the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Notice of Grant). If, on the date of termination, the Optionee is
not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall terminate. If, after termination, the Optionee does
not exercise his or her Option within the time specified herein, the Option
shall terminate.
10. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
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Asset Sale.
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(a) Changes in Capitalization. Subject to any required action by the
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shareholders of the Company, the number of shares of Common Stock covered by
this Option, as well as the price per share of Common Stock covered by this
Option, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to this Option.
(b) Dissolution or Liquidation. In the event of the proposed
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dissolution or liquidation of the Company, to the extent that this Option has
not been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Board may, in the exercise of its
sole discretion in such instances, declare that this Option shall terminate as
of a date fixed by the Board and give the Optionee the right to vest in and
exercise his or her Option as to all or any part of the Optioned Stock,
including Shares as to which the Option would not otherwise be vested or
exercisable.
(c) Merger or Asset Sale. In the event of a merger of the Company
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with or into another corporation, or the sale of substantially all of the assets
of the Company, this Option shall be assumed or an equivalent option or right
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for this Option, the Optionee shall fully vest in and have
the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If the
Option becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Board shall notify
the Optionee in writing or electronically that the Option shall be fully vested
and exercisable for a period of fifteen (15) days from the date of such notice,
and the Option shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option shall be considered assumed if, following
the merger or sale of assets, the option confers the right to purchase or
receive, for each Share of Optioned Stock subject to the Option immediately
prior to the merger or sale of assets, the consideration (whether stock, cash,
or other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets is not solely common stock of the successor corporation or its Parent,
the Board may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Option, for each Share of
Optioned Stock subject to the Option, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
11. Tax Consequences.
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(a) Exercising the Option. Optionee understands that Optionee may
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suffer adverse tax consequences as a result of Optionee's purchase or
disposition of the Shares. Optionee represents that Optionee has consulted with
any tax consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice. Optionee understands that the Company may be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of any
compensation income recognized at the time of exercise, and may refuse to honor
the exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.
(b) National Insurance Contributions. This Option is granted on the
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condition that Optionee agrees to indemnify the Company in full in respect of
any liability of the Company to account for any amount of income tax or primary
(employees') national insurance contributions arising in respect of the exercise
of the stock options and that the Company will within 30 days of any exercise
pay to the Company the full amount due in respect of this indemnity. By signing
this Agreement Optionee agree(s) to indemnify the Company against this
liability. The Optionee indemnity will not cover any liability of the Company's
sole responsibility; provided however that in the event that English law is
changed so that it becomes possible for an employer and an employee to agree
that the employee shall bear the national insurance contribution which would
otherwise fall on the employer on the exercise by the employee of any option
hereunder, Optionee agrees that Optionee will enter into and/or sign any
acknowledges and agrees that Optionee will bear the secondary national insurance
contribution which would otherwise fall on the Company. In order to affect the
above, the Optionee will make such election and/or execute such further
documentation as the Company may require.
12. Restrictive Legends and Stop-Transfer Orders.
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(a) Legends. Optionee understands and agrees that the Company shall
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cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares together
with any other legends that may be required by the Company or by state or
federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT O R, IN THE OPINION OF COMPANY COUNSEL
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE
ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN
THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH
MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF
THESE SHARES.
(b) Stop-Transfer Notices. Optionee agrees that, in order to ensure
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compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required (i) to
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transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Exercise Notice or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.
13. Entire Agreement; Governing Law. This Agreement constitute the entire
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agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified
adversely to the Optionee's interest except by means of a writing signed by the
Company and Optionee. This agreement is governed by the internal substantive
laws, but not the choice of law rules, of California.
14. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES
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THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S
RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of this Agreement. Optionee has reviewed this Agreement in
its entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of this Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board upon any questions relating to this Agreement.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.
OPTIONEE: EVOLVE SOFTWARE, INC.
____________________________ __________________________________
By
__________________________________
Residence Address: Title:
CONSENT OF SPOUSE
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The undersigned spouse of Optionee has read and hereby approves the terms
and conditions of this Agreement. In consideration of the Company's granting
his or her spouse the right to purchase Shares as set forth in this Agreement,
the undersigned hereby agrees to be irrevocably bound by the terms and
conditions of this Agreement and further agrees that any community property
interest shall be similarly bound. The undersigned hereby appoints the
undersigned's spouse as attorney-in-fact for the undersigned with respect to any
amendment or exercise of rights under this Agreement.
________________________________________
Spouse of Optionee
EXHIBIT A
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EVOLVE SOFTWARE, INC.
EXERCISE NOTICE
Evolve Software, Inc.
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Attention: President
1. Exercise of Option. Effective as of today, _____________________, the
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undersigned ("Purchaser") hereby elects to purchase ______________ shares (the
"Shares") of the Common Stock of Evolve Software, Inc. (the "Company") under and
pursuant to the Stock Option Agreement dated _________, 2000 (the "Option
Agreement"). The purchase price for the Shares shall be $__________, as
required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
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full purchase price for the Shares.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser
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has received, read and understood the Option Agreement and agrees to abide by
and be bound by their terms and conditions. Purchaser has executed and delivers
herewith the Investment Representation Statement attached here to as Exhibit B.
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4. Rights as Shareholder. Until the issuance (as evidenced by the
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appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 8 of the
Option Agreement.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
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adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
6. Entire Agreement; Governing Law. The Option Agreement is incorporated
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herein by reference. This Agreement, and the Option Agreement constitute the
entire agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company
and Purchaser with respect to the subject matter hereof, and may not be modified
adversely to the Purchaser's interest except by means of a writing signed by the
Company
and Purchaser. This agreement is governed by the internal substantive laws, but
not the choice of law rules, of California.
Submitted by: Accepted by:
PURCHASER: EVOLVE SOFTWARE, INC.
____________________________________ __________________________________
Signature By
____________________________________ __________________________________
Print Name Title
Address: Address:
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____________________________________ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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____________________________________
Date Received ___________________
EXHIBIT B
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INVESTMENT REPRESENTATION STATEMENT
OPTIONEE: _____________________________
COMPANY: EVOLVE SOFTWARE, INC.
SECURITY: COMMON STOCK
AMOUNT: ___________ SHARES
DATE: _____________________________
In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:
(a) Optionee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. Optionee is
acquiring these Securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
(b) Optionee acknowledges and understands that the Securities
constitute "restricted securities" under the Securities Act and have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of Optionee's investment intent as expressed herein. In this connection,
Optionee understands that, in the view of the Securities and Exchange
Commission, the statutory basis for such exemption may be unavailable if
Optionee's representation was predicated solely upon a present intention to hold
these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to register
the Securities. Optionee understands that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is not required in
the opinion of counsel satisfactory to the Company, a legend prohibiting their
transfer without the consent of the Commissioner of Corporations of the State of
California and any other legend required under applicable state securities laws.
(c) Optionee is familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Securities Act, which, in substance, permit limited
public resale of "restricted securities" acquired, directly or indirectly from
the issuer thereof, in a non-public
offering subject to the satisfaction of certain conditions. Rule 701 provides
that if the issuer qualifies under Rule 701 at the time of the grant of the
Option to the Optionee, the exercise will be exempt from registration under the
Securities Act. In the event the Company becomes subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
ninety (90) days thereafter (or such longer period as any market stand-off
agreement may require) the Securities exempt under Rule 701 may be resold,
subject to the satisfaction of certain of the conditions specified by Rule 144,
including: (1) the resale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934); and, in the case of
an affiliate, (2) the availability of certain public information about the
Company, (3) the amount of Securities being sold during any three month period
not exceeding the limitations specified in Rule 144(e), and (4) the timely
filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at the time
of grant of the Option, then the Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which requires the resale
to occur not less than one year after the later of the date the Securities were
sold by the Company or the date the Securities were sold by an affiliate of the
Company, within the meaning of Rule 144; and, in the case of acquisition of the
Securities by an affiliate, or by a non-affiliate who subsequently holds the
Securities less than two years, the satisfaction of the conditions set forth in
sections (1), (2), (3) and (4) of the paragraph immediately above.
(d) Optionee further understands that in the event all of the
applicable requirements of Rule 701 or 144 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that
any such other registration exemption will be available in such event.
Signature of Optionee:
_____________________________________
Date:_________________________
