THE KEITH COMPANIES, INC. INDEPENDENT DIRECTOR STOCK OPTION AGREEMENT
Exhibit 10.14
THE ▇▇▇▇▇ COMPANIES, INC.
This Nonqualified Stock Option Agreement (the
“Agreement”) is entered into as of [Date], by
and between The ▇▇▇▇▇ Companies, Inc. (formerly known as The
▇▇▇▇▇ Companies — Inland Empire, Inc.), a California
corporation (the“Company”) and [Name] (the
“Optionee”) pursuant to the Company’s
Amended and Restated 1994 Stock Incentive Plan (the
“Plan”).
1. Grant of Option. The Company hereby grants to
Optionee an option (the“Option”) to purchase
all or any portion of a total of [number of shares] (#,###)
shares (the “Shares”) of the Common Stock of
the Company at a purchase price of [price] per share ($xx.xx),
subject to the terms and conditions set forth herein and the
provisions of the Plan. This Option is NOT intended to
qualify as an “incentive stock option” as defined in
Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”).
2. Vesting of Option. The Shares under this Option
shall vest:
3. Term of Option. Optionee’s right to exercise
this Option shall terminate upon the first to occur of the
following:
| (a) the expiration of ten (10) years from the date of this Agreement. | |
| (b) the expiration of thirty (30) days from the date of termination of Optionee’s Continuous Service if such termination occurs for any reason other than permanent disability or death or voluntary resignation: provided, however, that if Optionee dies during such thirty-day period the provisions of Section 3(d) below shall apply; | |
| (c) the expiration of one (1) year from the date of termination of Optionee’s Continuous Service if such termination is due to permanent disability of the Optionee (as defined in Section 22(e)(3) of the Code); | |
| (d) the expiration of one (1) year from the date of termination of Optionee’s Continuous Service if such termination is due to Optionee’s death or if death occurs during the thirty-day period following termination of Optionee’s Continuous Service pursuant to Section 3(b) above; or | |
| (e) the expiration of ninety (90) days from the date of termination of Optionee’s Continuous Service if such termination is due to voluntary resignation; provided, however that if Optionee dies during such ninety-day period the provisions of Section 3(d) above shall apply. |
As used herein, the term “Continuous Service”
means (i) employment by either the Company or any parent or
subsidiary corporation of the Company, or by a corporation or a
parent or subsidiary of a corporation issuing or assuming a
stock option in a transaction to which Section 424(a) of
the Code applies, which is uninterrupted except for vacations,
illness (except for permanent disability as defined in
Section 22(e)(3) of the Code), or leaves of absence which
are approved in writing by the Company or any other employer
corporations, if applicable, (ii) service as a member of
the Board of Directors of the Company until Optionee resigns, is
removed from office, or Optionee’s term of office expires
and he or she is not reelected, or (iii) so long as
Optionee is engaged as a consultant or service provider to the
Company or other corporation referred to in clause
(i) above.
4. Exercise of Option. On or after the vesting of
any portion of this Option in accordance with Section 2
above, and until termination of this Option in accordance with
Section 3 above, the portion of this Option which has
vested may be exercised in whole or in part by the Optionee (or,
after his or her death, by the person designated in
Section 5 below) upon delivery of the following to the
Company at its principal executive offices:
| (a) a written notice of exercise which identifies this Agreement and states the number of Shares then being purchased (but no fractional Shares may be purchased). |
| (b) a check or cash in the amount of the Exercise Price (or payment of the Exercise Price in such other form of lawful consideration as the Administrator may approve from time to time under the provisions of Section 5.3 of the Plan); | |
| (c) a check or cash in the amount reasonably requested by the Company to satisfy the Company’s withholding obligations under Federal, State or other applicable tax laws with respect to the taxable income, if any, recognized by the Optionee in connection with the exercise of this Option (unless the Company and Optionee shall have made other arrangements for deductions or withholding from Optionee’s wages, bonus or other compensation payable to Optionee, or by the withholding of Shares issuable upon exercise of this Option or the delivery of Shares owned by the Optionee in accordance with Section 10 of the Plan, provided such arrangements satisfy the requirements of applicable tax laws); and | |
| (d) a letter, if requested by the Company, in such form and substance as the Company may require, setting forth the investment intent of the Optionee, or person designated in Section 5 below, as the case may be. |
5. Death of Optionee; No Assignment. The rights of
the Optionee under this Agreement may not be assigned or
transferred except by will or by the laws of descent and
distribution, and may be exercised during the lifetime of the
Optionee only by such Optionee. Any attempt to sell, pledge,
assign, hypothecate, transfer or dispose of this Option in
contravention of this Agreement or the Plan shall be void and
shall have no effect. If the Optionee’s Continuous Service
terminates as a result of his or her death, and provided
Optionee’s rights hereunder shall have vested pursuant to
Section 2 hereof, Optionee’s legal representative, his
or her legatee, or the person who acquired the right to exercise
this Option by reason of the death of the Optionee
(individually, a “Successor”) shall succeed to
the Optionee’s rights and obligations under this Agreement.
After the death of the Optionee, only a Successor may exercise
this Option.
6. Representations and Warranties of Optionee.
| (a) Optionee represents and warrants that this Option is being acquired by Optionee for Optionee’s personal account, for investment purposes only, and not with a view to the distribution, resale or other disposition thereof. | |
| (b) Optionee acknowledges that the Company may issue Shares upon the exercise of the Option without registering such Shares under the Securities Act of 1933, as amended (the “Act”), on the basis of certain exemptions from such registration requirement. Accordingly, Optionee agrees that his or her exercise of the Option may be expressly conditioned upon his or her delivery to the Company of an investment certificate including such representations and undertakings as the Company may reasonably require in order to assure the availability of such exemptions, including a representation that Optionee is acquiring the Shares for investment and not with a present intention of selling or otherwise disposing thereof and an agreement by Optionee that the certificates evidencing the Shares may bear a legend indicating such non-registration under the Act and the resulting restrictions on transfer. Optionee acknowledges that, because Shares received upon exercise of an Option may be unregistered, Optionee may be required to hold the Shares indefinitely unless they are subsequently registered for resale under the Act or an exemption from such registration is available. | |
| (c) Optionee acknowledges receipt of a copy of the Plan and understands that all rights and obligations connected with this Option are set forth in this Agreement and in the Plan. |
7. Restrictive Legends. Optionee hereby acknowledges
that Federal securities laws and the securities laws of the
State in which he or she resides may require the placement of
certain restrictive legends upon the Shares issued upon exercise
of this Option, and Optionee hereby consents to the placing of
any such legends upon certificates evidencing the Shares as the
Company, or its counsel, may deem necessary or advisable.
8. Limitation of Company’s Liability for
Nonissuance. The Company agrees to use its reasonable best
efforts to obtain from any applicable regulatory agency such
authority or approval as may be required in order to issue and
sell the Shares to the Optionee pursuant to this Option.
Inability of the Company to obtain, from any such regulatory
agency, authority or approval deemed by the Company’s
counsel to be necessary for the
lawful issuance and sale of the Shares hereunder and under the
Plan shall relieve the Company of any liability in respect of
the nonissuance or sale of such shares as to which such
requisite authority or approval shall not have been obtained.
9. Adjustments Upon Changes in Capital Structure. In
the event that the outstanding shares of Common Stock of the
Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other
securities of the Company by reason of a recapitalization, stock
split, combination of shares, reclassification, stock dividend
or other change in the capital structure of the Company, then
appropriate adjustment shall be made by the Administrator to the
number of Shares subject to the unexercised portion of this
Option and to the Exercise Price per share, in order to
preserve, as nearly as practical, but not to increase, the
benefits of the Optionee under this Option, in accordance with
the provisions of Section 4.2 of the Plan.
10. Change in Control.
| (a) In the event of the earlier of: (i) a sale of substantially all of the assets of the Company; (ii) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation in which shareholders immediately before the merger or consolidation have, immediately after the merger or consolidation, greater stock voting power or a merger solely for the purpose of reincorporating the Company in another jurisdiction); (iii) a reverse merger in which the Company is the surviving corporation but the shares of the Company’s Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise (other than a reverse merger in which shareholders immediately before the merger have, immediately after the merger, greater stock voting power): or (iv) any transaction or series of related transactions in which in excess of 50% of the Company’s voting power is transferred (collectively an “Acceleration Event”), the portion of the Option not otherwise vested as of the date of the Acceleration Event shall become vested and exercisable (the “Accelerated Vested Portion”) from the date of Company’s Board of Directors approves the Acceleration Event, but in no event more than fifteen business days before the effective date of the Acceleration Event, until the fifth business day immediately before the effective date of the Acceleration Event (the “Exercise Period”), and the Option shall terminate upon the expiration of the Exercise Period, except as provided in Section 10(b) below. | |
| (b) The Option shall not terminate upon the expiration of the Exercise Period if provision is made in writing in connection with the Acceleration Event for (i) the assumption of this Option or the substitution of this Option with a new option of comparable value covering shares of a successor corporation, with the appropriate adjustments as to the number and kind of shares and the Exercise Price, in which event this Option or the new option substituted therefore shall continue in the manner and under the terms so provided, or (ii) the substitution for this Option of a program or plan to provide rights to Optionee to receive, on exercise of such rights, the type and amount of consideration Optionee would have received had he or she exercised this Option prior to the Acceleration Event less the aggregate Exercise Price therefore. |
11. No Employment Contract Created. Neither the
granting of this Option nor the exercise hereof shall be
construed as granting to the Optionee any right with respect to
continuance of employment by the Company or any of its
subsidiaries. The right of the Company or any of its
subsidiaries to terminate at will the Optionee’s employment
at any time (whether by dismissal, discharge or otherwise), with
or without cause, is specifically reserved.
12. Rights as Shareholder. The Optionee (or
transferee of this option by will or by the laws of descent and
distribution) shall have no rights as a shareholder with respect
to any Shares covered by this Option until the date of the
issuance of a stock certificate or certificates to him or her
for such Shares, notwithstanding the exercise of this Option.
13. “Market Stand-Off” Agreement. Optionee
agrees that, if requested by the Company or the managing
underwriter of any proposed public offering of the
Company’s securities, Optionee will not sell or otherwise
transfer or dispose of any Shares held by Optionee without the
prior written consent of the Company
or such underwriter, as the case may be, during such period of
time, not to exceed 180 days following the effective date
of the registration statement filed by the Company with respect
to such offering, as the Company or the underwriter may specify.
14. Interpretation. This Option is granted pursuant
to the terms of the Plan, and shall in all respects be
interpreted in accordance therewith. The Administrator shall
interpret and construe this Option and the Plan, and any action,
decision, interpretation or determination made in good faith by
the Administrator shall be final and binding on the Company and
the Optionee. As used in this Agreement, the term
“Administrator” shall refer to the committee of
the Board of Directors of the Company appointed to administer
the Plan, and if no such committee has been appointed, the term
Administrator shall mean the Board of Directors.
15. Notices. Any notice, demand or request required
or permitted to be given under this Agreement shall be in
writing and shall be deemed given when delivered personally or
three (3) days after being deposited in the United States
mail, as certified or registered mail, with postage prepaid, and
addressed, if to the Company, at its principal place of
business, Attention: the Chief Financial Officer, and if to the
Optionee, at his or her most recent address as shown in the
employment or stock records of the Company.
16. Governing Law. The validity, construction,
interpretation, and effect of this Option shall be governed by
and determined in accordance with the laws of the State of
California.
17. Severability. Should any provision or portion of
this Agreement be held to be unenforceable or invalid for any
reason, the remaining provisions and portions of this Agreement
shall be unaffected by such holding.
18. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original and all of which together shall be deemed one
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
THE ▇▇▇▇▇ COMPANIES, INC.
| By: |
▇▇▇▇ ▇. ▇▇▇▇▇
Chief Executive Officer
| By: |
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chief Financial Officer
OPTIONEE
[Name]