EXHIBIT 4.3
OPENTV CORP.
2005 INCENTIVE PLAN
FORM OF INCENTIVE STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT dated as of ________, 20_ (the "Grant Date"),
between OpenTV Corp. (the "Company") and ________________ ("Optionee").
RECITALS
A. Optionee is [CHOOSE APPROPRIATE RELATIONSHIP] [an employee of the
Company or one of its Affiliates] [a consultant or other independent advisor who
provides services to the Company or one or more of its Subsidiaries].
B. The Company has adopted the OpenTV Corp. 2005 Incentive Plan, effective
October 13, 2005, (the "Plan"), a copy of which is attached hereto as Exhibit
A. This Agreement is entered into pursuant to Section 11.5 of the Plan. Any
capitalized terms used herein and not otherwise defined are used as defined in
the Plan.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Optionee hereby agree to the following:
1. Option Grant. The Company hereby grants to Optionee the option
("Option") to purchase up to ___ shares (the "Shares") of the Company's Class A
Ordinary Shares, no par value, at an exercise price of $ __ per share (the
"Exercise Price"), which is not less than the Fair Market Value of the Shares as
of the Grant Date, on the terms, and subject to the conditions, set forth in
this Agreement and the Plan. The Option is intended to be an incentive stock
option as defined in Section 422 of the Code and is hereby designated an
"incentive stock option" for all purposes of the Code and the Plan, provided
that to the extent the limitations of Section 422 of the Code are exceeded, the
excess portion of the Option is intended to be a nonqualified stock option
within the meaning of Section 83 of the Code.
2. Exercise.
(a) Vesting Schedule. The Option shall be exercisable from time to
time during its term in accordance with the following vesting schedule, except
as otherwise expressly provided in this Agreement and the Plan: Twenty-five
percent (25%) of the Option shall vest and become exercisable on the first
anniversary of the Vesting Commencement Date. At the end of each month
thereafter, the Option shall vest and become exercisable as to an additional
l/48th of the Shares until the Option is vested with respect to one hundred
percent (100%) of the Shares. If application of the vesting percentage causes a
fractional Share, such fractional Share shall be rounded down to a whole Share.
For purposes of this Section 2(a), the Vesting Commencement Date is ____.
(b) Termination of Service. Notwithstanding Section 2(a), if
Optionee's service for the Company and/or its Subsidiaries (whether such service
was rendered as an employee or a consultant or advisor) terminates for any
reason ("Termination of Service")
prior to the complete exercise of the Option, then all vesting pursuant to
Section 2(a) shall cease as of the date of Termination of Service and the Option
shall thereafter be exercisable only to the extent, if any, that the Option was
exercisable at the time of Termination of Service; provided, however, that (i)
if Termination of Services occurs by reason of death or Disability then the
Option shall immediately become exercisable in full as to 100% of the Shares and
(ii) upon any Termination of Service by the Company for Cause (as defined
below), the entire Option shall immediately and automatically terminate,
notwithstanding any prior vesting. In addition, notwithstanding any other
provision in this Agreement to the contrary, the entire Option shall immediately
and automatically terminate, notwithstanding any prior vesting, if following
Termination of Service the Optionee breaches any material provision of the
Employee Invention Agreement (as defined below). For purposes of this Agreement,
the term "Cause" (i) shall expressly include the breach by Optionee of any
material provision of the Employee Proprietary Information and Inventions
Agreement signed by the Optionee for the benefit of the Company and/or its
Subsidiaries (the "Employee Invention Agreement") and (ii) shall also include
any actions or inactions constituting "cause" within the meaning ascribed
thereto in the Plan and in any employment agreement to which Optionee is a party
or, in the absence thereof, shall include but not be limited to insubordination,
dishonesty, incompetence, moral turpitude, other misconduct of any kind and the
refusal to perform his or her duties and responsibilities for any reason other
than illness or incapacity.
(c) Exercise After Termination. Upon any Termination of Service
other than (i) a termination by the Company for Cause or (ii) a termination by
reason of death or Disability, then the Option will terminate at the close of
business on the first business day following the expiration of the ninety (90)
day period beginning on the date of such Termination of Service. Upon any
Termination of Service by reason of death or Disability, the Option shall remain
exercisable for a period of one year following Termination of Service (but not
later than the scheduled expiration of the Option).
(d) Method of Exercise. This Option shall be exercisable by written
notice (in the form attached as Exhibit B or other form acceptable to the
Company) which shall state the election to exercise the Option, the number of
Shares with respect to which the Option is being exercised, and such
representations, warranties and agreements as the Company may reasonably request
to comply with applicable U.S. federal or state securities laws and/or the
requirements of any stock exchange (or quotation system) upon which the Class A
Ordinary Shares are listed or included (a "Stock Exchange"). The written notice
of exercise shall be accompanied by payment of the aggregate Exercise Price for
the number of Shares for which the Option is being exercised, pursuant to one of
the methods described in Section 4 below. The Option shall only be deemed to be
exercised upon receipt by the Company of such written notice accompanied by the
Exercise Price so paid.
(e) Compliance with Law. No Shares will be issued pursuant to the
exercise of the Option unless such issuance and such exercise shall be in
conformity with all relevant provisions of law and the requirements of any
applicable Stock Exchange. Assuming such compliance, for income tax purposes,
the Shares shall be deemed transferred to the Optionee at the close of business
(or such other time as the Board shall determine) on the date on which the
Option is exercised with respect to such Shares.
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(f) Withholding. The Company's obligation to deliver Shares upon
exercise of the Option shall be subject to applicable federal, state and local
tax withholding requirements. Federal, state and local withholding tax due upon
any exercise of the Option may, in the discretion of the Board (or, if the Board
expressly provides, the Committee), be paid in Class A Ordinary Shares already
owned by Optionee or through the withholding of Shares otherwise issuable to
Optionee, upon such terms and conditions as the Board (or the Committee) shall
determine. If Optionee shall fail to pay, or make arrangements satisfactory to
the Board or the Committee for the payment to the Company of all such federal,
state and local taxes required to be withheld by the Company, then the Company
shall, to the extent permitted by law, have the right to deduct from any payment
of any kind otherwise due to Optionee an amount equal in value to any federal,
state or local taxes of any kind required to be withheld by the Company with
respect to any exercise of the Option.
3. Optionee's Representations. If, at the time the Option is exercised,
the issuance of Shares upon exercise of the Option has not been registered
pursuant to an effective registration statement under the Securities Act of
1933, as amended, then concurrently with the exercise of all or any portion of
the Option, Optionee shall deliver to the Company a signed Investment
Representation Letter in the form of Exhibit C attached hereto.
4. Method of Payment. Payment of the Exercise Price shall be made only
by one or more of the following methods, or a combination thereof, as Optionee
shall from time to time elect:
(a) cash;
(b) check;
(c) surrender of whole Shares that (A) have been owned by Optionee
for at least six months on the date of surrender (or for a shorter period, if
the Committee expressly approves the use of such Shares), and (B) have an
aggregate Fair Market Value (as determined in accordance with the provisions of
the Plan) on the date of surrender equal to the aggregate Exercise Price of the
Shares as to which the Option is being exercised (it being understood that
so-called "pyramid" or "bootstrap" exercising of options is not permitted by
this Agreement); or
(d) delivery, together with such other documentation as the Company
in its sole and absolute discretion shall require, of irrevocable instructions
by Optionee to an approved broker to (i) sell the Shares issuable upon exercise
of the Option and (ii) deliver to the Company the amount of sale proceeds
required to pay the Exercise Price; provided, that: (A) the delivery by the
Company to the approved broker of Shares sold pursuant to the Optionee's
instructions, (B) the broker's delivery of the Exercise Price to the Company,
and (C) the broker's delivery of the net proceeds of the sale to the Optionee,
take place on the same date (the "Settlement Date") and; provided, further, that
the Settlement Date is no later than three (3) days following the date the
Optionee provides the approved broker with instructions to sell the Shares
issuable upon the exercise of the Option.
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5. Compliance with Laws. The Option may not be exercised if the
issuance of Shares upon such exercise or the method of paying the Exercise Price
for such Shares would constitute a violation of any applicable federal or state
securities or other law or regulation, including any rule under Part 207 of
Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by
the Federal Reserve Board.
6. Non-Transferability. Neither the Option nor any rights of Optionee
hereunder may be transferred or assigned in any manner otherwise than by will or
by the laws of descent or distribution or pursuant to a Domestic relations
order, and, except as otherwise required pursuant to a Domestic relations order,
the Option may be exercised during the lifetime of Optionee only by Optionee (or
his or her court appointed legal representative). The terms of this Option shall
be binding upon the executors, administrators, heirs, successors and assigns of
the Optionee.
7. Term of Option. The term of the Option shall commence on the date of
this Agreement and shall automatically expire on the tenth (10th) anniversary of
the Grant Date, to the extent not theretofore exercised.
8. Employee Invention Agreement. Optionee hereby represents and agrees
that Optionee has executed and delivered prior to the date hereof an Employee
Invention Agreement. The Optionee expressly acknowledges that his/her agreement
to enter into and to be bound by the terms of the Employee Invention Agreement
is a condition precedent to the grant of the Option hereunder and that without
that agreement, the Company would not enter into this Agreement.
9. Incorporation of the Plan; Entire Agreement; Governing Law. This
Agreement is an agreement entered into pursuant to the Plan, and the Option is
an Option granted under the Plan, and the Plan is hereby incorporated herein by
reference. Optionee agrees that his or her rights under the Option and this
Agreement shall be subject to such administrative rules and interpretations of
the Plan as the Board or the Committee shall adopt in accordance with the Plan.
The Plan (including any and all such rules and interpretations adopted by the
Board or the Committee), this Agreement, the Employee Invention Agreement and
any other employment agreement between the Company and Optionee that has been
approved by the Board, or an authorized officer of the Company acting within his
scope of authority, and that expressly references the Option or this 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 Optionee with respect to the subject matter
hereof, and Optionee and Company hereby represent and warrant that no promise or
agreement not herein expressed has been made by any person with respect to this
Agreement or the subject matter hereof. If any provision of this Agreement
conflicts with any requirement of the Plan, the Plan requirements shall govern.
This Option Agreement shall be governed by the laws of Delaware applicable to
contracts made and performed wholly therein.
10. Notices. All notices, requests or demands under this Agreement
shall be in writing and will be deemed to have been duly given or delivered (a)
when delivered by hand, (b) one (1) day after being given to an express courier
with a reliable system for tracking delivery, (c) when sent by confirmed
facsimile with a copy sent by another means specified in
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this Section 10, or (d) five (5) days after the date of mailing by certified or
registered mail, return receipt requested, postage prepaid, and addressed as
follows:
In the case of the Company:
OpenTV Corp.
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
In the case of Optionee, to the Optionee at the address indicated on
the signature page of this Agreement, or such other address, or to the attention
of such other person, as the recipient party shall have specified by prior
written notice to the sending party, as reflected in the books and records of
the Company from time to time.
11. Optionee Employment. Nothing contained in this Agreement, and no
action of the Company, the Board or the Committee with respect hereto, shall
confer or be construed to confer on Optionee any right to continue in the
service of the Company or any of its Affiliates or interfere in any way with the
right of the Company or any Affiliate to terminate Optionee's service at any
time, with or without Cause.
12. Amendment. Notwithstanding any other provisions hereof, this
Agreement may be supplemented or amended from time to time as approved by the
Committee as contemplated by Section 11.8(b) of the Plan. Without limiting the
generality of the foregoing, without the consent of the Optionee:
(a) this Agreement may be amended or supplemented (i) to cure any
ambiguity or to correct or supplement any provision herein which may be
defective or inconsistent with any other provision herein, or (ii) to add to the
covenants and agreements of the Company for the benefit of Optionee or surrender
any right or power reserved to or conferred upon the Company in this Agreement,
subject, however, to any required approval of the Company's shareholders and,
provided, in each case, that such changes or corrections shall not adversely
affect the rights of Optionee with respect to the Option evidenced hereby, or
(iii) to make such other changes as the Company, upon advice of counsel,
determines are necessary or advisable because of the adoption or promulgation
of, or change in or of the interpretation of, any law or governmental rule or
regulation, including any applicable federal or state securities laws; and
(b) subject to Section 11.8(b) of the Plan and any required approval
of the Company's shareholders, the Option evidenced by this Agreement may be
cancelled by the Committee and a new Option granted in substitution therefor,
provided that the Option so substituted shall satisfy all of the requirements of
the Plan as of the date such new Option grant is made and no such action shall
adversely affect the Option to the extent then exercisable.
(c) Optionee Acceptance. Optionee shall signify acceptance of the
terms and conditions of this Agreement by signing in the space provided at the
end hereof and
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returning a signed copy to the Company. This Agreement may be executed in any
number of counterparts (i.e., duplicate originals) and on separate counterparts,
each of which shall be deemed to be an original instrument and all of which
shall together constitute a single agreement.
(d) Severability. Any provision of this Agreement which is held by a
court of competent jurisdiction to be invalid, illegal or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability, without affecting in any way
the remaining provisions hereof in such jurisdiction or rendering that or any
other provisions of this Agreement invalid, illegal or unenforceable in any
other jurisdiction; provided, that if any provision hereof or the application
thereof shall be so held to be invalid, void or unenforceable by a court of
competent jurisdiction, then such court may substitute therefor a suitable and
equitable provision in order to carry out, so far as may be valid and
enforceable, the intent and purpose of the invalid, void or unenforceable
provision and, if such court shall fail or decline to do so, the parties shall
negotiate in good faith in an effort to agree upon such a suitable and equitable
provision.
13. Code Section 409A. If any provision of this Agreement would result
in the imposition of an excise tax under Section 409A of the Code and related
regulations and Treasury pronouncements ("Section 409A"), that provision will be
reformed to avoid imposition of the excise tax and no action taken to comply
with Section 409A shall be deemed to impair a benefit under this Agreement or
require the consent of the Optionee.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
OPENTV CORP.
By: _____________________________
Name:
Title:
Optionee has had an opportunity to obtain the advice of counsel prior
to executing this Option and fully understands all provisions of the Option.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.
Dated:
______________________________
NAME OF OPTIONEE
Residence Address:
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EXHIBIT A
OPENTV CORP. 2005 INCENTIVE PLAN
[Filed as Exhibit 4.2 to this Form S-8]
EXHIBIT B
OpenTV Corp.
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
EXERCISE NOTICE
Gentlemen:
Effective at the close of business today, _____________, 20__, the
undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase
___Class A Ordinary Shares, no par value (the "Shares"), of Open TV Corp. (the
"Company"), pursuant to the Stock Option Agreement dated as of _____________,
20__ (the "Option Agreement"), between Optionee and the Company, and hereby
acknowledges, represents and agrees, for the benefit of the Company as follows:
1. Option Agreement. Optionee has read and understands the Option
Agreement and the Plan and is bound by the terms and conditions thereof. Unless
otherwise defined herein, terms defined in the Option Agreement have the same
meanings in this Exercise Notice.
2. Rights as Shareholder. Until the stock certificate evidencing the
Shares has been issued (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a shareholder shall exist with
respect to any Shares, notwithstanding the exercise of the Option. No adjustment
will be made for any dividend or other right for which the record date is prior
to the date the stock certificate is issued, except as provided in the Plan.
3. Tax Consultation. Optionee understands that Optionee may incur tax
consequences as a result of Optionee's purchase or disposition of the Shares.
Optionee has consulted with any tax consultants Optionee deems advisable in
connection with the purchase or disposition of the Shares and is not relying on
the Company for any tax advice.
4. Restrictive Legends and Stop-Transfer Orders.
(a) Legends. Optionee agrees that, if; at the time the Option is
exercised, the issuance of Shares on exercise of the Option has not been
registered pursuant to an effective registration statement under the Securities
Act of 1933, as amended, the Company (or its transfer agent) may cause a legend
in substantially the form set forth below, and/or such other legend or legends
as the Company, in its sole discretion, deems necessary, proper or advisable
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under U.S. federal and applicable state securities laws and regulations, to be
placed on any certificate(s) evidencing ownership of the Shares:
"The securities represented by this certificate have not
been registered under the Securities Act of 1933, and
may not be sold or otherwise transferred unless so
registered or unless an exemption from the registration
requirements of such Act is available for such sale or
transfer."
(b) Stop-Transfer Notices; Refusal to Transfer. The Company may
issue appropriate "stop transfer" instructions to its transfer agent from time
to time in order to ensure compliance with the restrictions referred to herein.
The Company shall not be required to 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 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 transferred.
5. Successors and Assigns. This Exercise Notice shall be binding upon
Optionee, his heirs, executors, administrators, successors and assigns, and
shall inure to the benefit of the Company, its successors and assigns.
6. Governing Law; Severability. This Exercise Notice shall be governed
by and construed in accordance with the laws of Delaware applicable to contracts
made and performed wholly therein. Should any provision of this Exercise Notice
be determined by a court of law to be illegal or unenforceable, the other
provisions shall nevertheless remain in effect.
7. Notices. Any notice required or permitted hereunder shall be given
in writing and shall be effectively given if given in accordance with Section 10
of the Option Agreement.
8. Further Instruments. The parties shall execute such further
instruments and take such further action as may be reasonably necessary to carry
out the purposes and intent of this Exercise Notice, the Plan and the Option.
9. Delivery of Payment. Optionee herewith delivers to the Company the
full Exercise Price for the Shares, in accordance with Section 4 of the Option
Agreement.
10. Entire Agreement. The Option Agreement, the Plan and, if
applicable, the Investment Representation Letter are incorporated herein by
reference. This Exercise Notice, the Option Agreement, the Plan and, if
applicable, the Investment Representation Letter 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 Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interests except by means of a writing signed by the Company and
Optionee.
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Submitted by: Accepted by:
OPTIONEE: OPENTV CORP.
By: _____________________________
Its: _____________________________
________________________________
(Signature)
Address:
________________________
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EXHIBIT C
OpenTV Corp.
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Fax: (▇▇▇)▇▇▇-▇▇▇▇
Attn: General Counsel
INVESTMENT REPRESENTATION LETTER
Gentlemen:
In connection with the purchase of Class A Ordinary Shares, no par
value (the "Shares"), of Open TV Corp. (the "Company"), by exercise of that
certain Stock Option Agreement dated as of __________, 20__, between the
undersigned ("Optionee") and the Company, Optionee hereby represents and
warrants to the Company as follows:
(a) Optionee is knowledgeable with respect to the business of the
Company and financial affairs and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to acquire the Shares.
Optionee is acquiring the Shares 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 Shares 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 Shares for the minimum
capital gains period specified under tax statutes, for a deferred sale, for or
until a given increase or decrease in the market price of the Shares, or for a
period of one year or any other fixed period in the future.
(c) Optionee is familiar with the provisions of Rule 144 promulgated
under the Securities Act, which, in substance, permits 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, including: (1) the resale to occur not less than one year after the
Shares were acquired, (2) 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, or a nonaffiliate who has held the Shares less than
two years, (3) the availability of certain public information about the Company,
(4) the amount of Shares being sold during any three-month
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period not exceeding the limitations specified in Rule 144(e), and (5) the
timely filing of a Form 144, if applicable.
(d) Optionee further understands that in the event all of the
applicable requirements of Rule 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A or some other registration
exemption will be required in connection with any transfer of Shares; and that,
notwithstanding the fact that Rule 144 is 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 Rule 144 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:
Dated: _____________, 20__ ________________________________
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