EXHIBIT 99.2
Name of Optionee: ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------
OPTION GRANT
OF
▇▇▇▇▇▇▇.▇▇▇ INC.
This is an option grant dated the date set forth on Schedule A hereto
(hereinafter, together with this Agreement, called this "Agreement") by
▇▇▇▇▇▇▇.▇▇▇ Inc., a Washington corporation (the "Company"), to ▇▇▇▇▇▇ ▇▇▇▇▇▇
(the "Optionee").
1. GRANT OF OPTION. The Company hereby grants to the Optionee, as a
matter of separate agreement and not in lieu of salary or of any other
compensation for services, the right and option (the "Option") to purchase all
or any part of an aggregate number of full shares of the Company's common stock
("Common Stock") set forth in Schedule A on the terms and conditions set forth
(i) herein and (ii) on Schedule A. The date of grant of the Option is the date
set forth in Schedule A.
2. NON-TRANSFERABLE. The Option shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and distribution, and
the Option is exercisable, during his lifetime, only by him. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this Option or any
right or privilege conferred hereby, contrary to the provisions hereof, or upon
the sale or levy or any attachment or similar process, the Option thereupon
shall terminate and become null and void. During an Optionee's lifetime, the
Option granted is personal to him and is exercisable solely by Optionee.
3. WITHHOLDING. Prior to delivery of any shares purchased upon exercise
of this Option, the Company shall determine the amount of any federal or state
income tax, if any, which is required to be withheld under Applicable Law (as
defined herein) and shall collect from Optionee in accordance with Section 12
hereof the amount of any such tax to the extent not previously withheld.
4. RIGHTS AS SHAREHOLDER. Optionee shall not have any rights as a
shareholder with respect to any shares of Common Stock subject to this Option
(the "Optioned Stock") until the date that a stock certificate for such shares
as to which Optionee has exercised this Option has been issued to Optionee. The
Company shall issue such certificate as expeditiously as possible.
5. SECURITIES REGULATION.
(a) COMPLIANCE; CONDITION TO EXERCISE. Shares of Common Stock
(collectively, "Shares") shall not be issued with respect to this Option unless
the exercise of the Option and the issuance and delivery of such Shares pursuant
thereto shall comply with all relevant provisions of law, including, without
limitation any applicable state securities laws, the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the Shares may then be listed, and shall further be
subject to the approval of counsel for the Company with respect to such
compliance. Inability of the Company to obtain from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any Shares hereunder, shall relieve the Company
of any liability in respect of the non-issuance or sale of Shares as to which
such requisite authority shall not have been obtained.
(b) REPRESENTATIONS BY OPTIONEE. As a condition to the
exercise of this option, the Company may not require the Optionee to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
shares, if mutually agreed, such representation is required by any relevant
provisions of the laws referred to in Section 5(a).
-1-
At the option of the Company, a stop transfer order against any Shares may be
placed on the official stock books and records of the Company, and two
legends may be stamped on the stock certificate, one of which indicating that
the Shares may not be pledged, sold or otherwise transferred unless an
opinion of counsel is provided (concurred in by counsel for the Company)
stating that such transfer is not in violation of any applicable law or
regulation. The Board of Directors of the Company (the "Board") may also
require such other action or agreement by the optionees as may from time to
time be necessary to comply with the federal and state securities laws.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, NEITHER THIS
PROVISION NOR ANY OTHER PROVISION SHALL OBLIGATE THE COMPANY TO UNDERTAKE
REGISTRATION OF OPTIONS OR STOCK HEREUNDER.
6. FORM OF CONSIDERATION. The Administrator (as defined below) shall
determine the acceptable form of consideration for exercising the Option,
including the method of payment. Such consideration may consist entirely of:
a. cash;
b. check;
c. promissory note;
d. 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 months
on the date of surrender, and (ii) have a Fair Market Value (as defined below)
on the date of surrender equal to the aggregate exercise price of the Shares as
to which the Option shall be exercised;
e. consideration received by the Company under a cashless
exercise program implemented by the Company;
f. a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;
g. any combination of the foregoing methods of payment; or
h. such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Law.
7. EXERCISE OF OPTION.
a. PROCEDURE FOR EXERCISE. The Option granted hereunder shall
be exercisable at such times and under such conditions as set forth in this
Agreement. Unless the Administrator provides otherwise, vesting of the Option
granted hereunder shall be tolled during any unpaid leave of absence. The Option
may not be exercised for a fraction of a Share.
The Option shall be deemed exercised when the Company
receives: (i) an executed Notice of Exercise of Stock Option (in the form
attached hereto) from the Optionee, and (ii) full payment for the Shares with
respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by this Agreement. Shares issued upon exercise of an Option shall be
issued in the name of the Optionee or, if requested by the Optionee, in the name
of the Optionee and his spouse. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the Shares are
issued, except as provided in Section 8 of this Agreement.
b. TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. If an
Optionee ceases to be a Service Provider (as defined below), other than upon the
Optionee's death or Disability (as defined below), the
-2-
Optionee may exercise his Option within three (3) months following the
Optionee's termination (but in no event later than the expiration of the term
of such Option as set forth in Schedule A). If, on the date of termination,
the Optionee is not vested as to his entire Option, the Shares covered by the
unvested portion of the Option shall be cancelled unless Optionee is still
being paid salary by company in which case vesting period shall continue for
salary paid period. If, after termination, the Optionee does not exercise his
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall be cancelled.
c. DISABILITY OF OPTIONEE. If the Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his Option within twelve (12) months following the Optionee's
termination (but in no event later than the expiration of the term of such
Option as set forth in Schedule A). If, on the date of termination, the Optionee
is not vested as to his entire Option, the Shares covered by the unvested
portion of the Option shall be cancelled. If, after termination, the Optionee
does not exercise his Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall be cancelled.
d. DEATH OF OPTIONEE. If the Optionee dies while a Service
Provider, the Option may be exercised within twelve (12) months following the
Optionee's termination or death by Optionee's family or (but in no event later
than the expiration of the term of such Option as set forth in Schedule A) 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 immediately be cancelled. 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, and the Shares covered by
such Option shall be cancelled.
e. BUYOUT PROVISIONS. The Administrator may at any time offer
to buy out for a payment in cash or Shares the Option based on such terms and
conditions as the Administrator shall establish and communicate to the Optionee
at the time that such offer is made. The Optionee is not obligated or required
to take or accept buy out unless mutually agreed.
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
ASSET SALE.
a. CHANGES IN CAPITALIZATION. Subject to any required action
by the shareholders of the Company, the number of shares of Common Stock covered
by the Option, as well as the price per share of Common Stock covered by the
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 the Option.
b. DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the Optionee
as soon as practicable prior to the effective date of such proposed transaction.
The Administrator in its discretion may provide for the Optionee to have the
right to exercise his Option until ten (10) days prior to such transaction as to
all of the shares of Optioned Stock, including Shares as to which the Option
would not otherwise be exercisable. In addition, the Administrator may provide
that any Company repurchase option applicable to any Shares purchased upon
exercise of an Option shall lapse as to all such Shares, provided the proposed
dissolution or liquidation takes place at the time and in the manner
-3-
contemplated. To the extent it has not been previously exercised, an Option
will terminate immediately prior to the consummation of such proposed action.
c. MERGER OR ASSET SALE. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, the Option shall vest completely upon merger unless
Optionee continues CEO for at least 1 year 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 the 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 fully vested and exercisable in lieu of assumption or substitution in the
event of a merger or sale of assets, the Administrator 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 or right 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 Administrator 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.
9. INABILITY TO OBTAIN AUTHORITY. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
10. RESERVATION OF SHARES. The Company, during the term of this
Agreement, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of this Agreement and the
Option.
11. AMENDMENT AND TERMINATION OF THIS AGREEMENT.
a. AMENDMENT AND TERMINATION. The Board may at any time amend,
alter, suspend or terminate this Agreement.
b. EFFECT OF AMENDMENT OR TERMINATION. No amendment,
alteration, suspension or termination of this Agreement shall impair the rights
of the Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of this Agreement shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to the
Option granted under this Agreement prior to the date of such termination.
12. ADMINISTRATION OF THIS AGREEMENT.
a. PROCEDURE.
(i) SECTION 162(m). To the extent that the
Administrator determines it to be desirable to qualify the Option granted
hereunder as "performance-based compensation" within the meaning of Section
162(m) of the Code, this Agreement shall be administered by a Committee of two
or more "outside directors" which are acceptable directors by Optionee within
the meaning of Section 162(m) of the Code.
-4-
(ii) RULE 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.
(iii) OTHER ADMINISTRATION. Other than as provided
above, this Agreement shall be administered by (A) the Compensation Committee of
the Board, (B) the Board or (C) another Committee, which Committee shall be
constituted to satisfy Applicable Laws.
▇. ▇▇▇▇▇▇ OF THE ADMINISTRATOR. Subject to the provisions of
this Agreement, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to reduce the exercise price of the Option to
the then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted;
(iii) to institute a program whereby the Option may
be surrendered in exchange for other options to purchase Common Stock with a
lower exercise price;
(iv) to construe and interpret the terms of this
Agreement and awards granted pursuant to this Agreement;
(v) to prescribe, amend and rescind rules and
regulations relating to this Agreement;
(vi) to modify or amend the Option (subject to
Section 11(b) hereof), including the discretionary authority to extend the
post-termination exercisability period of the Option longer than is otherwise
provided for in this Agreement;
(vii) to allow the Optionee to satisfy withholding
tax obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of the Option that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by the Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable; and
(viii) to make all other determinations deemed
necessary or advisable for administering this Agreement.
c. EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's
decisions, determinations and interpretations shall be final and binding on the
Optionee and any other holders of the Option.
13. NOTICES. Any notice or demand which either party may give to the
other hereunder shall be in writing and shall be effective when delivered
personally or sent by registered mail, postage prepaid, addressed, if to
Optionee, as set forth on Schedule A and if to Company, as follows:
▇▇▇▇▇▇▇.▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Stock Option Administrator
-5-
Either party may, by notice in writing, direct that future notices or
demands be sent to a different address.
14. DEFINITIONS. As used in this Agreement, the following definitions
shall apply:
a. "Administrator" means the Compensation Committee of the
Board or any other Committee as shall be administering the Plan, in accordance
with Section 12 hereof;
b "Applicable Laws" means the requirements relating to the
administration of stock option plans 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 where the Option is granted.
c. "Code" means the Internal Revenue Code of 1986, as amended.
d. "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity.
e. "Committee" means a committee of Directors appointed by the
Board in accordance with Section 12 of this Agreement.
f. "Director" means a member of the Board.
g. "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
h. "Employee" means any person, including Officers and
Directors, 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 (A) any leave
of absence approved by the Company or (B) 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.
i. "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed 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,
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 such exchange or system 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 Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in THE WALL STREET JOURNAL or such
other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
j. "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
k. "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
-6-
l. "Service Provider" means an Employee, Director or
Consultant.
m. "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
15. INTERPRETATION. All matters of interpretation of this Agreement,
including the terms and conditions hereof and the definitions of the words used
herein, shall be in the sole and final discretion of the Board or authorized
Committee.
16. GOVERNING LAW. This Option and Agreement shall be governed by the
laws of the State of Washington.
▇▇▇▇▇▇▇.▇▇▇ INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Its: CFO/GENERAL COUNSEL
----------------------------------
-7-
ACCEPTANCE AND ACKNOWLEDGEMENT
I accept the stock option dated September 27, 1999 granted by
▇▇▇▇▇▇▇.▇▇▇, Inc., and understand its terms and conditions.
Signature of /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Optionee: ----------------------------
Dated: 11/12/99
----------------------------
-8-
OPTION GRANT
▇▇▇▇▇▇▇.▇▇▇ INC.
SCHEDULE A
1. Name and Address of Optionee:
▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
2. Date of grant of this Option: September 27, 1999
------------------------
3. This Option is: / / an Incentive Stock Option, or
/X/ a Nonqualified Stock Option.
4. Number of shares of Common Stock covered by this Option:
500,000 shares.
--------
5. Purchase price per share: $12.00.
-------
6. This Option expires on: September 27, 2009.
-------------------
7. Except as set forth in Paragraph 8 below, this Option shall become
exercisable in increments with respect to the following numbers of
shares as set forth below:
Date on and after Portion of total
which Option Option which
is exercisable is exercisable
-------------- --------------
4-4-2000 125,000 shares
----------------------------- --------------------------------
10-4-2000 125,000 shares
----------------------------- --------------------------------
4-4-2001 125,000 shares
----------------------------- --------------------------------
10-4-2001 125,000 shares
----------------------------- --------------------------------
8. Acceleration of Options: Notwithstanding anything to the contrary
contained herein, (a) this entire set of Options may vest earlier than
provided in Paragraph 7 above as set forth in Section 5 of that certain
-9-
Employment Agreement between the Company and the Optionee, dated July
23, 1999, and (b) this Option shall immediately and fully vest all
options, and the Optionee shall immediately have the right to exercise
all Options as to all of the Optioned Stock, on the first business day
following the 30 calendar day period that the closing sales price for
the Common Stock (or the closing bid, if no sales were reported) as
quoted on the Nasdaq Stock Market for each trading day during such
period is equal to or greater than $20 per share.
NOTICE OF EXERCISE OF STOCK OPTION
TO: ▇▇▇▇▇▇▇.▇▇▇ INC.
I hereby exercise my stock option granted by ▇▇▇▇▇▇▇.▇▇▇ Inc. (the
"Company"), subject to all the terms and provisions thereof and notify the
Company of my desire to purchase ______________ shares of Common Stock of the
Company at the exercise price of $_______ per share which were offered to me
pursuant to said option.
I hereby represent that the _________________ shares of Common Stock to
be delivered to me pursuant to this exercise are being acquired by me for my own
account, for investment and not with a view to resale or distribution.
Dated:
-----------------------------
--------------------------------------
-10-