EXHIBIT 99.2
STARSEED, INC.
STOCK OPTION AGREEMENT
WITNESSETH:
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RECITALS
A. The Board has adopted the Plan for the purpose of attracting and
retaining the services of selected key employees (including officers and
directors), non-employee members of the Board and consultants and other
independent contractors who contribute to the financial success of the
Corporation.
B. Optionee is an individual who is to render valuable services to
the Corporation, and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Corporation's grant
of a stock option to Optionee.
C. Capitalized terms used in this Agreement shall, unless the
context clearly indicates otherwise, have the meaning assigned to such terms in
Paragraph 19 of this Agreement.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions
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set forth in this Agreement, the Corporation hereby grants to Optionee, as of
the Grant Date, a stock option to purchase up to that number of Option Shares as
is specified in the Grant Notice. The Option Shares shall be purchasable from
time to time during the Option term at the Option Price per share specified in
the Grant Notice.
2. OPTION TERM. This Option shall expire at the close of business
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on the Expiration Date specified in the Grant Notice, unless sooner terminated
in accordance with Paragraphs 5 or 6 hereof; Provided, in no event shall this
Option have a maximum term in excess of ten (10) years measured from the Grant
Date,.
3. OPTION NONTRANSFERABLE; EXCEPTION. This Option shall be neither
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transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following the Optionee's death and may be exercised,
during Optionee's lifetime, only by Optionee.
4. DATES OF EXERCISE. This Option may not be exercised in whole or
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in part at any time prior to the time the Plan is approved by the Corporation's
shareholders in accordance with Paragraph 18. As the Option becomes exercisable
in one or more installments, the installments shall accumulate and the Option
shall remain exercisable for such installments until the Expiration Date or the
sooner termination of the Option term under Paragraph 5 or Paragraph 6 of this
Agreement.
5. ACCELERATED TERMINATION OF OPTION TERM. Should Optionee cease to
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remain in Service while this Option is outstanding, then the period for
exercising this Option
shall be reduced to a thirty-six (36) month period commencing with the date of
such cessation of Service, but in no event shall this Option be exercisable at
any time after the Expiration Date. This Option may be exercised for any or all
of the Option Shares in which the Optionee, at the time of cessation of Service,
is vested in accordance with the exercise/vesting provisions specified in the
Grant Notice. Upon the expiration of such thirty-six (36) month period or (if
earlier) upon the Expiration Date, this Option shall terminate and cease to be
outstanding. This Option shall immediately terminate upon the Optionee's
cessation of Service if the Optionee is not vested in any of the Option Shares
(in accordance with the exercise/vesting in the Grant Notice) at the time of
termination.
6. CORPORATE TRANSACTION.
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(a) This Option shall terminate upon the consummation of any
Corporate Transaction, unless expressly assumed by the successor corporation or
parent thereof.
(b) In connection with any such Corporate Transaction, the Plan
Administrator may, at its sole discretion, (i) accelerate this Option so that
this Option shall, immediately prior to the specified effective date for such
Corporate Transaction, become fully exercisable with respect to all of the
Option Shares and may be exercised for all or any portion of such shares, (ii)
arrange for this Option either to be assumed by the successor corporation or
parent thereof or to be replaced with a comparable option to purchase shares of
the capital stock of the successor corporation or parent thereof, (iii) arrange
for this Option to be replaced by a comparable cash incentive program of the
successor corporation based on the option spread (the amount by which the Fair
Market Value of the shares of Common Stock at the time subject to the Option
exceeds the Option Price payable for such shares) or (iv) take none of the
actions described in clauses (i), (ii) or (iii) above and allow this Option to
terminate as provided in Paragraph 6(a) above. The determination of
comparability under clauses (ii) and (iii) above shall be made by the Plan
Administrator, and its determination shall be final and conclusive.
(c) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES.
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(a) In the event any change is made to the Corporation's outstanding
Common Stock by reason of any stock split, stock dividend, combination of
shares, exchange or conversion of shares, or other change affecting the
outstanding Common Stock as a class without receipt of consideration, then
appropriate adjustments shall be made to (i) the total number of Option Shares
subject to this Option and (ii) the Option Price payable per share in order to
reflect such change and thereby preclude a dilution or enlargement of benefits
hereunder.
(b) If this Option is to be assumed or is otherwise to remain
outstanding after the Corporate Transaction, then this Option shall be
appropriately adjusted to apply and pertain to the number and class of
securities that would have been issuable to the Optionee in the consummation of
such Corporation Transaction had the option been exercised immediately prior to
such Corporate Transaction, and appropriate adjustments shall also be made to
the Option
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Price payable per share, provided the aggregate Option Price payable hereunder
shall remain the same.
8. PRIVILEGE OF STOCK OWNERSHIP. The holder of this Option shall not
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have any of the rights of a shareholder with respect to the Option Shares until
such individual shall have exercised the option and paid the Option Price.
9. MANNER OF EXERCISING OPTION.
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(a) In order to exercise this Option with respect to all or any part
of the Option Shares for which this Option is at the time exercisable, Optionee
(or in the case of exercise after Optionee's death, the Optionee's executor,
administrator, heir or legatee, as the case may be) must take the following
actions:
(1) Execute and deliver to the Secretary of the Corporation the
Purchase Agreement;
(2) Pay the aggregate Option Price for the purchased shares either by
full payment in cash or check, or any other form approved by the
Plan Administrator at the time of exercise in accordance with the
provisions of Paragraph 15.1
(3) Furnish to the Corporation appropriate documentation that the
person or persons exercising the Option (if other than Optionee)
have the right to exercise this Option.
(b) Should the Corporation's outstanding Common Stock be registered
under Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), at the time the Option is exercised, then the Option Price may also
be paid as follows:
(1) in shares of the Common Stock held by the Optionee for the
requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date; or
(2) through a special sale and remittance procedure pursuant to which
the Optionee (i) is to provide irrevocable written instructions
to a designated brokerage firm to effect the immediate sale of
the purchased shares and remit to the Corporation, out of the
sale proceeds, an amount sufficient to cover the aggregate Option
Price payable for the purchased shares plus all applicable
Federal and state income and employment taxes required to be
withheld by the Corporation by reason of such purchase and (ii)
concurrently provides written directives to the Corporation to
deliver the certificates for the purchased shares directly to
such broker-dealer in order to effect the sale transaction.
(c) Except to the extent the special sale and remittance procedure is
utilized to exercise this Option, payment of the Option Price must accompany the
delivery of the Purchase Agreement. As soon after such payment is practical, the
Corporation shall mail or deliver to Optionee (or to the other person or persons
exercising this Option) a certificate or certificates representing the shares so
purchased and paid for, with the appropriate legends affixed thereto.
(d) In no event may this Option be exercised for any fractional
shares.
10. RIGHTS OF FIRST REFUSAL/REPURCHASE RIGHTS. THE OPTIONEE HEREBY
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AGREES THAT ALL OPTION SHARES ACQUIRED UPON THE EXERCISE OF THIS OPTION
SHALL BE SUBJECT TO CERTAIN RIGHTS OF FIRST REFUSAL OF THE CORPORATION AND
ITS ASSIGNS IN CONNECTION WITH ANY PROPOSED TRANSFER OF ANY SUCH SHARES IN
ACCORDANCE WITH THE TERMS AND CONDITIONS SPECIFIED IN THE 1998 STOCK
OPTION/STOCK ISSUANCE PLAN. ADDITIONALLY, THE GRANT NOTICE MAY GRANT THE
CORPORATION THE RIGHT TO REPURCHASE ANY SHARES ACQUIRED UNDER THIS
OPTION, WHICH RIGHT SHALL LAPSE OVER TIME BASED UPON THE OPTIONEE'S LENGTH
OF SERVICE TO THE CORPORATION.
11. COMPLIANCE WITH LAWS AND REGULATIONS.
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(a) The exercise of this Option and the issuance of Option Shares
upon such exercise shall be subject to compliance by the Corporation and the
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange on which shares of the
Corporation's Common Stock may be listed at the time of such exercise and
issuance.
(b) In connection with the exercise of this Option, Optionee shall
execute and deliver to the Corporation such representations in writing as may be
requested by the Corporation in order for it to comply with the applicable
requirements of Federal and state securities laws.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
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in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Corporation.
13. LIABILITY OF CORPORATION. The inability of the Corporation to
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obtain approval from any regulatory body having authority the Corporation deems
necessary to the lawful issuance and sale of any Common stock pursuant to this
Option shall relieve the Corporation of any liability with respect to the
nonissuance of sale of the Common stock as to which such approval shall not have
been obtained. The Corporation, however, shall use its best efforts to obtain
all such approvals.
14. NOTICES. Any notice required to be given or delivered to the
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Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation in care of the Corporate Secretary at its principal corporate
offices. Any notices required to be given or
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delivered to the Optionee shall be in writing and addressed to Optionee at the
address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed to have been given or delivered upon personal delivery
or upon deposit in the US Mail, postage prepaid and properly addressed to the
party to be notified.
15. LOANS. The Plan Administrator may, in its absolute discretion
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and without any obligation to do so, assist the Optionee in the exercise of this
Option by (i) authorizing the extension of a loan to the Optionee from the
Corporation or (ii) permitting the Optionee to pay the option price for the
purchased Common Stock in installments over a period of years. The terms of any
such loan or installment method of payment (including the interest rate, the
requirement for collateral and the terms of repayment) shall be established by
the Plan Administrator in its sole discretion.
16. CONSTRUCTION. This Agreement and the Option evidenced hereby are
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made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of the Plan. All decisions of the
Plan Administrator with respect to any question or issue arising under the Plan
or this Agreement shall be conclusive and binding on all persons having an
interest in this Option.
17. GOVERNING LAW. The interpretation, performance, and enforcement
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of this Agreement shall be governed by the laws of the State of Oregon.
18. WITHHOLDING OBLIGATIONS AND PAYMENT OF TAXES. Optionee hereby
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agrees to make appropriate arrangements with the Corporation for the
satisfaction of all Federal, state or local tax withholding requirements and
Federal Social Security employee tax requirements applicable to the exercise of
this Option.
19. DEFINITIONS. The following definitions shall apply to the
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respective capitalized terms used herein:
(a) Board means the Board of Directors of Starseed, Inc.
(b) Code means the Internal Revenue Code of 1986, as amended.
(c) Common Stock means the Common Stock of Starseed, Inc.
(d) Corporation means Starseed, Inc., a Louisiana corporation, and
any of its successors.
(e) Corporate Transaction means one or more of the following
transactions:
(1) a merger or consolidation in which the Corporation is not
the surviving entity, except for a transaction the principal
purpose of which is to change the state of the Corporation's
incorporation;
(2) the sale, transfer, or other disposition of all or
substantially all of the assets of the Corporation; or
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(3) any reverse merger in which the Corporation is the surviving
entity but in which fifty percent (50%) or more of the
Corporation's outstanding voting stock is transferred to
holders different from those who held stock immediately
prior to such merger.
(f) EXERCISE DATE shall be the date on which the executed Purchase
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Agreement for one or more Option Shares is delivered to the Corporation in
accordance with Paragraph 9 of this Agreement.
(g) FAIR MARKET VALUE of a share of Common Stock on any relevant date
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shall be determined in accordance with the following provisions:
(1) If the Common Stock is not at the time listed or admitted to
trading on any stock exchange but is traded in the over-the-
counter market, the Fair Market Value shall be the mean
between the highest bid and the lowest asked prices (or if
such information is available the closing selling price) per
share of Common Stock on the date in question in the over-
the-counter market, as such prices are reported by the
National Association of Securities Dealers through its
NASDAQ National Market System or any successor system. If
there are no reported bid and asking prices (or closing
selling price) for the Common Stock on the date in question,
then the mean between the highest bid and the lowest asked
prices (or closing selling price) on the last preceding date
for which such quotations exist shall be determinative of
Fair Market Value.
(2) If the Common Stock is at the time listed or admitted to
trading on any stock exchange then the Fair Market Value
shall be the closing selling price per share of Common Stock
on the date in question on the stock exchange determined by
the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there
is no reported sale of Common Stock on such exchange on the
date in question, then the Fair Market Value shall be the
closing selling price on the exchange on the last preceding
date for which such quotation exists.
(3) If the Common Stock is at the time neither listed nor
admitted to trading on any stock exchange nor traded in the
over-the-counter market, or if the Plan Administrator
otherwise determines that the valuation provisions of
subparagraphs (a) and (b) above will not result in a true
and accurate valuation of the Common Stock, then the Fair
Market Value shall be determined by the Plan Administrator
after taking into account such factors as the Plan
Administrator shall deem appropriate under the
circumstances.
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(h) GRANT DATE means the date specified in the Grant Notice as the
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date on which the Option was granted to the Optionee under the Plan.
(i) NON-STATUTORY STOCK OPTION means an option not intended to meet
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the statutory requirements of Section 422 of the Code.
(j) OPTION SHARES means the total number of shares of Common Stock
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indicated in the Grant Notice as purchasable under this Option.
(k) OPTIONEE means the individual identified in the Grant Notice as
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the person to whom this Option has been granted under the Plan.
(l) OPTION PRICE means the exercise price per share to be paid by the
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Optionee for the exercise of this Option. The Option Price is indicated in the
Grant Notice.
(m) PARENT corporation means any corporation (other than the
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Corporation) in an unbroken chain of corporations ending with the Corporation,
provided each such corporation in the unbroken chain (other than the
Corporation) owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such claim.
(n) PLAN means the 1998 Stock Option/Stock Issuance Plan of the
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Corporation, in the form of Exhibit C to the Grant Notice.
(o) PLAN ADMINISTRATOR means either the Board or a committee of two
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or more Board members, to the extent such committee may at the time be
responsible for plan administration.
(p) PURCHASE AGREEMENT means the stock purchase agreement, in
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substantially the form of Exhibit B to the Grant Notice, which is to be
executed in connection with the exercise of this Option for one or more Option
Shares.
(q) SERVICE means the performance of services for the Corporation or
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any Parent or Subsidiary corporation by an individual in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant or advisor. Accordingly, the Optionee shall be deemed to remain in
Service for so long as such individual renders services to the Corporation or
any Parent or Subsidiary corporation on a periodic basis in the capacity of an
Employee, a non-employee of the board of directors or an independent consultant
or advisor.
(r) SUBSIDIARY corporation means each corporation (other than the
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Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each such corporation (other than the last corporation) in
the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
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