EXHIBIT 10.18
FORM OF STOCK OPTION AGREEMENT
EXHIBIT 10.18
WARP 9, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS EMPLOYEE NONSTATUTORY STOCK OPTION AGREEMENT ("AGREEMENT") is made
and entered into as of the date set forth below, by and between Warp 9, Inc., a
Nevada corporation (the "COMPANY"), and the employee of the Company ("OPTIONEE")
named in Section 1(b):
In consideration of the covenants herein set forth, the parties hereto
agree as follows:
1. OPTION INFORMATION.
(a) Date of Option:
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(b) Optionee:
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(c) Number of Shares:
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(d) Exercise Price:
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2. ACKNOWLEDGEMENTS.
(a) Optionee is an employee of the Company.
(b) The Board of Directors (the "BOARD") has authorized the
granting to Optionee of a nonstatutory stock option ("OPTION") to
purchase shares of common stock of the Company ("STOCK") upon the terms
and conditions hereinafter stated and pursuant to an exemption from
registration under the Securities Act of 1933, as amended (the
"SECURITIES ACT") provided by Rule 701 thereunder.
3. SHARES; PRICE. Company hereby grants to Optionee the right to
purchase, upon and subject to the terms and conditions herein stated, the number
of shares of Stock set forth in Section 1(c) above (the "SHARES") for cash or on
a cashless basis (or other consideration as is acceptable to the Board of
Directors of the Company, in their sole and absolute discretion) at the price
per Share set forth in Section 1(d) above (the "EXERCISE PRICE").
4. TERM OF OPTION; CONTINUATION OF SERVICE. This Option shall expire,
and all rights hereunder to purchase the Shares shall terminate seven (7) years
from the date hereof. This Option shall earlier terminate subject to Sections 7
and 8 hereof upon, and as of the date of, the termination of Optionee's
employment if such termination occurs prior to the Termination Date. Nothing
contained herein shall confer upon Optionee the right to the continuation of his
or her employment by the Company or to interfere with the right of the Company
to terminate such employment or to increase or decrease the compensation of
Optionee from the rate in existence at the date hereof.
5. VESTING OF OPTION. Subject to the provisions of Sections 7 and 8
hereof, this Option shall vest in equal amounts over a THIRTY-SIX (36) month
period during the term of Optionee's employment, with the first installment of
_________ vesting on _________________________.
6. EXERCISE. This Option shall be exercised by delivery to the Company
of (a) written notice of exercise stating the number of Shares being purchased
(in whole shares only) and such other information set forth on the form of
Notice of Exercise attached hereto as APPENDIX A, (b) a check or cash in the
amount of the Exercise Price of the Shares covered by the notice (or such other
consideration as has been approved by the Board of Directors) and (c) a written
investment representation as provided for in Section 13 hereof. Notwithstanding
anything to the contrary contained in this Option, this Option may be exercised
by presentation and surrender of this Option to the Company at its principal
executive offices with a written notice of the holder's intention to effect a
cashless exercise, including a calculation of the number of shares of Common
Stock to be issued upon such exercise in accordance with the terms hereof (a
"Cashless Exercise"). In the event of a Cashless Exercise, in lieu of paying the
Exercise Price in cash, the holder shall surrender this Option for that number
of shares of Common Stock determined by multiplying the number of Shares to
which it would otherwise be entitled by a fraction, the numerator of which shall
be the difference between the then current Market Price per share of the Common
Stock and the Exercise Price, and the denominator of which shall be the then
current Market Price per share of Common Stock. For example, if the holder is
exercising 100,000 Options with a per exercise price of $0.75 per share through
a cashless exercise when the Common Stock's current Market Price per share is
$2.00 per share, then upon such Cashless Exercise the holder will receive 62,500
shares of Common Stock. Market Price is defined as the average of the last
reported sale prices on the principal trading market for the Common Stock during
the five (5) trading days immediately preceding such date. This Option shall not
be assignable or transferable, except by will or by the laws of descent and
distribution, and shall be exercisable only by Optionee during his or her
lifetime, except as provided in Section 8 hereof.
7. TERMINATION OF EMPLOYMENT. If Optionee shall cease to be employed by
the Company for any reason, whether voluntarily or involuntarily, other than by
his or her death, Optionee (or if the Optionee shall die after such termination,
but prior to such exercise date, Optionee's personal representative or the
person entitled to succeed to the Option) shall have the right at any time
within three (3) months following such termination of employment or the
remaining term of this Option, whichever is the lesser, to exercise in whole or
in part this Option to the extent, but only to the extent, that this Option was
exercisable as of the date of termination of employment and had not previously
been exercised; provided, however: (i) if Optionee is permanently disabled
(within the meaning of Section 22(e)(3) of the Code) at the time of termination,
the foregoing three (3) month period shall be extended to six (6) months; or
(ii) if Optionee is terminated "for cause", or this Option Agreement or by any
employment agreement between the Optionee and the Company, this Option shall
automatically terminate as to all Shares covered by this Option not exercised
prior to termination.
Unless earlier terminated, all rights under this Option shall terminate
in any event on the expiration date of this Option as defined in Section 4
hereof.
8. DEATH OF OPTIONEE. If the Optionee shall die while in the employ of
the Company, Optionee's personal representative or the person entitled to
Optionee's rights hereunder may at any time within six (6) months after the date
of Optionee's death, or during the remaining term of this Option, whichever is
the lesser, exercise this Option and purchase Shares to the extent, but only to
the extent, that Optionee could have exercised this Option as of the date of
Optionee's death; provided, in any case, that this Option may be so exercised
only to the extent that this Option has not previously been exercised by
Optionee.
9. NO RIGHTS AS SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to the Shares covered by any installment of this Option
until the effective date of issuance of the Shares following exercise of this
Option, and no adjustment will be made for dividends or other rights for which
the record date is prior to the date such stock certificate or certificates are
issued except as provided in Section 10 hereof.
10. RECAPITALIZATION. Subject to any required action by the
shareholders of the Company, the number of Shares covered by this Option, and
the Exercise Price thereof, shall be proportionately adjusted for any increase
or decrease in the number of issued shares resulting from a subdivision or
consolidation of shares, or any other increase or decrease in the number of such
shares effected without receipt of consideration by the Company; provided
however that the conversion of any convertible securities of the Company shall
not be deemed having been "effected without receipt of consideration by the
Company".
In the event of a proposed dissolution or liquidation of the Company, a
merger or consolidation in which the Company is not the surviving entity, or a
sale of all or substantially all of the assets or capital stock of the Company
(collectively, a "REORGANIZATION"), unless otherwise provided by the Board, this
Option shall terminate immediately prior to such date as is determined by the
Board, which date shall be no later than the consummation of such
Reorganization. In such event, if the entity which shall be the surviving entity
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does not tender to Optionee an offer, for which it has no obligation to do so,
to substitute for any unexercised Option a stock option or capital stock of such
surviving of such surviving entity, as applicable, which on an equitable basis
shall provide the Optionee with substantially the same economic benefit as such
unexercised Option, then the Board may grant to such Optionee, in its sole and
absolute discretion and without obligation, the right for a period commencing
thirty (30) days prior to and ending immediately prior to the date determined by
the Board pursuant hereto for termination of the Option or during the remaining
term of the Option, whichever is the lesser, to exercise any unexpired Option or
Options without regard to the installment provisions of Section 5; provided,
however, that such exercise shall be subject to the consummation of such
Reorganization.
Subject to any required action by the shareholders of the Company, if
the Company shall be the surviving entity in any merger or consolidation, this
Option thereafter shall pertain to and apply to the securities to which a holder
of Shares equal to the Shares subject to this Option would have been entitled by
reason of such merger or consolidation, and the installment provisions of
Section 5 shall continue to apply.
In the event of a change in the shares of the Company as presently
constituted, which is limited to a change of all of its authorized Stock without
par value into the same number of shares of Stock with a par value, the shares
resulting from any such change shall be deemed to be the Shares within the
meaning of this Option.
To the extent that the foregoing adjustments relate to shares or
securities of the Company, such adjustments shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Except as
hereinbefore expressly provided, Optionee shall have no rights by reason of any
subdivision or consolidation of shares of Stock of any class or the payment of
any stock dividend or any other increase or decrease in the number of shares of
stock of any class, and the number and price of Shares subject to this Option
shall not be affected by, and no adjustments shall be made by reason of, any
dissolution, liquidation, merger, consolidation or sale of assets or capital
stock, or any issue by the Company of shares of stock of any class or securities
convertible into shares of stock of any class.
The grant of this Option shall not affect in any way the right or power
of the Company to make adjustments, reclassifications, reorganizations or
changes in its capital or business structure or to merge, consolidate, dissolve
or liquidate or to sell or transfer all or any part of its business or assets.
11. TAXATION UPON EXERCISE OF OPTION. Optionee understands that, upon
exercise of this Option, Optionee will recognize income, for Federal and state
income tax purposes, in an amount equal to the amount by which the fair market
value of the Shares, determined as of the date of exercise, exceeds the Exercise
Price. The acceptance of the Shares by Optionee shall constitute an agreement by
Optionee to report such income in accordance with then applicable law and to
cooperate with Company in establishing the amount of such income and
corresponding deduction to the Company for its income tax purposes. Withholding
for federal or state income and employment tax purposes will be made, if and as
required by law, from Optionee's then current compensation, or, if such current
compensation is insufficient to satisfy withholding tax liability, the Company
may require Optionee to make a cash payment to cover such liability as a
condition of the exercise of this Option.
12. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. The Board or
Committee, may modify, extend or renew this Option or accept the surrender
thereof (to the extent not theretofore exercised) and authorize the granting of
a new option in substitution therefore (to the extent not theretofore
exercised). Notwithstanding the foregoing provisions of this Section 12, no
modification shall, without the consent of the Optionee, alter to the Optionee's
detriment or impair any rights of Optionee hereunder.
13. INVESTMENT INTENT; RESTRICTIONS ON TRANSFER.
(a) Optionee represents and agrees that if Optionee exercises
this Option in whole or in part, Optionee will in each case acquire the
Shares upon such exercise for the purpose of investment and not with a
view to, or for resale in connection with, any distribution thereof;
and that upon such exercise of this Option in whole or in part,
Optionee (or any person or persons entitled to exercise this Option
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under the provisions of Sections 7 and 8 hereof) shall furnish to the
Company a written statement to such effect, satisfactory to the Company
in form and substance. If the Shares represented by this Option are
registered under the Securities Act, either before or after the
exercise of this Option in whole or in part, the Optionee shall be
relieved of the foregoing investment representation and agreement and
shall not be required to furnish the Company with the foregoing written
statement.
(b) Optionee further represents that Optionee has had access
to the financial statements or books and records of the Company, has
had the opportunity to ask questions of the Company concerning its
business, operations and financial condition, and to obtain additional
information reasonably necessary to verify the accuracy of such
information
(c) Unless and until the Shares represented by this Option are
registered under the Securities Act, all certificates representing the
Shares and any certificates subsequently issued in substitution
therefor and any certificate for any securities issued pursuant to any
stock split, share reclassification, stock dividend or other similar
capital event shall bear legends in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER
THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE
APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES
NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR
ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO
EXEMPTIONS THEREFROM.
and/or such other legend or legends as the Company and its counsel deem
necessary or appropriate. Appropriate stop transfer instructions with respect to
the Shares have been placed with the Company's transfer agent.
14. STAND-OFF AGREEMENT. Optionee agrees that, in connection with any
registration of the Company's securities under the Securities Act, and upon the
request of the Company or any underwriter managing an underwritten offering of
the Company's securities, Optionee shall not sell, short any sale of, loan,
grant an option for, or otherwise dispose of any of the Shares (other than
Shares included in the offering) without the prior written consent of the
Company or such managing underwriter, as applicable, for a period of at least
one year following the effective date of registration of such offering.
15. RESTRICTION UPON TRANSFER. The Shares may not be sold, transferred
or otherwise disposed of and shall not be pledged or otherwise hypothecated by
the Optionee except as hereinafter provided.
(a) Right of First Refusal. In the event Optionee desires to
transfer any Shares during his or her lifetime, Optionee shall first
offer to sell such Shares to the Company. Optionee shall deliver to the
Company written notice of the intended sale, such notice to specify the
number of Shares to be sold, the proposed purchase price and terms of
payment, and grant the Company an option for a period of thirty days
following receipt of such notice to purchase the offered Shares upon
the same terms and conditions. To exercise such option, the Company
shall give notice of that fact to Optionee within the thirty (30) day
notice period and agree to pay the purchase price in the manner
provided in the notice. If the Company does not purchase all of the
Shares so offered during foregoing option period, Optionee shall be
under no obligation to sell any of the offered Shares to the Company,
but may dispose of such Shares in any lawful manner during a period of
one hundred and eighty (180) days following the end of such notice
period, except that Optionee shall not sell any such Shares to any
other person at a lower price or upon more favorable terms than those
offered to the Company.
(b) Acceptance of Restrictions. Acceptance of the Shares shall
constitute the Optionee's agreement to such restrictions and the
legending of his certificates with respect thereto. Notwithstanding
such restrictions, however, so long as the Optionee is the holder of
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the Shares, or any portion thereof, he shall be entitled to receive all
dividends declared on and to vote the Shares and to all other rights of
a shareholder with respect thereto.
(c) Permitted Transfers. Notwithstanding any provisions in
this Section 15 to the contrary, the Optionee may transfer Shares
subject to this Agreement to his or her parents, spouse, children, or
grandchildren, or a trust for the benefit of the Optionee or any such
transferee(s); provided, that such permitted transferee(s) shall hold
the Shares subject to all the provisions of this Agreement (all
references to the Optionee herein shall in such cases refer mutatis
mutandis to the permitted transferee, except in the case of clause (iv)
of Section 15(a) wherein the permitted transfer shall be deemed to be
rescinded); and provided further, that notwithstanding any other
provisions in this Agreement, a permitted transferee may not, in turn,
make permitted transfers without the written consent of the Optionee
and the Company.
16. NOTICES. Any notice required to be given pursuant to this Option
shall be in writing and shall be deemed to be delivered upon receipt or, in the
case of notices by the Company, five (5) days after deposit in the U.S. mail,
postage prepaid, addressed to Optionee at the address last provided by Optionee
for his or her employee records.
17. APPLICABLE LAW. This Option has been granted, executed and
delivered in the State of California, and the interpretation and enforcement
shall be governed by the laws thereof and subject to the exclusive jurisdiction
of the courts located in the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Option as of
the date first above written.
COMPANY: Warp 9, Inc.
By:
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Name: ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Title: Chief Executive Officer
OPTIONEE:
By:
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(Signature)
Name:
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APPENDIX A
NOTICE OF EXERCISE
WARP 9, INC.
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Re: Nonstatutory Stock Option
1) Notice is hereby given pursuant to Section 6 of my Nonstatutory
Stock Option Agreement that I elect to purchase the number of shares set forth
below at the exercise price set forth in my option agreement:
Nonstatutory Stock Option Agreement dated: ____________
Number of shares being purchased: ____________
Exercise Price: $____________
A check in the amount of the aggregate price of the shares being
purchased is attached.
OR
2) I elect a cashless exercise pursuant to Section 6 of my Nonstatutory
Stock Option Agreement. The Average Market Price as of _______ was $_____.
I hereby confirm that such shares are being acquired by me for my own
account for investment purposes, and not with a view to, or for resale in
connection with, any distribution thereof. I will not sell or dispose of my
Shares in violation of the Securities Act of 1933, as amended, or any applicable
federal or state securities laws. Further, I understand that the exemption from
taxable income at the time of exercise is dependent upon my holding such stock
for a period of at least one year from the date of exercise and two years from
the date of grant of the Option.
I understand that the certificate representing the Option Shares will
bear a restrictive legend within the contemplation of the Securities Act and as
required by such other state or federal law or regulation applicable to the
issuance or delivery of the Option Shares.
By:
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(signature)
Name:
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