EXHIBIT 6.2.1
VALUESTAR CORPORATION
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Incentive Stock Option
______________________
Under the ValueStar Corporation 1992 Incentive Stock Option Plan
THIS INCENTIVE STOCK OPTION, dated as of ______________ (the "Date of Grant"),
is granted by VALUESTAR CORPORATION, a Colorado corporation ("Company"), to
__________________ (the "Optionee"), whose status under the Company's 1992 Stock
Option Plan is described on the signature page hereof below his or her
signature.
WHEREAS, the Optionee is now an officer or key employee of the Company and the
Company desires to have the Optionee remain in its service and desires to
encourage stock ownership by the Optionee and to increase the Optionee's
proprietary interest in the Companys success; and as an inducement thereto has
determined to grant to the Optionee the option herein provided for, to the end
that the Optionee may thereby be assisted in obtaining an interest, or an
increased interest, as the case may be, in the stock ownership of the Company;
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:
1. Grant. Pursuant to its 1992 Incentive Stock Option Plan (the "Plan"), the
Company hereby grants to the Optionee an option (the "Option") to purchase
________ shares of the Company's common stock, $.00025 par value per share (the
"Option Shares"), at the price of $____ per share (the "Purchase Price" or
"Exercise Price"). Both the Purchase Price and the number of Option Shares
purchasable may be adjusted pursuant to Paragraph 10 hereof. Vesting:
2. Term. Subject to the vesting described in Item 1, the Option is exercisable
in whole or from time to time in part during the period beginning on the Date of
Grant (___________) and ending at 5:00 o'clock p.m. (Pacific Time) on _________
except as provided in Paragraph 7 hereof.
3. Exercise of Option. During the Optionee's life, this Option may only be
exercised by him or her. This Option may only be exercised by presentation at
the principal offices of the Company in Alameda, California of written notice to
the Company's Secretary advising the Company of the Optionee's election to
purchase Option Shares, specifying the number of Option Shares being purchased,
accompanied by payment. No Option Shares shall be issued until full payment is
made therefor. Payment shall be made either (i) in cash, represented by bank or
cashier's check, certified check or money order, (ii) by delivering shares of
the Company's Common Stock of the same class as the Option Shares, which have
been beneficially owned by the Optionee, the Optionee's spouse, or both of them
for a period of at least six (6) months prior to the time of exercise (the
"Delivered Stock"), in a number equal to the number of shares of Stock being
purchased upon exercise of this Option, or (iii) by delivery of shares of
corporate stock registered in the Optionee's name, endorsed in blank or
accompanied by an executed stock power with signature guaranteed in either case,
which are freely tradeable without restriction and are part of a class of
securities which has been listed for trading on the NASDAQ system or a national
securities exchange, with an aggregate fair market value equal to or greater
than the total purchase price of the Option Shares being purchased hereunder, or
a combination of cash, Delivered Stock or other corporate shares. The Board of
Directors (or by its designation, the Compensation Committee) shall have the
authority to determine whether any corporate shares offered by the Optionee in
payment of the exercise price of Option Shares are acceptable to the Company,
and the Board's (or Committee's) discretion in this regard shall be absolute.
4. Issuance of Option Shares; Restrictive Legend. (a) Upon proper exercise of
this Option, the Company shall mail or deliver to the Optionee, as promptly as
practicable, a stock certificate or certificates representing the Option Shares
purchased, subject to clause (b) below. The Company shall not be required to
sell or issue any shares under the Option if the issuance of such shares shall
constitute a violation of any applicable law or regulation or of any
requirements of any national securities exchange upon which the Company's common
stock may be listed.
(b) Upon any exercise of this Option, if a registration statement under the
Securities Act of 1933 (the "Act") is not in effect with respect to the Option
Shares, then the Company shall not be required to issue any Option Shares unless
the Company has received evidence reasonably satisfactory to it to the effect
that the Optionee is acquiring such shares for investment and not with a view to
the distribution thereof. Any reasonable determination in this connection by the
Company shall be final, binding and conclusive.
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(c) Unless and until removed as provided below, each certificate evidencing
unregistered Option Shares shall bear a legend in substantially the following
form:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities
laws of any state and may not be sold or transferred except upon such
registration or upon receipt by this Corporation of an opinion of
counsel satisfactory to this Corporation, in form and substance
satisfactory to this Corporation, that registration is not required for
such sale or transfer."
The Company shall issue a new certificate which does not contain such legend if
(i) the shares represented by such certificate are sold pursuant to a
registration statement (including a current prospectus) which has become
effective under the Act, or (ii) the staff of the Securities and Exchange
Commission shall have issued a "no action" letter, reasonably satisfactory to
the Company's counsel, to the effect that such shares may be freely sold and
thereafter traded publicly without registration under the Act, or (iii) the
Company's counsel, or other counsel acceptable to the Company, shall have
rendered an opinion satisfactory to the Company to the effect that such shares
may be freely sold and thereafter publicly traded without registration under the
Act. The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Act. The Company shall not be
obligated to take any other affirmative action in order to cause the exercise of
the Option or the issuance of any Option Shares to comply with any law or
regulation of any governmental authority.
5. Transfer of Option Shares. Option Shares issued upon exercise of this Option
which have not been registered under the Act shall be transferable by a holder
thereof only upon compliance with the conditions in this Paragraph. Before
making any transfer of Option Shares, the holder of the shares shall give
written notice to the Company of the holder's intention to make the transfer,
describing the manner and circumstances of the transfer. If in the opinion of
the Companys counsel, or of other counsel acceptable to the Company, the
proposed transfer may be effected without registration under the Act, the
Company shall so notify the holder and the holder shall be entitled to transfer
such shares as described in the holder's notice to the Company. If such counsel
opines that the transfer may not be made without registration under the Act,
then the Company shall so notify the holder, in which event the holder shall not
be entitled to transfer the shares until (i) the Company notifies the holder
that it is permissible to proceed with the transfer, or (ii) registration of the
shares under the Act has become effective. The Company may issue "stop transfer"
instructions to its transfer agent with respect to any or all of the Option
Shares as it deems necessary to prevent any violation of the Act.
6. Transfer or Encumbrance of this Option Prohibited. This Option may not be
transferred or assigned in any manner by the Optionee, except by will or trust
upon the Optionee's death or by operation of law under the laws of descent and
distribution. The same restriction on transfer or assignment shall apply to any
heirs, devisees, beneficiaries or other persons acquiring this Option or an
interest herein under such an instrument or by operation of law. Further, this
Option may not be pledged, hypothecated or otherwise encumbered, by operation of
law or otherwise, nor shall it be subject to execution, attachment or similar
process.
7. Termination of Service, Death, or Disability. (a) Except as may be otherwise
expressly provided in this Agreement, this Option shall terminate as follows:
(i) Upon termination of the Optionee's employment with the Company for
cause;
(ii) At the expiration of twelve (12) months from the date of the
Optionee's resignation or termination of the Optionee's employment with
the Company without cause, for any reason other than death; provided,
that if the Optionee dies within such twelve-month period, subclause
(iii) below shall apply; or
(iii) At the expiration of fifteen (15) months after the date of death
of the Optionee.
(b) "Employment with the Company" shall include employment with any parent or
subsidiary of the Company, and this Option shall not be affected by the
Optionee's transfer of employment among the Company and any parent or subsidiary
thereof. An Optionee's employment with the Company shall not be deemed
interrupted or terminated by a bona fide leave of absence (such as sabbatical
leave or employment by the government) duly approved, military leave or sick
leave. This Option shall not be affected in the event the Optionee suffers a
significant diminution in his duties or any significant reduction in his overall
compensation. After the death of the Optionee, his executors, administrators or
personal representatives, or any person or persons to whom the Option may be
transferred by will, trust or by the laws of descent and distribution, shall
have the right, at any time prior to termination hereof, to exercise this Option
pursuant to its terms.
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(c) This Option confers no right upon the Optionee with respect to the
continuation of his employment (or his position as an officer, director or other
provider of services) with the Company or any parent or subsidiary of the
Company, and shall not interfere with the right of the Company, or any parent or
subsidiary of the Company, to terminate such relationship(s) at any time in
accordance with law and any agreements then in force.
8. Change in Control of the Company. If there shall occur a change in control of
the Company while any Option Shares remain subject to this Option, then this
Option shall become immediately exercisable, notwithstanding Paragraph 2 hereof,
and such exercisability shall terminate only upon the termination date set forth
in Paragraph 2 hereof, notwithstanding the provisions of Paragraph 7 hereof
concerning acceleration of the termination date. For purposes of this Agreement,
a "change in control" of the Company shall mean a change in control of a nature
that would be required to be reported in response to Item 5(f) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act") as in effect on the date hereof; provided, that, without
limitation, such a change in control shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act) becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the Company's
then outstanding securities, or if (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board of
Directors of the Company cease for any reason to constitute at least a majority
thereof.
9. No Rights as Stockholder. The Optionee shall have no rights as a stockholder
with respect to Option Shares until the date of issuance of a stock certificate
for such shares. No adjustment for dividends, or otherwise, except as provided
in Paragraph 10, shall be made if the record date therefor is prior to the date
of exercise of such Option.
10. Changes in the Company's Capital Structure. The existence of this Option
shall not limit or affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Option
Shares or the rights thereof, or the dissolulion or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
However,
(a) If, prior to the Company's delivery of all the Option Shares subject to this
Option, the Company shall effect a subdivision (split) or combination (reverse
split) of shares or other capital readjustment, the payment of a common stock
dividend, or other increase or reduction of the number of shares of common stock
outstanding, without receiving compensation therefor in money, services or
property, then (i) in the event of an increase in the number of such shares
outstanding, the Purchase Price shall be proportionately reduced and the number
of Option Shares then still purchasable shall be proportionately increased; and
(ii) in the event of a reduction in the number of such shares outstanding, the
Purchase Price payable per share shall be proportionately increased and the
number of Option Shares then still purchasable shall be proportionately reduced.
(b) If while this Option remains outstanding the Company is reorganized, merged,
consolidated or party to a plan of share exchange with another corporation, or
if the Company sells or otherwise disposes of all or substantially all its
property or assets to another corporation, then subject to the provisions of
clause (ii) below, (i) after the effective date of such reorganization, merger,
consolidation, exchange or sale, as the case may be, the Optionee shall be
entitled, upon exercise of this Option, to receive, in lieu of the Option
Shares, the number and class of shares of such stock, other securities, cash and
other property or rights as the holders of shares of the Company's common stock
received pursuant to the terms of the reorganization, merger, consolidation,
exchange or sale and to which he would have been entitled if, immediately prior
to such reorganization, merger, consolidation, exchange or sale, he had been the
holder of record of a number of shares of common stock equal to the number of
Option Shares as to which this Option shall be so exercised; and (ii) this
Option may be cancelled by the Board of Directors of the Company as of the
effective date of any such reorganization, merger, consolidation, exchange or
sale; provided that (x) such reorganization, merger, consolidation, exchange or
sale results in a change in control of the Company rather than a mere change of
form or domicile of the Company, (y) written notice of such cancellation is
given to the Optionee or other holder of this Option not less than 45 days prior
to such effective date, and (z) the Optionee or other holder shall have the
right to exercise the Option in full during such 45-day period preceding the
effective date of such reorganization, merger, consolidation, exchange or sale.
(c) In case the Company shall determine to offer to the holders of its common
stock rights to subscribe pro rata for any new or additional shares of common
stock, or any securities convertible into common stock, then the Optionee shall
be entitled to participate in such pro rata offering in the same manner and to
the same extent as if this Option had been
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exercised at the Purchase Price then in effect and the number of Option Shares
then purchasable upon exercise hereof had been issued to the Optionee pursuant
to the terms hereof.
(d) Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thercof shall
be made with respect to, the Purchase Price or the number of Option Shares then
subject to this Option.
11. Notification to Company of Certain Sales. The Optionee or other holder of
Option Shares who sells any of such shares shall notify the Company of such fact
in writing within 30 days after the date of sale, if:
(a) At the time the Option Shares were sold, less than ONE year had elapsed
since the date the Option Shares were purchased by the Optionee, and less than
TWO years had elapsed since the Date of Grant of this Option; or
(b) the Optionee was not an employee of the Company (or of a parent or
subsidiary thereof) at all times during the period beginning on the Date of
Grant of this Option and ending on the date three (3) months prior to the date
this Option was exercised to purchase the Oplion Shares sold.
The failure of the Optionee or other holder of Option Shares to promptly give
such notice to the Company shall entitle the Company to cancel this Option
forthwith, without prior notice to the holder hereof.
12. Notices, etc. Any notice hereunder by the Optionee shall be given to the
Company in writing, and such notice and any payment by the Optionee hereunder
shall be deemed duly given or made only upon receipt thereof at the Company's
office at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other
address as the Company may designate by notice to the Optionee. Any notice or
other communication to the Optionee hereunder shall be in writing and shall be
deemed duly given or made if mailed or delivered to the Optionee at the last
address as the Optionee may have on file with the Companys Secretary. This
Option shall be governed under and construed in accordance with the laws of the
State of California. This address shall be binding on the Company and the
Optionee and all successors, assigns, heirs, devisees and personal
representatives thereof.
NOTE: This option must match the Control copy maintained by the Company, in all
particulars.
IN WITNESS WHEREOF, the parties hereto have executed this Incentive Stock Option
as of the day and year first above written.
VALUESTAR CORPORATION
By
ATTEST:
By
OPTIONEE NAME and STATUS:
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