EXHIBIT (e)(18)
STOCK OPTION AGREEMENT
FOR OPTION GRANTED TO _____________________
ON [DATE]
Pursuant to the Notice of Grant and Stock Options and this Stock Option
Agreement, the Company has granted you an option to purchase the number of
shares of Common Stock indicated in the Notice of Grant and Stock Options at the
exercise price indicated in the Notice of Grant and Stock Options.
Your option is granted in connection with and in furtherance of the
Company's compensatory benefit plan for the Company's employees (including
officers), directors or consultants, and is intended to comply with the
provisions of Rule 701 promulgated by the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act"). Defined
terms not explicitly defined in this Stock Option Agreement but defined in the
Plan shall have the same definitions as in the Plan.
1. VESTING. Subject to the limitations contained herein, your option will
vest as provided in the Notice of Grant and Stock Options, provided that vesting
will cease upon the termination of your Continuous Status as an Employee,
Director or Consultant.
2. METHOD OF PAYMENT.
(a) PAYMENT OPTIONS. Payment of the exercise price is due in full
upon exercise of all or any part of your option. You may elect, to the extent
permitted by applicable law and the Notice of Grant and Stock Options, to make
payment of the exercise price under one of the following alternatives:
(i) By cash or check;
(ii) Payment pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which, prior to the
issuance of Common Stock, results in either the receipt of cash (or a check) by
the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds; or
(iii) Payment by a combination of the above methods.
3. WHOLE SHARES. Your option may only be exercised for whole shares.
4. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, your option may not be exercised unless the shares issuable
upon exercise of your option are then registered under the Securities Act or, if
such shares are not then so registered, the Company has determined that such
exercise and issuance would be exempt from the registration requirements of the
Securities Act.
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5. TERM. The term of your option commences on the date of grant and
expires upon the earliest of:
(i) the Expiration Date indicated in the Notice of Grant
and Stock Options.
(ii) ten (10) years after the Date of Grant; or
(iii) three (3) months after the termination of your
Continuous Status as an Employee, Director or Consultant for any reason other
than death or total and permanent disability (as determined by the Company in
its sole discretion), unless: (a) during any part of such three (3) month
period, the option is not exercisable solely because of the condition set forth
in Section 5 above, in which event the option shall not expire until the earlier
of the Expiration Date or until it shall have been exercisable for an aggregate
period of three (3) months after the termination of Continuous Status as an
Employee, Director or Consultant; (b) exercise of the option within three (3)
months after termination of your Continuous Status as an Employee, Director or
Consultant would result in liability under Section 16(b) of the Securities
Exchange Act of 1934, in which event the option will expire on the earliest of
(i) the Expiration Date, (ii) the tenth (10th) day after the last date upon
which exercise would result in such liability or (iii) six (6) months and ten
(10) days after the termination of your Continuous Status as an Employee,
Director or Consultant; or (c) such termination of employment is due to your
disability or death, in which event the option shall terminate on the earlier of
the termination date set forth above or twelve (12) months following such
termination of employment.
To obtain the federal income tax advantages associated with an
"incentive stock option," the Code requires that at all times beginning on the
date of grant of the option and ending on the day three (3) months before the
date of the option's exercise, you must be an employee of the Company or an
affiliate of the Company, except in the event of your death or permanent and
total disability. The Company cannot guarantee that your option will be treated
as an "incentive stock option" if you exercise your option more than three (3)
months after the date your employment with the Company terminates.
6. EXERCISE.
(a) You may exercise the vested portion of your option during its
term (and the unvested portion of your option if the Notice of Grant of Stock
Options so permits) by delivering a notice of exercise (in a form designated by
the Company) together with the exercise price to the Secretary of the Company,
or to such other person as the Company may designate, during regular business
hours, together with such additional documents as the Company may then require.
(b) By exercising your option you agree that:
(i) as a condition to any exercise of your option, the
Company may require you to enter an arrangement providing for the payment by you
to the Company of any tax withholding obligation of the Company arising by
reason of (1) the exercise of your option; (2) the lapse of any substantial risk
of forfeiture to which the shares are subject at the time of exercise; or (3)
the disposition of shares acquired upon such exercise;
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(ii) you will notify the Company in writing within fifteen
(15) days after the date of any disposition of any of the shares of Common Stock
issued upon exercise of your option that occurs within two (2) years after the
date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option;
(iii) the Company (or a representative of the underwriters)
may, in connection with the first underwritten registration of the offering of
any securities of the Company under the Securities Act, require that you not
sell or otherwise transfer or dispose of any shares of Common Stock or other
securities of the Company during such period (not to exceed one hundred eighty
(180) days) following the effective date of the registration statement of the
Company filed under the Securities Act as may be requested by the Company or the
representative(s) of the underwriters. You further agree that the Company may
impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such period; and
7. TRANSFERABILITY. Your option is not transferable, except by will or by
the laws of descent and distribution, and is exercisable during your life only
by you. Notwithstanding the foregoing, by delivering written notice to the
Company, in a form satisfactory to the Company, you may designate a third party
who, in the event of your death, shall thereafter be entitled to exercise your
option.
8. RIGHT OF FIRST REFUSAL. Before any shares of Common Stock (the
"Shares") issued upon exercise of an option to you or any transferee (either
being sometimes referred to herein as the "Holder") may be sold or otherwise
transferred (including transfer by gift or operation of law), the Company shall
have an assignable right of first refusal to purchase the Shares on the terms
and conditions set forth in this Section 8 (the "Right of First Refusal").
(a) NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall
deliver to the Company a written notice (the "Notice") stating: (i) the Holder's
bona fide intention to sell or otherwise transfer the Shares; (ii) the name of
each proposed purchaser or other transferee (the "Proposed Transferee"); (iii)
the number of Shares to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration for which the Holder proposed to
transfer the Shares (the "Offered Price"); and the Holder shall offer to sell
the Shares at the Offered Price to the Company.
(b) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within thirty
(30) days after receipt of the Notice, the Company or its assignee may, by
giving written notice to the Holder, elect to purchase all (but not less than
all) of the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the Offered Price.
(c) PAYMENT. Payment of the purchase price shall be made, at the
option of the Company or its assignee, either (i) in cash (by check) or (ii) in
the manner and at the time(s) set forth in the Notice.
(d) HOLDER'S RIGHT TO TRANSFER. If all the Shares proposed in the
Notice to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee as provided in this Section 10, then the Holder may
sell or otherwise transfer such Shares to that
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Proposed Transferee at the Offered Price or at a higher price, provided that
such sale or other transfer is consummated within thirty (30) days after the
date of the Notice and provided further that any such sale or other transfer is
effected in accordance with any applicable securities laws. If the Shares
described in the Notice are not transferred to the Proposed Transferee within
such period, a new Notice shall be given to the Company, and the Company shall
again be offered the Right of First Refusal, before any Shares held by the
Holder may be sold or otherwise transferred.
(e) EXCEPTION FOR CERTAIN FAMILY TRANSFERS. Anything to the
contrary contained in this Section 8 notwithstanding, the transfer of any or all
of the Shares during the Optionee's lifetime or on the Optionee's death by will
or intestacy to Optionee's immediate family or to a trust for the benefit of
Optionee or Optionee's immediate family shall be exempt from the provisions of
this Section 8; provided that, as a condition to receiving the Shares, the
transferee or other recipient shall agree in writing to receive and hold the
Shares so transferred subject to the provisions of the Plan, and to transfer
such Shares no further except in accordance with the terms of the Plan. As used
herein, "immediate family" shall mean spouse, lineal descendant or antecedent,
father, mother, brother or sister.
(f) TERMINATION OF RIGHT OF FIRST REFUSAL. The Right of First
Refusal shall terminate as to any Shares upon the first sale of Common Stock of
the Company to the general public pursuant to a registration statement filed
with and declared effective by the Securities and Exchange Commission (other
than a registration statement solely covering an employee benefit plan or
corporate reorganization).
9. OPTION NOT A SERVICE CONTRACT. Your option is not an employment
contract and nothing in your option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company,
or of the Company to continue your employment with the Company. In addition,
nothing in your option shall obligate the Company or its stockholders, board of
directors, officers or employees to continue any relationship which you might
have as a director or consultant for the Company.
10. NOTICES. Any notices provided for in your option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in the
case of notices delivered by the Company to you, five (5) days after deposit in
the United States mail, postage prepaid, addressed to you at the last address
you provided to the Company.
11. GOVERNING PLAN DOCUMENT. Your option is subject to all the provisions
of the Plan, the provisions of which are hereby made a part of your option,
including without limitation the provisions of the Plan relating to option
provisions, and is further subject to all interpretations, amendments, rules and
regulations which may from time to time be promulgated and adopted pursuant to
the Plan. In the event of any conflict between the provisions of your option and
those of the Plan, the provisions of the Plan shall control.
12. ACCELERATED VESTING. If a change in control occurs, as defined under
the 1999 Vixel Stock Option Plan, and within twelve (12) months after the
effective date of such change in control, your continuous service terminates due
to an involuntary termination (not including
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death or disability) without "Cause" or due to a voluntary termination with
"Good Reason," then the vesting and exercisability of the designated stock
option awards held by you will be accelerated as follows: (i) if you have been
employed as an officer by the Company for less than one year, then twelve months
of additional vesting shall immediately occur, or (ii) if you have been employed
as an officer by the Company for at least one year, the greater of one half of
your unvested options or one year of your unvested options will immediately vest
and become exercisable; provided, however, that if such potential vesting
acceleration would cause a contemplated change of control transaction that would
otherwise be eligible to be accounted for as a "pooling-of-interests"
transaction to become ineligible for such accounting treatment under generally
accepted accounting principles, as determined by the Company's independent
public accountants prior to the change in control, your stock options will not
have their vesting so accelerated.
For purposes of the Accelerated Vesting provisions above, "Cause" will mean the
occurrence of any one or more of the following: (i) your conviction of any
felony or any crime involving fraud, dishonesty or moral turpitude; (ii) your
participation in a fraud or act of dishonesty against the Company that results
in material harm to the business of the Company; or (iii) your intentional,
material violation of any contract or agreement between the Company and you or
any statutory duty you owe to the Company that you do not correct within thirty
(30) days after written notice thereof has been provided to you.
For purposes of the Accelerated Vesting provisions above, "Good Reason" will
mean that one or more of the following are undertaken by the Company without
your express written consent: (i) the assignment to you of any duties or
responsibilities that results in a material diminution in your position or
function as in effect immediately prior to the effective date of the change in
control; provided, however, that a mere change in your reporting relationships
will not provide the basis for a voluntary termination with Good Reason; (ii) a
material reduction by the Company in your annual base salary, as in effect on
the effective date of the change in control or as increased thereafter; (iii)
any failure by the Company to continue in effect any benefit plan or program,
including incentive plans or plans with respect to the receipt of securities of
the Company, in which you were participating immediately prior to the effective
date of the change in control (hereinafter referred to as "Benefit Plans"), or
the taking of any action by the Company that would adversely affect your
participation in or reduce your benefits under the Benefit Plans or deprive you
of any fringe benefit that you enjoyed immediately prior to the effective date
of the change in control; provided, however, that Good Reason will not be deemed
to have occurred if the Company provides for your participation in benefit plans
and programs that, taken as a whole, are comparable to the Benefit Plans; (iv) a
relocation of the Participant's business office to a location more than one
hundred (100) miles from the location at which you perform duties as of the
effective date of the change in control, except for required travel by you on
the Company's business to an extent substantially consistent with your business
travel obligations prior to the effective date of the change in control; or (v)
a material breach by the Company of any provision of the Stock Option Agreement
or any other material agreement between you and the Company concerning the terms
and conditions of the your employment.
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