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EXHIBIT 10.2
ICX ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
STOCK OPTION AGREEMENT
TYPE OF OPTION (CHECK ONE): [ ] INCENTIVE [ ] NONQUALIFIED
This Stock Option Agreement (the "Agreement") is entered into as of_____,
____, by and between ICX ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a California corporation (the
"Company"), and _____________ (the "Optionee") pursuant to the Company's 1999
Stock Incentive Plan (the "Plan"). Any capitalized term not defined herein shall
have the meaning given it in the Plan.
1. GRANT OF OPTION. The Company hereby grants to Optionee an option (the
"Option") to purchase all or any portion of a total of _______________
(________) shares (the "Shares") of the Common Stock of the Company at a
purchase price of ________ ($_______ ) per share (the "Exercise Price"), subject
to the terms and conditions set forth herein and the provisions of the Plan. If
the box marked "Incentive" above is checked, then this Option is intended to
qualify as an "incentive stock option" as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). If this Option fails in whole or
in part to qualify as an incentive stock option, or if the box marked
"Nonqualified" is checked, then this Option shall to that extent constitute a
nonqualified stock option.
2. VESTING OF OPTION. This Option is fully vested and immediately
exercisable from time to time in whole or in part. No fewer than 500 Shares may
be purchased upon the initial exercise of this Option, and no fewer than 100
Shares may be purchased upon any exercise of this Option after the initial
exercise of this Option (each, a "Minimum Amount"). Notwithstanding the
foregoing sentence, if the number of Shares available for exercise is less than
the Minimum Amount (whichever is applicable), Optionee shall nevertheless be
entitled to exercise this Option but only as to the entire remaining amount in a
single exercise transaction.
3. TERM OF OPTION. Optionee's right to exercise this Option shall
terminate immediately upon the first to occur of the following:
(a) the expiration of ten (10) years from the date of this
Agreement;
(b) termination of Optionee's Continuous Service if such
termination occurs for any reason other than permanent disability, death or
voluntary resignation;
(c) the expiration of one (1) month from the date of termination
of Optionee's Continuous Service if such termination occurs due to voluntary
resignation; provided, however, that if Optionee dies during such one-month
period the provisions of Section 3(e) below shall apply;
(d) the expiration of one (1) year from the date of termination of
Optionee's Continuous Service if such termination is due to permanent disability
of the Optionee (as defined in Section 22(e)(3) of the Code);
(e) the expiration of one (1) year from the date of termination of
Optionee's Continuous Service if such termination is due to Optionee's death or
if death occurs during the one-
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month period following termination of Optionee's Continuous Service pursuant to
Section 3(c) above; or
(f) upon the consummation of a "Change in Control" (as defined in
Section 2.4 of the Plan), unless otherwise provided pursuant to Section 11
below.
4. EXERCISE OF OPTION. Until termination of the right to exercise this
Option in accordance with Section 3 above, this Option may be exercised in whole
or in part by the Optionee (or, after his or her death, by the person designated
in Section 5 below) upon delivery of the following to the Company at its
principal executive offices:
(a) a written notice of exercise which identifies this Agreement
and states the number of Shares then being purchased (but no fractional Shares
may be purchased);
(b) a check or cash in the amount of the Exercise Price (or
payment of the Exercise Price in such other form of lawful consideration as the
Administrator may approve from time to time under the provisions of Section 5.3
of the Plan);
(c) a check or cash in the amount reasonably requested by the
Company to satisfy the Company's withholding obligations under federal, state or
other applicable tax laws with respect to the taxable income, if any, recognized
by the Optionee in connection with the exercise of this Option (unless the
Company and Optionee shall have made other arrangements for deductions or
withholding from Optionee's wages, bonus or other compensation payable to
Optionee, or by the withholding of Shares issuable upon exercise of this Option
or the delivery of Shares owned by the Optionee in accordance with Section 10.1
of the Plan, provided such arrangements satisfy the requirements of applicable
tax laws); and
(d) a letter, if requested by the Company, in such form and
substance as the Company may require, setting forth the investment intent of the
Optionee, or person designated in Section 5 below, as the case may be.
5. DEATH OF OPTIONEE; NO ASSIGNMENT. The rights of the Optionee under
this Agreement may not be assigned or transferred except by will or by the laws
of descent and distribution, and may be exercised during the lifetime of the
Optionee only by such Optionee. Any attempt to sell, pledge, assign,
hypothecate, transfer or dispose of this Option in contravention of this
Agreement or the Plan shall be void and shall have no effect. If the Optionee's
Continuous Service terminates as a result of his or her death, and provided
Optionee's rights hereunder shall have vested pursuant to Section 2 hereof,
Optionee's legal representative, his or her legatee, or the person who acquired
the right to exercise this Option by reason of the death of the Optionee
(individually, a "Successor") shall succeed to the Optionee's rights and
obligations under this Agreement. After the death of the Optionee, only a
Successor may exercise this Option.
6. RIGHT OF FIRST REFUSAL.
(a) The Shares acquired pursuant to the exercise of this Option
may be sold by the Optionee only in compliance with the provisions of this
Section 6. Prior to any intended sale, Optionee shall first give written notice
(the "Offer Notice") to the Company specifying (i) his or her bona fide
intention to sell or otherwise transfer such Shares, (ii) the name and address
of the
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proposed purchaser(s), (iii) the number of Shares the Optionee proposes to sell
(the "Offered Shares"), (iv) the price for which he or she proposes to sell the
Offered Shares, and (v) all other material terms and conditions of the proposed
sale.
(b) Within thirty (30) days after receipt of the Offer Notice, the
Company or its nominee(s) may elect to purchase all or any portion of the
Offered Shares at the price and on the terms and conditions set forth in the
Offer Notice by delivery of written notice (the "Acceptance Notice") to the
Optionee specifying the number of Offered Shares that the Company or its
nominees elect to purchase. Within fifteen (15) days after delivery of the
Acceptance Notice to the Optionee, the Company and/or its nominee(s) shall
deliver to the Optionee payment of the amount of the purchase price of the
Offered Shares to be purchased pursuant to this Section 7, against delivery by
the Optionee of a certificate or certificates representing the Offered Shares to
be purchased, duly endorsed for transfer to the Company or such nominee(s), as
the case may be. Payment shall be made on the same terms as set forth in the
Offer Notice or, at the election of the Company or its nominees(s), by check or
wire transfer of funds. If the Company and/or its nominee(s) do not elect to
purchase all of the Offered Shares, the Optionee shall be entitled to sell the
balance of the Offered Shares to the purchaser(s) named in the Offer Notice at
the price specified in the Offer Notice or at a higher price and on the terms
and conditions set forth in the Offer Notice; provided, however, that such sale
or other transfer must be consummated within 60 days from the date of the Offer
Notice and any proposed sale after such 60-day period may be made only by again
complying with the procedures set forth in this Section 6.
(c) Optionee may transfer all or any portion of the Shares to a
trust established for the sole benefit of the Optionee and/or his or her spouse
or children without such transfer being subject to the right of first refusal
set forth in this Section 6, provided that the Shares so transferred shall
remain subject to the terms and conditions of this Agreement and no further
transfer of such Shares may be made without complying with the provisions of
this Section 6.
(d) Any Successor of Optionee pursuant to Section 5 hereof, and
any transferee of the Shares pursuant to this Section 6, shall hold the Shares
subject to the terms and conditions of this Agreement and no further transfer of
the Shares may be made without complying with the provisions of this Section 6.
(e) The provisions of this Section 6 shall not apply to a sale of
the Shares to the Company pursuant to Section 7 below.
(f) The rights provided the Company and its nominee(s) under this
Section 6 shall terminate upon the closing of the initial public offering of
shares of the Company's Common Stock pursuant to a registration statement filed
with and declared effective by the Securities and Exchange Commission under the
Securities Act.
7. COMPANY'S REPURCHASE RIGHT.
(a) The Company shall have the right (but not the obligation) to
repurchase (the "Repurchase Right") any or all of the Shares acquired pursuant
to the exercise of this Option in the event that the Optionee's Continuous
Service should terminate for any reason whatsoever, including without limitation
Optionee's death, disability, voluntary resignation or termination by the
Company with or without cause. Upon exercise of the Repurchase Right, the
Optionee shall be obligated to sell
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his or her Shares to the Company, as provided in this Section 7. The Repurchase
Right may be exercised by the Company at any time during the period commencing
on the date of termination of Optionee's Continuous Service and ending one
hundred twenty (120) days after the last to occur of the following:
(i) the termination of Optionee's Continuous Service;
(ii) the expiration of Optionee's right to exercise this
Option pursuant to Section 3 hereof; or
(iii) in the event of Optionee's death, receipt by the
Company of notice of the identity and address of Optionee's Successor (as
defined in Section 5 hereof).
(b) The purchase price for Shares repurchased hereunder (the
"Repurchase Price") shall be the Fair Market Value per share of Common Stock
(determined in accordance with Section 2.11 of the Plan) as of the date of
termination of Optionee's Continuous Service.
(c) Written notice of exercise of the Repurchase Right, stating
the number of Shares to be repurchased and the Repurchase Price per Share, shall
be given by the Company to the Optionee or his or her Successor, as the case may
be, during the period specified in Section 7(a) above.
(d) The Repurchase Price shall be payable, at the option of the
Company, by check or by cancellation of all or a portion of any outstanding
indebtedness of Optionee to the Company, or by any combination thereof. The
Repurchase Price shall be paid without interest within sixty (60) days after
delivery of the notice of exercise of the Repurchase Right, against delivery by
the Optionee or his or her Successor of a certificate or certificates
representing the Shares to be repurchased, duly endorsed for transfer to the
Company.
(e) The rights provided the Company under this Section 7 shall
terminate upon the closing of the initial public offering of shares of the
Company's Common Stock pursuant to a registration statement filed with and
declared effective by the Securities and Exchange Commission under the
Securities Act.
8. RESTRICTIVE LEGENDS.
(a) Optionee hereby acknowledges that federal securities laws and
the securities laws of the state in which he or she resides may require the
placement of certain restrictive legends upon the Shares issued upon exercise of
this Option, and Optionee hereby consents to the placing of any such legends
upon certificates evidencing the Shares as the Company, or its counsel, may deem
necessary or advisable.
(b) In addition, all stock certificates evidencing the Shares
shall be imprinted with a legend substantially as follows:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER, REPURCHASE RIGHTS AND A RIGHT OF FIRST
REFUSAL IN FAVOR OF THE CORPORATION AND/OR ITS NOMINEE(S), AS SET FORTH
IN A STOCK
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OPTION AGREEMENT DATED _________, ____. TRANSFER OF THESE SHARES MAY BE
MADE ONLY IN COMPLIANCE WITH THE PROVISIONS OF SAID AGREEMENT, A COPY OF
WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF SAID CORPORATION. SUCH
TRANSFER RESTRICTIONS, REPURCHASE RIGHTS AND RIGHT OF FIRST REFUSAL ARE
BINDING ON TRANSFEREES OF THESE SHARES."
10. ADJUSTMENTS UPON CHANGES IN CAPITAL STRUCTURE. In the event that the
outstanding shares of Common Stock of the Company are hereafter increased or
decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Company by reason of a recapitalization, stock split,
combination of shares, reclassification, stock dividend or other similar change
in the capital structure of the Company, then appropriate adjustment shall be
made by the Administrator to the number of Shares subject to the unexercised
portion of this Option and to the Exercise Price per share, in order to
preserve, as nearly as practical, but not to increase, the benefits of the
Optionee under this Option, in accordance with the provisions of Section 4.2 of
the Plan.
11. CHANGE IN CONTROL. In the event of a Change in Control of the
Company, the Administrator in its discretion may take one or more of the
following actions: (A) provide for the purchase or exchange of this Option for
an amount of cash or other property having a value equal to the difference, or
spread, between (x) the value of the cash or other property that the Optionee
would have received pursuant to such Change in Control transaction in exchange
for the shares issuable upon exercise of this Option had this Option been
exercised immediately prior to such Change in Control transaction and (y) the
Exercise Price, (B) adjust the terms of this Option in a manner determined by
the Administrator to reflect the Change in Control, (C) cause this Option to be
assumed, or new rights substituted therefor, by another entity, through the
continuance of the Plan and the assumption of this Option, or the substitution
for this Option of a new option of comparable value covering shares of a
successor corporation, with appropriate adjustments as to the number and kind of
shares and Exercise Price, in which event the Plan and this Option, or the new
option substituted therefor, shall continue in the manner and under the terms so
provided, or (D) make such other provision as the Administrator may consider
equitable. If the Administrator does not take any of the forgoing actions, this
Option shall terminate upon the consummation of the Change in Control and the
Administrator shall cause written notice of the proposed transaction to be given
to the Optionee not less than fifteen (15) days prior to the anticipated
effective date of the proposed transaction.
12. NO EMPLOYMENT CONTRACT CREATED. Neither the granting of this Option
nor the exercise hereof shall be construed as granting to the Optionee any right
with respect to continuance of employment by the Company or any of its
subsidiaries. The right of the Company or any of its subsidiaries to terminate
at will the Optionee's employment at any time (whether by dismissal, discharge
or otherwise), with or without cause, is specifically reserved.
13. RIGHTS AS SHAREHOLDER. Optionee (or transferee of this option by will
or by the laws of descent and distribution) shall have no rights as a
shareholder with respect to any Shares covered by this Option until the date of
the issuance of a stock certificate or certificates to him or her for such
Shares, notwithstanding the exercise of this Option.
14. "MARKET STAND-OFF" AGREEMENT. Optionee agrees that, if requested by
the Company or the managing underwriter of any proposed public offering of the
Company's securities,
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Optionee will not sell or otherwise transfer or dispose of any Shares held by
Optionee without the prior written consent of the Company or such underwriter,
as the case may be, during such period of time, not to exceed 180 days following
the effective date of the registration statement filed by the Company with
respect to such offering, as the Company or the underwriter may specify.
15. INTERPRETATION. This Option is granted pursuant to the terms of the
Plan, and shall in all respects be interpreted in accordance therewith. The
Administrator shall interpret and construe this Option and the Plan, and any
action, decision, interpretation or determination made in good faith by the
Administrator shall be final and binding on the Company and the Optionee. As
used in this Agreement, the term "Administrator" shall refer to the committee of
the Board of Directors of the Company appointed to administer the Plan, and if
no such committee has been appointed, the term Administrator shall mean the
Board of Directors.
16. NOTICES. Any notice, demand or request required or permitted to be
given under this Agreement shall be in writing and shall be deemed given when
delivered personally or three (3) days after being deposited in the United
States mail, as certified or registered mail, with postage prepaid, and
addressed, if to the Company, at its principal place of business, Attention: the
Chief Financial Officer, and if to the Optionee, at his or her most recent
address as shown in the employment or stock records of the Company.
17. AGREEMENT OF SHAREHOLDERS/SUBCHAPTER S CORPORATION. If the
Corporation is an electing small business corporation under Subchapter S of the
Internal Revenue Code of 1986, as amended, at the time Optionee acquires any
Shares hereunder, and Optionee seeks to transfer the Shares so acquired, no
transfer shall be effective unless the transferee shareholder covenants to
comply with any rules and regulations of the Internal Revenue Service then in
effect relating to the Corporation's Subchapter S election and to take no action
which will jeopardize such election. Further, Optionee agrees that he will not
transfer or attempt to transfer his Shares to any transferee whose ownership of
the Shares would automatically invalidate the Corporation's Subchapter S
election or which would be prohibited by this Agreement or the Agreement of
Shareholders. Such a sale or transfer shall be void and ineffectual.
18. GOVERNING LAW. The validity, construction, interpretation, and effect
of this Option shall be governed by and determined in accordance with the laws
of the State of California.
19. SEVERABILITY. Should any provision or portion of this Agreement be
held to be unenforceable or invalid for any reason, the remaining provisions and
portions of this Agreement shall be unaffected by such holding.
20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed one instrument.
21. CALIFORNIA CORPORATE SECURITIES LAW. The sale of the shares that are
the subject of this Agreement has not been qualified with the Commissioner of
Corporations of the State of California and the issuance of such shares or the
payment or receipt of any part of the consideration therefor prior to such
qualification is unlawful, unless the sale of such shares is exempt from such
qualification by Section 25100, 25102 or 25105 of the California Corporate
Securities Law of l968, as amended. The rights of all parties to this Agreement
are expressly conditioned upon such qualification being obtained, unless the
sale is so exempt.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ICX ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC. "OPTIONEE"
By:
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(Signature)
Its:
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(Type or print name)
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CONSENT OF SPOUSE
I acknowledge that I have read the foregoing Stock Option Agreement under
the 1999 Stock Incentive Plan and that I know its contents. I am aware that by
its provisions, my spouse agrees, among other things, to a right of first
refusal, to the granting of rights to purchase and to the imposition of certain
restrictions on the transfer of the securities Enterprising Computing Solutions,
Inc., a California corporation (the "Company"), including my community interest
therein (if any), which rights and restrictions may survive my spouse's death. I
hereby consent to such rights and restrictions and approve of the provisions of
the Agreement.
I further agree that in the event of a dissolution of the marriage
between myself and my spouse, in connection with which I secure or am awarded
shares of the common stock of the Company, or any interest therein through
property settlement agreement or otherwise, I shall receive and hold said shares
subject to all the provisions and restrictions contained in the foregoing
Agreement, including any option of a shareholder or the Company to purchase such
shares or interest from me.
I also acknowledge that I have been advised to obtain independent counsel
to represent my interests with respect to this Agreement but that I have
declined to do so and I hereby expressly waive my right to such independent
counsel.
Date: _________________, 200__
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Signature
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Print Name
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Spouse's Name