STOCK OPTION AGREEMENT SCORES HOLDING COMPANY, INC.
Exhibit
10.3
SCORES
HOLDING COMPANY, INC.
THIS
AGREEMENT is entered into as of the ___ day of _______, 2010 (the “Date of
Grant”)
BETWEEN:
SCORES HOLDING COMPANY, INC.,
a company incorporated pursuant to the laws of the State of Utah,
(the
“Company”)
AND:
______________________, of
[address]
(the
“Optionee”).
WHEREAS:
A. The
Board of Directors of the Company (the “Board”) has approved and adopted the
Scores Holding Company, Inc., 2010 Equity Incentive Plan (the “2010 Plan”),
pursuant to which the Board is authorized to grant to employees and other
selected persons stock options to purchase common shares of the Company (the
“Common Stock”);
B. The
2010 Plan provides for the granting of stock options that either (i) are
intended to qualify as “Incentive Stock Options” within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the “Code”), or (ii) do
not qualify under Section 422 of the Code (“Non-Qualified Stock Options”);
and
C. The
Board has authorized the grant to Optionee of options to purchase a total of
___________________
(_________) shares of Common Stock (the “Options”), which Options are
intended to be (select one):
[ ] Incentive
Stock Options;
[ ] Non
Qualified Stock Options
NOW
THEREFORE, the Company agrees to offer to the Optionee the option to purchase,
upon the terms and conditions set forth herein and in the 2010 Plan, ___________ (___________)
shares of Common Stock. Capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the 2010 Plan.
1. Exercise
Price. The exercise price of the options shall be US$____ per
share.
2. Limitation on the Number of
Shares. If the Options granted hereby are Incentive Stock
Options, the number of shares which may be acquired upon exercise thereof is
subject to the limitations set forth in Section 6(e)(iv) of the 2010
Plan.
3. Vesting
Schedule. The Options shall vest in accordance with Exhibit
A.
4. Options not
Transferable. The Options may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise)
other than by will, by applicable laws of descent and distribution or, in the
case of a Non-Qualified Stock Option, pursuant to a qualified domestic relations
order, and shall not be subject to execution, attachment or similar process;
provided, however, that
if the Options represent a Non-Qualified Stock Option, such Option is
transferable without payment of consideration to immediate family members of the
Optionee or to trusts or partnerships established exclusively for the benefit of
the Optionee and Optionee’s immediate family members. Upon any
attempt to transfer, pledge, hypothecate or otherwise dispose of any Option or
of any right or privilege conferred by the 2010 Plan contrary to the provisions
thereof, or upon the sale, levy or attachment or similar process upon the rights
and privileges conferred by the 2010 Plan, such Option shall thereupon terminate
and become null and void.
5. Investment
Intent. By accepting the Options, the Optionee represents and
agrees that none of the shares of Common Stock purchased upon exercise of the
Options will be distributed in violation of applicable federal and state laws
and regulations. In addition, the Company may require, as a condition
of exercising the Options, that the Optionee execute an undertaking, in such a
form as the Company shall reasonably specify, that the Stock is being purchased
only for investment and without any then-present intention to sell or distribute
such shares.
6. Termination of Employment
and Options. Vested Options shall terminate, to the extent not
previously exercised, upon the occurrence of the first of the following
events:
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(a)
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Expiration. Five (5) years from the
Date of Grant.
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(b)
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Termination for
Cause. The date of the first discovery by the Company of
any reason for the termination of an Optionee’s employment or contractual
relationship with the Company or any related company for cause (as
determined in the sole discretion of the 2010 Plan administrator), and, if
an Optionee’s employment is suspended pending any investigation by the
Company as to whether the Optionee’s employment should be terminated for
cause, the Optionee’s rights under this Agreement and the 2010 Plan shall
likewise be suspended during the period of any such
investigation.
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(c)
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Termination Due to
Death or Disability. The expiration of one (1) year from
the date of the death of the Optionee or cessation of an Optionee’s
employment or contractual relationship by reason of Disability (within the
meaning of Section 22(e) of the Code). If an Optionee’s
employment or contractual relationship is terminated by death, any Option
held by the Optionee shall be exercisable only by the person or persons to
whom such Optionee’s rights under such Option shall pass by the Optionee’s
will or by the laws of descent and
distribution.
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(d)
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Termination for Any
Other Reason. The expiration of three (3) months from
the date of an Optionee’s termination of employment or contractual
relationship with the Company or any affiliated company or subsidiary of
the Company (a “Related Corporation”) for any reason whatsoever other than
termination of service for cause, death or
Disability.
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Each
unvested Option granted pursuant hereto shall terminate immediately upon
termination of the Optionee’s employment or contractual relationship with the
Company for any reason whatsoever, including Disability unless vesting is
accelerated in accordance with Section 11(e) of the 2010 Plan.
7. Stock. In the case of
any stock split, stock dividend or like change in the nature of shares of Stock
covered by this Agreement, the number of shares and exercise price shall be
proportionately adjusted as set forth in Section 5(b) of the 2010
Plan.
8. Exercise of
Option. Options shall be exercisable, in full or in part, at
any time after vesting, until termination; provided, however, that any
Optionee who is subject to the reporting and liability provisions of Section 16
of the Securities Exchange Act of 1934 with respect to the Common Stock shall be
precluded from selling or transferring any Common Stock or other security
underlying an Option during the six (6) months immediately following the grant
of that Option. If less than all of the shares included in the vested
portion of any Option are purchased, the remainder may be purchased at any
subsequent time prior to the expiration of the Option term. No
portion of any Option for less than fifty (50) shares (as adjusted pursuant to
Section 5(b) of the 2010 Plan) may be exercised; provided, that if the vested
portion of any Option is less than fifty (50) shares, it may be exercised with
respect to all shares for which it is vested. Only whole shares may
be issued pursuant to an Option, and to the extent that an Option covers less
than one (1) share, it is unexercisable.
Each
exercise of the Option shall be by means of delivery of a notice of election to
exercise (which may be in the form attached hereto as Exhibit B) to the CEO
of the Company at its principal executive office, specifying the number of
shares of Common Stock to be purchased and accompanied by payment in cash by
certified check or cashier’s check in the amount of the full exercise price for
the Common Stock to be purchased. In addition to payment in cash by
certified check or cashier’s check, an Optionee or transferee of an Option may
pay for all or any portion of the aggregate exercise price by complying with one
or more of the following alternatives:
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(a)
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by
delivering to the Company shares of Common Stock previously held by such
person, duly endorsed for transfer to the Company, or by the Company
withholding shares of Common Stock otherwise deliverable pursuant to
exercise of the Option, which shares of Common Stock received or withheld
shall have a fair market value at the date of exercise (as determined by
the 2010 Plan administrator) equal to the aggregate purchase price to be
paid by the Optionee upon such exercise;
or
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(b)
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by
complying with any other payment mechanism approved by the 2010 Plan
administrator at the time of
exercise.
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It is a
condition precedent to the issuance of shares of Common Stock that the Optionee
execute and/or deliver to the Company all documents and withholding taxes
required in accordance with Sections 11(a) and 11(f) of the 2010
Plan.
9. Holding period for Incentive
Stock Options. In order to obtain the tax treatment provided
for Incentive Stock Options by Section 422 of the Code, the shares of Common
Stock received upon exercising any Incentive Stock Options received pursuant to
this Agreement must be sold, if at all, after a date which is later of two (2)
years from the date of this agreement is entered into or one (1) year from the
date upon which the Options are exercised. The Optionee agrees to
report sales of shares prior to the above determined date to the Company within
one (1) business day after such sale is concluded. The Optionee also
agrees to pay to the Company, within five (5) business days after such sale is
concluded, the amount necessary for the Company to satisfy its withholding
requirement required by the Code in the manner specified in Section 11(f) of the
2010 Plan. Nothing in this Section 9 is intended as a representation
that Common Stock may be sold without registration under state and federal
securities laws or an exemption therefrom or that such registration or exemption
will be available at any specified time.
10. Resale restrictions may
apply. Any resale of the shares of Common Stock received upon
exercising any Options will be subject to resale restrictions contained in the
securities legislation applicable to the Optionee. The Optionee
acknowledges and agrees that the Optionee is solely responsible (and the Company
is not in any way responsible) for compliance with applicable resale
restrictions.
11. Subject to 2010
Plan. The terms of the Options are subject to the provisions
of the 2010 Plan, as the same may from time to time be amended, and any
inconsistencies between this Agreement and the 2010 Plan, as the same may be
from time to time amended, shall be governed by the provisions of the 2010 Plan,
a copy of which has been delivered to the Optionee, and which is available for
inspection at the principal offices of the Company.
12. Professional
Advice. The acceptance of the Options and the sale of Common
Stock issued pursuant to the exercise of Options may have consequences under
federal and state tax and securities laws which may vary depending upon the
individual circumstances of the Optionee. Accordingly, the Optionee
acknowledges that he or she has been advised to consult his or her personal
legal and tax advisor in connection with this Agreement and his or her dealings
with respect to Options. Without limiting other matters to be
considered with the assistance of the Optionee’s professional advisors, the
Optionee should consider: (a) whether upon the exercise of Options, the Optionee
will file an election with the Internal Revenue Service pursuant to Section
83(b) of the Code and the implications of alternative minimum tax pursuant to
the Code; (b) the merits and risks of an investment in the underlying shares of
Common Stock; and (c) any resale restrictions that might apply under applicable
securities laws.
13. No Employment
Commitment. The grant of the Options shall in no way
constitute any form of agreement or understanding binding on the Company or any
Related Company, express or implied, that the Company or any Related Company
will employ or contract with the Optionee, for any length of time, nor shall it
interfere in any way with the Company’s or, where applicable, a Related
Company’s right to terminate Optionee’s employment at any time, which right is
hereby reserved.
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14. Entire
Agreement. This Agreement is the only agreement between the
Optionee and the Company with respect to the Options, and this Agreement and the
2010 Plan supersede all prior and contemporaneous oral and written statements
and representations and contain the entire agreement between the parties with
respect to the Options.
15. Notices. Any
notice required or permitted to be made or given hereunder shall be mailed or
delivered personally to the addresses set forth below, or as changed from time
to time by written notice to the other:
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The
Company:
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Scores
Holding Company, Inc.
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Attention: CEO
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With
a copy to:
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Gottbetter
& Partners, LLP
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Attention:
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The
Optionee:
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[address]
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SCORES
HOLDING COMPANY, INC.
Per:
_____________________________________
Authorized
Signatory
_________________________________________
[Optionee]
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EXHIBIT
A
TERMS OF THE
OPTION
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Name
of the Optionee:
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____________
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Date
of Grant:
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__________
___, 2010
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Designation:
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[Non
Qualified] [Incentive] Stock Options
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1. Number
of Options granted:
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___________
shares
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2. Purchase
Price:
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$____
per share
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3. Vesting
Dates:
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__________
shares __________ ___, 20__
__________
shares __________ ___, 20__
__________
shares __________ ___, 20__
__________
shares __________ ___, 20__
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4. Expiration
Date:
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__________
___, 2015
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EXHIBIT
B
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To:
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Scores
Holding Company, Inc.
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Attention: CEO
Notice of Election to
Exercise
This
Notice of Election to Exercise shall constitute proper notice under the Scores
Holding Company, Inc.’s (the “Company”) 2010 Equity Incentive Plan (the “2010
Plan”) pursuant to Section 8 of that certain Stock Option Agreement (the
“Agreement”) dated as of the ___ day of _______, 2010, between the Company and
the undersigned.
The
undersigned hereby elects to exercise Optionee’s option to purchase
__________________ shares of the common stock of the Company at a price of
US$____ per share, for aggregate consideration of US$__________, on the terms
and conditions set forth in the Agreement and the 2010 Plan. Such
aggregate consideration, in the form specified in Section 8 of the Agreement,
accompanies this notice.
The
Optionee hereby directs the Company to issue, register and deliver the
certificates representing the shares as follows:
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Registration
Information:
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Delivery
Instructions:
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Name
to appear on certificates
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Name
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Address
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Address
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Telephone
Number
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DATED at
____________________________________, the _______ day of
________________________, 20___.
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(Name
of Optionee – Please type or print)
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(Signature
and, if applicable, Office)
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(City,
State, and Zip Code of
Optionee)
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