BPO Management Services, Inc Stock Option Plan GRANT OF STOCK OPTION
THE
OPTION GRANTED PURSUANT TO THIS NONSTATUTORY STOCK OPTION AGREEMENT
(THE
“OPTION”) AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR
THE OPTION OR THE SHARES UNDER THE SECURITIES ACT, OR AN OPINION OF COUNSE
L,
WHICH IS SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION
IS
NOT REQUIRED. IN
ADDITION, THE SHARES ISSUABLE UPON THE ERXERCISE HEREOF ARE ALSO SUBJECT TO
THE
FOLLOWING, AS SET FORTH IN THAT CERTAIN RIGHTS AGREEMENT DATED JULY 29, 2005,
AND THAT CERTAIN REGISTRATION RIGHTS AGREEMENT DATED JULY 29, 2005
(COLLECTIVELY, THE “AGREEMENTS”) BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF
THESE SHARES, COPIES OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
COMPANY: (1) A LOCK-UP PERIOD OF UP TO 180 DAYS FOLLOWING THE EFFECTIVE DATE
OF
A REGISTRATION STATEMENT OF THE COMPANY FILED UNDER THE ACT; AND (2) SUCH OTHER
RESTRICTIONS ON TRANSFER AS PROVIDED FOR IN SUCH AGREEMENTS. SUCH LOCK-UP PERIOD
AND OTHER RESTRICTIONS ON TRANSFER AS PROVIDED FOR IN THE AGREEMENTS ARE BINDING
ON TRANSFEREES OF SUCH SHARES.
Stock
Option Plan
GRANT
OF STOCK OPTION
Date
of
Grant: _________, 2005
THIS
GRANT, dated as of the date of grant first stated above (the "Date of Grant"),
is delivered by BPO
Management Services, Inc.,
a
Delaware corporation ("BPO" or the “Company”) to ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Grantee"),
who is an employee or officer of BPO or one of its subsidiaries (the Grantee's
employer is sometimes referred to herein as the "Employer").
WHEREAS,
the Board of Directors of BPO (the "Board") on July 29, 2005, adopted, with
subsequent stockholder approval, the BPO
Management Services, Inc.
Stock
Option Plan (the "Plan");
WHEREAS,
the Plan provides for the granting of stock options by a committee to be
appointed by the Board (the "Committee) to directors, officers and key employees
of BPO or any subsidiary of BPO to purchase, or to exercise certain rights
with
respect to, shares of the voting Common Stock of BPO, .001 par value (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS,
the Committee considers the Grantee to be a person who is eligible for a grant
of stock options under the Plan, and has determined that it would be in the
best
interest of BPO to grant the stock options documented herein.
NOW,
THEREFORE, the parties hereto, intending to be legally bound hereby, agree
as
follows:
1.
Grant of Option.
Subject
to the terms and conditions hereinafter set forth, BPO, with the approval and
at
the direction of the Committee, hereby grants to the Grantee, as of the Date
of
Grant, an option to purchase up to 500,000 shares of Stock at a price of Two
and
One Half cents ($.025) per share, the fair market value (“Option Price”). Such
option is hereinafter referred to as the "Option" and the shares of stock
purchasable upon exercise of the Option are hereinafter sometimes referred
to as
the "Option Shares." The Option is not intended by the parties hereto to be
a
qualified an incentive stock option as such term is defined under section 422
of
the Internal Revenue Code of 1986, as amended (“Code”)).
2.
Installment Exercise.
Subject
to such further limitations as are provided herein, the Option shall become
exercisable in four (4) installments, the Grantee having the right hereunder
to
purchase from BPO the following number of Option Shares upon exercise of the
Option, on and after the following dates, in cumulative fashion:
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(a)
on
and after the first anniversary of the Date of Grant, up to one-fourth (ignoring
fractional shares) of the total number of Option Shares;
(b)
on
and after the second anniversary of the Date of Grant, up to an additional
one-fourth (ignoring fractional shares) of the total number of Option Shares;
and
(c)
on
and after the third anniversary of the Date of Grant, up to an additional
one-fourth (ignoring fractional shares) of the total number of Option Shares;
and
(d)
on
and after the fourth anniversary of the Date of Grant, the remaining Option
Shares.
3.
Termination of Option.
(a)
The
Option and all rights hereunder with respect thereto, to the extent such rights
shall not have been exercised, shall terminate and become null and void after
the expiration of five years from the Date of Grant (the "Option
Term").
(b)
Upon
the occurrence of the Grantee's ceasing for any reason to be employed by the
Employer (such occurrence being a "termination of the Grantee's employment"),
the Option, to the extent not previously exercised, may be exercised during
the
following periods, but only to the extent that the Option was outstanding and
exercisable on the date of termination: (i) not later than six (6) months from
the date of termination of the Grantee's employment in the case of a disability
(within the meaning of Section 22(e) (3) of the Code), (ii) in the case of
the
Grantee's death during his employment by the Employer, not later than six (6)
months from the Grantee's date of death, and (iii) not later than three (3)
months from the date of termination of the Grantee’s employment other than for
the reasons described in (i) and (ii), above. In no event, however, shall any
such period extend beyond the Option Term.
(c)
In
the event of the death of the Grantee, the Option may be exercised by the
Grantee's estate, or by a person who acquires the right to exercise such Stock
Option by bequest or inheritance or by reason of the death of the Grantee,
but
only to the extent that the Option would otherwise have been exercisable by
the
Grantee. Any such estate or other person acquiring rights under this Section
shall be subject to the Grantee’s obligations under the Option and the
Plan.
(d)
A
transfer of the Grantee's employment between BPO and any subsidiary of BPO,
or
between any subsidiaries of ONP, shall not be deemed to be a termination of
the
Grantee's employment.
(e)
Notwithstanding any other provisions set forth herein or in the Plan, if the
Grantee shall (i) commit any act of malfeasance or wrongdoing affecting BPO
or
any subsidiary of BPO, (ii) breach any covenant not to compete, or employment
contract, with BPO or any subsidiary of BPO, or (iii) engage in conduct that
would warrant the Grantee's discharge for cause (excluding general
dissatisfaction with the performance of the Grantee's duties, but including
any
act of disloyalty or any conduct clearly tending to bring discredit upon BPO
or
any subsidiary of BPO), any unexercised portion of the Option shall immediately
terminate and be void.
4.
Exercise of Option.
(a)
The
Grantee may exercise the Option with respect to all or any part of the number
of
Option Shares then exercisable hereunder by giving the Secretary of BPO written
notice of intent to exercise. The notice of exercise shall specify the number
of
Option Shares as to which the Option is to be exercised and the date of exercise
thereof, which date shall be at least five (5) days after the giving of such
notice unless an earlier time shall have been mutually agreed upon.
(b)
Full
payment (in U.S. dollars) by the Grantee of the Option Price for the Option
Shares purchased shall be made on or before the exercise date specified in
the
notice of exercise in cash, or, with the prior written consent of the Committee,
in whole or in part through the surrender of previously acquired shares of
Stock
at their fair market value on the exercise date.
On
the
exercise date specified in the Grantee's notice or as soon thereafter as is
practicable, BPO shall cause to be delivered to the Grantee, a certificate
or
certificates for the Option Shares then being purchased (out of theretofore
unissued Stock or reacquired Stock, as BPO may elect) upon full payment for
such
Option Shares. The obligation of BPO to deliver Stock shall, however, be subject
to the condition that if at any time the Committee shall determine in its
discretion that the listing, registration or qualification of the Option or
the
Option Shares upon any securities exchange or under any state or federal law,
or
the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the Option or the issuance
or purchase of Stock thereunder, the Option may not be exercised in whole or
in
part unless such listing, registration, qualification, consent or approval
shall
have been effected or obtained free of any conditions not acceptable to the
Committee.
-2-
(c)
If
the Grantee fails to pay for any of the Option Shares specified in such notice
or fails to accept delivery thereof, the Grantee's right to purchase such Option
Shares may be terminated by BPO. The date specified in the Grantee's notice
as
the date of exercise shall be deemed the date of exercise of the Option,
provided that payment in full for the Option Shares to be purchased upon such
exercise shall have been received by such date.
(d)
If
during the Option Term, (i) there is the sale of eighty (80%) or more of the
assets of the Company, or (ii) any one person, or more than one person acting
as
a group (other than the Company or existing shareholders and any revocable
intervivos trusts created by any of the existing shareholders), acquires, by
purchase or exchange, ownership of stock of the Company possessing more than
fifty (50%) percent of the total voting power of the Company, in such event,
the
Option, to the extent not previously exercised, shall immediately become fully
exercisable.
5.
Adjustment of and Changes in Stock of BPO.
In
the
event of a reorganization, recapitalization, change of shares, stock split,
spin-off, stock dividend, reclassification, subdivision or combination of
shares, merger, consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of BPO, the Committee shall
make
such adjustment as it deems appropriate in the number and kind of shares of
Stock subject to the Option or in the Option Price; provided, however, that
no
such adjustment shall give the Grantee any additional benefits under the
Option.
6.
Fair Market Value.
As
used
herein, the "fair market value" of a share of Stock shall be determined by
the
Committee.
7.
Sale of Common Stock to Company
Pursuant
to Section 4.18 of the Plan, and in accordance with the terms thereof, if at
the
time of Grantee’s termination of employment with the Employer the Common Stock
of BPO is not publicly traded, BPO shall have the right (but not the obligation)
to purchase, and the Grantee shall have the obligation to sell to BPO, the
Common Stock acquired by the Grantee by the exercise of the Option.
8.
No Rights of Stockholders.
Neither
the Grantee nor any personal representative shall be, or shall have any of
the
rights and privileges of, a stockholder of BPO with respect to any shares of
Stock purchasable or issuable upon the exercise of the Option, in whole or
in
part, prior to the date of exercise of the Option.
9.
Non-Transferability of Option.
During
the Grantee's lifetime, the Option hereunder shall be exercisable only by the
Grantee or any guardian or legal representative of the Grantee, and the Option
shall not be transferable except, in case of the death of the Grantee, by will
or the laws of descent and distribution, nor shall the Option be subject to
attachment, execution or other similar process. In the event of (i) any attempt
by the Grantee to alienate, assign, pledge, hypothecate or otherwise dispose
of
the Option, except as provided for herein, or (ii) the levy of any attachment,
execution or similar process upon the rights or interest hereby conferred,
BPO
may terminate the Option by notice to the Grantee and it shall thereupon become
null and void.
10.
Employment Not Affected.
The
granting of the Option or its exercise shall not be construed as granting to
the
Grantee any right with respect to continuance of employment by the Employer.
Except as may otherwise be limited by a written agreement between the Employer
and the Grantee, the right of the Employer to terminate at will the Grantee's
employment with it at any time (whether by dismissal, discharge, retirement
or
otherwise) is specifically reserved by BPO, as the Employer or on behalf of
the
Employer (whichever the case may be), and acknowledged by the
Grantee.
11.
Amendment of Option.
The
Option may be amended by the Board or the Committee at any time (i) if the
Board
or the Committee determines, in its sole discretion, that amendment is necessary
or advisable in the light of any addition to or change in the Internal Revenue
Code of 1986, as amended, or in the regulations issued thereunder, or any
federal or state securities law or other law or regulation, which change occurs
after the Date of Grant and by its terms applies to the Option; or (ii) other
than in the circumstances described in clause (i), with the consent of the
Grantee.
-3-
12.
Notice.
Any
notice to BPO provided for in this instrument shall be addressed to it in care
of its Secretary at its executive offices at: c/o Cornman & ▇▇▇▇▇▇,
attention: ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇, or such other address per written notice by the BPO, and any notice
to
the Grantee shall be addressed to the Grantee at the current address shown
on
the payroll records of the Employer. Any notice shall be deemed to be duly
given
if and when properly addressed and posted by registered or certified mail,
postage prepaid.
13.
Incorporation of Plan by Reference; Amendment.
The
Option is granted pursuant to the terms of the Plan, the terms of which are
incorporated herein by reference, and the Option shall in all respects be
interpreted in accordance with the Plan. The Committee shall interpret and
construe the Plan and this instrument, and its interpretations and
determinations shall be conclusive and binding on the parties hereto and any
other person claiming an interest hereunder, with respect to any issue arising
hereunder or thereunder. This Option may be amended after written notice to
Grantee to the extent necessary to comply with United States Internal Revenue
Code Section 409A and any regulations relating thereto as determined by BPO
from
time to time
14.
Governing Law.
The
validity, construction, interpretation and effect of this instrument shall
exclusively be governed by and determined in accordance with the law of the
State of Delaware, except to the extent preempted by federal law, which shall
to
the extent govern.
IN
WITNESS WHEREOF, BPO has caused its duly authorized officers to execute and
attest this Grant of Stock Option, and to apply the corporate seal hereto,
and
the Grantee has placed his or her signature hereon, effective as of the Date
of
Grant.
| BPO Management Services, Inc. | ||
|
Attest:
|
|
|
| By: | ||
|
Secretary |
President |
|
| ACCEPTED AND AGREED TO; | ||
| |
|
|
| Date: | By: | |
Grantee |
||
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