[Mission West Properties Logo] GRANT PURSUANT TO
1997 STOCK OPTION PLAN
________________________, OPTIONEE:
Mission West Properties, a California corporation (the "Company"), hereby grants
to Optionee, an option ("Option") to purchase a total of __________________
(_______) shares of Common Stock ("Shares") of the Company, at the price set
forth herein, and in all respects subject to the terms, definitions and
provisions of the Company's 1997 Stock Option Plan ("Plan"), which is
incorporated herein by this reference.
THE DETAILS OF YOUR OPTION ARE AS FOLLOWS:
1. NATURE OF THE OPTION
The Option is intended to be an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that the Option, or any portion thereof, does not qualify as an
incentive stock option under the Code because the aggregate fair market value
(determined at the grant date) of the Shares for which the Option or portion
thereof first becomes exercisable hereunder will, when added to the aggregate
fair market value (determined as of the respective date or dates of grant) of
the Shares or other securities for which the Option or one or more other
incentive stock options granted to the Optionee prior to the grant date (whether
under the Plan or any other option plan of the Corporation or any Parent or
Subsidiary) first becomes exercisable during the calendar year, exceed $100,000
in the aggregate, the Option or portion thereof shall constitute an incentive
stock option under the Plan in such calendar year only to the extent of such
$100,000 limitation. To the extent that the fair market value of the Shares for
which the Option first becomes exercisable in any calendar year exceeds such
$100,000 limitation, the Option may nevertheless be exercised for those excess
Shares in such calendar year as a "Nonstatutory Stock Option", as defined in
Section 2.o of the Plan.
2. OPTION PRICE
The Option Price is $____________ for each Share.
3 VESTING AND EXERCISE OF OPTION
The Option shall vest and become exercisable during its term in accordance with
the provisions of Section 9 of the Plan as follows:
a. VESTING AND RIGHT TO EXERCISE
i. The Option shall vest as follows, subject to the Optionee's
Continuous Employment with the Company:
NUMBER OF SHARES DATE OF EARLIEST EXERCISE
(INSTALLMENT) (VESTING)
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Subject to the provisions of subparagraphs ii and iii below, the
Optionee can only exercise the portion of the Option that is
vested, until the expiration of the Option term.
ii. In the event of the Optionee's death, disability or other
termination of employment, the exercisability of the Option shall
be governed by Sections 9.d, e and f of the Plan.
iii. The Option may not be exercised for fractional shares or
for less than ten (10) Shares
b. METHOD OF EXERCISE
In order to exercise any portion of this Option, the Optionee shall
notify the Company in writing of the election to exercise the Option,
the number of shares in respect of which the Option is being exercised
by executing and delivering the Notice of Exercise of Stock Option in
the form attached hereto to the Secretary of the Company. The
certificate or certificates representing Shares as to which this
Option has been exercised shall be registered in the name of the
Optionee.
b. RESTRICTIONS ON EXERCISE
This Option may not be exercised if the issuance of the Shares upon
such exercise or the method of payment of consideration for such
shares would constitute a violation of any applicable Federal or state
securities law or other law or regulation. Furthermore, the method
and manner of payment of the Option Price will be subject to the rules
under Part 207 of Title 12 of the Code of Federal Regulations
("Regulation G") as promulgated by the Federal Reserve Board if such
rules apply to the Company at the date of exercise. As a condition to
the exercise of this Option, the Company may require the Optionee to
make any representation or warranty to the Company at the time of
exercise of this Option as in the opinion of legal counsel for the
Company may be required by any applicable law or regulation, including
the execution and delivery of an appropriate representation statement.
Accordingly, the stock certificates for the Shares issued upon
exercise of this Option may bear appropriate legends restricting
transfer.
4. NON-TRANSFERABILITY OF OPTION
This Option may be exercised during the lifetime of the Optionee only by the
Optionee and, subject to the provisions of Sections 9.f and 10 of the Plan, may
not be transferred in any manner other than by will or by the laws of descent
and distribution. The terms of this Option shall be binding upon the executors,
administrators, heirs and successors of the Optionee.
5. METHOD OF PAYMENT
Payment of the exercise price shall be by any of the following, or a combination
thereof, at the election of the Optionee:
a. cash;
b. certified or bank cashier's check;
c. in the event there exists a public market for the Company's Common
Stock on the date of exercise, by delivery of a sell order to a broker for
the shares being purchased and an agreement to pay (or have the broker
remit payment for) the purchase price of the shares being purchased on or
before the settlement date for the sale of such shares to the broker; or
e. in the event there exists a public market for the Company's Common
Stock on the date of exercise, by surrender of shares of the Company's
Common Stock, provided that if such shares were acquired upon exercise of
an incentive stock option, the Optionee must have first satisfied the
holding period requirements under Section 422(a)(1) of the Code. In this
case payment shall be made as follows:
i. Optionee shall deliver to the Secretary of the Company a written
notice which shall set forth the portion of the purchase price the
Optionee wishes to pay with Common Stock, and the number of shares of
such Common Stock the Optionee intends to surrender pursuant to the
exercise of this Option, which shall be determined by dividing the
aforementioned portion of the purchase price by the average of the
last reported bid and asked prices per share of Common Stock of the
Company, as reported in THE WALL STREET JOURNAL, for the day on which
the notice of exercise is sent or delivered;
ii. Fractional shares shall be disregarded and the Optionee shall pay
in cash an amount equal to such fraction multiplied by the price
determined under subparagraph i above;
iii. The written notice shall be accompanied by a duly endorsed blank
stock power with respect to the number of Shares set forth in the
notice, and the certificate(s)
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representing said Shares shall be delivered to the Company at its
principal offices within three (3) working days from the date of the
notice of exercise;
iv. The Optionee hereby authorizes and directs the Secretary of the
Company to transfer so many of the Shares represented by such
certificate(s) as are necessary to pay the purchase price in
accordance with the provisions herein;
v. If any such transfer of Shares requires the consent of the
California Commissioner of Corporations or of some other agency under
the securities laws of any other state, or an opinion of counsel for
the Company or Optionee that such transfer may be effected under
applicable Federal and state securities laws, the time periods
specified herein shall be extended for such periods as the necessary
request for consent to transfer is pending before said Commissioner or
other agency, or until counsel renders such an opinion, as the case
may be. All parties agree to cooperate in making such request for
transfer, or in obtaining such opinion of counsel, and no transfer
shall be effected without such consent or opinion if required by law;
and
vi. Notwithstanding any other provision herein, the Optionee shall
only be permitted to pay the purchase price with Shares of the
Company's Common Stock owned by him as of the exercise date in the
manner and within the time periods allowed under 17 CFR Section
240.16b-3 promulgated under the Securities Exchange Act of 1934, as
amended ("Exchange Act"), as such regulation is presently constituted,
as it is amended from time to time, and as it is interpreted now or
hereafter by the Securities and Exchange Commission.
6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
The number of Shares covered by this Option shall be adjusted in accordance with
the provisions of Section 11 of the Plan in the event of changes in the
capitalization or organization of the Company, or if the Company is a party to a
merger or other corporate reorganization.
7. TERM OF OPTION
This Option may not be exercised more than six (6) years from the date of grant
of this Option, as set forth below, and may be exercised during such term only
in accordance with the Plan and the terms of this Option.
8. NOT EMPLOYMENT CONTRACT
Nothing in this Agreement or in the Plan shall confer upon the Optionee any
right to continue in the employ of the Company or shall interfere with or
restrict in any way the rights of the Company, which are hereby expressly
reserved, to discharge the Optionee at any time for any reason whatsoever, with
or without cause, subject to the provisions of applicable law. This is not an
employment contract.
9. INCOME TAX WITHHOLDING
a. The Optionee authorizes the Company to withhold in accordance with
applicable law from any compensation payable to him or her any taxes required to
be withheld by Federal, state or local laws as a result of the exercise of this
Option. The Optionee agrees to notify the Company immediately in the event of
any disqualifying disposition (within the meaning of Section 421(b) of the Code)
of the shares acquired upon exercise of an incentive stock option. Furthermore,
in the event of any determination that the Company has failed to withhold a sum
sufficient to pay all withholding taxes due in connection with the exercise of
this Option, or a disqualifying disposition of the shares acquired upon exercise
of an incentive stock option, the Optionee agrees to pay the Company the amount
of such deficiency in cash within five (5) days after receiving a written demand
from the Company to do so, whether or not Optionee is an employee of the Company
at that time.
b. At such time as the Optionee is required to pay to the Company an amount
with respect to tax withholding obligations as set forth in subparagraph a, the
Optionee may elect prior to the date the amount of such withholding tax is
determined to make such payment, or such increased payment as the Optionee
elects to make up to the maximum federal, state and local marginal tax rates
(including any related FICA obligation) applicable to the Optionee and the
particular transaction in accordance with the provisions of Section 9.g of the
Plan.
c. Any adverse consequences incurred by an Optionee with respect to the use of
shares of Common Stock to pay any part of the Option Price or of any tax in
connection with the exercise of an Option, including, without limitation, any
adverse tax consequences arising as a result of a disqualifying disposition
within the meaning of Section 422 of the Code, shall be the sole responsibility
of the Optionee.
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Dated the _____ day of ________________________.
MISSION WEST PROPERTIES
By
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Duly authorized on behalf of the Board of Directors
The Optionee acknowledges receipt of copies of the Plan, the Restricted Stock
Purchase Agreement and the exhibits referred to therein, and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. The Optionee
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Plan.
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Optionee
CONSENT OF SPOUSE
I, _________________________, spouse of the Optionee who executed the foregoing
Agreement, hereby agree that my spouse's interest in the shares of Common Stock
subject to said Agreement shall be irrevocably bound by the Agreement's terms.
I further agree that my community property interest in such shares, if any,
shall similarly be bound by said Agreement and that such consent is binding upon
my executors, administrators, heirs and assigns. I agree to execute and deliver
such documents as may be necessary to carry out the intent of said Agreement and
this consent.
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Spouse
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