Exhibit No. 4
Form 10-SB
Cluster Technology Corp.
CLUSTER TECHNOLOGY CORP.
STOCK OPTION AGREEMENT
Option for the Purchase of 125,000
Shares of Common Stock
Par Value $0.01
THE HOLDER OF THIS OPTION, BY ACCEPTANCE HEREOF, BOTH WITH
RESPECT TO THE OPTION AND COMMON STOCK ISSUABLE UPON CONVERSION
OF THE OPTION, AGREES AND ACKNOWLEDGES THAT THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED OR SOLD
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR OTHER
COMPLIANCE UNDER THE SECURITIES ACT OR THE LAWS OF THE APPLICABLE
STATE OR A "NO ACTION" OR INTERPRETIVE LETTER FROM THE SECURITIES
AND EXCHANGE COMMISSION OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE ISSUER, AND ITS COUNSEL, TO THE EFFECT THAT
THE SALE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT AND SUCH STATE STATUTES.
This is to certify that, for value received,
___________________ (the "Optionee") is entitled to purchase from
CLUSTER TECHNOLOGY CORP. (the "Company"), on the terms and
conditions hereinafter set forth, all or any part of 125,000
shares ("Option Shares") of the Company's common stock, par value
$0.01 (the "Common Stock"), at the purchase price of $0.50 per
share ("Option Price"). Upon exercise of this option in whole or
in part, a certificate for the Option Shares so purchased shall
be issued and delivered to the Optionee, upon presentation and
surrender to the Company of the duly executed form of purchase
attached hereto accompanied by payment of the purchase price of
each share purchased either in cash or by certified or bank
cashier's check payable to the order of the Company. If less than
the total option is exercised, a new option of similar tenor
shall be issued for the unexercised portion of the options
represented by this Agreement. Upon such exercise, the Company
shall issue and cause to be delivered with all reasonable
dispatch (and 'in any event within 10 business days of such
exercise) to or upon the written order of the Optionee at its
address, and in the name of the Optionee, a certificate or
certificates for the number of full Option Shares issuable upon
the exercise together with such other property (including cash)
and securities as may then be deliverable upon such exercise.
Such certificate or certificates shall be deemed to have been
issued and the Optionee shall be deemed to have become a holder
of record of such Option Shares as of the date of the surrender
of the purchase form. This Agreement constitutes an "Award
Agreement" as defined in the 1996 Long Term Equity Incentive Plan
of the Company ("Plan"), and is intended to qualify as an
incentive option under section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), to the fullest extent permitted
under section 422 of the Code. A copy of the Plan will be made
available to the Optionee on request. Except as otherwise
provided herein, the Options shall be governed by the terms and
conditions set forth in the Plan.
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This option is granted subject to the following further terms and
conditions:
1 . These options shall vest immediately upon issuance and
delivery of this Agreement to the Optionee, and may be exercised
at any time, in whole or in part, during the five-year period
following the date of this Agreement, subject to continued
engagement as a consultant or employment by the Company or any of
its subsidiaries. In the event such engagement or employment of
the Optionee by the Company or any of its subsidiaries terminates
for any reason, the purchase rights represented by this Agreement
shall expire 30 days following the date employment of the
Optionee terminates; provided, that in the event such
2. The Optionee acknowledges that the shares subject to this
option have not and will not be registered as of the date of
exercise of this option under the Securities Act or the
securities laws of any state. The Optionee acknowledges that this
option and the shares issuable on exercise of the option, when
and if issued, are and will be "restricted securities" as defined
in Rule 144 promulgated by the Securities and Exchange Commission
and must be held indefinitely unless subsequently registered
under the Securities Act and any other applicable state
registration requirements. The Company is under no obligation to
register the securities under the Securities Act or under
applicable state statutes. In the absence of such a registration
or an available exemption from registration, sale of the Option
Shares may be practicably impossible. The Optionee shall confirm
to the Company the representations set forth above in connection
with the exercise of all or any portion of this option.
3. The Company, during the term of this Agreement, will use
its best efforts to seek to obtain from the appropriate
regulatory agencies any requisite authorization in order to issue
and sell such number of shares of its Common Stock as shall be
sufficient to satisfy the requirements of the Agreement. The
inability of the Company to obtain from any such regulatory
agency having jurisdiction thereof the authorization deemed by
the Company's counsel to be necessary to the lawful issuance and
sale of any share of its stock hereunder shall relieve the
Company of any liability in respect of the non-issuance or sale
of such stock as to which such requisite authorization shall not
have been obtained. In the event that such stock cannot be
issued, the Company will renegotiate this Agreement with the
Optionee.
4. The number of Option Shares purchasable upon the exercise
of this option and the Option Price per share shall be subject to
adjustment from time to time subject to the following terms. If
the outstanding shares of Common Stock of the Company are
increased, decreased, changed into or exchanged for a different
number or kind of shares of the Company through reorganization,
recapitalization, reclassification, stock dividend, stock split
or reverse stock split, the Company or its successors and assigns
shall make an appropriate and proportionate adjustment in the
number or kind of shares, and the per-share Option Price thereof,
which may be issued to the Optionee under this Agreement upon
exercise of the options granted under this Agreement. The
purchase rights represented by this option shall not be
exercisable with respect to a fraction of a share of Common
Stock. Any fractional shares of Common Stock arising from the
dilution or other adjustment in the number of shares subject to
this option shall rounded up to the nearest whole share.
5. The Company covenants and agrees that all Option Shares
which may be delivered upon the exercise of this option will,
upon delivery, be free from all taxes, liens, and charges with
respect to the purchase thereof, provided, that the Company shall
have no obligation with respect to any income tax liability of
the Optionee and the Company may, in its discretion, withhold
such amount or require the Optionee to make such provision of
funds or other consideration as the Company deems necessary to
satisfy any income tax withholding obligation under federal or
state law.
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6. The Company agrees at all times to reserve or hold
available a sufficient number of shares of Common Stock to cover
the number of Option Shares issuable upon the exercise of this
and all other options of like tenor then outstanding.
7. This option shall not entitle the holder hereof to any
voting rights or other rights as a shareholder of the Company, or
to any other rights whatsoever, except the rights herein
expressed, and no dividends shall be payable or accrue in respect
of this option or the interest represented hereby or the Option
Shares purchasable hereunder until or unless, and except to the
extent that, this option shall be exercised..
8. The holder of this option, by acceptance hereof,
acknowledges and agrees that this option is not transferable by
the Optionee except by will or the laws of descent or
distribution. The Company may deem and treat the registered owner
of this option as the absolute owner hereof for all purposes and
shall not be affected by any notice to the contrary.
9. In the event that any provision of this Agreement is
found to be invalid or otherwise unenforceable under any
applicable law, such invalidity or unenforceability shall not be
construed as rendering any other provisions contained herein
invalid or unenforceable, and all such other provisions shall be
given full force and effect to the same extent as though the
invalid or unenforceable provision were not contained herein.
10. This Agreement shall be governed by and construed in
accordance with the internal laws of the state of Delaware,
without regard to the principles of conflicts of law thereof.
11. Except as otherwise provided herein, this Agreement
shall be binding on and inure to the benefit of the Company and
the person to whom an option is granted hereunder, and such
person's heirs, executors, administrators, legatees, personal
representatives, assignees, and transferees.
IN WITNESS WHEREOF, the Company has caused this option to be
executed by the signature of its duly authorized officer,
effective this 1 st day of October, 1999.
CLUSTER TECHNOLOGY CORP.
BY
Duly Authorized Officer
The undersigned Optionee hereby acknowledges receipt of a
copy of the foregoing option and acknowledges and agrees to the
terms and conditions set forth in the option.
By: OPTIONEE
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FORM OF PURCHASE
(to be signed only upon exercise of Option)
TO: CLUSTER TECHNOLOGY CORP.
The Optionee, holder of the attached option, hereby
irrevocable elects to exercise the purchase rights represented by
the option for, and to purchase thereunder,
_______________________________
shares of common stock of Cluster Technology Corp., and herewith
makes payment therefor, and requests that the certificate(s) for
such shares be delivered to the Optionee at:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
The Optionee represents that the Common Stock is being
acquired without a view to, or for, resale in connection with any
distribution thereof without registration or other compliance
under the Securities Act of 1933, as amended (the "Securities
Act"), and applicable state statutes, and that the Optionee has
no direct or indirect participation in any such undertaking or in
the underwriting of such an undertaking. The Optionee understands
that the Common Stock has not been registered, but is being
acquired by reason of a specific exemption under the Securities
Act as well as under certain state statutes for transactions by
an issuer not involving any public offering and that any
disposition of the Common Stock may, under certain circumstances,
be inconsistent with these exemptions. The Optionee acknowledges
that the Common Stock must be held and may not be sold,
transferred, or otherwise disposed of for value unless
subsequently registered under the Securities Act or an exemption
from such registration is available. The Company is under no
obligation to register the Common Stock under the Securities Act.
The certificates representing the Common Stock will bear a legend
restricting transfer, except in compliance with applicable
federal and state securities statutes.
The Optionee agrees and acknowledges that this purported
exercise of the option is conditioned on, and subject to, any
compliance with requirements of applicable federal and state
securities laws deemed necessary by the Company.
DATED this ______ day of _____________________, ______.
Signature
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