FORM OF STOCK OPTION AGREEMENT
(Under Provisions of the Malleable Technologies, Inc.
1998 Stock Incentive Plan)
STOCK OPTION AGREEMENT
----------------------
1. Grant of Option. Malleable Technologies, Inc., a California corporation (the
"Company"), hereby grants to the Optionee named in the Notice of Stock Option
Grant (the "Optionee"), an option (the "Option") to purchase the total number of
shares of Common Stock (the "Shares") set forth in the Notice of Stock Option
Grant (the "Notice"), at the exercise price per share set forth in the Notice
(the "Exercise Price") subject to the terms, definitions and provisions of the
Notice and the Company's 1998 Stock Incentive Plan (the "Plan") adopted by the
Company, which are incorporated herein by reference. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Option Agreement.
If designated in the Notice of Stock Option Grant as an Incentive Stock
Option, the Option is intended to qualify as an Incentive Stock Option as
defined in Section 422 of the Code. Nevertheless, to the extent that it exceeds
the $100,000 rule of Section 422(d) of the Code, the Option shall be treated as
a Non-Qualified Stock Option.
2. Exercise of Option.
(a) Right to Exercise. The Option shall be exercisable during its
term in accordance with the Vesting Schedule set out in the
Notice and with the applicable provisions of the Plan and this
Option Agreement. The Option shall be subject to the provisions
of Section 11(b) of the Plan relating to the exercisability or
termination of the Option in the event of a Corporate
Transaction. No partial exercise of the Option may be for less
than the lesser of five percent (5%) of the total number of
Shares subject to the Option or the remaining number of Shares
subject to the Option. In no event shall the Company issue
fractional Shares.
(b) Method of Exercise. The Option shall be exercisable only by
delivery of an Exercise Notice (attached as Exhibit A) which
shall state the election to exercise the Option, the whole
number of Shares in respect of which the Option is being
exercised, and such other provisions as may be required by the
Administrator. Such Exercise Notice shall be signed by the
Optionee and shall be delivered in person or by certified mail
to the Secretary of the Company accompanied by payment of the
Exercise Price. The Option shall be deemed to be exercised upon
receipt by the Company of such written notice accompanied by the
Exercise Price.
No Shares will be issued pursuant to the exercise of the Option
unless such issuance and such exercise shall comply with all
Applicable Laws. Assuming such compliance, for income tax
purposes, the Shares shall be considered transferred to the
Optionee on the date on which the Option is exercised with
respect to such Shares.
(c) Taxes. No Shares will be issued to the Optionee or other person
pursuant to the exercise of the Option until the Optionee or
other person has made arrangements acceptable to the
Administrator for the satisfaction of foreign, federal, state
and local income and employment tax withholding obligations.
3. Optionee's Representations. In the event the Shares purchasable
pursuant to the exercise of the Option have not been registered under the
Securities Act of 1933, as amended, at the time the Option is exercised, the
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion the Option, deliver to the Company his or her Investment
Representation Statement in the form attached hereto as Exhibit B.
4. 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; provided,
however, that such exercise method does not then violate an Applicable Law:
(a) cash;
(b) check;
(c) if the exercise occurs on or after the Registration Date,
surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Administrator may
require (including withholding of Shares otherwise deliverable
upon exercise of the Option) which have a Fair Market Value on
the date of surrender or attestation equal to the aggregate
Exercise Price of the Shares as to which the Option is being
exercised (but only to the extent that such exercise of the
Option would not result in an accounting compensation charge
with respect to the Shares used to pay the exercise price);
(d) if the exercise occurs on or after the Registration Date,
delivery of a properly executed Exercise Notice together with
such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option
and delivery to the Company of the sale or loan proceeds
required to pay the Exercise Price; or
(e) provided that the aggregate Exercise Price for the number of
Shares being purchased exceeds _________ thousand dollars
($___,000), payment pursuant to a promissory note as described
below.
(i) The promissory note shall have a term of _____ (__) years
with principal and interest payable in _______ (__) equal
annual installments;
(ii) The promissory note shall bear interest at the minimum rate
required by the federal tax laws to avoid the imputation of
interest income to the Company and compensation income to
the Optionee;
(iii)The Optionee shall be personally liable for payment of the
promissory and the promissory note shall be secured by the
Shares purchased upon delivery of the promissory note in a
manner satisfactory to the Administrator with such
documentation as the Administrator may request; and
(iv) The promissory note shall become due and payable upon the
occurrence of any or all of the following events: (A) the
sale or transfer of the Shares purchased with the promissory
note; (B) termination of the Optionee's Continuous Status as
an Employee, Director or Consultant for any reason other
than death or disability; or (C) the first anniversary of
the termination of the Optionee's Continuous Status as an
Employee, Director or Consultant due to death or disability.
5. Restrictions on Exercise. The Option may not be exercised if the issuance
of the Shares subject to the Option upon such exercise would constitute a
violation of any Applicable Laws.
6. Termination of Relationship. In the event the Optionee's Continuous Status
as an Employee, Director or Consultant terminates, the Optionee may, to the
extent otherwise so entitled at the date of such termination (the "Termination
Date"), exercise the Option during the Termination Period set out in the Notice.
Except as provided in Sections 7 and 8, below, to the extent that the Optionee
was not entitled to exercise the Option on the Termination Date, or if the
Optionee does not exercise the Option within the Termination Period, the Option
shall terminate.
7. Disability of Optionee. In the event the Optionee's Continuous Status as
an Employee, Director or Consultant terminates as a result of his or her
disability, the Optionee may, but only within twelve (12) months from the
Termination Date (and in no event later than the Term/Expiration Date), exercise
the Option to the extent otherwise entitled to exercise it on the Termination
Date; provided, however, that if such disability is not a "disability" as such
term is defined in Section 22(e)(3) of the Code and the Option is an Incentive
Stock Option, such Incentive Stock Option shall cease to be treated as an
Incentive Stock Option and shall be treated as a Non-Qualified Stock Option on
the day three (3) months and one day following the Termination Date. To the
extent that the Optionee was not entitled to exercise the Option on the
Termination Date, or if the Optionee does not exercise the Option to the extent
so entitled within the time specified herein, the Option shall terminate.
8. Death of Optionee. In the event of the Optionee's death, the Option may be
exercised at any time within twelve (12) months following the date of death (and
in no event later than the Expiration Date), by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent the Optionee could exercise the Option at the date of
death. To the extent that the Optionee was not entitled to exercise the Option
on the date of death, or if the Option is not exercised to the extent so
entitled within the time specified herein, the Option shall terminate.
9. Non-Transferability of Option. The Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of the Optionee only by the Optionee. The terms
of the Option shall be binding upon the executors, administrators, heirs and
successors of the Optionee.
10. Term of Option. The Option may be exercised no later than the Expiration
Date set forth in the Notice.
11. Company's Right of First Refusal.
(a) Transfer Notice. Neither the Optionee nor a transferee (either
being sometimes referred to herein as the "Holder") shall sell,
hypothecate, encumber or otherwise transfer any Shares or any
right or interest therein without first obtaining the prior
written consent of the Company. In the event the Holder desires
to accept a bona fide third-party offer for any or all of the
Shares, the Holder shall provide the Company with written notice
(the "Transfer Notice") of:
(i) The Holder's intention to transfer;
(ii) The name of the proposed transferee;
(iii) The number of Shares to be transferred; and
(iv) The proposed transfer price or value and terms thereof.
(b) First Refusal Exercise Notice. Within 45 days after receipt of
the Transfer Notice (the "Option Period") the Company and/or its
assigns shall have the right to purchase (the "Right of First
Refusal") all but not less than all, of the Shares which are
described in the Transfer Notice (the "Offered Shares") at the
per share price or value and in accordance with the terms stated
in the Transfer Notice, which Right of First Refusal shall be
exercised by written notice (the "First Refusal Exercise
Notice") to the Holder setting forth the number of Offered
Shares the Company and/or its assigns elects to purchase,
provided that the number equals all of the Offered Shares.
(c) Payment Terms. The Company shall consummate the purchase of the
Offered Shares on the terms set forth in the Transfer Notice
within 15 days after delivery of the First Refusal Exercise
Notice; provided, however, that in the event the Transfer Notice
provides for the payment for the Offered Shares other than in
cash, the Company and/or its assigns shall have the right to pay
for the Offered Shares by the discounted cash equivalent of the
consideration described in the Transfer Notice as reasonably
determined by the Administrator. Upon payment for the Offered
Shares to the Holder or into escrow for the benefit of the
Holder, the Company or its assigns shall become the legal and
beneficial owner of the Offered Shares and all rights and
interest therein or related thereto, and the Company shall have
the right to transfer the Offered Shares to its own name or its
assigns without the further action by the Holder.
(d) Assignment. Whenever the Company shall have the right to
purchase Shares under this Right of First Refusal, the Company
may designate and assign one or more employees, officers,
directors or shareholders of the Company or other persons or
organizations, to exercise all or a part of the Company's Right
of First Refusal.
(e) Non-Exercise. If the Company and/or its assigns do not
collectively elect to exercise the Right of First Refusal within
the specified 45-day period or such earlier time if the Company
and/or its assigns notifies the Holder that it will not exercise
the Right of First Refusal, then the Holder may transfer the
Shares upon the terms and conditions stated in the Transfer
Notice, provided that:
(i) The transfer is made within 120 days of the date of the
Transfer Notice; and
(ii) The transferee agrees in writing that such Shares shall be
held subject to the provisions of this Right of First
Refusal.
(f) Expiration of Transfer Period. Following such 120-day period, no
transfer of the Offered Shares and no change in the terms of the
transfer as stated in the Transfer Notice (including the name of
the proposed transferee) shall be permitted without a new
written Transfer Notice prepared and submitted in accordance
with the requirements of this Right of First Refusal.
(g) Exception for Certain Family Transfers. Anything to the contrary
contained in this section notwithstanding, the transfer of any
or all of the Shares during the Optionee's lifetime or on the
Optionee's death by will or intestacy to the Optionee's
Immediate Family or a trust for the benefit of the Optionee or
the Optionee's Immediate Family shall be exempt from the
provisions of this Right of First Refusal. "Immediate Family" as
used herein shall mean spouse, domestic partner (as determined
by the Administrator), child, lineal descendant or antecedent,
father, mother, brother or sister and the lineal descendants of
such individuals. In such case, the transferee or other
recipient shall receive and hold the Shares so transferred
subject to the provisions of this Right of First Refusal, and
there shall be no further transfer of such Shares except in
accordance with the terms of this Right of First Refusal.
(h) Termination of Right of First Refusal. The provisions of this
Right of First Refusal shall terminate as to all Shares upon the
Registration Date.
(i) Additional Shares or Substituted Securities. In the event of any
stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the
outstanding Common Stock as a class effected without the
Company's receipt of consideration, any new, substituted or
additional securities or other property which is by reason of
any such transaction distributed with respect to the Shares
shall be immediately subject to the Right of First Refusal, but
only to the extent the Shares are at the time covered by such
right.
(j) Corporate Transaction. Immediately prior to the consummation of
a Corporate Transaction, the Right of First Refusal shall
automatically lapse in its entirety, except to the extent the
Right of First Refusal is to be assigned to the successor
corporation (or its parent company) in connection with such
Corporate Transaction, the right shall apply to the new capital
stock or other property received in exchange for the Shares in
consummation of the Corporate Transaction, but only to the
extent the Shares are at the time covered by such right.
12. [Intentionally Omitted.]
13. Stop-Transfer Notices. In order to ensure compliance with the restrictions
on transfer referred to in the legends placed upon certificates evidencing
ownership of the Shares, the Company may issue appropriate "stop transfer"
instructions to its transfer agent, if any, and, if the Company transfers its
own securities, it may make appropriate notations to the same effect in its own
records.
14. Refusal to Transfer. The Company shall not be required (i) to transfer on
its books any Shares that have been sold or otherwise transferred in violation
of any of the provisions of this Option Agreement or (ii) to treat as owner of
such Shares or to accord the right to vote or pay dividends to any purchaser or
other transferee to whom such Shares shall have been so transferred.
15. Tax Consequences. Set forth below is a brief summary as of the date of
this Option Agreement of some of the federal tax consequences of exercise of the
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of Incentive Stock Option. If the Option qualifies as
an Incentive Stock Option, there will be no regular federal
income tax liability upon the exercise of the Option, although
the excess, if any, of the Fair Market Value of the Shares on
the date of exercise over the Exercise Price will be treated as
an adjustment to the alternative minimum tax for federal tax
purposes and may subject the Optionee to the alternative minimum
tax in the year of exercise.
(b) Exercise of Incentive Stock Option Following Disability. If the
Optionee's Continuous Status as an Employee, Director or
Consultant terminates as a result of disability that is not
total and permanent disability as defined in Section 22(e)(3) of
the Code, to the extent permitted on the date of termination,
the Optionee must exercise an Incentive Stock Option within
three (3) months of such termination for the Incentive Stock
Option to be qualified as an Incentive Stock Option.
(c) Exercise of Non-Qualified Stock Option. There may be a regular
federal income tax liability upon the exercise of a
Non-Qualified Stock Option. The Optionee will be treated as
having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market Value
of the Shares on the date of exercise over the Exercise Price.
If the Optionee is an Employee or a former Employee, the Company
will be required to withhold from the Optionee's compensation or
collect from the Optionee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to
honor the exercise and refuse to deliver Shares if such
withholding amounts are not delivered at the time of exercise.
(d) Disposition of Shares. In the case of a Non-Qualified Stock
Option, if Shares are held for at least one year, any gain
realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes and
subject to tax at a maximum rate of 28%. For Shares held more
than 18 months, the maximum rate falls to 20%. In the case of an
Incentive Stock Option, if Shares transferred pursuant to the
Option are held for at least one year after receipt of the
Shares and are disposed of at least two years after the Date of
Grant, any gain realized on disposition of the Shares also will
be treated as long-term capital gain for federal income tax
purposes and subject to the same tax rates and holding periods
that apply to Shares acquired upon exercise of a Non-Qualified
Stock Option. If Shares purchased under an Incentive Stock
Option are disposed of within such one-year or two-year periods,
any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the
extent of the difference between the Exercise Price and the
lesser of (i) the Fair Market Value of the Shares on the date of
exercise, or (ii) the sale price of the Shares.
16. Lock-Up Agreement.
(a) Agreement. The Optionee, if requested by the Company and the
lead underwriter of any public offering of the Common Stock or
other securities of the Company (the "Lead Underwriter"), hereby
irrevocably agrees not to sell, contract to sell, grant any
option to purchase, transfer the economic risk of ownership in,
make any short sale of, pledge or otherwise transfer or dispose
of any interest in any Common Stock or any securities
convertible into or exchangeable or exercisable for or any other
rights to purchase or acquire Common Stock (except Common Stock
included in such public offering or acquired on the public
market after such offering) during the 180-day period following
the effective date of a registration statement of the Company
filed under the Securities Act of 1933, as amended, or such
shorter period of time as the Lead Underwriter shall specify.
The Optionee further agrees to sign such documents as may be
requested by the Lead Underwriter to effect the foregoing and
agrees that the Company may impose stop-transfer instructions
with respect to such Common Stock subject until the end of such
period. The Company and the Optionee acknowledge that each Lead
Underwriter of a public offering of the Company's stock, during
the period of such offering and for the 180-day period
thereafter, is an intended beneficiary of this Section 16.
(b) Permitted Transfers. Notwithstanding the foregoing, Section
16(a) shall not prohibit the Optionee from transferring any
shares of Common Stock or securities convertible into or
exchangeable or exercisable for the Company's Common Stock to
the extent such transfer is not otherwise prohibited by this
Option Agreement, either during the Optionee's lifetime or on
death by will or intestacy to the Optionee's immediate family or
to a trust the beneficiaries of which are exclusively the
Optionee and/or a member or members of the Optionee's immediate
family; provided, however, that prior to any such transfer, each
transferee shall execute an agreement pursuant to which each
transferee shall agree to receive and hold such securities
subject to the provisions of Section 16 hereof. For the purposes
of this subsection, the term "immediate family" shall mean
spouse, domestic partner (as determined by the Administrator),
child, lineal descendant or antecedent, father, mother, brother
or sister and the lineal descendants of such individuals.
(c) No Amendment Without Consent of Underwriter. During the period
from identification as a Lead Underwriter in connection with any
public offering of the Company's Common Stock until the earlier
of (i) the expiration of the lock-up period specified in Section
16(a) in connection with such offering or (ii) the abandonment
of such offering by the Company and the Lead Underwriter, the
provisions of this Section 16 may not be amended or waived
except with the consent of the Lead Underwriter.
17. Entire Agreement: Governing Law. The Notice of Stock Option Grant, the
Plan and this Option Agreement constitute the entire agreement of the parties
with respect to the subject matter hereof and supersede in their entirety all
prior undertakings and agreements of the Company and the Optionee with respect
to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. These agreements are governed by California law except for that body
of law pertaining to conflict of laws.
18 Headings. The captions used in the Notice of Stock Option Grant and this
Option Agreement are inserted for convenience and shall not be deemed a part of
the Option for construction or interpretation.
19. Interpretation. Any dispute regarding the interpretation of the Notice of
Stock Option Grant, the Plan, and this Option Agreement shall be submitted by
the Optionee or by the Company forthwith to the Board or the Administrator that
administers the Plan, which shall review such dispute at its next regular
meeting. The resolution of such dispute by the Board or the Administrator shall
be final and binding on all persons.
EXHIBIT A
MALLEABLE TECHNOLOGIES, INC. 1998 STOCK INCENTIVE PLAN
EXERCISE NOTICE
[COMPANY ADDRESS]
Attention: Secretary
1. Exercise of Option. Effective as of today, ______________,
________________ ________________, the undersigned (the "Optionee") hereby
elects to exercise the Optionee's option to purchase ___________ shares of the
Common Stock (the "Shares") of Malleable Technologies, Inc. (the "Company")
under and pursuant to the Company's 1998 Stock Incentive Plan (the "Plan") and
the [ ] Incentive [ ] Non-Qualified Stock Option Agreement and Notice of Stock
Option Grant dated ______________, ________ (the "Option Agreement").
2. Representations of the Optionee. The Optionee acknowledges that the
Optionee has received, read and understood the Notice of Stock Option Grant, the
Plan and the Option Agreement and agrees to abide by and be bound by their terms
and conditions.
3. Rights as Shareholder. Until the stock certificate evidencing such Shares
is issued (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Shares, notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such stock certificate promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the stock certificate is issued, except as
provided in Section 11(a) of the Plan.
The Optionee shall enjoy rights as a shareholder until such time as the
Optionee disposes of the Shares or the Company and/or its assignee(s) exercises
the Right of First Refusal or the Repurchase Right. Upon such exercise, the
Optionee shall have no further rights as a holder of the Shares so purchased
except the right to receive payment for the Shares so purchased in accordance
with the provisions of the Option Agreement, and the Optionee shall forthwith
cause the certificate(s) evidencing the Shares so purchased to be surrendered to
the Company for transfer or cancellation.
4. Delivery of Payment. The Optionee herewith delivers to the Company the
full Exercise Price for the Shares.
5. Tax Consultation. The Optionee understands that the Optionee may suffer
adverse tax consequences as a result of the Optionee's purchase or disposition
of the Shares. The Optionee represents that the Optionee has consulted with any
tax consultants the Optionee deems advisable in connection with the purchase or
disposition of the Shares and that the Optionee is not relying on the Company
for any tax advice.
6. Taxes. The Optionee agrees to satisfy all applicable federal, state and
local income and employment tax withholding obligations and herewith delivers to
the Company the full amount of such obligations or has made arrangements
acceptable to the Company to satisfy such obligations. In the case of an
Incentive Stock Option, the Optionee also agrees, as partial consideration for
the designation of the Option as an Incentive Stock Option, to notify the
Company in writing within thirty (30) days of any disposition of any shares
acquired by exercise of the Option if such disposition occurs within two (2)
years from the Grant Date or within one (1) year from the date the Shares were
transferred to the Optionee. If the Company is required to satisfy any federal,
state or local income or employment tax withholding obligations as a result of
such an early disposition, the Optionee agrees to satisfy the amount of such
withholding in a manner that the Administrator prescribes.
7. Restrictive Legends. The Optionee understands and agrees that the Company
shall cause the legends set forth below or legends substantially equivalent
thereto, to be placed upon any certificate(s) evidencing ownership of the Shares
together with any other legends that may be required by the Company or by state
or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF
THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST
REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH
IN THE OPTION AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL
HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT
THE PRINCIPAL OFFICE OF THE ISSUER SUCH TRANSFER
RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON
TRANSFEREES OF THESE SHARES.
8. Successors and Assigns. The Company may assign any of its rights under
this Exercise Notice to single or multiple assignees, and this agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Exercise Notice shall be
binding upon the Optionee and his or her heirs, executors, administrators,
successors and assigns.
9. Headings. The captions used in this Exercise Notice are inserted for
convenience and shall not be deemed a part of this agreement for construction or
interpretation.
10. Interpretation. Any dispute regarding the interpretation of this Exercise
Notice shall be submitted by the Optionee or by the Company forthwith to the
Company's Board of Directors or the Administrator that administers the Plan,
which shall review such dispute at its next regular meeting. The resolution of
such a dispute by the Board or Administrator shall be final and binding on all
persons.
11. Governing Law; Severability. This Exercise Notice shall be governed by and
construed in accordance with the laws of the State of California excluding that
body of law pertaining to conflicts of law. Should any provision of this
Exercise Notice be determined by a court of law to be illegal or unenforceable,
the other provisions shall nevertheless remain effective and shall remain
enforceable.
12. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.
13. Further Instruments. The parties agree to execute such further instruments
and to take such further action as may be reasonably necessary to carry out the
purposes and intent of this agreement.
14. Entire Agreement. The Notice of Stock Option Grant, the Plan and the
Option Agreement are incorporated herein by reference and together with this
Exercise Notice constitute the entire agreement of the parties with respect to
the subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and the Optionee with respect to the subject
matter hereof, and may not be modified adversely to the Optionee's interest
except by means of a writing signed by the Company and the Optionee.
Submitted by: Accepted by:
OPTIONEE: MALLEABLE TECHNOLOGIES, INC.
By: ___________________________
Its: __________________________
______________________
(Signature)
Address: Address:
[COMPANY ADDRESS]
EXHIBIT B
MALLEABLE TECHNOLOGIES, INC. 1998 STOCK INCENTIVE PLAN
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE:
COMPANY: MALLEABLE TECHNOLOGIES, INC.
SECURITY: COMMON STOCK
AMOUNT:
DATE:
In connection with the purchase of the above-listed
Securities, the undersigned Optionee represents to the Company the
following:
(a) Optionee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the
Securities. Optionee is acquiring these Securities for investment for
Optionee's own account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the
Securities Act of 1933, as amended (the "Securities Act").
(b) Optionee acknowledges and understands that the Securities constitute
"restricted securities" under the Securities Act and have not been
registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon among other things,
the bona fide nature of Optionee's investment intent as expressed
herein. In this connection, Optionee understands that, in the view of
the Securities and Exchange Commission, the statutory basis for such
exemption may be unavailable if Optionee's representation was
predicated solely upon a present intention to hold these Securities
for the minimum capital gains period specified under tax statutes, for
a deferred sale, for or until an increase or decrease in the market
price of the Securities, or for a period of one year or any other
fixed period in the future. Optionee further understands that the
Securities must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such
registration is available. Optionee further acknowledges and
understands that the Company is under no obligation to register the
Securities. Optionee understands that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the
transfer of the Securities unless they are registered or such
registration is not required in the opinion of counsel satisfactory to
the Company.
(c) Optionee is familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Securities Act, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non-public offering subject
to the satisfaction of certain conditions. Rule 701 provides that if
the issuer qualifies under Rule 701 at the time of the grant of the
Option to the Optionee, the exercise will be exempt from registration
under the Securities Act. In the event the Company becomes subject to
the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, ninety (90) days thereafter (or such longer
period as any market stand-off agreement may require) the Securities
exempt under Rule 701 may be resold, subject to the satisfaction of
certain of the conditions specified by Rule 144, including: (1) the
resale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934); and, in
the case of an affiliate, (2) the availability of certain public
information about the Company, (3) the amount of Securities being sold
during any three month period not exceeding the limitations specified
in Rule 144(e), and (4) the timely filing of a Form 144, if
applicable.
In the event that the Company does not qualify under Rule 701
at the time of grant of the Option, then the Securities may be resold
in certain limited circumstances subject to the provisions of Rule 144,
which requires the resale to occur not less than one year after the
later of the date the Securities were sold by the Company or the date
the Securities were sold by an affiliate of the Company, within the
meaning of Rule 144; and, in the case of acquisition of the Securities
by an affiliate, or by a non-affiliate who subsequently holds the
Securities less than two years, the satisfaction of the conditions set
forth in sections (1), (2), (3) and (4) of the paragraph immediately
above.
(d) Optionee further understands that in the event all of the applicable
requirements of Rule 701 or 144 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other
registration exemption will be required; and that, notwithstanding the
fact that Rules 144 and 701 are not exclusive, the Staff of the
Securities and Exchange Commission has expressed its opinion that
persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rules 144 or 701
will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and
that such persons and their respective brokers who participate in such
transactions do so at their own risk. Optionee understands that no
assurances can be given that any such other registration exemption
will be available in such event.
(e) Optionee represents that he is a resident of the state of
____________________.
Signature of Optionee:
_______________________
Date: ,
