EXHIBIT 4.1
TELEGEN CORPORATION
STOCK OPTION AGREEMENT
I. NOTICE OF STOCK OPTION GRANT
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[Optionee's Name and Address]
You have previously been granted an option to purchase Common Stock of
Telegen Corporation, a California corporation ("the Company"). By execution
hereof, the Company and you hereby agree that such option is subject to the
terms and conditions of this Option Agreement, as follows:
Grant Number _________________________
Original Date of Grant _________________________
Vesting Commencement Date _________________________
(if applicable)
Exercise Price per Share $________________________
Total Number of Shares Granted _________________________
Total Exercise Price $________________________
Type of Option: Nonstatutory Stock Option
Term/Expiration Date: _________________________
Vesting Schedule:
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This Option may be exercised, in whole or in part, in accordance with the
following schedule:
[TO BE FILLED IN FOR EACH OPTION GRANT.]
Termination Period:
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In no event shall this Option be exercised later than the Term/Expiration
Date as provided above.
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II. AGREEMENT
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1. Grant of Option. The Company hereby acknowledges the grant to the Optionee
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named in the Notice of Grant attached as Part I of this Agreement (the
"Optionee") of an option (the "Option") to purchase the number of Shares, as set
forth in the Notice of Grant, at the exercise price per share set forth in the
Notice of Grant (the "Exercise Price"), subject to the terms and conditions
contained herein.
2. Exercise of Option.
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(a) Right to Exercise. This Option is exercisable during its term in
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accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of this Option Agreement.
(b) Method of Exercise. This Option is exercisable by delivery of an
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exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions contained herein. The Exercise Notice shall be
completed by the Optionee and delivered to the Chief Financial Officer of the
Company. The Exercise Notice shall be accompanied by payment of the aggregate
Exercise Price as to all Exercised Shares. This Option shall be deemed to be
exercised upon receipt by the Company of such fully executed Exercise Notice
accompanied by such aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.
3. Method of Payment. Payment of the aggregate Exercise Price shall be by any
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of the following, or a combination thereof, at the election of the Optionee:
(a) cash; or
(b) check; or
(c) surrender of other Shares which (i) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
(6) months on the date of surrender, and (ii) have a Fair Market Value on the
date of surrender equal to the aggregate Exercise Price of the Exercised Shares.
4. Non-Transferability of Option. This Option may not be transferred in
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any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of this Option Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
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5. Term of Option. This Option may be exercised only within the term set
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out in the Notice of Grant, and may be exercised during such term only in
accordance with the terms of this Option Agreement.
6. Tax Consequences. Some of the federal tax consequences relating to
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this Option, as of the date of this Option, are set forth below. THIS SUMMARY
IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION
OR DISPOSING OF THE SHARES.
(a) Exercising the Option. This option will be treated as a nonstatutory
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stock option ("NSO"). The Optionee may incur regular federal income tax
liability upon exercise of a NSO. 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 Exercised Shares on the date of
exercise over their aggregate Exercise Price. If the Optionee is an Employee or
a former Employee, the Company will be required to withhold from his or her
compensation or collect from 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.
(b) Disposition of Shares. If the Optionee holds NSO Shares for at least
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one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
7. Entire Agreement; Governing Law. This Option Agreement constitutes the
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entire agreement of the parties with respect to the subject matter hereof and
supersedes in its entirety all prior undertakings and agreements of the Company
and 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. This agreement is governed by the internal substantive
laws, but not the choice of law rules, of California.
8. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES THAT
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THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE
SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT
ALL, AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.
By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is governed by the terms and
conditions of this Option Agreement. Optionee has reviewed this Option
Agreement in its entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option Agreement and fully understands all
provisions of this Option Agreement. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
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Company's Board of Directors upon any questions relating to this Option
Agreement. Optionee further agrees to notify the Company upon any change in the
residence address indicated below.
OPTIONEE: TELEGEN CORPORATION
______________________________ _________________________________
Signature By
______________________________ _________________________________
Print Name Title
______________________________ _________________________________
Residence Address Date
______________________________
Date
CONSENT OF SPOUSE
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The undersigned spouse of Optionee has read and hereby approves the terms
and conditions of this Option Agreement. In consideration of the Company's
granting his or her spouse the right to purchase Shares as set forth in this
Option Agreement, the undersigned hereby agrees to be irrevocably bound by the
terms and conditions of this Option Agreement and further agrees that any
community property interest shall be similarly bound. The undersigned hereby
appoints the undersigned's spouse as attorney-in-fact for the undersigned with
respect to any amendment or exercise of rights under this Option Agreement.
_______________________________
Spouse of Optionee
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EXHIBIT A
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EXERCISE NOTICE
Telegen Corporation
000 Xxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
1. Exercise of Option. Effective as of today, ________________, 199__,
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the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of Telegen Corporation (the "Company") under
and pursuant to the Stock Option Agreement dated _____________, 1996 (the
"Option Agreement"). The purchase price for the Shares shall be $5.00, as
required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
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full purchase price for the Shares.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser
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has received, read and understood the Option Agreement and agrees to abide by
and be bound by its terms and conditions.
4. Rights as Shareholder. Until the issuance (as evidenced by the
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appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
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adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
6. Entire Agreement; Governing Law. The Option Agreement are
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incorporated herein by reference. This Agreement and the 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 Purchaser with respect to the subject matter
hereof, and may not be modified
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adversely to the Purchaser's interest except by means of a writing signed by the
Company and Purchaser. This agreement is governed by the internal substantive
laws, but not the choice of law rules, of California.
Submitted by: Accepted by:
PURCHASER: TELEGEN CORPORATION
__________________________________ _____________________________________
Signature By
__________________________________ _____________________________________
Print Name Its
Address: Address:
------- -------
__________________________________ 000 Xxxxxxx Xxxxx
__________________________________ Xxxxxxx Xxxx, Xxxxxxxxxx 00000
_____________________________________
Date Received
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