Participant is an employee of the Company;
Company desires to afford the Participant an opportunity to purchase shares of
Common Stock in the Company as provided in this Agreement, effective as of the
Company has adopted the optionsXpress Holdings, Inc. 2005 Equity Incentive Plan
(as the same may be amended from time to time, the “Plan”) and desires
that the options granted to the Participant be governed by the terms and
conditions of the Plan; and
Committee has duly made all determinations necessary or appropriate to the
in consideration of the premises and the mutual covenants set forth in this
Agreement and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto have agreed, and do hereby agree, as
For purposes of this
Agreement, the definitions of terms contained in the Plan are hereby
incorporated by reference, except to the extent that any term is specifically
defined in this Agreement.
of Option, Option Price and Term.
(a) Grant. Subject to the terms and conditions of the
Plan and this Agreement, the Company hereby grants to the Participant, as a
matter of separate agreement and not in lieu of salary or any other
compensation for services, the right and option (“Option”) to purchase
shares of Common Stock of the Company (“Option Shares”).
Price. For each of the Option Shares
purchased, upon purchase thereof, the Participant shall pay to the Company
(the “Option Price”).
Accordingly, the aggregate Option Price to purchase all of the Option
Shares subject to the Option granted hereunder is $ (the “Aggregate Option Price”).
Fractional Shares. The Company shall
not be required to issue any fractional Option Shares hereunder.
Term. The term of the Option granted
hereunder shall be a period of ten (10) years from the Grant Date (the “Option
Period”). The termination of the
Option Period shall result in the termination and cancellation of such
Option. In no event shall the Option be
exercisable at any time after the expiration of the Option Period.
(e) Adjustments. The number of shares subject to the Option
and the Option Price shall be adjusted to reflect any stock-split, stock
dividend or other recapitalization affecting the Company’s Common Stock
subsequent to the date hereof.
(f) This Option is intended to be, and is
designated as, an Incentive Stock Option.
To the extent that this Option does not qualify as an Incentive Stock
Option or either the Company or the Participant takes any action that causes
the Option to fail to qualify as an Incentive Stock Option, it shall constitute
a Nonqualified Stock Option. The Company
does not represent, warrant or covenant to the Participant that the Option
does, and will at all times, qualify as an Incentive Stock Option and the
Company shall have no liability to the Participant in the event this Option
does not qualify as an Incentive Stock Option for any reason.
3.Vesting. Except as provided in the Plan, the
Option shall vest as follows: .
representing Option Shares shall bear such legends as the Company deems
necessary or desirable in connection with the Securities Act or other rules,
regulations or laws.
(a) Exercisability. The Option shall be exercisable to the extent
vested and subject to the terms and conditions of the Plan. Except as otherwise provided in this
Agreement or in the Plan, the Option granted hereunder shall be exercisable
during the Participant’s lifetime only by the Participant (or his or her legal
representative), and after the Participant’s death, only in accordance with the
of Exercise. The Option may only be
exercised by the delivery to the Company of a properly completed exercise
notice, in the form of Exhibit A attached hereto,together
with payment in full of the Option Price for each of the Option Shares purchased
pursuant thereto. No Option Shares will
be issued until full payment therefor has been made and the Participant has
executed any agreements in effect at such time which the Company may require
its stockholders to execute. Payment
shall only be made:
cash or by check;
transferring shares of Common Stock already owned by the Participant for a
period of at least six (6) months prior to payment having a total Share Value
on the date of such transfer equal to the Option Price;
(iii) by simultaneous sale
through a broker reasonably acceptable to the Committee of Shares acquired on
exercise, as permitted under Regulation T of the Federal Reserve Board; or
any combination of (i), (ii) or (iii).
of Exercise. In order to exercise
the Option in whole or in part, the Participant must execute a counterpart to
any agreement then in effect between the Company and some or all of the holders
The Options granted
hereunder shall not be validly exercised unless there has been compliance with
all the preceding provisions of this Section 7,
and, for all purposes of this Agreement, the date of the exercise of an Option
shall be the date upon which there is compliance with all such requirements.
of Withholding Taxes.
If as a result of this
Agreement or otherwise, the Company is obligated to withhold an amount on
account of any tax imposed in connection with the exercise of an Option, the
Participant shall be required to pay such amount to the Company, as provided
in the Plan.
The Company shall not be
required to sell or issue any Option Shares under an Option if such issuance
shall constitute a violation of any provision of any law or regulation of any
The Participant hereby
acknowledges receipt of a copy of the Plan.
Notwithstanding any other provision of this Agreement, the Option
granted hereunder is granted pursuant to the Plan, as in effect on the date
hereof, and is subject to all the terms and conditions of the Plan, as the same
may be amended from time to time. The
interpretation and construction by the Committee of the Plan, this Agreement,
the Option granted hereunder, and such rules and regulations as may be adopted
by the Committee for the purpose of administering the Plan, shall be final and
binding upon the Participant. Until the
Option granted hereunder shall have expired, terminated or been exercised in
full, the Company shall, upon written request therefor, send a copy of the
Plan, in its then current form, to the Participant or any other person or
entity then entitled to exercise such Option.
Until the Option granted
hereunder has been duly exercised to purchase the Option Shares and such Option
Shares have been officially recorded as issued on the Company’s official
records, no person will be entitled to receive distributions or will be deemed
for any purpose a stockholder, and adjustments for distributions or otherwise
will be made only if the record date therefor is subsequent to the date such
Option Shares are recorded and after the date of exercise, and without
duplication of any adjustment.
No provision of this
Agreement or of the Option granted hereunder shall give the Participant any
right to continue in the employ of the Company or any of its
Affiliates, create any inference as to the length of employment of the
Participant, affect the right of the Company or its Affiliates to terminate the
employment of the Participant, with or without Cause, or give the Participant
any right to participate in any employee welfare or benefit plan or other
program (other than the Plan) of the Company or any of its Affiliates.
None of the Company or
any of its Affiliates shall have a duty or obligation to affirmatively disclose
to the Participant or a Representative, and the Participant or a Representative
shall have no right to be advised of, any material information regarding the
Company or any of its Affiliates at any time prior to, upon or in connection
with the exercise of an Option or regarding the Company’s repurchase of Option
Shares in accordance with the terms of this Agreement.
Representation and Agreement.
on Transfers. The Participant
represents and warrants that any Option Shares to be issued in satisfaction of
this Option will be acquired by the Participant solely for the Participant’s
own account for investment and not with a view to or for sale in connection
with any distribution thereof. The
Participant agrees that the Participant will not, directly or indirectly,
offer, transfer, sell, pledge, convey, gift, assign, encumber, alienate,
hypothecate or otherwise dispose of all or any of the Option Shares (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of all or any
of the Option Shares), except in compliance with the Company’s governing
documents, the Securities Act and the rules and regulations of the Securities
and Exchange Commission or any successor agency thereunder, applicable state
securities or “blue sky” laws.
Representations. If prior to the
issuance of any Option Shares upon the exercise of an Option, in the opinion of
counsel for the Company, a particular representation by the Participant is
required under the Securities Act or any other applicable Federal or state law,
or any regulation or rule of any governmental agency, the Company may require
the Participant to make such investment representations and such other
representations as the Company reasonably may determine to be necessary which
representations shall be evidenced in an agreement in such form as the Company
in Company’s Capital or Organizational Structure.
The existence of the
Option shall not affect in any way the right or authority of the Company or its
stockholders to make or authorize any or all adjustments, recapitalization,
reorganizations or other changes in the Company’s capital structure or its
business, or any merger or consolidation of the Company, or any class of
interests in the Company or affecting the Option Shares or the rights thereof,
or the dissolution or liquidation of the Company, or any sale or transfer of
all or any part of its assets or business, or any other act or proceeding,
whether of a similar character or otherwise.
This Agreement and the
Option granted hereunder will be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware (other than its laws
respecting choice of law) except to the extent Federal law would be applicable.
This Agreement, together
with the Plan, constitute the entire obligation of the parties hereto with
respect to the subject matter of this Agreement and shall supersede any prior
expressions of intent or understanding with respect to such subject matter.
Any amendment to this
Agreement shall be in writing and signed on behalf of the Company, and if
required pursuant to the Plan and/or this Agreement, by the Participant.
The failure or delay of
either party hereto to require performance by the other party of any provision
hereof shall not affect its right to require performance of such provision
unless and until such performance has been waived in writing. Each and every right hereunder is cumulative
and may be exercised in part or in whole from time to time.
This Agreement may be
signed in two (2) counterparts, each of which shall be an original, but both of
which shall constitute but one and the same instrument.
Any notice which either
party hereto may be required or permitted to give the other shall be in writing
and may be given to the Company and to the Participant at his last known
address as shown on the Company’s payroll records, or to such other address as
the Participant, by notice to the Company, may designate in writing from time
Gender and Number.
The headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
Common nouns and pronouns shall be deemed to refer to the masculine,
feminine, neuter, singular and plural, as the context so requires.
If any provision of this
Agreement shall for any reason be held to be invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provision hereof, and
this Agreement shall be construed as if such invalid or unenforceable provision
This Agreement shall
inure to the benefit of and be binding upon each successor and assign of the
Company. All obligations imposed upon
the Participant or a Representative, and all rights granted to the Company
hereunder, shall be binding upon the Participant’s or the Representative’s heirs,
legal representatives and successors.
The Participant agrees to
undertake to determine and be responsible for any and all tax consequences to
himself with respect to the Option granted hereunder and the Option Shares
relating thereto. The Company shall not
be responsible for any tax consequences of the Participant or anyone else that
arise from the Option not being treated as an Incentive Stock Option for tax
Of Page Intentionally Left Blank; Signature Page Follows]
WITNESS WHEREOF, the Company has caused this Agreement to be
duly executed by an officer thereunto duly authorized, and the Participant has
hereunto set his hand, all as of the day and year first above written.
In order to exercise your
Option granted under the optionsXpress Holdings, Inc. 2005 Equity Incentive
Plan (“Plan”) pursuant to your Option Grant Agreement, please complete and sign
the attached Exercise Notice (“Exercise Notice”). On the Exercise Notice, you should indicate
the manner in which you will pay the exercise price of the Option (“Option
If you have any questions
regarding this Exercise Notice, please contact David Kalt.
or Check: If you are paying the Option
Price by certified check or cashier’s check, checks should be made payable to
optionsXpress Holdings, Inc.
Share Certificate: If you are paying the
Option Price by delivering a certificate representing Shares, the certificate
should be properly endorsed as follows:
record holder of the certificate being surrendered should sign and date the
certificate on the reverse side. The signature should correspond exactly (including
misspellings) with the name shown on the front side of the certificate.
the certificate being surrendered is held of record in joint tenancy, both
joint tenants must sign.
the endorsement is by a corporation or by a person acting in a fiduciary or
other representative capacity, proper evidence of the authority of the person
making the endorsement should be included with the certificate being
the certificate being surrendered represents a larger number of Shares than are
being surrendered as the Option Price (i.e., having a share value on the date
the Option is exercised in excess of the Option Price), indicate on the reverse
side of the certificate the number of Shares being transferred to the Company
pursuant to the exercise of the Option.
A new certificate representing any excess Shares will be issued in the
name appearing on the surrendered certificate and delivered to you by the
transfer agent for the Company.
method of delivery of a certificate representing Shares is at the option and
risk of the holder of such certificates.
If a certificate is sent by mail, insured registered mail is
The Participant desires
to exercise the Option on the following terms and conditions:
1.General. Each term defined in the Plan or the Option
Grant Agreement shall, when capitalized herein, have the same meaning for the
purpose of this Notice as given to it in the Plan or the Option Grant
Agreement. All of the provisions of the
Plan and the Option Grant Agreement shall remain in full force and effect with
respect to the Option and the Option Shares following the execution and
delivery of this Notice and the performance of the obligations of the parties
hereunder and the execution and delivery of this Notice and the performance of
the parties’ obligations hereunder shall not terminate, modify, amend or
otherwise alter any party’s rights or obligations under the Plan or the Option
Grant Agreement. The Plan and the Option
Grant Agreement shall control if there is any conflict between the Plan (or the
Option Grant Agreement) and this Notice, and as to all matters not provided in
2.Exercise. Subject to the terms of this Notice, the
Participant hereby irrevocably elects to exercise, as of the date hereof, the
Option with respect to
Option Shares at the Option Price of $
per Option Share (as set forth in the Option Grant Agreement). The exercise pursuant hereto shall reduce the
number of Option Shares subject to the Option Grant Agreement by the number of
Option Shares exercised hereunder.
3.Consideration. The Option Shares to be received pursuant to
this Notice are being transferred in consideration for: [Please
check the applicable Option payment provision.]
a. o cash
in the amount of $ . Enclosed herewith is a o
certified check or o cashier’s check
for this amount.
b. o delivery
of valid and enforceable certificate(s) representing Shares owned by the
Participant for greater than six (6) months and endorsed for transfer to the
Company, in accordance with the Instructions accompanying this Notice.
c. o by
simultaneous sale through a broker reasonably acceptable to the Committee of
Shares acquired on exercise, as permitted under Regulation T of the Federal
d. o any
combination of (a), (b) or (c) having an aggregate Share Value equal to the
aggregate Option Price.
of Dispute. Any dispute or
disagreement which shall arise under, as a result of, or in any way relate to
the interpretation or construction of this Notice shall be determined by the
Committee. Any such determination made
hereunder shall be final, binding and conclusive for all purposes.
Participant represents and warrants that he or she has received a copy of the
Plan, as amended through the date hereof.
on Option Shares. The
Participant acknowledges and agrees that (a) the certificates representing the
Option Shares shall bear all legends required by the Plan and the Option Grant
Agreement, and (b) the Option Shares shall be subject to all restrictions set
forth in the Plan and the Option Grant Agreement.
and Assigns. This Notice shall
inure to the benefit of and be binding upon each successor and assignee of the
Participant and the Company.
of Laws. This Notice shall be
governed by and construed in accordance with the laws of the State of Delaware
without regard to conflicts of laws principles.
Notice. This Notice, together
with the Plan, the Option Grant Agreement, and the Restricted Stock Agreement,
if applicable, constitute the entire obligation of the parties hereto with
respect to the subject matter hereof and shall supersede any prior expressions
of intent or understanding with respect to this exercise of the Option.
Affirmation. The Participant
represents, warrants and affirms all matters to which he or she represented,
warranted or affirmed in the Option Grant Agreement, and nothing in this Notice
shall derogate the Participant’s representations, warranties, affirmations or
obligations in the Option Grant Agreement.
11.Headings. The headings in this Notice are for reference
purposes only and will not affect the meaning or interpretation of this Notice.
12.Severability. If any provision of this Notice is for any
reason held to be invalid or unenforceable, such invalidity or unenforceability
will not affect any other provision of this Notice, and this Notice will be
construed as if such invalid or unenforceable provision were omitted.
Strict Construction. The
language used in this Notice will be deemed to be the language chosen by the
Participant to express its intent, and no rule of strict construction will be
applied against any party.
Consequences. The Participant
agrees to undertake to determine and be responsible for any and all tax
consequences to himself or herself with respect to the Option Shares.
IN WITNESS WHEREOF, the
Participant has executed this Notice as of the dates written below.