Exhibit 4.7
NON-QUALIFIED STOCK OPTION AGREEMENT
Date of Grant:
This NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement"),
dated as of the date of grant first stated above (the "Date of Grant"), is
delivered by Quackware, Inc. a California corporation (the "Company"), to [ ]
(the "Optionee"), who is an employee or non-employee consultant or director of
the Company or one of its subsidiaries (the Optionee's employer is sometimes
referred to herein as the ("Employer").
WHEREAS, the Board of Directors of the Company (the "Board")
has approved the grant of this stock option to the Optionee to purchase shares
of the Class A Common Stock of the Company, $.001 per share par value (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Board has determined that it would be in the best
interest of the Company to grant the non-qualified stock option documented
herein.
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth, the
Company, with the approval and at the direction of the Board, hereby grants to
the Optionee, as of the Date of Grant, an option to purchase up to [ ] shares of
Stock at a price of $[ ] per share, the fair market value on the Date of Grant
as determined by the Board.
Such option is hereinafter referred to as the "Option" and the
shares of stock purchasable upon exercise of the Option are hereinafter
sometimes referred to as the "Option Shares." The Option is intended by the
parties hereto to be, and shall be treated as, an option not qualified as an
incentive stock option (as such term is defined under Section 422 of the
Internal Revenue Code of 1986).
2. Installment Exercise.
Subject to such further limitations as are provided herein,
the Option shall become exercisable as follows, subject to the terms of this
Agreement:
Shares Vesting Type Vesting Date
3. Termination of Option.
(a) Subject to the other provisions of this Agreement, the
Option and all rights hereunder with respect thereto, to the extent such rights
shall not have been exercised, shall terminate and become null and void after
the expiration of ten years from the Date of Grant (the "Option Term").
(b) Upon the occurrence of the Optionee's ceasing for any
reason to be employed by, or to serve, the Company (such occurrence being a
"termination of the Optionee's employment"), the Option, to the extent not
previously exercised, shall terminate and become null and void within thirty
(30) days after the date of such termination of the Optionee's employment,
except (1) in the event employment is terminated for cause as defined by
applicable law, in which case Optionee's Option shall terminate and become null
and void immediately or (2) in a case where the Board may otherwise determine in
their sole and absolute discretion for up to ninety (90) days following the
termination of employment or service. Upon a termination of the Optionee's
employment by reason of disability or death, the Option may be exercised, but
only to the extent that the Option was outstanding and exercisable on such date
of disability or death, up to a six-month period following the date of such
termination of the Optionee's employment, unless extended for a period of up to
one year, at the sole and absolute discretion of the Board.
(c) In the event of the death of the Optionee, the Option may
be exercised by the Optionee's legal representative, but only to the extent that
the Option would otherwise have been exercisable by the Optionee.
(d) A transfer of the Optionee's employment between the
Company and any subsidiary of the Company, or between any subsidiaries of the
Company, shall not be deemed to be a termination of the Optionee's employment.
(e) The Administrators (as defined below), in their sole and
absolute discretion, may cancel the Option at any time if the Optionee is not in
compliance with all applicable provisions of this Agreement or if the Optionee,
whether or not he or she is currently employed by the Company or one of its
subsidiaries, acts in a manner contrary to the best interests of the Company and
its subsidiaries.
4. Exercise of Option.
(a) The Optionee may exercise the Option with respect to all
or any part of the number of Option Shares then exercisable hereunder by giving
the Secretary of the Company written notice of intent to exercise. The notice of
exercise shall specify the number of Option Shares as to which the Option is to
be exercised and the date of exercise thereof.
(b) Full payment (in U.S. dollars) by the Optionee of the
option price for the Option Shares purchased shall be made on or before the
exercise date specified in the notice of exercise in cash, or, with the prior
written consent of the Board, in whole or in part through the surrender of
shares of Stock at their Fair Market Value on the exercise date. The exercise of
the Option is subject to the condition that if at any time the Company shall
determine, in its discretion, that the satisfaction of withholding tax or other
withholding liabilities under any state or federal law is necessary or desirable
as a condition of, or in connection with, such exercise or the delivery of
shares pursuant thereto, then in such event, the exercise of the Option or the
sale and issuance of any shares to be purchased shall not be effective unless
such withholding shall have been effected or obtained in a manner acceptable to
the Company. At the Company's sole and absolute discretion, the Company may,
from time to time, accept shares of the Company's Common Stock subject to one of
the Plans as the source of payment for such liabilities. As used herein "Fair
Market Value" shall mean, as of any particular date, the value of the Common
Stock determined by the Board or any other person(s) designated by the Board to
administer the Company's stock options or stock option plans, including this
Agreement (the Board or any such persons when acting in such capacity, the
"Administrators") on the basis of such factors as they deem appropriate;
provided, however, that, if the Common Stock is traded on a national securities
exchange or a national market system, Fair Market Value on any day shall be
deemed to be the closing sales price (or, if no reported sale takes place on
such day, the mean of the reported bid and asked prices) of the Common Stock on
such day on the principal such exchange, or, if the stock is included on the
composite tape, the composite tape. In each case, the Administrators'
determination of Fair Market Value shall be conclusive and binding on the
Company and the Optionee.
(c) On the exercise date specified in the Optionee's notice or
as soon thereafter as is practicable, the Company shall cause to be delivered to
the Optionee, a certificate or certificates for the Option Shares then being
purchased (out of theretofore unissued stock or reacquired Stock, as the Company
may elect) upon full payment for such option Shares. However, if (i) the
Optionee is subject to Section 16 of the Securities Exchange Act of 1934 and
(ii) the Optionee exercises the Option before six months have passed from the
Date of Grant, the Company shall be permitted if required to comply with the
exemptive provisions of Section 16 of the Securities Exchange Act of 1934 to
hold in its custody any stock certificate arising from such exercise until six
months has passed from the Date of Grant. The obligation of the Company to
deliver Stock shall, however, be subject to the condition that if at any time
the Administrators shall determine in their discretion that the listing,
registration or qualification of the Option or the Option Shares upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the Option or the issuance or purchase of
Stock thereunder, the Option may not be exercised in whole or in part unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the
Administrators.
(d) If the Optionee fails to pay for any of the Option Shares
specified in such notice or fails to accept delivery thereof, the Optionee's
right to purchase such Option Shares may be terminated by the Company. The date
specified in the Optionee's notice as the date of exercise shall be deemed the
date of exercise of the Option, provided that payment in full for the Option
Shares to be purchased upon such exercise shall have been received by such date.
5. Adjustment of and Changes in Stock of the Company.
In the event of the dissolution or liquidation of the Company,
the Option shall terminate as of a date to be fixed by the Administrators;
provided that not less than 30 days' written notice of the date so fixed shall
be given to the Optionee and the Optionee shall have the right during such
period (unless such option shall have previously expired) to exercise the
Option, including up to fifty percent (50%) of the shares of Common Stock under
the Option that would not otherwise be exercisable by reason of an insufficient
lapse of time.
In the event of a Reorganization (as defined below) in which
the Company is not the surviving or acquiring company, or in which the Company
is or becomes a subsidiary of another company after the effective date of the
Reorganization, then:
(a) if there is no plan or agreement respecting the
Reorganization (the "Reorganization Agreement") or if the
Reorganization Agreement does not specifically provide for the
change, conversion or exchange of the outstanding options for
options of another corporation, then exercise and termination
provisions equivalent to those described in the first
paragraph of this Section 5 shall apply (which shall include
the right to receive upon exercise the consideration that
would be received by a holder of a number of shares of Common
Stock issuable upon exercise of the Option immediately prior
to the consummation of the Reorganization); or
(b) if there is a Reorganization Agreement and if the
Reorganization Agreement specifically provides for the change,
conversion, or exchange of the outstanding options for options
of another corporation, then the Administrators shall adjust
the outstanding unexercised portion of the Option in a manner
consistent with the applicable provisions of the
Reorganization Agreement; provided, however, that in no event
shall any such Reorganization Agreement affect the right of
the Optionee to, in the event of a Reorganization, exercise
fifty percent (50%) of the shares of Common Stock under the
Option that would not otherwise be exercisable by reason of an
insufficient lapse of time.
The term "Reorganization" as used in this Section 5 shall mean
any statutory merger, statutory consolidation, sale of all or substantially all
of the assets of the Company or a sale of the Common Stock pursuant to which the
Company is or becomes a subsidiary of another company after the effective date
of the Reorganization.
Adjustments and determinations under this Section 5 shall be
made by the Administrators, whose decisions as to such adjustments or
determinations shall be final, binding, and conclusive.
In the event of a recapitalization, change of shares, stock
split, spin-off, stock dividend, reclassification, subdivision or combination of
shares, merger, consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of the Company not otherwise
addressed by the balance of this Section 5, the Administrators shall make such
adjustment as may be required under the applicable reorganization agreement in
the number and kind of shares of Stock subject to the Option or in the option
price; provided, however, that no such adjustment shall give the Optionee any
additional benefits under the Option. If there is no provision for the treatment
of the Option under an applicable reorganization agreement, the Option may
terminate on a date determined by the Administrators following at least 30 days
written notice to the Optionee.
6. No Rights of Stockholders.
Neither the Optionee nor any personal representative shall be,
or shall have any of the rights and privileges of, a stockholder of the Company
with respect to any shares of Stock purchasable or issuable upon the exercise of
the Option, in whole or in part, prior to the date of exercise of the Option.
7. Non-Transferability of Option.
During the Optionee's lifetime, the Option hereunder shall be
exercisable only by the Optionee or any guardian or legal representative of the
Optionee, and the Option shall not be transferable except, in case of the death
of the Optionee, by will or the laws of descent and distribution, nor shall the
Option be subject to attachment, execution or other similar process. In the
event of (a) any attempt by the Optionee to alienate, assign, pledge,
hypothecate or otherwise dispose of the Option, except as provided for herein,
or (b) the levy of any attachment, execution or similar process upon the rights
or interest hereby conferred, the Company may terminate the Option by notice to
the Optionee and it shall thereupon become null and void.
8. Restriction on Exercise.
Shares shall not be issued with respect to the Option unless
the exercise of the Option and the issuance and delivery of the shares pursuant
thereto shall comply with all applicable provisions of foreign, state and
federal law, including, without limitation, the Securities Act of 1933, as
amended, and the Exchange Act, and the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance. The Administrators may also require an
Optionee to furnish evidence satisfactory to the Company, including a written
and signed representation letter and consent to be bound by any transfer
restrictions imposed by law, legend, condition, or otherwise, that the shares
are being purchased only for investment purposes and without any present
intention to sell or distribute the shares in violation of any state or federal
law, rule, or regulation. Further, the Optionee shall consent to the imposition
of a legend on the shares of Common Stock subject to the Option and the
imposition of stop-transfer instructions restricting their transferability as
required by law or by this Agreement.
9. Employment or Service Not Affected.
The granting of the Option or its exercise shall not be
construed as granting to the Optionee any right with respect to continuance of
employment by or service relationship with the Employer. Except as may otherwise
be limited by a written agreement between the Employer and the Optionee, the
right of the Employer to terminate at will the Optionee's employment or service
relationship with it at any time (whether by dismissal, discharge, retirement or
otherwise) is specifically reserved by the Company, as the Employer or on behalf
of the Employer (whichever the case may be), and acknowledged by the Optionee.
10. Amendment of Option.
The Option may be amended by the Administrators at any time
(i) if the Administrators determine, in their sole and absolute discretion, that
amendment is necessary or advisable in the light of any addition to or change in
the Internal Revenue Code of 1986 or in the regulations issued thereunder, or
any federal or state securities law or other law or regulation, which change
occurs after the Date of Grant and by its terms applies to the Option; or (ii)
other than in the circumstances described in clause (i), with the consent of the
Optionee.
11. Notice.
All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or by certified mail, return receipt requested, as follows:
To Company: Quackware, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Secretary
To Optionee: at the address provided
in the Company's records
12. Company's Right of First Refusal.
Any attempt by the Optionee to sell, transfer or otherwise
dispose of any securities issued to the Optionee under this Agreement upon
exercise, that is transferable in accordance with the terms of this Agreement
and applicable law, must also comply with the following provisions:
(a) The Optionee must have received a bona
fide offer to purchase the securities (the "Offer") and the Optionee
must then give written notice to the Company outlining the terms of
the Offer (including the identity of the maker of the Offer (the
"Offeror")). The Company shall then have the right, for a period of
sixty (60) days, to repurchase all, but not less than all, of the
securities offered by the Optionee upon the terms contained in the
Offer. If the Offer includes the payment of non-cash consideration for
the securities, the Company shall pay an amount equal to the Fair
Market Value of such non-cash consideration.
(b) If the Company does not exercise its
rights hereunder, the Optionee may, within sixty (60) days thereafter,
sell the offered securities to the Offeror upon terms not more
favorable to the Offeror than those contained in the Offer. Any sale
of securities by the Optionee after the expiration of the sixty (60)
day period referred to in the preceding sentence shall be deemed a new
transaction subject to the Company's right of first refusal here.
(c) The Company's right of first refusal
shall terminate when the Company's Common Stock is registered under
Section 12 of the Securities Exchange Act of 1934, as amended and
listed on or included in a national securities exchange or interdealer
quotation system registered under the Exchange Act.
13. Company's Right of Repurchase.
In the event that the Optionee's employment with or service to
the Company is terminated for any reason or any of its subsidiaries, the Company
shall have the right, unless waived by the Administrators at the time of any
award or thereafter, to repurchase all, but not less than all of the securities
that such Optionee has purchased or has been awarded under this Agreement on the
following terms:
(d) Upon the Optionee's termination of employment with or service to the
Company or any of its subsidiaries, the Company shall have the right
for a period of ninety (90) days form the last day of employment or
service to repurchase all, but not less than all of the securities
purchased by the Optionee under this Agreement.
(e) The Company shall notify the Optionee within ninety (90) days of the
last day of employment or service regarding the exercise of its right
of repurchase.
(f) If the Company exercises its right of repurchase, the Company will
purchase the securities within thirty (30) days of delivery of the
notice of its election to purchase at the higher of (i) the Fair Market
Value on the Optionee's date of termination, or (ii) the Fair Market
Value of such securities on the date of the Company's notification of
election to repurchase.
14. Lock-Up.
To the extent requested by any managing underwriter to the
Company, the Optionees shall enter into such market lock-up, escrow or other
agreements as may be requested by such underwriter in connection with any public
offering of the Company's securities.
15. Governing Law; Arbitration.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in accordance with
the law of the State of California, except to the extent preempted by federal
law, which shall to the extent govern. Subject to the next succeeding sentence,
acceptance of this Agreement shall be deemed to constitute consent to the
jurisdiction and venue of the state and federal courts located in Santa Xxxxx
County, State of California for all purposes in connection with any suit, action
or other proceeding relating to this Agreement, including the enforcement of any
rights under this Agreement or any other document, and shall be deemed to
constitute consent to any process or notice of motion in connection with such
proceeding being served by certified or registered mail or personal service
within or without the State of California, provided a reasonable time for
appearance is allowed. Notwithstanding the foregoing, any disputes involving
this Agreement will be resolved by arbitration in Santa Xxxxx County, California
before one (1) arbitrator in accordance with the Commercial Arbitration Rules of
the American Arbitration Association.
IN WITNESS WHEREOF, the Company has caused its duly authorized
officers to execute this Grant of Option, and to apply the corporate seal
hereto, and the Optionee has placed his or her signature hereon, effective as of
the Date of Grant.
QUACKWARE, INC.,
a California corporation
By: ___________________
Name:
Title:
ACCEPTED AND AGREED TO:
_______________________
