(d) Person Who May Exercise Option. During the lifetime of the Grantee, this Option shall be exercisable only by the Grantee, or if the Grantee is disabled, by his or her duly appointed guardian or legal representative. After Grantee’s death, Grantee’s personal representative may exercise the Option at any time prior to the earlier of (i) the expiration of the term of this Option or (ii) one year after Grantee’s death.
(e) Termination of Option. Notwithstanding any other provisions to the contrary, this Option, to the extent that it has not previously been exercised, shall terminate (i) upon the expiration of the term of this Option as set forth in subparagraph 2(b) hereof or (ii) as otherwise provided in the Plan. Section 6(h) of the Plan is specifically incorporated herein by reference.
3. VESTING.
(a) Except for the repurchase option of the Company set forth below, the option to purchase [total no. of shares divided by 4] shares of common stock will vest on December 31, 2013 and the option to purchase [total shares divided by 48] shares will vest on the first day of each month beginning on January 31, 2014 and continuing on the first day of each month through and including December 31, 2016 at which time the option to purchase all [total no. of shares] shares of the Award will be considered fully vested. In no event, however, will any vesting occur after the date of termination of the Optionee’s employment with the Company for any reason, whether by the Company or the Optionee, except as set forth in Section 3(b).
(b) Vesting in the Event of a Sale. If a Sale (as defined in Section 3[c] below) occurs while Grantee is employed by the Company (or if Grantee’s employment is terminated by Company without Cause within ninety (90) days prior to the execution of any definitive agreement relating to a Sale transaction and such Sale transaction is consummated), but before the Option is fully vested, then the date upon which the Sale occurs will be the Vesting Date with respect to the unvested portion of the Award and the Option shall become fully vested. For purposes of this Section 3(b) “Cause” means (i) a material breach by Grantee of any agreement with the Company or any of its affiliates, which breach, if curable, is not cured within 30 days of receipt by Grantee of written notice from the Company specifying the breach or, if cured, recurs within 180 days following receipt of the written notice; (ii) Grantee’s gross negligence in the performance of Grantee’s material job duties; (iii) Grantee’s intentional nonperformance or misperformance of such duties, or Grantee’s refusal or failure to abide by or comply with the directives of the Board of Directors or Grantee’s superiors, or the Company’s policies and procedures, which actions, if curable, are not cured within 30 days after receipt by Grantee of written notice thereof or, if cured, recurs within 180 days following receipt of the written notice; (iv) Grantee’s willful dishonesty with respect to the business or affairs of the Company, or the Grantee’s material breach of any fiduciary duty to the Company or its stockholders; or (v) Grantee’s conviction of any felony or any other crime involving moral turpitude.
(c) Definition of Sale. For purposes of this Award, “Sale” means the occurrence of a (A) sale of all or substantially all of the assets of the Company, (B) consolidation or merger of the Company, or (C) sale or other transfer of capital stock of the Company, in each case in one transaction or a series of related transactions, resulting in the beneficial holders of the Company’s outstanding common stock (calculated on an as-converted and fully-diluted basis) immediately prior to such transaction holding immediately after such transaction less than a majority of the Company’s outstanding common stock (calculated as aforesaid) or, in the case of an asset sale or a consolidation or merger where the Company is not the surviving entity, less than a majority of the voting securities or economic interests in the acquiring or surviving entity (calculated on an as-converted and fully-diluted basis). “Sale” shall not mean any initial public offering of the Company.
4. TRANSFERABILITY. This Agreement and any rights hereunder shall be nontransferable and nonassignable by the Grantee.
5. ADJUSTMENT OF COMMON SHARES. The numbers of shares to be granted under the Plan (including under its Section 4) and the terms of any outstanding options shall be equitably adjusted by the Company in accordance with the Plan in the event that the Company effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares. Any such adjustment made in good faith by the Company shall be final and conclusive on the Participant.
The issuance by the Company of stock of any class, or securities convertible into stock of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of stock or obligations of the Company convertible into such stock or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the maximum number of shares as to which options may be granted or the terms and number of outstanding options.
