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EXHIBIT 10.01
INFORMATION STORAGE DEVICES, INC.
1987 STOCK OPTION PLAN
ADOPTED DECEMBER 31, 1987
AS AMENDED THROUGH JANUARY 25, 1996
1. PURPOSE. This Stock Option Plan ("Plan") is established to
provide incentives for selected persons to promote the financial success and
progress of Information Storage Devices, Inc. (the "Company") by granting such
persons options to purchase shares of stock of the Company.
2. ADOPTION AND SHAREHOLDER APPROVAL. This Plan shall become
effective on the date that it is adopted by the Board of Directors (the "Board")
of the Company. This Plan shall be approved by the unanimous written consent of
the shareholders or the affirmative vote at a meeting of the holders of a
majority of the outstanding shares of the Company within twelve months before or
after the date this Plan is adopted by the Board.
3. TYPES OF OPTIONS AND SHARES. Options granted under this Plan
(the "Options") may be either (a) incentive stock options ("ISOs") within the
meaning of Section 422A of the Internal Revenue Code of 1986 (the "Code"), or
(b) nonqualified stock options ("NQSOs"), as designated at the time of grant.
The shares of stock that may be purchased upon exercise of Options granted under
this Plan (the "Shares") are shares of the common stock of the Company.
4. NUMBER OF SHARES. The maximum number of Shares that may be
issued pursuant to Options granted under this Plan is 1,156,666 Shares, subject
to adjustment as provided in this Plan. If any Option is terminated in whole or
in part for any reason without being exercised in whole or in part, the Shares
thereby released from such Option shall be available for purchase under other
Options subsequently granted under this Plan. At all times during the term of
this Plan, the Company shall reserve and keep available such number of Shares as
shall be required to satisfy the requirements of outstanding Options under this
Plan.
5. ADMINISTRATION. This Plan shall be administered by the Board
or by a committee of the Board appointed to administer this Plan (the
"Committee"). As used in this Plan, references to the Committee shall mean
either such Committee or the Board if no committee has been established. The
interpretation by the Committee of any of the provisions of this Plan or any
Option granted under this Plan shall be final and binding upon the Company and
all persons having an interest in any Option or any Shares purchased pursuant to
an Option.
6. ELIGIBILITY. Options may be granted only to such employees,
officers, directors, consultants and independent contractors of the Company or
any Parent, Subsidiary or Affiliate of the Company (as defined below) as the
Committee shall select from time to time
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in its sole discretion ("Optionees"), provided that only employees of the
Company or a Parent or Subsidiary of the Company shall be eligible to receive
ISOs. An Optionee may be granted more than one Option under this Plan.
(a) Grants to Directors. With respect to the grant of Options to
persons who are directors, the selection of any director to whom one Option is
granted and the determination of the number of Shares which may be purchased
shall be made only (i) by the board where a majority of the directors active in
the matter are Disinterested Persons (as defined below), or (ii) by, or only in
accordance with the recommendation of, a committee of three or more persons
having full authority to act in the matter, all of the members of which
committee are Disinterested Persons.
(b) Definitions. As used in this Plan, the following terms shall
have the following meanings:
(i) "Parent" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time of the granting of the Option, each of such corporations other than the
Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
(ii) "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if, at
the time of granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
(iii) "Affiliate" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with another corporation, where "control" (including the
terms "controlled by" and "under common control with") means the possession,
direct or indirect, of the power to cause the direction of the management and
policies of the corporation, whether through the ownership of voting securities,
by contract or otherwise.
(iv) "Disinterested Person" means an administrator of this
Plan who is not at the time he exercises discretion in administering this Plan,
and has not at any time within one year prior thereto been eligible for
selection as a person to whom an Option may be granted under this Plan or to
whom stock may be allocated or stock options or stock appreciation rights may be
granted pursuant to any other plan of the Company or its Affiliates entitling
the participants therein to acquire stock, stock options or stock appreciation
rights of the Company or any of its Affiliates.
7. TERMS AND CONDITIONS OF OPTIONS. The Committee shall determine
whether each Option is to be an ISO or an NQSO, the number of Shares for which
the Option shall be granted, the exercise price of the Option, the periods
during which the Option may be
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exercised, and all other terms and conditions of the Option, subject to the
following terms and conditions:
(a) Form of Option Grant. Each Option granted under this
Plan shall be evidenced by a written Stock Option Grant ("Grant") in such form
(which need not be the same for each Optionee) as the Committee shall from time
to time approve, which Grant shall comply with and be subject to the terms and
conditions of this Plan.
(b) Exercise Price. The exercise price of an Option shall
be not less than the fair market value of the Shares, at the time that the
Option is granted, as determined by the Committee in good faith. The exercise
price of any Option granted to a person owning more than 10% of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary of the Company ("Ten Percent Shareholder") shall not be less than
110% of the fair market value of the Shares at the time of the grant, as
determined by the Committee in good faith.
(c) Exercise Period. Options shall be exercisable within
the times or upon the events determined by the Committee as set forth in the
Grant, provided, however, that no Option shall be exercisable after the
expiration of ten years from the date the Option is granted, and provided
further that no Option granted to a Ten Percent Shareholder shall be exercisable
after the expiration of five years from the date the Option is granted.
(d) Limitations on ISOs. The aggregate fair market value
(determined as of the time an Option is granted) of stock with respect to which
ISOs are exercisable for the first time by an optionee during any calendar year
(under this Plan or under any other incentive stock option plan of the Company
or any Parent or Subsidiary of the Company) shall not exceed $100,000.
(e) Date of Grant. The date of grant of an Option shall
be the date on which the Committee makes the determination to grant such Option
unless otherwise specified by the Committee. The Grant representing the Option
shall be delivered to the Optionee within a reasonable time after the granting
of the Option.
8. EXERCISE OF OPTIONS.
(a) Notice. Options may be exercised only by delivery to
the Company of a written notice and exercise agreement in a form approved by the
Committee, stating the number of Shares being purchased, the restrictions
imposed on the Shares and such representations and agreements regarding the
Optionee's investment intent and access to information as may be required by the
Company to comply with applicable securities laws, together with payment in full
of the exercise price for the number of Shares being purchased.
(b) Payment. Payment for the Shares may be made (i) in
cash (by check), (ii) by surrender of shares of common stock of the Company
having a fair market value equal to the exercise price of the Option; (iii)
where permitted by applicable law and approved by the Committee in its sole
discretion, by tender of a full recourse promissory note having such terms as
may be approved by the Committee; or (iv) by any combination of the foregoing
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where approved by the Committee in its sole discretion. Optionees who are not
employees or directors of the Company shall not be entitled to purchase Shares
with a promissory note unless the note is adequately secured by collateral other
than the Shares.
(c) Withholding Taxes. Prior to issuance of the Shares
upon exercise of an Option, the Optionee shall pay or make adequate provision
for any federal or state withholding obligations of the Company, if applicable.
(d) Limitations on Exercise. Notwithstanding the exercise
periods set forth in the Grant, exercise of an Option shall always be subject to
the following limitations:
(i) An Option shall not be exercisable unless
such exercise is in compliance with the Securities Act of 1933, as amended, and
all applicable state securities laws, as they are in effect on the date of
exercise.
(ii) The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent the Optionee from exercising
the full number of Shares as to which the Option is then exercisable.
9. NONTRANSFERABILITY OF OPTIONS. During the lifetime of the
Optionee, an Option shall be exercisable only by the Optionee. No Option may be
sold, pledged, assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent and distribution.
10. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of
the rights of a shareholder with respect to any Shares subject to an Option
until the Option has been validly exercised. No adjustment shall be made for
dividends or distributions or other rights for which the record date is prior to
the date of exercise, except as provided in this Plan. The Company shall provide
to each Optionee a copy of the annual financial statements of the Company, at
such time after the close of each fiscal year of the Company as they are
released by the Company to its shareholders.
11. ADJUSTMENT OF OPTION SHARES. In the event that the number of
outstanding shares of common stock of the Company is changed by a stock
dividend, stock split, reverse stock split, combination, reclassification or
similar change in the capital structure of the Company without consideration,
the number of Shares available under this Plan and the number of Shares subject
to outstanding Options and the exercise price per share of such Options shall be
proportionately adjusted, subject to any required action by the Board or
shareholders of the Company and compliance with applicable securities laws;
provided, however, that no certificate or scrip representing fractional shares
shall be issued upon exercise of any Option and any resulting fractions of a
Share shall be ignored.
12. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Option
granted under this Plan shall confer on any Optionee any right to continue in
the employ of the Company or any Parent, Subsidiary or Affiliate of the Company
or limit in any way the right
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of the Company or any Parent, Subsidiary or Affiliate of the Company to
terminate the Optionee's employment at any time, with or without cause.
13. COMPLIANCE WITH LAWS. The grant of Options and the issuance of
Shares upon exercise of any Options shall be subject to and conditioned upon
compliance with all applicable requirements of law, including without limitation
compliance with the Securities Act of 1933, as amended, any required approval by
the Commissioner of Corporations of the State of California, compliance with all
other applicable state securities laws and compliance with the requirements of
any stock exchange on which the Shares may be listed. The Company shall be under
no obligation to register the Shares with the Securities and Exchange Commission
or to effect compliance with the registration or qualification requirement of
any state securities laws or stock exchange.
14. RESTRICTIONS ON SHARES. At the discretion of the Committee,
the Company may reserve to itself or its assignee(s) in the Grant (a) a right of
first refusal to purchase all Shares that an Optionee (or a subsequent
transferee) may propose to transfer to a third party and (b) a right to
repurchase all Shares held by an Optionee upon the Optionee's termination of
employment or service with the Company or its Parent, Subsidiary or Affiliate of
the Company for any reason within a specified time as determined by the
Committee at the time of grant at (i) the Optionee's original purchase price
(provided that the right to repurchase at such price shall lapse at the rate of
at least 20% per year from the date of grant), (ii) the fair market value of
such Shares as determined by the Committee in good faith or (iii) a price
determined by a formula or other provision set forth in the Grant.
15. CORPORATE TRANSACTIONS.
(a) Corporate Transactions. In the event of a Corporate
Transaction (as defined in this Section 15(a)), the exercisability of each
Option shall be automatically accelerated so that each Option shall, immediately
before the specified effective date for the Corporate Transaction, become fully
exercisable with respect to the total number of Shares and may be exercised for
all or any portion of such Shares; provided, that an Option shall not be
accelerated if and to the extent that such Option is, in connection with the
Corporate Transaction, either to be assumed by the successor corporation or
parent thereof or to be replaced with a comparable option to purchase shares of
the capital stock of the successor corporation or parent thereof. The
determination of comparability shall be made by the Board or the Committee, and
the Board or the Committee's determination shall be final, binding and
conclusive. Upon the consummation of a Corporate Transaction, all outstanding
Options shall, to the extent not previously exercised or assumed by the
successor corporation or its parent, terminate and cease to be exercisable.
"Corporate Transaction" means (i) a merger or acquisition in which the
Company is not the surviving entity (except for a transaction the principal
purpose of which is to change the State in which the Company is incorporated),
(ii) the sale, transfer or other disposition of all or substantially all of the
assets of the Company or (iii) any other corporate reorganization or business
combination that is not approved by the Board and in which the
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beneficial ownership of 50% or more of the Company's outstanding voting stock is
transferred.
(b) Dissolution. In the event of the proposed dissolution or
liquidation of the Company, the Board shall notify the Optionee at least fifteen
(15) days prior to such proposed action. To the extent that Options have not
been previously exercised, such Options will terminate immediately prior to the
consummation of such proposed action.
(c) Assumption of Awards by the Company. The Company, from time to
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either (a) granting an Option under this Plan in substitution of
such other company's Option, or (b) assuming such Option as if it had been
granted under this Plan if the terms of such assumed Option could be applied to
an Option granted under this Plan. Such substitution or assumption shall be
permissible if the holder of the substituted or assumed Option would have been
eligible to be granted an Option under the Plan if the other company had applied
the rules of the Plan to such grant. In the event the Company assumes an Option
granted by another company, the terms and conditions of such Option shall remain
unchanged (except that the exercise price and the number and nature of Shares
issuable upon exercise of any such option will be adjusted appropriately
pursuant to Section 424(a) of the Code). In the event the Company elects to
grant a new Option rather than assuming an existing option, such new Option may
be granted with a similarly adjusted exercise price.
16. AMENDMENT OR TERMINATION OF PLAN. The Committee may at any
time terminate or amend this Plan in any respect (including, but not limited to,
any form of Grant, agreement or instrument to be executed pursuant to this
Plan); provided, however, that the Committee shall not, without the approval of
the shareholders of the Company, increase the total number of Shares available
under this Plan (except by operation of the provisions of this Plan) or change
the class of persons eligible to receive Options. In any case, no amendment of
this Plan may adversely affect any then outstanding Options or any unexercised
portions thereof without the written consent of the Optionee.
17. TERM OF PLAN. Options may be granted pursuant to this Plan
from time to time within a period of ten years from the date this Plan is
adopted by the Board of Directors.
18. DELIVERY OF CERTAIN INFORMATION. In accordance with
(beta)260.140.46 of the California Commissioner's Rules, the Company shall
deliver to Optionees, on at least an annual basis, financial statements of the
Company consisting of an income statement and balance sheet. Financial
statements need not be audited. This Section 18 does not apply to Optionees who
are key employees whose duties in connection with the issuer assure them access
to equivalent information.
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INFORMATION STORAGE DEVICES, INC.
STOCK OPTION GRANT
Optionee:______________________________________________________________________
Address:_______________________________________________________________________
Total Options Granted:_________________________________________________________
Exercise Price Per Share:______________________________________________________
Date of Grant:_________________________________________________________________
Start Date:____________________________________________________________________
Expiration Date:_______________________________________________________________
OTC Grant Number:______________________________________________________________
Type of Stock Option (check one): ___ Incentive ___ Nonqualified
1. Grant of Option. Information Storage Devices, Inc., (the
"Company"), a California corporation, hereby grants to the optionee named above
("Optionee") an option (this "Option") to purchase the total number of shares of
common stock of the Company set forth above (the "Shares") at the exercise price
per share set forth above (the "Exercise Price"), subject to all of the terms
and conditions of this Grant and the Company's 1987 Stock Option Plan as adopted
as of December 31, 1987 (the "Plan"). If designated as an Incentive Stock Option
above, this Option is intended to qualify as an "incentive stock option" ("ISO")
within the meaning of Section 422A of the Internal Revenue Code of 1986 (the
"Code").
2. Exercise Period of Option. Subject to the terms and conditions
of the Plan and this Grant, this Option shall become exercisable as to 25% of
the Shares one year after the Start Date, provided that Optionee has remained
continually employed by the Company during such one year period, and as to
2.083% of the total number of Shares for each full month, over the 3 year period
commencing on the date that is one year after the Start Date, that the Optionee
remains continually employed by the Company; provided, however, that this Option
shall expire on the Expiration Date set forth above and must be exercised, if at
all, on or before the Expiration Date.
3. Restrictions on Exercise. Exercise of this Option is subject
to the following limitations:
(a) This Option may not be exercised unless such exercise
is in compliance with the Securities Act of 1933, as amended, and all applicable
state securities laws, as they are in effect on the date of exercise
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(b) This Option may not be exercised more often than
quarterly, as to then exercisable portions of this Option.
4. Termination of Option. Except as provided below in this
Section, this Option shall terminate and may not be exercised if Optionee ceases
to be employed by the Company or any Parent or Subsidiary of the Company (or in
the case of a nonqualified stock option, an Affiliate of the Company). Optionee
shall be considered to be employed by the Company if Optionee is an officer,
director or full-time employee of the Company, or any Parent, Subsidiary or
Affiliate of the Company or if the Board of Director determines that Optionee is
rendering substantial services as a part-time employee, consultant or
independent contractor to the Company or any Parent, Subsidiary or Affiliate of
the Company. The Board of Directors of the Company shall have discretion to
determine whether Optionee has ceased to be employed by the Company or any
Parent, Subsidiary or Affiliate of the Company and the effective date on which
such employment terminated (the "Termination Date").
(a) If Optionee ceases to be employed by the Company or
any Parent, Subsidiary or Affiliate of the Company for any reason except death
or disability, this Option, to the extent (and only to the extent) that it would
have been exercisable by Optionee on the Termination Date, may be exercised by
Optionee within three months after the Termination Date, but in any event no
later than the Expiration Date.
(b) If Optionee's employment with the Company or any
Parent, Subsidiary or Affiliate of the Company is terminated because of the
death of Optionee or disability of Optionee within the meaning of Section
22(e)(3) of the Code, this Option, to the extent that it is exercisable by
Optionee on the Termination Date, may be exercised by Optionee (or Optionee's
legal representative) within twelve months after the Termination Date, but in
any event no later than the Expiration Date.
(c) Nothing in the Plan or this Grant shall confer on
Optionee any right to continue in the employ of the Company or any Parent,
Subsidiary or Affiliate of the Company or limit in any way the right of the
Company or any Parent, Subsidiary or Affiliate of the Company to terminate
Optionee's employment at any time, with or without cause.
5. Manner of Exercise.
(a) This Option shall be exercisable by delivery to the
Company of an executed written Notice and Agreement in the form attached hereto
as Exhibit A, or in such other form as may be approved by the Company, which
shall set forth Optionee's election to exercise this Option, the number of
Shares being purchased, any restrictions imposed on the Shares and such other
representations and agreements regarding Optionee's investment intent and access
to information as may be required by the Company to comply with applicable
securities laws.
(b) Such Notice and Agreement shall be accompanied by
full payment of the Exercise Price for the Shares being purchased (i) in cash
(by check); (ii) by surrender of Shares of Common Stock of the Company having a
fair market value equal to the Exercise
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Price; (iii) where permitted by applicable law, by tender of a full recourse
promissory note having such terms as the Board of Directors or the committee
thereof that administers the Plan may approve; or (iv) by any combination
thereof.
(c) Prior to the issuance of the Shares upon exercise of
this Option, Optionee must pay or make adequate provision for any applicable
federal or state withholding obligations of the Company.
(d) Provided that such notice and payment are in form and
substance satisfactory to counsel for the Company, the Company shall issue the
Shares registered in the name of Optionee or Optionee's legal representative.
6. Notice of Disqualifying Disposition of ISO Shares. If the
Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the date of this grant, and (2) the date
one year after transfer of such Shares to the Optionee upon exercise of the ISO,
the Optionee shall immediately notify the Company in writing of such
disposition. Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the Optionee
from the early disposition by payment in cash or out of the current earnings
paid to the Optionee.
7. Compliance with Laws and Regulations. The issuance and
transfer of Shares shall be subject to compliance by the Company and the
Optionee with all applicable requirements of federal and state securities laws
and with all applicable requirements of any stock exchange on which the
Company's common stock may be listed at the time of such issuance or transfer.
Optionee understands that the Company is under no obligation to register or
qualify the Shares with the Securities and Exchange Commission, any state
securities commission or any stock exchange to effect such compliance.
8. Nontransferability of Option. This Option may not be
transferred in any manner other than by will or by the laws of descent and
distribution and may be exercised during the lifetime of the Optionee only by
the Optionee. The terms of this Option shall be binding upon the executors,
administrators, successors and assigns of the Optionee.
9. Tax Consequences. Set forth below is a brief summary as of the
date of this Option of some of the federal and California tax consequences of
exercise of this Option and disposition of the Shares. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.
(a) Exercise of ISO. If this Option qualifies as an ISO,
there will be no regular federal income tax liability or California 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 a tax preference item for federal income tax purposes and may
subject the Optionee to the alternative minimum tax in the year of exercise.
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(b) Exercise of Nonqualified Stock Option. If this Option
does not qualify as an ISO, there may be a regular federal income tax liability
and a California income tax liability upon the exercise of the 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. The Company will
be required to withhold from Optionee's compensation or collect from Optionee
and pay to the applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise.
(c) Disposition of Shares. If the Shares are held for at
least six months in the case of a nonqualified option and twelve months in the
case of an ISO after the date of the transfer of the Shares pursuant to the
exercise of this Option (and, in the case of an ISO, are disposed of at least
two years after the Date of Grant), any gain realized on disposition of the
Shares will be treated as long term capital gain for federal and California
income tax purposes. If Shares pur chased under an ISO are disposed of within
such one year period or within two years after the Date of Grant, any gain
realized on such disposition will be treated as compensation income (taxable at
ordinary income rates) to the extent of the excess, if any, of the fair market
value of the Shares on the date of exercise over the Exercise Price.
10. Interpretation. Any dispute regarding the interpretation of
this agreement shall be submitted by Optionee or the Company forthwith to the
Company's Board of Directors or the committee thereof that administers the Plan,
which shall review such dispute at its next regular meeting. The resolution of
such a dispute by the Board or committee shall be final and binding on the
Company and on Optionee.
11. Entire Agreement. The Plan and the Notice and Agreement
attached as Exhibit A are incorporated herein by reference. This Grant, the Plan
and the Notice and Agreement constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.
INFORMATION STORAGE DEVICES, INC.
By: _____________________________________________________
Name: ___________________________________________________
Title: __________________________________________________
Date signed: ____________________________________________
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ACCEPTANCE
Optionee hereby acknowledges receipt of a copy of the Plan, represents
that Optionee has read and understands the terms and provisions thereof, and
accepts this Option subject to all the terms and conditions of the Plan and this
Grant. Optionee acknowledges that there may be adverse tax consequences upon
exercise of this Option or disposition of the Shares and that Optionee should
consult a tax adviser prior to such exercise or disposition.
_____________________________________________________Optionee
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Exhibit A
INFORMATION STORAGE DEVICES, INC.
STOCK OPTION EXERCISE NOTICE AND AGREEMENT
I, an Optionee under the Company's 1987 Stock Option Plan, hereby elect
to purchase the number of shares of Common Stock as set forth below:
Optionee___________________________________________________ Number of Shares Purchased:_________________________________________
Social Security Number:____________________________________ Purchase Price per Share:___________________________________________
Address:___________________________________________________ Aggregate Purchase Price:___________________________________________
___________________________________________________ Date of Stock Option Grant:_________________________________________
Type of Option: [ ] Incentive Stock Option Exact Name of Title to Shares:______________________________________
[ ] Nonqualified Stock Option ____________________________________________________________________
____________________________________________________________________
Optionee hereby delivers to the Company the Aggregate Purchase Price,
to the extent permitted in the Option as follows (check as applicable and
complete):
[ ] in cash (by check) in the amount of $__________________, receipt of
which is acknowledged by the Company;
[ ] by delivery of ___________ fully-paid, nonassessable and vested shares
of the Common Stock of the Company owned by Optionee for at least six
(6) months prior to the date hereof (and which have been paid for
within the meaning of SEC Rule 144), or obtained by Optionee in the
open public market, and owned free and clear of all liens, claims,
encumbrances or security interests, valued at the current fair market
value of $_________ per share; or
[ ] by tender of a full recourse promissory note in the principal amount of
$_____________________.
Market Standoff Agreement. Optionee, if requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, agrees not to
sell or otherwise transfer or dispose of any Common Stock (or other securities)
of the Company held by Optionee during the period requested by the managing
underwriter following the effective date of a registration statement of the
Company filed under the 1933 Act or the Securities Exchange Act of 1934,
provided that all officers and directors of the Company are required to enter
into similar agreements. Such agreement shall be in writing in a form
satisfactory to the Company and such underwriter. The Company may impose
stop-transfer instructions with respect to the shares (or other securities)
subject to the foregoing restriction until the end of such period.
Tax Consequences. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE
TAX CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF THE
SHARES. OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX
CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR
ANY TAX ADVICE.
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Entire Agreement. The Plan and Option are incorporated herein by
reference. This Exercise Notice and Agreement, the Plan and the Option
constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and Optionee with respect
to the subject matter hereof, and is governed by California law except for that
body of law pertaining to conflict of laws.
Date:________________________________ ____________________________________
Signature of Optionee
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SPOUSE'S CONSENT
I acknowledge that I have read the Stock Option Exercise Notice and
Agreement (the "Agreement") and that I know its contents. I am aware that by the
Agreement's provisions my spouse (the "Optionee") agrees to sell the Number of
Shares Purchased (as provided for in the Agreement and hereinafter referred to
as "Shares"), including any community property interest I may have, on the
occurrence of certain events. I hereby consent to the sale, approve the
provisions of the Agreement and agree that these Shares and any interest I may
have in them are subject to the provisions of the Agreement. I will take no
action at any time to hinder operation of the Agreement on these Shares or any
interest I may have on them.
______________________________ Date:__________________
Spouse of Optionee
______________________________ Date:__________________
Optionee's Name