1
EXHIBIT 10.4
NONSTATUTORY STOCK OPTION
_______________________________, Optionee:
ALANEX CORPORATION (the "Company"), pursuant to its 1993 Stock Plan
(the "Plan"), has granted to you, the optionee named above, an option to
purchase shares of the common stock of the Company ("Common Stock"). This option
is not intended to qualify and will not be treated as an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's employees
(including officers), directors or consultants and is intended to comply with
the provisions of Rule 701 promulgated by the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act"). Defined terms not
explicitly defined in this agreement but defined in the Plan shall have the same
definitions as in the Plan.
The details of your option are as follows:
1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total
number of shares of Common Stock subject to this option is _____________________
(___________).
2. VESTING. Subject to the limitations contained herein,
__________ of the shares will vest (become exercisable) on ____________, 19__
and __________ of the shares will then vest each ____________ [DRAFTING NOTE:
INDICATE APPLICABLE TIME PERIOD (E.G., MONTH OR YEAR)] thereafter until either
(i) you cease to provide services to the Company for any reason, or (ii) this
option becomes fully vested.
3. EXERCISE PRICE AND METHOD OF PAYMENT.
(a) EXERCISE PRICE. The exercise price of this option is
__________________ ($_______________) per share, being not less than 85% of the
fair market value of the Common Stock on the date of grant of this option.
(b) METHOD OF PAYMENT. Payment of the exercise price per
share is due in full upon exercise of all or any part of each installment which
has accrued to you. You may elect, to the extent permitted by applicable
statutes and regulations, to make payment of the exercise price under one of the
following alternatives:
(i) Payment of the exercise price per share in
cash (including check) at the time of exercise;
1.
2
(ii) Payment pursuant to a program developed
under Regulation T as promulgated by the Federal Reserve Board which, prior to
the issuance of Common Stock, results in either the receipt of cash (or check)
by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds;
(iii) Provided that at the time of exercise the
Company's Common Stock is publicly traded and quoted regularly in the Wall
Street Journal, payment by delivery of already-owned shares of Common Stock,
held for the period required to avoid a charge to the Company's reported
earnings, and owned free and clear of any liens, claims, encumbrances or
security interests, which Common Stock shall be valued at its fair market value
on the date of exercise; or
(iv) Payment by a combination of the methods of
payment permitted by subparagraph 3(b)(i) through 3(b)(iii) above.
4. WHOLE SHARES. The minimum number of shares with respect to
which this option may be exercised at any one time is one hundred (100), except
(a) as to an installment subject to exercise, as set forth in paragraph 2, which
amounts to fewer than one hundred (100) shares, in which case, the number of
shares in such installment shall be the minimum number of shares, and (b) with
respect to the final exercise of this option, this minimum shall not apply. In
no event may this option be exercised for any number of shares which would
require the issuance of anything other than whole shares.
5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the
contrary contained herein, this option may not be exercised unless the shares
issuable upon exercise of this option are then registered under the Act or, if
such shares are not then so registered, the Company has determined that such
exercise and issuance would be exempt from the registration requirements of the
Act.
6. TERM. The term of this option commences on _________, 19__,
the date of grant and expires on _____________________ (the "Expiration Date,"
which date shall be no more than ten (10) years from the date this option is
granted), unless this option expires sooner as set forth below or in the Plan.
In no event may this option be exercised on or after the Expiration Date. This
option shall terminate prior to the Expiration Date as follows: three (3) months
after the termination of your Continuous Status as an Employee, Director or
Consultant with the Company or an Affiliate of the Company for any reason or for
no reason unless:
(a) such termination of Continuous Status as an Employee,
Director or Consultant is due to your permanent and total disability (within the
meaning of Section 422(c)(6) of the Code), in which event the option shall
expire on the earlier of the Expiration Date set forth above or twelve (12)
months following such termination of Continuous Status as an Employee, Director
or Consultant; or
2.
3
(b) such termination of Continuous Status as an Employee,
Director or Consultant is due to your death, in which event the option shall
expire on the earlier of the Expiration Date set forth above or twelve (12)
months after your death; or
(c) during any part of such three (3) month period the
option is not exercisable solely because of the condition set forth in paragraph
5 above, in which event the option shall not expire until the earlier of the
Expiration Date set forth above or until it shall have been exercisable for an
aggregate period of three (3) months after the termination of Continuous Status
as an Employee, Director or Consultant; or
(d) exercise of the option within three (3) months after
termination of your Continuous Status as an Employee, Director or Consultant
with the Company or with an Affiliate of the Company would result in liability
under section 16(b) of the Securities Exchange Act of 1934 (the "Exchange Act),
in which case the option will expire on the earlier of (i) the Expiration Date
set forth above, (ii) the tenth (10th) day after the last date upon which
exercise would result in such liability or (iii) six (6) months and ten (10)
days after the termination of your Continuous Status as an Employee, Director or
Consultant with the Company or an Affiliate of the Company.
However, this option may be exercised following termination of
Continuous Status as an Employee, Director or Consultant only as to that number
of shares as to which it was exercisable on the date of termination of
Continuous Status as an Employee, Director or Consultant under the provisions of
paragraph 2 of this option.
7. EXERCISE.
(a) This option may be exercised, to the extent specified
above, by delivering a notice of exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require pursuant
to subsection 12(f) of the Plan.
(b) By exercising this option you agree that:
(i) as a precondition to the completion of any
exercise of this option, the Company may require you to enter an arrangement
providing for the cash payment by you to the Company of any tax withholding
obligation of the Company arising by reason of: (1) the exercise of this option;
(2) the lapse of any substantial risk of forfeiture to which the shares are
subject at the time of exercise; or (3) the disposition of shares acquired upon
such exercise. You also agree that any exercise of this option has not been
completed and that the Company is under no obligation to issue any Common Stock
to you until such an arrangement is established or the Company's tax withholding
obligations are satisfied, as determined by the Company; and
3.
4
(ii) the Company (or a representative of the
underwriters) may, in connection with the first underwritten registration of the
offering of any securities of the Company under the Act, require that you not
sell or otherwise transfer or dispose of any shares of Common Stock or other
securities of the Company during such period (not to exceed one hundred eighty
(180) days) following the effective date (the "Effective Date") of the
registration statement of the Company filed under the Act as may be requested by
the Company or the representative of the underwriters. You further agree that
the Company may impose stop-transfer instructions with respect to securities
subject to the foregoing restrictions until the end of such period.
8. TRANSFERABILITY. This option is not transferable, except by
will or by the laws of descent and distribution, and is exercisable during your
life only by you. Notwithstanding the foregoing, by delivering written notice to
the Company, in a form satisfactory to the Company, you may designate a third
party who, in the event of your death, shall thereafter be entitled to exercise
this option.
9. OPTION NOT A SERVICE CONTRACT. This option is not an
employment contract and nothing in this option shall be deemed to create in any
way whatsoever any obligation on your part to continue in the employ of the
Company, or of the Company to continue your employment with the Company. In
addition, nothing in this option shall obligate the Company or any Affiliate of
the Company, or their respective stockholders, Board of Directors, officers, or
employees to continue any relationship which you might have as a Director or
Consultant for the Company or Affiliate of the Company.
10. NOTICES. Any notices provided for in this option or the Plan
shall be given in writing and shall be deemed effectively given upon receipt or,
in the case of notices delivered by the Company to you, five (5) days after
deposit in the United States mail, postage prepaid, addressed to you at the
address specified below or at such other address as you hereafter designate by
written notice to the Company.
11. GOVERNING PLAN DOCUMENT. This option is subject to all the
provisions of the Plan, a copy of which is attached hereto and its provisions
are hereby made a part of this option, including without limitation the
provisions of Section 6 of the Plan relating to option provisions, and is
further subject to all interpretations, amendments, rules and regulations which
4.
5
may from time to time be promulgated and adopted pursuant to the Plan. In the
event of any conflict between the provisions of this option and those of the
Plan, the provisions of the Plan shall control.
Dated the ____ day of __________________, 19__.
Very truly yours,
________________________________________
By______________________________________
Duly authorized on behalf of the
Board of Directors
ATTACHMENTS:
Alanex Corporation 1993 Stock Plan
Notice of Exercise
5.
6
The undersigned:
(a) Acknowledges receipt of the foregoing option and the
attachments referenced therein and understands that all rights and liabilities
with respect to this option are set forth in the option and the Plan; and
(b) Acknowledges that as of the date of grant of this option, it
sets forth the entire understanding between the undersigned optionee and the
Company and its Affiliates regarding the acquisition of stock in the Company and
supersedes all prior oral and written agreements on that subject with the
exception of (i) the options previously granted and delivered to the undersigned
under stock option plans of the Company, and (ii) the following agreements only:
NONE _____________
(Initial)
OTHER _________________________________
_________________________________
_________________________________
________________________________________
OPTIONEE
Address: _____________________________
_____________________________
6.