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EXHIBIT 99.6
HOT TOPIC, INC.
NON-EMPLOYEE DIRECTORS' NONSTATUTORY STOCK OPTION
______________________________________, Optionee:
HOT TOPIC, INC. (the "Company") has on ______________, 199_ 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 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 limitations contained herein, this option
shall become exercisable in installments over a period of four (4) years from
the date of grant as follows: twenty-five percent (25%) shall be exercisable
commencing on the date one year after the date of grant of the option and six
and one-quarter percent (6.25%) shall be exercisable at the end of each calendar
quarter thereafter, provided that the optionee has, during the entire period
prior to such vesting date, continuously served as a non-employee director or
employee of or consultant to the Company or any affiliate of the Company,
whereupon such option shall become fully exercisable in accordance with its
terms with respect to that portion of the shares represented by that
installment.
3. EXERCISE PRICE AND METHOD OF PAYMENT.
(a) The exercise price of this option is _________ ($ ) per share,
being the closing sales price of the Common Stock as quoted on the Nasdaq
National Market on the date of grant of this option.
(b) Payment of the exercise price of each option is due in full in
cash upon any exercise when the number of shares being purchased upon such
exercise is less than 1,000 shares; but when the number of shares being
purchased upon an exercise is 1,000 or more shares, the optionee may elect to
make payment of the exercise price under one of the following alternatives:
(i) Payment of the exercise price per share in cash at the
time of exercise;
(ii) Provided that at the time of the exercise the Common
Stock is publicly traded and quoted regularly in The Wall Street Journal,
payment by delivery of shares of Common Stock already owned by the optionee,
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
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or security interest, which Common Stock shall be valued at its fair market
value on the date preceding the date of exercise; or
(iii) Provided that at the time of the exercise the Common
Stock is publicly traded and regularly quoted in The Wall Street Journal,
pursuant to a program developed under Regulation T as promulgated by the Federal
Reserve Board which results in the receipt of cash (or check) by the Company
either prior to the issuance of shares of the Common Stock or pursuant to the
terms of irrevocable instructions issued by the optionee prior to the issuance
of shares of the Common Stock.
(iv) Payment by a combination of the methods of payment
specified in subparagraph 3(b)(i), 3(b)(ii) and 3(b)(iii) above.
4. WHOLE SHARES. This option may only be exercised for 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 Securities
Act of 1933, as amended (the "Securities 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 Securities Act.
6. TERM. The term of each option commences on the date it is granted
and, unless sooner terminated as set forth herein, expires on the date
("Expiration Date") ten (10) years from the date of grant. If the optionee's
service as a non-employee director or employee of or consultant to the Company
or any affiliate terminates for any reason or for no reason, the option shall
terminate on the earlier of the Expiration Date or the date three (3) months
following the date of termination of all such service; provided, however, that
if such termination of service is due to the optionee's death, the option shall
terminate on the earlier of the Expiration Date or twelve (12) months following
the date of the optionee's death. In any and all circumstances, this option may
be exercised following termination of the optionee's service as a non-employee
director or employee of or consultant to the Company or any affiliate only as to
that number of shares as to which it was exercisable as of the date of
termination of all such service.
7. EXERCISE. This option may be exercised 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. By exercising this option you
agree that 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 the exercise of this option or the lapse of any
substantial risk of forfeiture to which the shares are subject at the time of
exercise.
8. TRANSFERABILITY. An option shall not be transferable except by
will or by the laws of descent and distribution, or pursuant to a domestic
relations order, and shall be exercisable during the lifetime of the person to
whom the option is granted only by such person (or by his guardian or legal
representative) or transferee pursuant to such an order. Notwithstanding the
foregoing, the optionee may, by delivering written notice to the Company in
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a form satisfactory to the Company, designate a third party who, in the event of
the death of the optionee, shall thereafter be entitled to exercise the option.
9. ADJUSTMENT UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to this
option (through merger, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company), this option will be appropriately adjusted in the class and number of
shares and price per share of stock subject to the option. Such adjustments
shall be made by the Board of Directors (the "Board"), the determination of
which shall be final, binding and conclusive. (The conversion of any convertible
securities of the Company shall not be treated as a "transaction not involving
the receipt of consideration by the Company.")
(b) In the event of: (1) a dissolution, liquidation, or sale
of all or substantially all of the assets of the Company; (2) a merger or
consolidation in which the Company is not the surviving corporation; (3) a
reverse merger in which the Company is the surviving corporation but the shares
of the Company's common stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise; or (4) the acquisition by any person, entity or
group within the meaning of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") or any comparable successor
provisions (excluding any employee benefit plan, or related trust, sponsored or
maintained by the Company or any Affiliate of the Company) of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act,
or comparable successor rule) of securities of the Company representing at least
fifty percent (50%) of the combined voting power entitled to vote in the
election of directors, then the time during which this option may be exercised
shall be accelerated prior to such event and shall terminate if not exercised
after such acceleration and at or prior to such event.
10. NOTICES. Any notices provided for in this option 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. OPTION NOT A SERVICE CONTRACT. Nothing in this option shall
confer upon any non-employee director any right to continue in the service of
the Company or any affiliate in any capacity or shall affect any right of the
Company, its Board or shareholders or any affiliate to remove any non-employee
director pursuant to the Company's Bylaws and the provisions of laws of the
Company's state of incorporation.
12. AUTHORITY. This option is subject to all interpretations,
amendments, rules and regulations which may from time to time be promulgated and
adopted by the Company. This authority shall be exercised by the Board, or by a
committee of one or more members of the Board in the event that the Board
delegates its authority to a committee. The Board, in exercise
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of this authority, may correct any defect, omission or inconsistency in this
option in a manner and to the extent the Board shall deem necessary or desirable
to make this option fully effective. References to the Board shall mean the
committee if a committee has been appointed by the Board. Any interpretations,
rules and regulations promulgated by the Board shall be final and binding upon
the Company and its successors in interest as well as you and your heirs,
assigns, and other successors in interest. The Board at any time, and from time
to time, may amend the terms of this option; provided, however, that your rights
and obligations under this option shall not be impaired by any such amendment
unless (i) the Company requests your consent and (ii) you consent in writing.
13. AVAILABLE SHARES. During the term of this option, the Company
shall at all times keep available the number of shares of stock required to
satisfy the exercise of such option.
Dated the _____ day of , __________________ 19__.
Very truly yours,
HOT TOPIC, INC.
By:_______________________________
Duly authorized on behalf
of the Board of Directors
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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;
(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 options plans of the Company, and (ii) the following agreements
only:
NONE_______________________________
(Initial)
OTHER __________________________
__________________________
__________________________
___________________________________
Optionee
___________________________________
Address
___________________________________
___________________________________
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NOTICE OF EXERCISE
HOT TOPIC, INC.
3410 Pomona Blvd.
Pomona, California 91768 Date of Exercise: _______________
Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to
purchase the number of shares for the price set forth below.
Type of option: Nonstatutory
Stock option dated: __________________
Number of shares as
to which option is
exercised: __________________
Certificates to be
issued in name of: __________________
Total exercise price: $_________________
Cash payment delivered
herewith: $_________________
Value of ______ shares of
______________ common
stock delivered herewith(1): $_________________
By this exercise, I agree (i) to provide such additional documents as
you may require pursuant to the terms of the option and (ii) to provide for the
payment by me to you (in the manner designated by you) of your withholding
obligation, if any, relating to the exercise of this option.
I acknowledge that all certificates representing any of the shares
subject to the provisions of the option shall have endorsed thereon any legends
reflecting restrictions pursuant to the Company's Articles of Incorporation,
Bylaws and/or applicable securities laws.
Very truly yours,
___________________________________
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(1) This payment feature may be used with respect to an exercise of
1,000 or more shares. Shares must meet the public trading requirements set forth
in the option. Shares must be valued in accordance with the terms of the option
being exercised, must have been owned for the minimum period required in the
option, and must be owned free and clear of any liens, claims, encumbrances or
security interests. Certificates must be endorsed or accompanied by an executed
assignment separate from certificate.
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