EXHIBIT 10.11
FORM OF
DETWILER, MITCHELL & CO.
STOCK OPTION AGREEMENT
(NOTE: The options granted hereunder are subject to approval by the
stockholders of the Company)
This certifies that, for value received, ________________("Option
Holder") shall have the right set forth herein (the "Option"), subject to the
terms and conditions set forth below, to purchase from DETWILER, MITCHELL & CO.
("DMC"), in whole or in part that number of fully paid and nonassessable shares
(the "Shares") of Common Stock of DMC set forth in Section I below and at a
purchase price per share (the "Exercise Price") set forth in Section I below.
The number, character and Exercise Price of such Shares are subject to
adjustment as provided in Section II(11) below and all references to "Shares"
and "Exercise Price" herein shall be deemed to include any such adjustment or
series of adjustments.
I. GRANT INFORMATION.
Date of Grant: ___________________
Name of Option Holder: ___________________
Social Security Number: ___________________
Type of Option: Nonstatutory ("NSO")
Number of Shares of Common
Stock Covered by the Option: ___________________
Exercise Price per Share: ___________________
Vesting Start Date: ___________________
Vesting Schedule:
Number of and Date Shares Vested: ___________________
Number of and Date Shares Vested: ___________________
Number of and Date Shares Vested: ___________________
Expiration Date: Five Years After Date of Grant
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II. TERMS AND CONDITIONS
1. Stockholder Approval. Your Option is effective immediately subject,
however, to the approval of the Option, the issuance of the shares underlying
the Option and this Agreement by the stockholders of DMC at or prior to the next
Annual Meeting of Stockholders.
2. Vesting. Your Option vests during your Service on the dates specified in
the vesting schedule on the first page of this Stock Option Agreement. Vesting
will cease if your Service terminates for any reason.
3. Service; Leaves of Absence. Your Service shall cease when you cease to
be actively employed by, or a consultant or adviser to DMC (or any subsidiary)
(the "Company"), as determined in the sole discretion of the DMC Board. For
purposes of your Option, your Service does not terminate when you go on a bona
fide leave of absence, that was approved by the Company in writing, if the terms
of the leave provide for continued service crediting, or when continued service
crediting is required by applicable law. Your Service terminates in any event
when the approved leave ends, unless you immediately return to active work. The
Company determines which leaves count toward Service, and when your Service
terminates for all purposes under this Agreement.
4. Term of Option. Your Option expires on the fifth anniversary of the Date
of Grant, and will expire earlier if your Service terminates as follows:
(a) Regular Termination. If your Service terminates for any reason
except death or Disability, then your Option will expire at the close of
business at Company headquarters on the date 30 days after your termination
date. During that 30-day period, you may exercise that portion of your
Option that was vested on the date that your Service terminated.
(b) Cause. If your Service terminates for Cause or if you resign from
your employment, your Option will expire immediately.
For purposes of this Section, "Cause" means (i) your continued failure
to perform substantially your duties as set by the Company at the date of
this Agreement (other than as a result of sickness, accident or similar
cause beyond your reasonable control) after your receipt of a written
warning and have been given thirty (30) days to improve; (ii) willful and
material misconduct, which is demonstrably and materially injurious to the
Company or any of its subsidiaries, including willful and material failure
to perform your duties as an officer or employee of the Company or any of
its subsidiaries or a material breach of this Agreement; (iii) conviction
of or plea of nolo contendere to a felony; and (iv) conviction of an act of
fraud against, or the misappropriation of property belonging to, the
Company or any of its subsidiaries, or any employee, customer, or supplier
of the Company or any of its subsidiaries.
(c) Death. If you die while in Service, then your Option will expire
at the close of business at Company headquarters on the date six (6) months
after the date of
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death. During that six-month period, your estate or heirs may exercise
that portion of your Option that was vested on the date of death.
(d) Disability. If your Service terminates because of your
Disability, then your Option will expire at the close of business at
Company headquarters on the date six (6) months after your termination
date. During that six-month period, you may exercise that portion of
your Option that was vested on the date of your Disability.
"Disability" means that you are unable to engage in any substantial
gainful activity by reason of any medically determinable physical or
mental impairment.
5. Exercise of Option.
(a) Legal Restrictions. By signing this Agreement, you agree not
to exercise this Option or sell any Common Stock acquired upon exercise
of this Option at a time when applicable laws, regulations or Company
or underwriter trading policies prohibit exercise or sale and to comply
with any such laws, regulations or policies deemed applicable to such
exercise or sale by counsel to the Company. In particular, the Company
shall have the right to designate one or more periods of time, each of
which shall not exceed 180 days in length, during which this Option
shall not be exercisable if the Company determines (in its sole
discretion) that such limitation on exercise could in any way
facilitate a lessening of any restriction on transfer pursuant to the
Securities Act with respect to any issuance of securities by the
Company, facilitate the registration or qualification of any securities
by the Company under the Securities Act or any state securities laws,
or facilitate the perfection of any exemption from the registration or
qualification requirements of the Securities Act for the issuance or
transfer of any securities. Such limitation on exercise shall not alter
the vesting schedule set forth in this Agreement other than to limit
the periods during which this Option shall be exercisable.
Notwithstanding the foregoing, if a limitation is imposed and such
limitation would cause a forfeiture of your exercise right because your
option would expire during such limitation period, then the vesting
schedule and expiration date of your option shall be extended 30 days
beyond the limitation period to allow for exercise of your option.
(b) Method of Exercise. To exercise your Option, you must execute
the Notice of Exercise, attached hereto as Exhibit A. You must submit
this form, together with full payment, at the address given on the
form. Your Notice of Exercise must specify how many shares you wish to
purchase. Your Notice of Exercise will be effective when it is received
by the Company. If someone else wants to exercise your Option after
your death, that person must prove to the Company's satisfaction that
he or she is entitled to do so.
(c) Form of Payment. When you submit Exhibit A, you must include
payment of the aggregate Exercise Price for the Common Stock you are
purchasing. Payment may be made in one (or a combination) of the
following forms.
. Your personal cheque, a cashier's cheque or a money order.
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. Shares of Common Stock which you have owned for six
months and which are surrendered to the Company. The
value of such Common Stock, determined as of the
effective date of the Option exercise, will be
applied to the Exercise Price.
. To the extent that a public market for Common Stock
exists as determined by the Company, by delivery (on
a form approved by the Company) of an irrevocable
direction to a securities broker to sell Common Stock
and to deliver all or part of the sale proceeds to
the Company in payment of the aggregate Exercise
Price.
. To the extent that a public market for Common Stock
exists as determined by the Company, by delivery (on
a form approved by the Company) of an irrevocable
direction to a securities broker or lender to pledge
Common Stock, as security for a loan, and to deliver
all or part of the loan proceeds to the Company in
payment of the aggregate Exercise Price.
. Any other form of legal consideration approved by the
Board.
(d) Withholding Taxes. You will not be allowed to
exercise your Option unless you make acceptable arrangements to pay any
withholding or other taxes that may be due as a result of the exercise
of, or other dealing in, the Option or the sale of Common Stock
acquired upon exercise of your Option.
6. Market Stand-Off. In connection with any underwritten public
offering by the Company of its equity securities pursuant to an effective
registration statement filed under the US Securities Act of 1933, you shall not,
directly or indirectly, engage in any transaction prohibited by the underwriter,
nor shall you sell, make any short sale of, contract to sell, transfer the
economic risk of ownership in, loan, charge, pledge, grant any option for the
purchase of, or otherwise dispose of or transfer for value or agree to engage in
any of the foregoing transactions with respect to any Shares without the prior
written consent of the Company or its underwriters, for such period of time
after the effective date of such registration statement as may be requested by
the Company or such underwriters. Such period of time shall not exceed one
hundred eighty (180) days and may be required by the underwriter as a condition
of the offering. By signing this Stock Option Agreement you agree to execute and
deliver such other agreements as may be reasonably requested by the Company or
the underwriter which are consistent with the foregoing or which are necessary
to give further effect thereto. To enforce the provisions of this Section 5, the
Company may impose stop-transfer instructions with respect to the Shares until
the end of the applicable stand-off period.
7. Only Vested Shares Purchasable. You may not exercise your Option as
to any share before such share it is vested as provided in Section I above.
8. Transfer of Option. Prior to your death, only you may exercise your
Option. You cannot transfer or assign your Option. For instance, you may not
sell your Option or use it as security for a loan. If you attempt to do any of
these things, your Option will immediately become invalid. You may, however,
dispose of your Option in your will.
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Regardless of any marital property settlement agreement, the Company is
not obligated to honor a notice of exercise from your spouse or former spouse,
nor is the Company obligated to recognize such individual's interest in your
Option in any other way.
9. No Retention Rights. Your Option does not give you the right to be
retained by the Company (or any subsidiaries) in any capacity. The Company
reserves the right to terminate your Service at any time and for any reason.
10. Stockholder Rights. You, or your estate or heirs, have no rights as
a Stockholder of the Company until a certificate for your Common Stock has been
issued. No adjustments are made for dividends or other rights if the applicable
record date occurs before your stock certificate is issued.
11. Adjustments to Common Stock.
(a) Adjustments. In the event of a subdivision of the
outstanding Shares, a declaration of a dividend payable in Shares, a
declaration of a dividend payable in a form other than Shares in an
amount that has a material effect on the price of Shares, a combination
or consolidation of the outstanding Shares (by reclassification or
otherwise) into a lesser number of Shares, a recapitalization, a
spin-off or a similar occurrence, the Committee shall make such
adjustments as it, in its sole discretion, deems appropriate in one or
more of:
(1) The number of shares subject to the Option; or
(2) The Exercise Price under the outstanding Option.
Except as provided in this Section 11, you shall have no rights whatsoever as a
result of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.
(b) Dissolution or Liquidation. To the extent not
previously exercised, your Option shall terminate immediately prior to
the dissolution or liquidation of the Company.
(c) Reorganizations. If the Company is a party to a merger
or other reorganization, your Option shall be subject to the agreement
of merger or reorganization. Such agreement shall provide for one or
more of the following, in all cases without your consent being
required:
(1) The continuation of the Option, if the Company is a
surviving corporation;
(2) The assumption of the outstanding Option by the
surviving corporation or its parent or subsidiary;
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(3) The substitution by the surviving corporation or its
parent or subsidiary of its own awards for the Option; or
(4) Full exercisability and/or vesting and/or accelerated
expiration of the Option.
(d) Reservation of Rights. Except as provided in this
Section 11, you shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any
dividend or any other increase or decrease in the number of shares of
stock of any class. Any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class,
shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or Exercise Price of Shares subject to your
Option. The grant of your Option shall not affect in any way the right
or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to
issue or sell any shares of stock of any class, to merge or consolidate
or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.
12. Applicable Law. This Agreement will be interpreted and enforced
under the laws of the state of Delaware.
This Agreement and your Employment Agreement constitute the entire
understanding between you and the Company regarding your Option. Any prior
agreements, commitments or negotiations concerning your Option are superseded.
By signing below, you agree to all of the terms and conditions
described in this Stock Option Agreement, including the attached Notice
of Exercise.
Option Holder:__________________________________________________________________
(Signature)
Company:________________________________________________________________________
(Signature)
Title: Chairman and Chief Executive Officer
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