<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 27, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------
E*TRADE GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-284416
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
FOUR EMBARCADERO PLACE
2400 GENG ROAD, PALO ALTO, CALIFORNIA 94303
(Address of principal executive offices) (Zip Code)
--------------
1998 SPECIAL NONSTATUTORY STOCK OPTION PLAN
SHAREDATA, INC. AMENDED AND RESTATED 1984 STOCK OPTION PLAN
SHAREDATA, INC. OFFICER AND DIRECTOR STOCK OPTION PLAN
(Full title of the Plans)
--------------
CHRISTOS M. COTSAKOS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
E*TRADE, INC.
FOUR EMBARCADERO PLACE
2400 GENG ROAD
PALO ALTO, CA 94303
(650) 842-2500
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price Fee
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 Special Nonstatutory
Stock Option Plan
Common Stock, $_____ par value 60,855 shares $9.32 $ 567,168.60 $167.31
Amended and Restated 1984 Stock
Option Plan Common Stock,
$_____ par value 97,644 shares $6.38 $ 622,968.72 $183.78
ShareData, Inc. Officer and
Director Stock Option Plan
Common Stock, $_____ par value 147,948 shares $7.75 $1,146,596.00 $338.25
- ---------------------------------------------------------------------------------------------------------------
Aggregate Filing Fee: $689.34
===============================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the E*TRADE Group, Inc. 1998
Special Nonstatutory Stock Option Plan, the ShareData, Inc. Amended and
Restated 1984 Stock Option Plan and the ShareData, Inc. Officer and
Director Stock Option Plan, (together the "Option Plans") by reason of
any stock dividend, stock split, recapitalization or other similar
transaction effected without the Registrant's receipt of consideration
which results in an increase in the number of the outstanding shares of
Registrant's Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the weighted average
exercise price of the outstanding options.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
E*TRADE Group, Inc. (the "Registrant") hereby incorporates by reference
into this Registration Statement the following documents previously filed with
the Securities and Exchange Commission (the "SEC"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended September 30, 1997, filed with the SEC on December 23, 1997;
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarters ended December 31, 1997, March 31, 1998 and June 30, 1998,
filed with the SEC on February 17, 1998, May 14, 1998 and August 14,
1998, respectively;
(c) The Registrant's Current Reports on Form 8-K, filed with the SEC on
June 12, 1998 and July 17, 1998; and
(d) The Registrant's Registration Statement No. 00-111921 on Form 8-A
filed with the SEC on July 12, 1996 pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), in which
there is described the terms, rights and provisions applicable to the
Registrant's outstanding Common Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of
this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
-----------------------------------------
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, or suit proceedings, whether civil, criminal,
administrative or investigative (other than action by or in the right of such
corporation), by reason of the fact that such person was an officer or director
of such corporation, or is or was serving at the request of such corporation as
a director, officer, employee or agent of another corporation enterprise. The
indemnify may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that such officer or
director acted in good faith and in a manner he reasonably believed to be in or
not opposed to the corporation's best interests, and, for criminal proceedings,
had no reasonable cause to believe his conduct was illegal. A Delaware
corporation may indemnify officers and directors in an action by or in the right
of the corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation in the performance of his duty. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses which
such officer or director actually and reasonably incurred.
In accordance with the Delaware Law, the Restated Certificate of
Incorporation of the Registrant contains a provision to limit the personal
liability of the directors of the Registrant for violations of their fiduciary
duty. This provision eliminates each director's liability to the Registrant or
its stockholders for monetary damages except (i) for any breach of the
director's duty of loyalty to the Registrant or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware Law providing
for liability of directors for unlawful payment of dividends or unlawful stock
purchases or redemptions, or (iv) for any transaction from which a director
derived an improper personal benefit. The effect of this provision is to
eliminate the personal liability of directors for monetary damages for actions
involving a breach of their fiduciary duty of care, including any such actions
involving gross negligence.
Article 5 of the Restated Bylaws of the Registrant provide for
indemnification of the officers and directors of the Registrant to the fullest
extent permitted by applicable law.
In connection with the incorporation of the Registrant into the State of
Delaware, the Registrant entered into indemnification agreements with each
director and certain officers. The Indemnification Agreements provide
indemnification to such directors and officers under certain circumstances for
acts or omissions which may not be covered by directors' and officers'
liability insurance.
<PAGE> 3
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
<TABLE>
<CAPTION>
Number Exhibit
- ------ -------
<S> <C>
4 Instruments Defining Rights of Stockholders. Reference is made to
Registrant's Registration Statement No. 00-111921 on Form 8-A,
including exhibits thereto, which is incorporated herein by reference
pursuant to Item 3(c).
5.1 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Deloitte & Touche LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5.1.
24 Power of Attorney. Reference is made to page II-3 of this
Registration Statement.
99.1 1998 Special Nonstatutory Stock Option Plan.
99.2 Form of Notice of Grant for 1998 Special Nonstatutory Stock Option
Plan
99.3 Form of Stock Option Agreement for 1998 Special Nonstatutory Stock
Option Plan
99.4 ShareData, Inc. Amended and Restated 1984 Stock Option Plan.
99.5 Form of Notice of Grant of Stock Option and Grant Agreement for
Incentive Stock Option Agreement.
99.6 Form of Notice of Grant of Stock Option and Grant Agreement for
Non-Qualified Stock Option Agreement (Non-Employee Director).
99.7 Form of Option Assumption Agreement for 1984 Stock Option Plan.
99.8 ShareData, Inc. Officer and Director Stock Option Plan.
99.9 Form of Notice of Grant of Stock Option and Grant Agreement for
Incentive Stock Option Agreement.
99.10 Form of Notice of Grant of Stock Option and Grant Agreement for
Non-Qualified Stock Option Agreement (Non-Employee Director - Special
Acceleration Upon Acquisition)
99.11 Form of Notice of Grant of Stock Option and Grant Agreement for
Non-Qualified Stock Option Agreement (Non-Employee Director).
99.12 Form of Option Assumption Agreement for ShareData, Inc. Officer and
Director Stock Option Plan.
99.13 Form of Stock Option Agreement with Promissory Note.
</TABLE>
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the "1933 Act"), (ii) to
reflect in the prospectus any facts or events arising after the effective date
of this Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement and (iii) to include
any material information with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material change to such
information in this Registration Statement; provided, however, that clauses
(1)(i) and (1)(ii) shall not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act
that are incorporated by reference into this Registration Statement; (2) that
for the purpose of determining any liability under the 1933 Act each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
Option Plans.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers, or controlling persons of the
Registrant pursuant to the indemnification provisions in Item 6, or otherwise,
the Registrant has been advised that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the 1933 Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will,
II-2
<PAGE> 4
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Palo Alto, State of California on this day of
August 25, 1998.
E*TRADE GROUP, INC.
By: /s/ Christos M. Cotsakos
-------------------------------------
Christos M. Cotsakos
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of E*TRADE Group, Inc., a
Delaware corporation, do hereby constitute and appoint Christos M. Cotsakos and
Leonard C. Purkis and each of them, the lawful attorneys-in-fact and agents with
full power and authority to do any and all acts and things and to execute any
and all instruments which said attorneys and agents, and any one of them,
determine may be necessary or advisable or required to enable said corporation
to comply with the Securities Act of 1933, as amended, and any rules or
regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
that all said attorneys and agents, or any one of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ William A. Porter Chairman of the Board August 25, 1998
- ---------------------------
William A. Porter
/s/ Christos M. Cotsakos President and Chief Executive August 25, 1998
- --------------------------- Officer (Principal
Christos M. Cotsakos Executive Officer)
/s/ Leonard C. Purkis Senior Vice President, Finance August 25, 1998
- --------------------------- and Administration, Chief
Leonard C. Purkis Financial Officer and Treasurer
(Principal Financial and
Accounting Officer)
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Richard S. Braddock Director August 25, 1998
- ---------------------------
Richard S. Braddock
/s/ William E. Ford Director August 25, 1998
- ---------------------------
William E. Ford
/s/ George Hayter Director August 25, 1998
- ---------------------------
George Hayter
/s/ Masayoshi Son Director August 25, 1998
- ---------------------------
Masayoshi Son
/s/ Lewis E. Randall Director August 25, 1998
- ---------------------------
Lewis E. Randall
/s/ Lester C. Thurow Director August 25, 1998
- ---------------------------
Lester C. Thurow
</TABLE>
II-4
<PAGE> 6
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
E*TRADE GROUP, INC.
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Exhibit
- ------ -------
<S> <C>
4 Instruments Defining Rights of Stockholders. Reference is made to
Registrant's Registration Statement No. 00-111921 on Form 8-A,
including exhibits thereto, which is incorporated herein by reference
pursuant to Item 3(c).
5.1 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Deloitte & Touche LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5.1.
24 Power of Attorney. Reference is made to page II-3 of this
Registration Statement.
99.1 1998 Special Nonstatutory Stock Option Plan.
99.2 Form of Notice of Grant for 1998 Special Nonstatutory Stock Option
Plan
99.3 Form of Stock Option Agreement for 1998 Special Nonstatutory Stock
Option Plan
99.4 ShareData, Inc. Amended and Restated 1984 Stock Option Plan.
99.5 Form of Notice of Grant of Stock Option and Grant Agreement for
Incentive Stock Option Agreement.
99.6 Form of Notice of Grant of Stock Option and Grant Agreement for
Non-Qualified Stock Option Agreement (Non-Employee Director).
99.7 Form of Option Assumption Agreement for 1984 Stock Option Plan.
99.8 ShareData, Inc. Officer and Director Stock Option Plan.
99.9 Form of Notice of Grant of Stock Option and Grant Agreement for
Incentive Stock Option Agreement.
99.10 Form of Notice of Grant of Stock Option and Grant Agreement for
Non-Qualified Stock Option Agreement (Non-Employee Director - Special
Acceleration Upon Acquisition)
99.11 Form of Notice of Grant of Stock Option and Grant Agreement for
Non-Qualified Stock Option Agreement (Non-Employee Director).
99.12 Form of Option Assumption Agreement for ShareData, Inc. Officer and
Director Stock Option Plan.
99.13 Form of Stock Option Agreement with Promissory Note.
</TABLE>
<PAGE> 1
EXHIBIT 5.1
August 25, 1998
E*TRADE Group, Inc.
Four Embarcadero Plaza
2400 Geng Road
Palo Alto, CA 94303
Re: Registration Statement for Offering of an Aggregate of
306,477 Shares of Common Stock and Related Stock Options
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of 306,477 shares of
the Common Stock of E*TRADE Group, Inc. (the "Company") issuable under the (i)
1998 Special Nonstatutory Stock Option Plan (60,855 shares), (ii) ShareData,
Inc. 1984 Stock Option Plan (97,644 shares) and (iii) ShareData, Inc. Officer
and Director Stock Option Plan (147,948 shares) (collectively, the "Option
Plans"), as assumed by the Company. We advise you that, in our opinion, when
such shares have been issued and sold pursuant to the applicable provisions of
the Option Plans, and in accordance with the applicable provisions of the Option
Plans, and in accordance with the Registration Statement, such shares will be
duly authorized, validly issued, fully paid and non-assessable share of the
Company's Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ BROBECK, PHLEGER & HARRISON LLP
-----------------------------------
BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
EXHIBIT 23.1
We consent to the incorporation by reference in this Registration Statement of
E*Trade Group, Inc. on Form S-8 of our report dated November 6, 1997 (November
21, 1997 as to the second paragraph of Note 11), appearing in the Annual Report
on Form 10-K of E*Trade Group, Inc. for the year ended September 30, 1997.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
San Jose, California
August 25, 1998
<PAGE> 1
EXHIBIT 99.1
E*TRADE GROUP, INC.
1998 SPECIAL NONSTATUTORY STOCK OPTION PLAN
ARTICLE ONE
GENERAL PROVISIONS
I. PURPOSE OF THE PLAN
This 1998 Special Nonstatutory Stock Option Plan is intended to
promote the interests of E*TRADE Group, Inc., a Delaware corporation, by
providing eligible persons with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Corporation
as an incentive for them to remain in the service of the Corporation.
Capitalized terms shall have the meanings assigned to such terms in
the attached Appendix.
II. ADMINISTRATION OF THE PLAN
A. The Plan shall be administered by the Board. However, any or all
administrative functions otherwise exercisable by the Board may be delegated to
the Primary Committee. Members of the Primary Committee shall serve for such
period of time as the Board may determine and shall be subject to removal by the
Board at any time. The Board may also at any time terminate the functions of the
Primary Committee and reassume all powers and authority previously delegated to
the Primary Committee.
B. The Plan Administrator shall have full power and authority
(subject to the provisions of the Plan) to establish such rules and regulations
as it may deem appropriate for proper administration of the Plan and to make
such determinations under, and issue such interpretations of, the Plan and any
outstanding options thereunder as it may deem necessary or advisable. Decisions
of the Plan Administrator shall be final and binding on all parties who have an
interest in the Plan or any option thereunder.
III. ELIGIBILITY
A. The persons eligible to participate in the Plan are as follows:
(i) Associates,
(ii) non-employee members of the Board or the board of
directors of any Parent or Subsidiary, and
(iii) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
B. The Plan Administrator shall have full authority to determine
which eligible persons are to receive option grants, the time or times when such
option grants are to be
<PAGE> 2
made, the number of shares to be covered by each such grant, the time or times
when each option is to become exercisable and the maximum term for which the
option is to remain outstanding.
IV. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market. The maximum number of shares of Common Stock
which may be issued over the term of the Plan shall not exceed 60,855 shares.
B. If any change is made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and/or class of securities issuable under the
Plan and (ii) the number and/or class of securities and the exercise price per
share in effect under each outstanding option under the Plan. Such adjustments
to the outstanding options are to be effected in a manner which shall preclude
the enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.
2.
<PAGE> 3
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
shall comply with the terms specified below.
A. EXERCISE PRICE.
1. The exercise price per share shall be fixed by the Plan
Administrator and shall be less than, equal to or greater than the Fair Market
Value per share of Common Stock on the option grant date.
2. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section I of
Article Three and the documents evidencing the option, be payable in one or more
of the forms specified below:
(i) cash or check made payable to the Corporation,
(ii) shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date,
or
(iii) to the extent the option is exercised for vested shares,
through a special sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable written instructions to
(a) a Corporation-designated brokerage firm to effect the immediate sale
of the purchased shares and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased shares plus all
applicable Federal, state and local income and employment taxes required
to be withheld by the Corporation by reason of such exercise and (b) the
Corporation to deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable at
such time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option. However, no option shall have a term in excess of ten (10) years
measured from the option grant date.
3.
<PAGE> 4
C. EFFECT OF TERMINATION OF SERVICE.
1. The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or death:
(i) Any option outstanding at the time of the Optionee's
cessation of Service for any reason shall remain exercisable for such
period of time thereafter as shall be determined by the Plan Administrator
and set forth in the documents evidencing the option, but no such option
shall be exercisable after the expiration of the option term.
(ii) Any option exercisable in whole or in part by the
Optionee at the time of death may be subsequently exercised by the
personal representative of the Optionee's estate or by the person or
persons to whom the option is transferred pursuant to the Optionee's will
or in accordance with the laws of descent and distribution.
(iii) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number of
vested shares for which the option is exercisable on the date of the
Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term,
the option shall terminate and cease to be outstanding for any vested
shares for which the option has not been exercised. However, the option
shall, immediately upon the Optionee's cessation of Service, terminate and
cease to be outstanding to the extent the option is not otherwise at that
time exercisable for vested shares.
2. The Plan Administrator shall have complete discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:
(i) extend the period of time for which the option is to
remain exercisable following the Optionee's cessation of Service from the
limited exercise period otherwise in effect for that option to such
greater period of time as the Plan Administrator shall deem appropriate,
but in no event beyond the expiration of the option term, and/or
(ii) permit the option to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of
vested shares of Common Stock for which such option is exercisable at the
time of the Optionee's cessation of Service but also with respect to one
or more additional installments in which the Optionee would have vested
had the Optionee continued in Service.
D. STOCKHOLDER RIGHTS. The holder of an option shall have no
stockholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
4.
<PAGE> 5
E. LIMITED TRANSFERABILITY OF OPTIONS. An option shall be
exercisable only by the Optionee and shall not be assignable or transferable
other than by will or by the laws on descent and distribution following
Optionee's death.
II. CORPORATE TRANSACTION
A. In the event of any Corporate Transaction, each outstanding
option shall terminate and cease to be outstanding, except to the extent assumed
by the successor corporation (or parent thereof) in connection with such
Corporate Transaction.
B. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments to reflect such Corporate Transaction shall also be made
to (i) the exercise price payable per share under each outstanding option,
provided the aggregate exercise price payable for such securities shall remain
the same and (ii) the maximum number and/or class of securities available for
issuance over the remaining term of the Plan.
C. The Plan Administrator shall have the discretion, exercisable
either at the time the option is granted or at any time while the option remains
outstanding, to provide for the automatic acceleration (in whole or in part) of
one or more outstanding options upon the occurrence of a Corporate Transaction,
whether or not those options are to be assumed in the Corporate Transaction.
D. The outstanding options shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
III. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any
time and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution new options covering the same or different number of shares of
Common Stock but with an exercise price per share based on the Fair Market Value
per share of Common Stock on the new grant date.
5.
<PAGE> 6
ARTICLE THREE
MISCELLANEOUS
I. FINANCING
The Plan Administrator may permit any Optionee to pay the option
exercise price under the Plan by delivering a full-recourse, interest bearing
promissory note payable in one or more installments. The terms of any such
promissory note (including the interest rate and the terms of repayment) shall
be established by the Plan Administrator in its sole discretion. In no event may
the maximum credit available to the Optionee exceed the sum of (i) the aggregate
option exercise price payable for the purchased shares plus (ii) any Federal,
state and local income and employment tax liability incurred by the Optionee in
connection with the option exercise.
II. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock
upon the exercise of options or the issuance or vesting of such shares under the
Plan shall be subject to the satisfaction of all applicable Federal, state and
local income and employment tax withholding requirements.
B. The Plan Administrator may, in its discretion, provide any or all
holders of options or unvested shares of Common Stock under the Plan with the
right to use shares of Common Stock in satisfaction of all or part of the Taxes
incurred by such holders in connection with the exercise of their options or the
vesting of their shares. Such right may be provided to any such holder in either
or both of the following formats:
Stock Withholding: The election to have the Corporation
withhold, from the shares of Common Stock otherwise issuable upon the exercise
of such option or the vesting of such shares, a portion of those shares with an
aggregate Fair Market Value equal to the percentage of the Taxes (not to exceed
one hundred percent (100%)) designated by the holder.
Stock Delivery: The election to deliver to the Corporation, at
the time the option is exercised or the shares vest, one or more shares of
Common Stock previously acquired by such holder (other than in connection with
the option exercise or share vesting triggering the Taxes) with an aggregate
Fair Market Value equal to the percentage of the Taxes (not to exceed one
hundred percent (100%)) designated by the holder.
III. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan became effective when it was adopted by the Board on
July 5, 1998. The Plan Administrator may make option grants under the Plan at
any time before the date fixed herein for the termination of the Plan.
B. The Plan shall terminate upon the earliest of (i) July 4, 2008,
(ii) the date on which all shares available for issuance under the Plan shall
have been issued as fully-vested shares or (iii) the termination of all
outstanding options in connection with a Corporate
6.
<PAGE> 7
Transaction. Upon such plan termination, all outstanding option grants shall
thereafter continue to have force and effect in accordance with the provisions
of the documents evidencing such grants.
IV. AMENDMENT OF THE PLAN
The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
stock options at the time outstanding under the Plan unless the Optionee
consents to such amendment or modification. In addition, certain amendments may
require stockholder approval pursuant to applicable laws or regulations.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of
shares of Common Stock under the Plan shall be used for general corporate
purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any stock option
under the Plan and the issuance of any shares of Common Stock upon the exercise
of any granted option shall be subject to the Corporation's procurement of all
approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the stock options granted under it and the shares of Common Stock
issued pursuant to it.
B. No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee, which rights
are hereby expressly reserved by each, to terminate such person's Service at any
time for any reason, with or without cause.
7.
<PAGE> 8
APPENDIX
The following definitions shall be in effect under the Plan:
A. ASSOCIATE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
F. CORPORATION shall mean E*TRADE Group, Inc. and any corporate
successor to all or substantially all of the assets or voting stock of E*TRADE
Group, Inc. which shall by appropriate action adopt the Plan.
G. EXERCISE DATE shall mean the date on which the Corporation shall
have received written notice of the option exercise.
H. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the average of the
high and low selling prices per share of Common Stock on the date in
question, as the price is reported by the National Association of
Securities Dealers on the Nasdaq National Market or any successor system.
If there is no average of the high and low selling prices per share for
the Common Stock on the date in question, then the Fair Market Value shall
be the average of the high and low selling prices per share on the last
preceding date for which such quotation exists.
A-1
<PAGE> 9
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the average of the high and
low selling prices per of Common Stock on the date in question on the
Stock Exchange determined by the Plan Administrator to be the primary
market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no average of
the high and low selling prices per share for the Common Stock on the date
in question, then the Fair Market Value shall be the average of the high
and low selling prices per share on the last preceding date for which such
quotation exists
I. 1934 ACT shall mean the Securities Exchange Act of 1934, as
amended.
J. OPTIONEE shall mean any person to whom an option is granted under
the Plan.
K. PARENT shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
L. PLAN shall mean the Corporation's 1998 Special Nonstatutory Stock
Option Plan, as set forth in this document.
M. PLAN ADMINISTRATOR shall mean either the Board or a committee of
the Board acting in its capacity as administrator of the Plan.
N. SERVICE shall mean the performance of services for the
Corporation (or any Parent or Subsidiary) by a person in the capacity of an
Associate, a non-employee member of the board of directors or a consultant or
independent advisor, except to the extent otherwise specifically provided in the
documents evidencing the option grant or stock issuance.
O. STOCK EXCHANGE shall mean either the American Stock Exchange or
the New York Stock Exchange.
P. SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
A-2
<PAGE> 10
Q. TAXES shall mean the Federal, state and local income and
employment tax liabilities incurred by the holder of options or unvested shares
of Common Stock in connection with the exercise of those options or the vesting
of those shares.
a-3
<PAGE> 1
EXHIBIT 99.2
E*TRADE GROUP, INC.
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following option grant (the
"Option") to purchase shares of the Common Stock of E*TRADE Group, Inc. (the
"Corporation"):
Optionee: _______________________________________________________
Grant Date: _____________________________________________________
Vesting Commencement Date: ______________________________________
Exercise Price: $______ per share
Number of Option Shares: ______ shares
Expiration Date: ________________________________________________
Type of Option: Nonstatutory Stock Option
Exercise Schedule: The Option shall become exercisable with
respect to the Option Shares in four (4) equal successive
installments upon Optionee's completion of each year of Service
over the four (4) year period measured from the Vesting
Commencement Date. In no event shall the Option become
exercisable for any additional Option Shares after Optionee's
cessation of Service.
Optionee understands and agrees that the Option is granted
subject to and in accordance with the terms of the E*TRADE Group, Inc. 1998
Special Nonstatutory Stock Option Plan (the "Plan"). Optionee further agrees to
be bound by the terms of the Plan and the terms of the Option as set forth in
the Stock Option Agreement attached hereto as Exhibit A.
Optionee hereby acknowledges receipt of a copy of the official
prospectus for the Plan in the form attached hereto as Exhibit B. A copy of the
Plan is available upon request made to the Corporate Secretary at the
Corporation's principal offices.
No Employment or Service Contract. Nothing in this Notice or in
the attached Stock Option Agreement or in the Plan shall confer upon Optionee
any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining Optionee) or of Optionee,
which rights are hereby expressly reserved by each, to terminate Optionee's
Service at any time for any reason, with or without cause.
<PAGE> 2
Definitions. All capitalized terms in this Notice shall have the
meaning assigned to them in this Notice or in the attached Stock Option
Agreement.
, 199
- -----------------------------
Date
E*TRADE GROUP, INC.
By:
-------------------------------
Title:
-------------------------------
----------------------------------------
OPTIONEE
Address:
-------------------------------
----------------------------------------
ATTACHMENTS
EXHIBIT A - STOCK OPTION AGREEMENT
EXHIBIT B - PLAN SUMMARY AND PROSPECTUS
2.
<PAGE> 1
EXHIBIT 99.3
E*TRADE GROUP, INC.
STOCK OPTION AGREEMENT
RECITALS
A. The Board has adopted the Plan for the purpose of retaining the
services of selected Associates and individuals who provide services to the
Corporation (or any Parent or Subsidiary).
B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation's grant of an option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as
of the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.
2. OPTION TERM. This option shall have a term of ten (10) years
measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option shall, during Optionee's
lifetime, be exercisable only by the Optionee and shall not be assignable or
transferable other than by will or by the laws of descent and distribution
following Optionee's death.
4. DATES OF EXERCISE. This option shall become exercisable for
the Option Shares in one or more installments as specified in the Grant Notice.
As the option becomes exercisable for such installments, those installments
shall accumulate and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.
<PAGE> 2
5. CESSATION OF SERVICE. The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date in accordance with the following provisions:
(i) Should Optionee cease to remain in Service for
any reason (including death and Permanent Disability) while this option
is outstanding, then Optionee shall have a period of thirty (30) days
(commencing with the date of such cessation of Service) during which to
exercise this option, but in no event shall this option be exercisable
at any time after the Expiration Date.
(ii) During the limited period of post-Service
exercisability, this option may not be exercised in the aggregate for
more than the number of vested Option Shares for which the option is
exercisable at the time of Optionee's cessation of Service. Upon the
expiration of such limited exercise period or (if earlier) upon the
Expiration Date, this option shall terminate and cease to be outstanding
for any vested Option Shares for which the option has not been
exercised. However, this option shall, immediately upon Optionee's
cessation of Service for any reason, terminate and cease to be
outstanding with respect to Option Shares in which Optionee is not
otherwise at that time vested or for which this option is not otherwise
at that time exercisable.
6. CORPORATE TRANSACTION.
(a) In the event of any Corporate Transaction, this option
shall terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) in connection with the Corporate
Transaction.
(b) If this option is assumed in connection with a
Corporate Transaction, then this option shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply to the number and class
of securities which would have been issuable to Optionee in consummation of such
Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction, and appropriate adjustments shall also be made to the
Exercise Price, provided the aggregate Exercise Price shall remain the same.
(c) This Agreement shall not in any way affect the right
of the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i)
2.
<PAGE> 3
the total number and/or class of securities subject to this option and (ii) the
Exercise Price in order to reflect such change and thereby preclude a dilution
or enlargement of benefits hereunder.
8. STOCKHOLDER RIGHTS. The holder of this option shall not have
any stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all
or any part of the Option Shares for which this option is at the time
exercisable, Optionee (or any other person or persons exercising the option)
must take the following actions:
(i) Execute and deliver to the Corporation a
Notice of Exercise for the Option Shares for which the option is
exercised.
(ii) Pay the aggregate Exercise Price for the
purchased shares in one or more of the following forms:
(A) cash or check made payable to the
Corporation;
(B) a promissory note payable to the
Corporation, but only to the extent authorized by the Plan
Administrator in accordance with Paragraph 13;
(C) shares of Common Stock held by Optionee
(or any other person or persons exercising the option) for the
requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date; or
(D) to the extent the option is exercised
for vested Option Shares, through a special sale and remittance
procedure pursuant to which Optionee (or any other person or
persons exercising the option) shall concurrently provide
irrevocable written instructions (I) to a Corporation-designated
brokerage firm to effect the immediate sale of the purchased
shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased shares plus
all applicable Federal, state and local income and employment
taxes required to be withheld by the Corporation by reason of
such exercise and (II) to the Corporation to deliver the
certificates for the purchased shares directly to such brokerage
firm in order to complete the sale transaction.
3.
<PAGE> 4
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Notice of Exercise delivered to
the Corporation in connection with the option exercise.
(iii) Furnish to the Corporation appropriate
documentation that the person or persons exercising the option (if other
than Optionee) have the right to exercise this option.
(iv) Make appropriate arrangements with the
Corporation (or Parent or Subsidiary employing or retaining Optionee)
for the satisfaction of all Federal, state and local income and
employment tax withholding requirements applicable to the option
exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for any
fractional shares.
4.
<PAGE> 5
10. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the
Option Shares upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange (or the Nasdaq
National Market, if applicable) on which the Common Stock may be listed for
trading at the time of such exercise and issuance.
(b) The inability of the Corporation to obtain approval
from any regulatory body having authority deemed by the Corporation to be
necessary to the lawful issuance and sale of any Common Stock pursuant to this
option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. The Corporation, however, shall use its best efforts to
obtain all such approvals.
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraphs 3 and 6, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.
12. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
13. FINANCING. The Plan Administrator may, in its absolute
discretion and without any obligation to do so, permit Optionee to pay the
Exercise Price for the purchased Option Shares by delivering a promissory note
payable to the Corporation. The terms of any such promissory note (including the
interest rate, the requirements for collateral and the terms of repayment) shall
be established by the Plan Administrator in its sole discretion.
14. CONSTRUCTION. This Agreement and the option evidenced hereby
are made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.
15. GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules.
5.
<PAGE> 6
16. LEAVE OF ABSENCE. The following provisions shall apply upon
the Optionee's commencement of an authorized leave of absence:
(a) The exercise schedule in effect under the Grant Notice
shall be frozen as of the first day of the authorized leave, and this
option shall not become exercisable for any additional installments of
the Option Shares during the period Optionee remains on such leave.
(b) Should Optionee resume active Associate status within
sixty (60) days after the start date of the authorized leave, Optionee
shall, for purposes of the exercise schedule set forth in the Grant
Notice, receive Service credit for the entire period of such leave. If
Optionee does not resume active Associate status within such sixty
(60)-day period, then no Service credit shall be given for the entire
period of such leave.
(c) In no event shall this option become exercisable for
any additional Option Shares or otherwise remain outstanding if Optionee
does not resume Associate status prior to the Expiration Date of the
option term.
6.
<PAGE> 7
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify E*TRADE Group, Inc. (the "Corporation") that I elect to
purchase ______________shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $__________ per share (the "Exercise
Price") pursuant to that certain option (the "Option") granted to me under the
Corporation's 1998 Special Nonstatutory Stock Option Plan on
_____________________, 199__ .
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.
____________________, 199__
Date
____________________________________________
Optionee
Address:____________________________________
____________________________________________
Print name in exact manner
it is to appear on the
stock certificate: ____________________________________________
Address to which certificate
is to be sent, if different
from address above: ____________________________________________
____________________________________________
Social Security Number: ____________________________________________
Associate Number: ____________________________________________
<PAGE> 8
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. ASSOCIATE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
C. BOARD shall mean the Corporation's Board of Directors.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
F. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction, or
(ii) the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or dissolution
of the Corporation.
G. CORPORATION shall mean E*TRADE Group, Inc., a Delaware corporation.
H. EXERCISE DATE shall mean the date on which the option shall have been
exercised in accordance with Paragraph 9 of the Agreement.
I. EXERCISE PRICE shall mean the exercise price per share as specified
in the Grant Notice.
J. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the average of the
high and low selling prices per share of Common Stock on the date in
question, as the price is
A-1.
<PAGE> 9
reported by the National Association of Securities Dealers on the Nasdaq
National Market or any successor system. If there is no average of the
high and low selling prices per share for the Common Stock on the date
in question, then the Fair Market Value shall be the average of the high
and low selling prices per share on the last preceding date for which
such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the average of the high
and low selling prices per share of Common Stock on the date in question
on the Stock Exchange determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is officially quoted
in the composite tape of transactions on such exchange. If there is no
average of the high and low selling prices per share for the Common
Stock on the date in question, then the Fair Market Value shall be the
average of the high and low selling prices per share on the last
preceding date for which such quotation exists.
L. GRANT DATE shall mean the date of grant of the option as specified in
the Grant Notice.
M. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
N. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
requirements of Code Section 422.
O. NOTICE OF EXERCISE shall mean the notice of exercise in the form
attached hereto as Exhibit I.
P. OPTION SHARES shall mean the number of shares of Common Stock subject
to the option as specified in the Grant Notice.
Q. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
R. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
S. PERMANENT DISABILITY shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental
A-2.
<PAGE> 10
impairment which is expected to result in death or has lasted or can be expected
to last for a continuous period of twelve (12) months or more.
T. PLAN shall mean the Corporation's 1998 Special Nonstatutory Stock
Option Plan.
U. PLAN ADMINISTRATOR shall mean either the Board or a committee of the
Board acting in its administrative capacity under the Plan.
V. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Associate, a
non-employee member of the board of directors or a consultant or independent
advisor.
W. STOCK EXCHANGE shall mean the American Stock Exchange or the New York
Stock Exchange.
X. SUBSIDIARY shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
A-3.
<PAGE> 1
EXHIBIT 99.4
SHAREDATA, INC.
AMENDED AND RESTATED
1984 STOCK OPTION PLAN
1. Establishment. On September 10, 1984, ShareData, Inc., a California
corporation (the "Company"), established its 1984 Stock Option Plan under which
options may be granted to Eligible Persons to purchase shares of the Company's
Common Stock. On June 8, 1992, this 1984 Stock Option Plan was amended and
restated to increase the share reserve to 1,200,000 shares and to make certain
other changes. This 1984 Stock Option Plan is hereby amended as provided herein
to extend the duration thereof. It is expressly intended that options granted
pursuant to this 1984 Stock Option Plan may constitute incentive stock options
("Incentive Options") within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), or may constitute non-qualified stock
options ("Non-Qualified Options").
2. Purpose. This 1984 Stock Option Plan is designed to enable the Company
to attract, retain and motivate directors, officers and key employees of, and
consultants to, the Company, a Parent or a Subsidiary by providing for or
increasing the proprietary interest of such persons in the Company and thereby
provide an incentive to such persons to work toward the future financial
security and success of the Company. Options may also be granted under this 1984
Stock Option Plan in connection with the acquisition, by purchase, lease,
merger, consolidation or otherwise, of the business and assets of any
corporation, firm or association, including options granted to employees thereof
who become employees of the Company, a Parent or a Subsidiary.
3. Definitions.
(a) Plan. This 1984 Stock Option Plan as the same may be amended
from time to time as provided hereinafter.
(b) Parent. Any corporation in an unbroken chain of corporations
ending with the Company each of which, other than the Company, owns 50% or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
(c) Subsidiary. Any corporation in an unbroken chain of corporations
beginning with the Company each of which, other than the last corporation in the
unbroken chain, owns 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
(d) Board. The Board of Directors of the Company.
(e) Committee. The Committee of the Board established to direct and
administer the Plan as provided in Section 4 hereof.
1
<PAGE> 2
(f) Stock. Shares of the Common Stock of the Company, and such other
stock as may be substituted therefor as provided in the adjustment provisions of
Sections 16 and 17 hereof.
(g) Eligible Person. A person who is eligible to be granted an
Option. A person is eligible to be granted an Option if such person is (i)
regularly employed by the Company, a Parent or a Subsidiary, (ii) a director of
the Company, a Parent or a Subsidiary, and/or (iii) a consultant or other person
who is providing services to the Company, a Parent or a Subsidiary.
(h) Optionee. The person to whom an Option under the Plan has been
or is to be granted.
(i) Date of Grant. The date on which the Board or the Committee
completes the corporate action constituting authorization of the Option for a
specified Optionee.
(j) Option. A right granted under the Plan to purchase Stock.
(k) Exercise Price. The price at which Stock may be purchased on
exercise of an Option granted under the Plan.
(l) Fair Market Value. If the Stock is not publicly traded, fair
market value shall be determined by the Board or the Committee and may be
computed by any method as the Board or the Committee in good faith believes will
reflect the fair market value of the Stock on the day in question. If the Stock
is publicly traded, fair market value shall be the closing sale price per share
of the Stock, for securities listed on a national securities exchange, or the
closing bid price per share of the Stock, for securities quoted by NASDAQ, on
the day in question (or, if such day is not a trading day or if no sales of or
bids on the Stock were made on such day, on the nearest preceding trading day on
which sales of or bids on the Stock were made), as reported in The Wall Street
Journal, or, if trading in the Stock is then not reported in The Wall Street
Journal, at such closing sale or bid price as may then appear in what the Board
or the Committee in its judgment then deems to be the most nearly comparable
listing or reporting service.
4. Administration. The Plan shall be administered by the Board or, in the
discretion of the Board, by a Committee of not less than three persons selected
by the Board. The Board may from time to time remove members from, or add
members to, the Committee. Vacancies on the Committee, howsoever caused, shall
be filled by the Board. The Committee may select one of its members as its
chairman and shall hold its meetings at such times and places as it may
determine. A majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by not less than a majority of its
members. Any decision or determination reduced to writing and signed by all the
members of the Committee shall be fully as effective as if it had been made by a
majority vote at a meeting duly called and held. The Committee may appoint
a secretary, shall keep minutes of its
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<PAGE> 3
meetings, and shall make such rules and regulations for the conduct of its
business as it shall deem advisable.
The interpretation and construction by the Committee of any provision of
the Plan or of any Option granted under the Plan shall be final and binding upon
Optionees and their respective successors, unless otherwise determined by the
Board, in which case such determination of the Board shall be final and binding.
No member of the Board or the Committee shall be liable for any action or
determination made in good faith. The Board or the Committee may from time to
time adopt rules and regulations for carrying out the Plan and, subject to the
provisions of the Plan, may prescribe the form or forms of the instruments
evidencing any Option granted under the Plan.
Subject to the provisions of the Plan, the Board or the Committee shall
have full and final authority in its discretion to select the Eligible Persons
to be granted an Option, to grant such Option, and to determine the number of
shares of Stock to be subject thereto, whether the Option shall be an Incentive
Option or a Non-Qualified Option, the Exercise Price, the terms of exercise, the
expiration date, and such other terms and provisions thereof as it may
authorize, each of which terms may be different for each Option.
5. Stock Subject To The Plan. Subject to the adjustments provided in
Sections 16 and 17 hereof, the aggregate number of shares of Stock which may be
subject to Options granted under the Plan shall be 1,200,000 shares. Shares of
Stock subject to the unexercised portion of any Option granted under the Plan
which expires or terminates or is canceled shall again become available for
purposes of the Plan. Shares of Stock deliverable upon the exercise of any
Option granted under the Plan may be authorized and unissued Stock or previously
outstanding Stock which has been reacquired by the Company. No Option shall be
exercisable except in respect of whole shares of Stock.
6. Limitations On Incentive Options.
(a) Fair Market Value Limitation. With respect to Incentive Options
granted before January 1, 1987, subject to the overall limitations of Section 5
hereof, the aggregate Fair Market Value (determined as of the time the Option is
granted) of the shares of Stock with respect to which any Optionee may be
granted Incentive Options in any calendar year (under the Plan and all other
stock option plans of the Company, any Parent, and any Subsidiary) shall not
exceed $100,000 plus any unused limit carry-over, calculated under Section
422A(c)(4) of the Internal Revenue Code of 1954, as amended prior to the Tax
Reform Act of 1986 (the "1954 Code"). With respect to Incentive Options granted
after December 31, 1986, subject to the overall limitations of Section 5 hereof,
the aggregate Fair Market Value (determined as of the time the Option is
granted) of the shares of Stock for which Incentive Options held by an Optionee
may become exercisable for the first time during any calendar year (under the
Plan and all other stock option plans of the Company, any Parent, and any
Subsidiary) shall not be at a rate in excess of $100,000 as provided in Section
422(d) of the Code.
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<PAGE> 4
(b) Sequential Exercise Limitation. An Optionee may not exercise an
Incentive Option granted before January 1, 1987 so long as there is outstanding
(within the meaning in Section 422A(c)(7) of the 1954 Code) any other incentive
stock option (issued within the meaning of Section 422A of the 1954 Code) which
was granted to the Optionee by the Company, a Parent or a Subsidiary, or a
predecessor corporation of any of such corporations, prior to the grant of such
Incentive Option. The foregoing restriction on exercise shall not apply to any
Incentive Option granted after December 31, 1986.
7. Participants. Subject to the provisions of the Plan, the Board or the
Committee shall, from time to time, select from among the Eligible Persons those
persons to whom Options may be granted. No Incentive Option shall be granted to
any Eligible Person who is not an employee of the Company, a Parent or a
Subsidiary.
8. Employment Obligations For Incentive Options. As consideration for the
granting of any Incentive Option hereunder, the Optionee shall agree in the
applicable Incentive Stock Option Agreement or any other written agreement
between the Optionee and the Company, a Parent or a Subsidiary that, during the
period of his or her employment by or association with the Company, a Parent or
a Subsidiary, he or she shall faithfully and to the best of his or her ability
devote his or her time, energy, and skill during all of his or her working hours
for the Company to the service of the Company, a Parent or a Subsidiary, and the
promotion of its interests, subject to vacations, military service leave, sick
leave, and other bona fide absences in accordance with the regular policies and
practices of the Company, a Parent or a Subsidiary, or any written agreement
between the Optionee and the Company, a Parent or a Subsidiary. Nothing herein
or in an Incentive Stock Option Agreement shall confer upon an Optionee any
right with respect to continued employment or limit his or her rights to
terminate his or her employment.
9. Duration Of Plan. Options may be granted as provided in the Plan at
such time or times as may be determined by the Board or the Committee, but any
such grants must be made at or prior to the close of business on November 5,
2002. All Options outstanding on that date may thereafter be exercised in
accordance with their respective terms. However, no Option shall be granted
under the Plan after such date.
10. Option Period. No Option granted under the Plan may be exercised in
whole or in part more than ten years after its Date of Grant. The expiration
date of any Incentive Option granted to an Eligible Person who, on the Date of
Grant of the Option, owns, directly or indirectly, more than 10% of the total
combined voting power of all classes of stock of the Company, a Parent or a
Subsidiary (as interpreted under Section 422(b)(6) of the Code), shall be not
later than the fifth anniversary date of the Date of Grant. For purposes of
determining whether such 10% stock ownership exists, the attribution rules of
Section 424(d) of the Code shall apply.
11. Payment of Option Exercise Price. Payment for shares of Stock
purchased upon the exercise of an Option shall be made in full in cash or by
check, bank draft or postal or express money order payable, in each case, to the
order of the Company in lawful money of the United States at the time of
exercise, or an Optionee may deliver shares of Stock of the
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<PAGE> 5
Company which he or she has previously acquired or, if the Stock Option
Agreement with respect to the Option so provides, a promissory note having such
terms as the Board or the Committee shall, in its discretion, establish, to
satisfy in whole or in part the Exercise Price of the Option. Any shares of
Stock delivered to exercise an Option shall be valued at the aggregate Fair
Market Value of the Stock determined as of the date such Option is exercised.
12. Option Exercise Price. The Exercise Price of the Stock for each Option
granted under the Plan shall be at least 100% of the Fair Market Value of the
Stock at the Date of Grant of the Option; provided, however, if, at the time an
Option is granted, the Eligible Person to whom it is granted owns, directly or
indirectly, more than 10% of the total combined voting power of all classes of
stock of the Company, a Parent or a Subsidiary (as interpreted under Section
422(b)(6) of the Code and applying the attribution rules of Section 424(d) of
the Code), the Exercise Price of the Stock for such Option shall be at least
110% of the Fair Market Value of the Stock at the Date of Grant of such Option.
Subject to the general limitations of the Plan, and with the consent of the
Optionee, the Board or the Committee may make any adjustment in the Exercise
Price, the number of shares of Stock subject to or the term of an Option by
cancellation of an outstanding Option and a subsequent regranting of an Option,
or by amendment or substitution of an outstanding Option. An Option which has
been so amended, substituted or regranted may have a higher or lower Exercise
Price, cover a greater or lesser number of shares of Stock, or have a longer or
shorter term than the Option it replaced, but its Exercise Price shall in no
event be less than 100% or 110%, as the case may be, of the Fair Market Value of
the Stock at the date of amendment, substitution or regrant of the Option.
13. Exercise Of Options. The Board or the Committee shall have full
authority, in its discretion, to prescribe in any Stock Option Agreement subject
to the provisions of the Plan that the subject Option will be exercisable in
full at any time or from time to time during the term of the Option, to provide
that the subject Option will be exercisable in such installments and at such
times during the term of the Option as the Board or the Committee may determine,
to provide that the subject Option will be exercisable following termination of
the Optionee's employment by or association with the Company, a Parent or a
Subsidiary for any reason (subject to the overall limitations of Section 10
hereof) or to specify additional conditions which the Optionee must fulfill in
order to exercise the Option. The holder of an Option shall not have any of the
rights of a shareholder with respect to the shares of Stock covered by the
Option until such shares are issued to him or her upon the exercise of the
Option.
14. Rights Of Repurchase. So long as the Stock is not listed on any
national securities exchange, or so long as the Stock is not traded on a regular
basis, as determined by the Company, in the over-the-counter market, the Company
may reserve for itself (a) a right of first refusal on any sale or disposition
of shares of Stock acquired upon the exercise of an Option (if the Company
chooses to repurchase such shares of Stock, it will do so on terms equivalent to
those offered by the intended transferee), and (b) a right to repurchase shares
of Stock acquired upon the exercise of an Option if an Optionee's employment by
or association with the Company, a Parent or a Subsidiary is terminated for any
reason, or in other circumstances (whether or not such shares of Stock are
vested or unvested), at a price at least
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<PAGE> 6
equal to the Exercise Price of such shares of Stock. Unless and until a public
market exists for the Stock, each certificate representing shares of Stock
subject to such provisions shall bear a legend to the effect that such shares
are subject to certain repurchase rights in favor of the Company.
15. Nontransferability Of Options. Any Option granted under the Plan shall
by its terms be nontransferable by the Optionee other than by will or according
to the laws of descent and distribution and is exercisable during the Optionee's
lifetime only by him or her.
16. Adjustments. If outstanding shares of Stock are increased or
decreased, or are changed into or exchanged for a different number or kind of
shares or securities of the Company, through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
change in the corporate structure of the Company, an appropriate and
proportionate adjustment shall be made in the maximum number and/or type of
shares or securities as to which Options may be granted under the Plan. A
corresponding adjustment changing the number and/or type of shares or securities
allocated to unexercised Options, or portions thereof, which shall have been
granted prior to any such change, shall likewise be made. Any such adjustment in
outstanding Options shall be made without change in the aggregate Exercise Price
applicable to the unexercised portion of such Options, but a corresponding
adjustment in the Exercise Price for each share or other unit of any security
covered by the Option shall be made. Adjustments under this Section 16 shall be
made by the Board, and its determinations as to what adjustments shall be made,
and the extent thereof, shall be final and binding.
17. Terminating Transactions. Except as provided in this Section 17, upon
the dissolution or liquidation of the Company, upon a reorganization, merger or
consolidation of the Company with one or more corporations as a result of which
the Company is not the surviving corporation or as a result of which the
outstanding shares of Stock are exchanged or converted into cash or property or
securities not issued by the Company, or upon a sale of substantially all the
property of the Company or the acquisition of Stock representing more than 80%
of the voting power of the then outstanding securities of the Company by another
corporation (any of which shall be deemed hereunder to constitute a "Terminating
Transaction"), the Plan shall terminate. Any Option theretofore granted under
the Plan shall then terminate, unless provision is made in writing in connection
with such Terminating Transaction for the continuance of the Plan and/or for the
assumption of the Options theretofore granted, or the substitution for such
Options of options covering the securities of a surviving or acquiring
corporation, or a parent or a subsidiary thereof, with appropriate adjustments
as to the numbers and/or types of shares and prices, in which event the Plan
and/or Options theretofore granted shall continue in the manner and under the
terms so provided. If the Plan and/or Options terminate pursuant to this Section
17, all persons entitled to exercise any unexercised portions of Options then
outstanding shall have the right, at such time prior to the consummation of the
Terminating Transaction as the Company shall designate, to exercise the
unexercised portions of their Options then exercisable.
18. Government And Stock Exchange Regulations. The Company shall not be
required to issue any shares of Stock upon the exercise of any Option unless and
until any
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<PAGE> 7
then applicable requirements of the Securities and Exchange Commission, the
Department of Corporations of the State of California and/or other regulatory
agencies having jurisdiction with respect to such issuance, and of any national
securities exchanges upon which the Stock may be listed, shall have been fully
complied with.
Upon the exercise of an Option at a time when there is not in effect a
registration statement under the Securities Act of 1933, as amended, or any
successor statute thereto (the "Securities Act"), relating to the shares of
Stock issuable upon exercise thereof and available for delivery a prospectus
meeting the requirements of Section 10(a)(3) of the Securities Act, or, if the
rules or interpretations of the Securities and Exchange Commission so require,
such shares may be issued only if the Optionee represents and warrants in
writing to the Company that the shares are being acquired for investment and not
with a view to the distribution thereof, and any certificates issued upon
exercise of the Option shall bear appropriate legends setting forth the
restrictions on transfer of such shares.
19. Withholding Taxes. Whenever shares of Stock are to be issued by reason
of the exercise of an Option, the Company, in its discretion, may require the
Optionee to remit to the Company, prior to the delivery of any certificate or
certificates for such shares, all or any part of an amount determined by the
Company, in its discretion, to be sufficient to satisfy federal, state, and
local withholding tax requirements which the Company, or counsel for the
Company, determine may be payable with respect to such exercise.
20. Amendment And Termination Of The Plan. The Board may alter, amend,
suspend or terminate the Plan, provided that no such action shall deprive an
Optionee, without his or her consent, of any Option or any of the rights
thereunder granted to the Optionee pursuant to the Plan. Except as herein
provided, no such action of the Board, unless taken with the approval of the
shareholders of the Company holding a majority of its voting power, may:
(a) increase the total number of shares of Stock reserved for the
purposes of the Plan, other than pursuant to adjustments under Sections 16 and
17 hereof;
(b) reduce the minimum permissible Exercise Price;
(c) extend the termination date of the Plan set forth herein; or
(d) alter the class of persons eligible to receive Options under the
Plan.
21. Provision of Information. The Company shall make available to each
Optionee, at least annually during the period for which such Optionee has one or
more Options outstanding, copies of the Company's balance sheet and income
statement for the just completed fiscal year. The Company shall not be required
to provide such information to any Optionee whose duties in connection with the
Company assure their access to equivalent information.
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<PAGE> 8
22. Effectiveness Of The Plan. The effective date of the Plan is
September 10, 1984. However, implementation of the Plan is subject to the
qualification of the grant of Options and the issuance of the underlying shares
of Stock by the Department of Corporations of the State of California and to
approval of the Plan by shareholders of the Company holding a majority of its
voting power within 12 months before or after the effective date of the Plan as
above set forth. Options may be granted under the Plan prior to such
qualification and approval, but each Option so granted shall expressly provide
that it is subject to the aforementioned conditions and in no event may any such
Option be exercised in whole or in part prior to such qualification and
approval.
IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies
that the foregoing ShareData, Inc. Amended and Restated 1984 Stock Option Plan
was duly amended by the Board of Directors of the Company as provided herein on
the 6th day of April, 1993.
------------------------------------
8
<PAGE> 1
EXHIBIT 99.5
SHAREDATA, INC.
NOTICE OF GRANT OF STOCK OPTION
AND GRANT AGREEMENT
[Name and Address]
You have been granted an option to purchase ShareData, Inc. stock as
follows:
<TABLE>
<S> <C>
Incentive Stock Option Grant No.
------------
Date of Grant
------------
Vesting Commencement Date
------------
Stock Option Plan 1984
Exercise Price per Share $
------------
Total Number of Shares Granted
------------
Total Price of Shares Granted $
------------
</TABLE>
By your signature and the signature of the Company's authorized
representative to the attached Incentive Stock Option Agreement, you and
ShareData, Inc. agree that this option is granted under and governed by the
terms and conditions of the ShareData, Inc. Amended and Restated 1984 Stock
Option Plan and the Incentive Stock Option Agreement, both of which are attached
and made a part of this document.
<PAGE> 2
INCENTIVE STOCK OPTION AGREEMENT
UNDER THE SHAREDATA, INC.
AMENDED AND RESTATED 1984 STOCK OPTION PLAN
RECITALS
WHEREAS, ShareData, Inc. (the "Company") has adopted the 1984 Stock
Option Plan and subsequently amended and restated the 1984 Stock Option Plan
(the "Plan"), which Plan is incorporated herein by reference and made a part of
this Incentive Stock Option Agreement (this "Agreement"); and
WHEREAS, the Optionee is an employee of the Company, a Parent or a
Subsidiary, as defined in the Plan, and the Company has determined that it would
be to the advantage and interest of the Company and its shareholders to grant to
the Optionee the option (i) described in the cover sheet of this Agreement which
is hereby incorporated by reference and (ii) subject to the terms and conditions
provided for herein and in the Plan, as an inducement to remain in the service
of the Company, a Parent or a Subsidiary and as an incentive for increased
efforts during such service.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and the
terms, conditions, and covenants contained herein, the parties hereby agree as
follows:
1. Grant of Option. The Company hereby grants to the Optionee the right
and option to purchase, on the terms and conditions hereinafter set forth, all
or any part of the number of shares of the common stock of the Company (the
"Stock") set forth on the cover sheet of this Agreement at the exercise price
set forth thereon (the "Option"). The number of shares of Stock subject to the
Option and the exercise price are subject to adjustment under certain
circumstances, as provided in the Plan.
2. Term and Exercisability of Option.
(a) Term of Option. The Option shall be exercisable in whole or
in part at any time beginning on the first anniversary date of the vesting
commencement date as set forth on the cover sheet of this Agreement and prior to
the tenth anniversary date of the date of grant as set forth on the cover sheet
of this Agreement (the "Termination Date"), unless sooner terminated in
accordance with the provisions of Sections 3 and 5 hereof, pursuant to the
schedule set forth in Subsection 2(b) hereof. In no event shall the Company be
required to issue fractional shares.
(b) Exercisability of Option. For the purposes of this Section 2,
the Option shall be exercisable during its term according to the following
schedule:
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<PAGE> 3
(i) As to one-fourth of the shares of Stock subject to
the Option, after the first anniversary date of the vesting commencement date;
(ii) As to an additional one-fourth of the shares of
Stock subject to the Option, after the second anniversary date of the vesting
commencement date;
(iii) As to an additional one-fourth of the shares of
Stock subject to the Option, after the third anniversary date of the vesting
commencement date; and
(iv) As to the remaining one-fourth of the shares of Stock
subject to the Option, after the fourth anniversary date of the vesting
commencement date.
3. Expiration of Option. The period for exercising the Option (the
"Option Period") will end on the Termination Date, unless sooner terminated as
provided in Subsections (a), (b) or (c) below:
(a) If the Optionee ceases to be a bona fide employee of the
Company, a Parent or Subsidiary (other than by death or disability) during the
Option Period, the Option shall thereafter be exercisable for a period of 30
days after termination of the Optionee's employment, but only if, and to the
extent that, the Option was exercisable by the Optionee under the provisions of
Section 2 hereof at the time of such cessation of employment and only prior to
the Termination Date. If the Optionee is absent from work with the Company, a
Parent or a Subsidiary because of his or her disability or if he or she is on
leave of absence for the purpose of serving the government of the country in
which the principal place of employment of the Optionee is located, either in a
military or civilian capacity, or for such other purpose or reason as the Board
of Directors of the Company (the "Board") or the Committee administering the
Plan (the "Committee") may approve, the Optionee shall not be deemed during the
period of any such absence, by virtue of such absence alone, to have terminated
his or her employment with the Company, a Parent or a Subsidiary, except as the
Board or the Committee may otherwise expressly provide.
(b) If the Optionee should die while in the employ of the
Company, a Parent or a Subsidiary, or within the period referred to in
Subsection 3(a) hereof, the Option may, within a period of one year from the
date of the Optionee's death, be exercised by the Optionee's legal
representative, or by the person or persons to whom the Optionee's rights under
the Option shall pass by will or by the applicable laws of descent and
distribution, but only if, and to the extent that, the Option was exercisable by
the Optionee under the provisions of Section 2 hereof at the time of his or her
death and only prior to the Termination Date.
(c) If the Optionee should become disabled within the meaning of
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code")
while in the employ of the Company, a Parent or a Subsidiary, the Option may,
within a period of 180 days after the termination of the Optionee's employment,
be exercised by the Optionee, but only if, and to the extent that, the Option
was exercisable by the Optionee under the
2
<PAGE> 4
provisions of Section 2 hereof at the time of such cessation of employment and
only prior to the Termination Date.
4. Manner of Exercise. The Optionee may exercise the Option with respect
to all or any part of the shares of Stock then subject to such exercise as
follows:
(a) By giving the Company written notice of such exercise
specifying the number of shares of Stock as to which the Option is so exercised
and accompanied by an amount equal to the aggregate exercise price of such
shares, in the form of any one or combination of (i) cash or a check, bank draft
or postal or express money order payable to the order of the Company in lawful
money of the United States or (ii) shares of Stock of the Company previously
acquired by the Optionee. Any shares of Stock delivered to exercise the Option
shall be valued at their aggregate Fair Market Value (as defined in the Plan) on
the date of exercise.
(b) If required by the Company, by giving satisfactory assurance
in writing, signed by the Optionee or his or her legal representative, as the
case may be, that such shares of Stock are being purchased for investment only
and not with a view to the distribution thereof; provided, however, that such
assurance shall be deemed inapplicable to (i) any sale of such shares by the
Optionee subject to a registration statement covering such sale, which has
heretofore been (or may hereafter be) filed and become effective under the
Securities Act of 1933, as amended (the "Securities Act"), and is current and
with respect to which no stop order suspending the effectiveness thereof has
been issued, and (ii) any other sale of such shares with respect to which, in
the opinion of counsel for the Company, such assurance is not required to be
given in order to comply with the provisions of the Securities Act.
As soon as practicable after receipt of such written notice of exercise
from the Optionee, the Company shall, without transfer or issue tax or other
incidental expenses to the Optionee, deliver to the Optionee at the office of
the Company, or such other place as may be mutually acceptable to the Company
and the Optionee, a certificate or certificates for such shares of Stock, which
certificate or certificates may bear such legend or legends with respect to
restrictions on transfer thereof as counsel for the Company deems to be required
by applicable provisions of law and this Agreement; provided, however, that
nothing herein shall be deemed to impose upon the Company any obligation to
deliver any shares of Stock to the Optionee if, in the opinion of counsel for
the Company, doing so would violate any provision of: (1) the Securities Act;
(2) the Securities Exchange Act of 1934, as amended; (3) any applicable listing
requirements of any national securities exchange; (4) any state securities
regulation or "Blue Sky" laws; or (5) requirements under any other law or
regulation applicable to the issuance or transfer of such shares. In no event
shall the Company be required to take any affirmative action to comply with any
of such laws, regulations or requirements, nor shall the Company be liable for
any failure to deliver shares of Stock because such shares have not been
registered or because a registration statement with respect thereto is not
current or because such delivery would otherwise be in violation of any
applicable law or regulation.
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<PAGE> 5
The term "current" when used herein to refer to a registration statement
shall mean a registration statement that, in the opinion of counsel for the
Company, does not include any untrue statement of a material fact and that
includes all material facts required to be stated therein or that are necessary
to make the statements therein not misleading.
5. Adjustments. If outstanding shares of Stock are increased or
decreased, or are changed into or exchanged for a different number or kind of
shares or securities of the Company, through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
change in the corporate structure of the Company, an appropriate and
proportionate adjustment shall be made by the Company in the number and/or type
of the shares of Stock subject to this Agreement and in the exercise price in
order to preserve, but not increase, the benefit to the Optionee. Anything
herein contained to the contrary notwithstanding, (a) upon dissolution or
liquidation of the Company, other than in connection with a Terminating
Transaction (as defined in the Plan), or (b) upon dissolution or liquidation of
the Company, in connection with a Terminating Transaction where the surviving or
acquiring corporation does not, prior to or concurrent with the succession to
the business of the Company, assume the Option (subject to any applicable
provisions of the Code), or substitute a new option of comparable value for the
Option, the Option, in either case, shall terminate and thereupon become null
and void; provided, however, that the Optionee shall have the right, at such
time prior to the consummation of such dissolution, liquidation or Terminating
Transaction, as the case may be, as the Company shall designate, to exercise any
unexercised portion of the Option to the full extent then exercisable.
6. Assignment or Transfer. The Option shall, during the Optionee's
lifetime, be exercisable only by him or her, and neither the Option nor any
right hereunder shall be transferable by the Optionee by operation of law or
otherwise other than by will or according to the laws of descent and
distribution. In the event of any attempt by the Optionee to alienate, assign,
pledge, hypothecate or otherwise dispose of the Option or of any right
hereunder, except as provided for herein, or in the event of the levy of any
attachment, execution or similar process upon the rights or interest hereby
conferred, the Option shall thereupon become null and void and of no effect.
7. No Rights as a Shareholder. Neither the Optionee nor any person
entitled to exercise the Optionee's rights in the event of his or her death
shall have any of the rights of a shareholder with respect to the shares of
Stock subject to the Option except to the extent the certificates for such
shares, or a portion thereof, shall have issued upon the exercise of the Option.
8. Right of Repurchase and First Refusal.
(a) Right of Repurchase. In the event that a Repurchase Event
(as defined in Subsection 8(a)(i) hereof) occurs, then the Company shall have
the option, but not the obligation, to repurchase all, but not less than all, of
the shares of Stock acquired upon the exercise of the Option (the "Option
Shares") from the Optionee, or his or her legal representative, as the case may
be (the "Repurchase Option"). The Repurchase Option shall commence on the date
set forth in Subsection 8(a)(i) hereof for the particular Repurchase
4
<PAGE> 6
Event and shall expire as to a particular Repurchase Event 60 days after the
applicable starting date for the Repurchase Event (the "Repurchase Period");
provided, however, that if the Option is exercised in whole or in part during
the Repurchase Period, the Repurchase Period shall be extended until 60 days
after the last exercise of the Option during the Repurchase Period. The
Repurchase Option shall be exercised by the Company giving the Optionee, or his
or her legal representative, as the case may be, written notice of its intention
to exercise the Repurchase Option on or before the last day of the Repurchase
Period, and, together with such notice, tendering to the Optionee, or his or her
legal representative, as the case may be, an amount equal to the greater of the
Optionee's original cost per share (as adjusted pursuant to Section 5 hereof) or
the fair market value of the Option Shares. The Company may, in exercising the
Repurchase Option, designate one or more assignees to purchase the Option
Shares. Upon timely exercise of the Repurchase Option in the manner provided in
this Subsection 8(a), the Optionee, or his or her legal representative, as the
case may be, shall deliver to the Company the certificate or certificates
representing the Option Shares, duly endorsed and free and clear of any and all
liens, charges, and encumbrances. If the Repurchase Option is not exercised as
provided in this Subsection 8(a) during the Repurchase Period, the Repurchase
Option shall not thereafter be exercisable unless and until there is a
subsequent Repurchase Event. If there is a subsequent Repurchase Event, the
Repurchase Option shall again become exercisable in full as provided in this
Section 8.
(i) The Company shall have a Repurchase Option in the
event that any of the following shall occur (a "Repurchase Event"):
(A) The termination of the Optionee's employment
with the Company, any Parent or any Subsidiary, voluntarily or involuntarily,
for any reason whatsoever, including death or permanent disability. The
Repurchase Period shall commence on the date the Optionee ceases to be an
employee of the Company, a Parent or a Subsidiary;
(B) The receivership, bankruptcy or other
creditor's proceeding regarding the Optionee or the taking of any of the
Optionee's shares of Stock by legal process, such as a levy of execution. The
Repurchase Period shall commence on the date the Company receives actual notice
of the commencement of pendency of the receivership, bankruptcy or other
creditor's proceeding or the date of such taking, as the case may be. The fair
market value of the Option Shares shall be determined as of the last day of the
month preceding the month in which the proceeding involved commenced or the
taking occurred;
(C) The Optionee, or his or her legal
representative, as the case may be, attempts to sell, exchange, transfer (by
gift or otherwise), assign, hypothecate, pledge, grant a security interest or in
any other way dispose of or alienate any of the Option Shares, or any interest
therein. The Repurchase Period shall commence on the date the Company receives
actual notice of such attempted sale, transfer or other disposition;
(D) The distribution of shares of Stock held by
the Optionee to his or her spouse as such spouse's joint or community interest
pursuant to a decree of dissolution, property settlement agreement or for any
other reason, except as may be otherwise
5
<PAGE> 7
permitted by the Company. The Repurchase Period shall commence on the date the
Company receives actual notice of such distribution. The fair market value of
the Option Shares shall be determined as of the last day of the month preceding
the month in which the decree, agreement or, if there is no decree or agreement,
the distribution occurred; or
(E) The Optionee violates any provision of Section
9 hereof or the Company can reasonably anticipate that the Optionee will violate
any provision of Section 9 hereof. The Repurchase Period shall commence on the
date that the Company receives actual notice of such violation or on the date
that the Board reasonably determines that such a violation may occur.
(ii) The fair market value of the Option Shares, as used
in this Section 8(a), shall be the fair market value of a share of Stock
multiplied by the number of Option Shares being purchased. The fair market value
of a share of Stock shall be determined by the Board. The determination by the
Board of the fair market value shall, if reasonable, be conclusive and binding
notwithstanding the possibility that other persons might reach a different, and
also reasonable, determination. If the Board determines the fair market value of
a share of Stock is equal to the fair market value of a share of Stock as set
forth in an appraisal of the Company by an independent appraiser selected by the
Company, such determination shall be conclusively determined to be reasonable if
the date as of which the shares of Stock were valued for purposes of the
appraisal was within 12 months of the date of the Repurchase Event.
(b) Right of First Refusal. If at any time, whether during the
continuance of the Optionee's employment by the Company, a Parent or a
Subsidiary or thereafter, the Optionee desires to sell, exchange, transfer (by
gift or otherwise), assign, hypothecate, pledge, grant as a security interest or
in any other way dispose of or alienate any of the Option Shares or any interest
therein (hereinafter referred to as a "Disposition"), the Optionee shall give
written notice to the Company of the Optionee's intent to make a Disposition of
such shares of Stock (the "First Refusal Offer"). The First Refusal Offer shall
contain a statement signed by the Optionee notifying the Company that the
Optionee desires to make a Disposition of the Option Shares or an interest
therein and shall be accompanied by a copy of the bona fide offer to purchase
such shares of Stock, in case of a sale, or a description of the proposed
transaction with respect to any other Disposition, and shall set forth the
following:
(i) The full name and address of the intended transferee
(the "Transferee");
(ii) The number of Option Shares to be purchased by, or
transferred to, the Transferee;
(iii) The price, in case of a sale, and other terms under
which the purchase or transfer is intended to be made;
(iv) A statement, in case of a sale, signed by the
Transferee, that the price and other terms specified are a bona fide offer to
purchase; and
6
<PAGE> 8
(v) A representation, in case of a sale, by the Transferee
that he or she has the financial capability necessary to complete the
transaction as proposed.
The Company shall have 30 days from the date of receipt of the First
Refusal Offer within which to exercise an option to purchase all, but not less
than all, of the Option Shares covered by such First Refusal Offer (the "First
Refusal Shares") at the same price and upon the same terms as set forth in such
First Refusal Offer (the "First Refusal Option"). The Company may, in exercising
the First Refusal Option, designate one or more assignees to purchase the First
Refusal Shares. Notwithstanding the generality of the foregoing, however, with
the consent of the Optionee, the purchase price for the First Refusal Shares
may, at the option of the Company, be paid in cash in an amount equal to the
present value of any payments to be made over a period of time according to the
terms of the First Refusal Offer, or, if the terms specified in such offer state
that payment is to be made in property, in an amount equal to the present value
of the fair market value of such property. For purposes of any computation made
pursuant to this Subsection 8(b), the present value of any amount to be paid in
the future shall be determined by the Board by discounting such amount using an
interest rate of 10% or an interest rate equal to the then effective federal
reserve discount rate, without surcharge, of the Federal Reserve Bank of San
Francisco, whichever is higher.
If the Optionee desires to make a Disposition of any of the Option
Shares other than by sale, including, without limitation, by gift,
hypothecation, pledge or the grant of a security interest, the Optionee shall
obtain the prior written approval of the Company to the proposed transfer, which
approval may be withheld by the Company in the Company's sole discretion for any
or no reason.
If the First Refusal Shares are not purchased pursuant to the related
First Refusal Offer by the Company in accordance with this Subsection 8(b), in
the case of a proposed sale, or if the Company approves a Disposition other than
by sale, the Optionee may make a bona fide transfer of the First Refusal Shares
to the respective Transferee or Transferees named in the related First Refusal
Offer; provided, however, that (1) such transfer shall only be made in strict
accordance with the terms stated in such First Refusal Offer, and immediately
following such transfer, the transferor shall so certify in writing to the
Company, and (2) before any such transfer shall become effective or be recorded
in the books of the Company, each Transferee of the First Refusal Shares shall
agree in writing to hold such shares of Stock subject to the terms of this
Agreement, except that the Repurchase Events described in Subsection
8(a)(i)(B)-(E) shall refer to the Transferee and the Repurchase Event described
in Subsection 8(a)(i)(A) shall refer to the Transferee if the Transferee is an
employee or a director of the Company, a Parent or a Subsidiary and to the
Optionee if the Transferee is not an employee or a director of the Company, a
Parent or a Subsidiary. In the event the Optionee does not make such transfer
for a period of 45 days following the date of the First Refusal Offer, no
transfer of the First Refusal Shares covered by the First Refusal Offer shall be
made without a new First Refusal Offer from the Optionee to the Company in
accordance with this Subsection 8(b) and in full compliance with all the
provisions hereof.
(c) Effect of Tender of Purchase Price. Notwithstanding the
failure of the holder of any certificate evidencing all or any part of the
Option Shares to deliver the same to
7
<PAGE> 9
the Company for cancellation, and upon tender by the Company of the purchase
price for any of the Option Shares in accordance with the terms of this
Agreement, such Option Shares and the certificates representing the same shall
forthwith and without further action be deemed to be canceled and forfeited.
(d) Restrictions on Transfer. Except as otherwise may be
permitted by this Agreement, the Optionee shall not sell, exchange, transfer (by
gift or otherwise), assign, hypothecate, pledge, grant as a security interest or
in any other way dispose of or alienate any of the Option Shares, which at any
time would be subject to repurchase by the Company or the gift, hypothecation
of, pledge or grant of a security interest in, is subject to the approval of the
Company, and the attempt to effect any such transaction shall be null and void
ab initio and of no force and effect.
(e) Legends. All certificates representing the Option Shares
shall bear a legend or legends revealing the existence of the restrictions
imposed by this Section 8.
(f) Termination of Rights. The provisions of this Section 8 shall
cease to be applicable to the Option Shares at such time as the shares of Stock
of the Company are listed on any national securities exchange, or there is an
established market therefor in the over-the-counter market and the shares of
Stock are listed in the pink or white sheets of the National Association of
Securities Dealers automated quotation system or a comparable service.
(g) Adjustments. In the event that (i) shares of Stock are
changed into or exchanged for a different class or series of securities issued
by the Company or any other corporation as the result of any merger,
consolidation or sale of assets followed by a dissolution, liquidation,
reclassification or reorganization, or (ii) any additional shares of Stock or
any other securities shall be distributed with respect to such shares as a
reclassification, stock dividend, stock split, reverse stock split or other
change in the corporate structure of the Company, then all such securities shall
be subject to the terms and provisions of this Section 8 and shall be deemed to
be included in the term the "Option Shares" as used herein. As used herein, the
term "Company" shall include any other corporation which shall succeed to
substantially all of the business and assets of the Company as the result of any
reorganization, merger or consolidation, sale of assets or sale of Stock.
9. S Corporation Status. The Optionee acknowledges that the Company has
elected to be classified as an S Corporation for federal and state income tax
purposes and, following the exercise of the Option with respect to all or any
part of the shares of Stock subject to the Option, agrees to provide to the
Company, immediately upon the Company's request, such properly signed consents
or other documents as, in the opinion of counsel for the Company, may be
necessary or useful to maintaining the Company's status as an S Corporation.
Except with the written consent of the Company specifically referring to this
Section 9, the following provisions shall apply to the shares of Stock acquired
upon the exercise of the Option until such time as the Company ceases to qualify
as an S Corporation:
8
<PAGE> 10
(a) Restrictions in Exercise. The Option may not be exercised if
such exercise would result in the Company ceasing to qualify as an S
Corporation.
(b) Restriction on Transfer. No transfer of any shares of Stock
by the Optionee, whether voluntary or involuntary, shall be effective unless all
of the Optionee's shares are transferred to one transferee and such transferee
is a permitted shareholder of an S Corporation. Thus, for example, in the event
of a divorce of the Optionee, the former spouse of the Optionee may be awarded
the Optionee's shares of Stock if and only if the former spouse is a permitted
shareholder of an S Corporation and the former spouse is awarded all of the
shares held by the Optionee.
(c) Restriction on Other Action. The Optionee shall not take any
action or fail to take any action which shall result in the Company being unable
to maintain the Company's status as an S Corporation. This provision requires,
without limitation, the Optionee (i) to notify the Company prior to the Optionee
ceasing to qualify as an eligible shareholder of an S Corporation and (ii) to
permit the Company to repurchase all shares of Stock owned by the Optionee
pursuant to Section 8(a) hereof.
(d) Transfer by Trust. If any transfer by the Optionee is by
operation of law or by right of succession under a trust, the transferees shall
be obligated to make such transfers as shall reasonably be necessary, in the
opinion of counsel for the Company, either (i) to avoid termination of the
Company's status as an S Corporation or (ii) to permit the Company to requalify
as an S Corporation as soon as possible.
(e) Other Restrictions. The provisions of this Section 9 are in
addition to the provisions of Section 8 hereof. By way of example and not
limitation, a transfer by divorce or otherwise to a permitted transferee
pursuant to this Section 9 shall be subject to the Right of First Refusal set
forth in Subsection 8(b) hereof.
(f) Legends. All certificates representing shares of Stock
acquired upon the exercise of the Option shall bear a legend revealing the
existence of the restrictions imposed by this Section 9.
(g) Termination of Restrictions. The restrictions imposed by this
Section 9 shall terminate upon the occurrence of the first of any of the
following events: (i) the written agreement of the Company and the Optionee,
(ii) the bankruptcy, receivership or complete dissolution of the Company, (iii)
a transfer or purchase of shares of Stock of the Company which results in one
shareholder holding all of the issued and outstanding shares of Stock of the
Company, or (iv) at such time as the shares of Stock of the Company are listed
on any national securities exchange, or there is an established market therefor
in the over-the-counter market and the shares of Stock are listed in the pink or
white sheets of the National Association of Securities Dealers automated
quotation system or a comparable service.
10. Optionee's Employment Obligations. The Optionee agrees that, during
the period of his or her employment by the Company, a Parent or a Subsidiary, he
or she shall faithfully and to the best of his or her ability devote his or her
time, energy or skill to the
9
<PAGE> 11
service of the Company, a Parent or a Subsidiary, and to the promotion of its
interests, subject to vacations, military service leave, sick leave, and other
bona fide absences in accordance with the regular policies and practices of, or
any written agreement between the Optionee and, the Company, a Parent or a
Subsidiary which employs the Optionee. Subject to any contrary terms of any
employment contract, the Company, the Parent or the Subsidiary which employs the
Optionee shall have the right to terminate or change the terms of employment of
the Optionee at any time and for any reason whatsoever. Nothing herein shall
limit the Optionee's right to terminate his or her employment.
11. Notice. Any notice or other written communication required or
permitted to be given under the terms of this Agreement shall be addressed to
the Company in care of its Secretary at the principal executive offices of the
Company and any notice to be given to the Optionee shall be addressed to him or
her at the address given by him or her beneath his or her signature hereto or
such other address for a party hereto as such party may hereafter designate in
writing to the other. Any such notice shall be deemed to have been duly given
when enclosed in a properly sealed envelope addressed as aforesaid, registered
or certified and deposited (postage or registration or certification fee
prepaid) in a post office or branch post office regularly maintained by the
United States.
12. Finality of Decisions. All decisions of the Board or the Committee
upon any question arising under the Plan or under this Agreement shall be final
and binding.
13. Participation in Other Plans. Nothing herein contained shall affect
the Optionee's right to participate in and receive benefits from and in
accordance with the then current provisions of any pension, insurance, or other
employment welfare plan or program of the Company.
14. Binding Effect of Agreement. Except as set forth in Section 5
hereof, this Agreement shall be binding upon and inure to the benefit of any
successor or successors of the Company.
15. Agreement Subject to Plan. This Agreement is entered into pursuant
to, and is subject to, the provisions of the Plan. Terms not otherwise defined
herein shall have the meanings given them in the Plan.
16. Governing Law. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of California.
17. Tax Information and Notice of Disqualifying Disposition. The Option
is intended to be eligible for treatment as an Incentive Stock Option under
Section 422 of the Code. Whether the Option will receive such tax treatment will
depend, in part, on actions by the Optionee after exercise of the Option. If the
Optionee disposes of any of the shares of Stock within two years after the date
of grant of the Option or within one year of the date of exercise of the Option
with respect to such shares, the Optionee may lose the benefits of Section 422.
Other factors not discussed herein may also affect the tax consequences of this
transaction. Accordingly, the Company makes no representation, by way of the
Plan, this
10
<PAGE> 12
Agreement or otherwise, with respect to the actual tax effect of the grant or
exercise of the Option or the subsequent disposition, including, without
limitation, repurchase by the Company or its designee pursuant to Section 8
hereof, of any of the shares of Stock.
If the Optionee sells or makes a disposition (within the meaning of
Section 422 of the Code) of any of the shares of Stock acquired pursuant to
exercise of the Option prior to the later of (a) one year from the date such
shares were acquired, or (b) two years from the date of grant of the Option,
then the Optionee agrees to give written notice to the Company of such
disposition. The notice shall include the Optionee's name, the number, exercise
price, and exercise date of the shares disposed of, and the date of disposition.
18. Withholding Taxes. By accepting the Option, the Optionee, for
himself or herself and his or her transferees by will or the laws of descent and
distribution, agrees that whenever shares of Stock are to be issued by reason of
the exercise of the Option, the Optionee or such other person who is to receive
such shares of Stock will remit to the Company, prior to the delivery of any
certificate or certificates for such shares, all or any part of an amount
determined by the Company in its discretion to be sufficient to satisfy federal,
state, and local withholding tax requirements which the Company, or counsel for
the Company, determine may be payable with respect to such exercise.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed on its behalf, and the Optionee has hereunto set his or her hand,
effective the day and year first above written on the cover sheet of this
Agreement, which is the date of grant of the Option.
SHAREDATA, INC.
By:
----------------------------------------
OPTIONEE
-------------------------------------------
--------------------------------------------
--------------------------------------------
Address
11
<PAGE> 1
EXHIBIT 99.6
SHAREDATA, INC.
NOTICE OF GRANT OF STOCK OPTION
AND GRANT AGREEMENT
[Name and Address]
You have been granted an option to purchase ShareData, Inc. stock as
follows:
<TABLE>
<S> <C>
Non-Qualified Stock Option Grant No.
----------
Date of Grant
----------
Vesting Commencement Date
----------
Stock Option Plan 1984
Exercise Price per Share $
----------
Total Number of Shares Granted
----------
Total Price of Shares Granted $
----------
</TABLE>
By your signature and the signature of the Company's authorized
representative to the attached Non-Qualified Stock Option Agreement, you and
ShareData, Inc. agree that this option is granted under and governed by the
terms and conditions of the ShareData, Inc. Amended and Restated 1984 Stock
Option Plan and the Non-Qualified Stock Option Agreement, both of which are
attached and made a part of this document.
<PAGE> 2
NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE SHAREDATA, INC.
AMENDED AND RESTATED 1984 STOCK OPTION PLAN
(NON-EMPLOYEE DIRECTOR)
RECITALS
WHEREAS, ShareData, Inc. (the "Company") has adopted the 1984 Stock Option
Plan and subsequently amended and restated the 1984 Stock Option Plan (the
"Plan"), which Plan is incorporated herein by reference and made a part of this
Non-Qualified Stock Option Agreement (this "Agreement"); and
WHEREAS, the Optionee is a director of the Company, a Parent or a
Subsidiary, as defined in the Plan, and the Company has determined that it would
be to the advantage and interest of the Company and its shareholders to grant to
the Optionee the option (i) described in the cover sheet of this Agreement which
is hereby incorporated by reference and (ii) subject to the terms and conditions
provided for herein and in the Plan, as an inducement to remain in the service
of the Company, a Parent or a Subsidiary and as an incentive for increased
efforts during such service.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and the terms,
conditions, and covenants contained herein, the parties hereby agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee the right
and option to purchase, on the terms and conditions hereinafter set forth, all
or any part of the number of shares of the common stock of the Company (the
"Stock") set forth on the cover sheet of this Agreement at the exercise price
set forth thereon (the "Option"). The number of shares of Stock subject to the
Option and the exercise price are subject to adjustment under certain
circumstances, as provided in the Plan.
2. Term and Exercisability of Option.
(a) Term of Option. The Option shall be exercisable in whole or in
part at any time beginning on the first anniversary date of the vesting
commencement date as set forth on the cover sheet of this Agreement and prior to
the tenth anniversary date of the date of grant as set forth on the cover sheet
of this Agreement (the "Termination Date"), unless sooner terminated in
accordance with the provisions of Sections 3 and 5 hereof, pursuant to the
schedule set forth in Subsection 2(b) hereof. In no event shall the Company be
required to issue fractional shares.
(b) Exercisability of Option. For the purposes of this Section 2,
the Option shall be exercisable during its term according to the following
schedule:
1
<PAGE> 3
(i) As to one-fourth of the shares of Stock subject to the
Option, after the first anniversary date of the vesting commencement date;
(ii) As to an additional one-fourth of the shares of Stock
subject to the Option, after the second anniversary date of the vesting
commencement date;
(iii) As to an additional one-fourth of the shares of Stock
subject to the Option, after the third anniversary date of the vesting
commencement date; and
(iv) As to the remaining one-fourth of the shares of Stock
subject to the Option, after the fourth anniversary date of the vesting
commencement date.
3. Expiration of Option. The period for exercising the Option (the "Option
Period") will end on the Termination Date, unless sooner terminated as provided
in Subsections (a), (b) or (c) below:
(a) If the Optionee ceases to be a director of the Company, a Parent
or Subsidiary (other than by death or disability) during the Option Period, the
Option shall thereafter be exercisable for a period of 30 days after termination
of the Optionee's service as a director, but only if, and to the extent that,
the Option was exercisable by the Optionee under the provisions of Section 2
hereof at the time of such termination of service and only prior to the
Termination Date.
(b) If the Optionee should die while a director of the Company, a
Parent or a Subsidiary, or within the period referred to in Subsections 3(a) and
3(c) hereof, the Option may, within a period of one year from the date of the
Optionee's death, be exercised by the Optionee's legal representative, or by the
person or persons to whom the Optionee's rights under the Option shall pass by
will or by the applicable laws of descent and distribution, but only if, and to
the extent that, the Option was exercisable by the Optionee under the provisions
of Section 2 hereof at the time of his or her death and only prior to the
Termination Date.
(c) If the Optionee should become disabled within the meaning of
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code")
while serving as a director of the Company, a Parent or a Subsidiary, the Option
may, within a period of 180 days after the termination of the Optionee's service
as a director, be exercised by the Optionee, but only if, and to the extent
that, the Option was exercisable by the Optionee under the provisions of Section
2 hereof at the time of such termination of service and only prior to the
Termination Date.
4. Manner of Exercise. The Optionee may exercise the Option with respect
to all or any part of the shares of Stock then subject to such exercise as
follows:
(a) By giving the Company written notice of such exercise specifying
the number of shares of Stock as to which the Option is so exercised and
accompanied by an amount equal to the aggregate exercise price of such shares,
in the form of any one or
2
<PAGE> 4
combination of (i) cash or a check, bank draft or postal or express money order
payable to the order of the Company in lawful money of the United States or (ii)
shares of Stock of the Company previously acquired by the Optionee. Any shares
of Stock delivered to exercise the Option shall be valued at their aggregate
Fair Market Value (as defined in the Plan) on the date of exercise.
(b) If required by the Company, by giving satisfactory assurance in
writing, signed by the Optionee or his or her legal representative, as the case
may be, that such shares of Stock are being purchased for investment only and
not with a view to the distribution thereof; provided, however, that such
assurance shall be deemed inapplicable to (i) any sale of such shares by the
Optionee subject to a registration statement covering such sale, which has
heretofore been (or may hereafter be) filed and become effective under the
Securities Act of 1933, as amended (the "Securities Act"), and is current and
with respect to which no stop order suspending the effectiveness thereof has
been issued, and (ii) any other sale of such shares with respect to which, in
the opinion of counsel for the Company, such assurance is not required to be
given in order to comply with the provisions of the Securities Act.
As soon as practicable after receipt of such written notice of exercise
from the Optionee, the Company shall, without transfer or issue tax or other
incidental expenses to the Optionee, deliver to the Optionee at the office of
the Company, or such other place as may be mutually acceptable to the Company
and the Optionee, a certificate or certificates for such shares of Stock, which
certificate or certificates may bear such legend or legends with respect to
restrictions on transfer thereof as counsel for the Company deems to be required
by applicable provisions of law and this Agreement; provided, however, that
nothing herein shall be deemed to impose upon the Company any obligation to
deliver any shares of Stock to the Optionee if, in the opinion of counsel for
the Company, doing so would violate any provision of: (1) the Securities Act;
(2) the Securities Exchange Act of 1934, as amended; (3) any applicable listing
requirements of any national securities exchange; (4) any state securities
regulation or "Blue Sky" laws; or (5) requirements under any other law or
regulation applicable to the issuance or transfer of such shares. In no event
shall the Company be required to take any affirmative action to comply with any
of such laws, regulations or requirements, nor shall the Company be liable for
any failure to deliver shares of Stock because such shares have not been
registered or because a registration statement with respect thereto is not
current or because such delivery would otherwise be in violation of any
applicable law or regulation.
The term "current" when used herein to refer to a registration statement
shall mean a registration statement that, in the opinion of counsel for the
Company, does not include any untrue statement of a material fact and that
includes all material facts required to be stated therein or that are necessary
to make the statements therein not misleading.
5. Adjustments. If outstanding shares of Stock are increased or decreased,
or are changed into or exchanged for a different number or kind of shares or
securities of the Company, through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
change in the corporate structure of the Company, an appropriate and
proportionate adjustment shall be made by the Company in the number and/or type
of the
3
<PAGE> 5
shares of Stock subject to this Agreement and in the exercise price in order to
preserve, but not increase, the benefit to the Optionee. Anything herein
contained to the contrary notwithstanding, (a) upon dissolution or liquidation
of the Company, other than in connection with a Terminating Transaction (as
defined in the Plan), or (b) upon dissolution or liquidation of the Company, in
connection with a Terminating Transaction where the surviving or acquiring
corporation does not, prior to or concurrent with the succession to the business
of the Company, assume the Option (subject to any applicable provisions of the
Code), or substitute a new option of comparable value for the Option, the
Option, in either case, shall terminate and thereupon become null and void;
provided, however, that the Optionee shall have the right, at such time prior to
the consummation of such dissolution, liquidation or Terminating Transaction, as
the case may be, as the Company shall designate, to exercise any unexercised
portion of the Option to the full extent then exercisable.
6. Assignment or Transfer. The Option shall, during the Optionee's
lifetime, be exercisable only by him or her, and neither the Option nor any
right hereunder shall be transferable by the Optionee by operation of law or
otherwise other than by will or the laws of descent and distribution. In the
event of any attempt by the Optionee to alienate, assign, pledge, hypothecate or
otherwise dispose of the Option or of any right hereunder, except as provided
for herein, or in the event of the levy of any attachment, execution or similar
process upon the rights or interest hereby conferred, the Option shall thereupon
become null and void and of no effect.
7. No Rights as a Shareholder. Neither the Optionee nor any person
entitled to exercise the Optionee's rights in the event of his or her death
shall have any of the rights of a shareholder with respect to the shares of
Stock subject to the Option except to the extent the certificates for such
shares, or a portion thereof, shall have issued upon the exercise of the Option.
8. Right of Repurchase and First Refusal.
(a) Right of Repurchase. In the event that a Repurchase Event (as
defined in Subsection 8(a)(i) hereof) occurs, then the Company shall have the
option, but not the obligation, to repurchase all, but not less than all, of the
shares of Stock acquired upon the exercise of the Option (the "Option Shares")
from the Optionee, or his or her legal representative, as the case may be (the
"Repurchase Option"). The Repurchase Option shall commence on the date set forth
in Subsection 8(a)(i) hereof for the particular Repurchase Event and shall
expire as to a particular Repurchase Event 60 days after the applicable starting
date for the Repurchase Event (the "Repurchase Period"); provided, however, that
if the Option is exercised in whole or in part during the Repurchase Period, the
Repurchase Period shall be extended until 60 days after the last exercise of the
Option during the Repurchase Period. The Repurchase Option shall be exercised by
the Company giving the Optionee, or his or her legal representative, as the case
may be, written notice of its intention to exercise the Repurchase Option on or
before the last day of the Repurchase Period, and, together with such notice,
tendering to the Optionee, or his or her legal representative, as the case may
be, an amount equal to the greater of the Optionee's original cost per share (as
adjusted pursuant to Section 5 hereof) or the fair market value of the Option
Shares. The
4
<PAGE> 6
Company may, in exercising the Repurchase Option, designate one or more
assignees to purchase the Option Shares. Upon timely exercise of the Repurchase
Option in the manner provided in this Subsection 8(a), the Optionee, or his or
her legal representative, as the case may be, shall deliver to the Company the
certificate or certificates representing the Option Shares, duly endorsed and
free and clear of any and all liens, charges, and encumbrances. If the
Repurchase Option is not exercised as provided in this Subsection 8(a) during
the Repurchase Period, the Repurchase Option shall not thereafter be exercisable
unless and until there is a subsequent Repurchase Event. If there is a
subsequent Repurchase Event, the Repurchase Option shall again become
exercisable in full as provided in this Section 8.
(i) The Company shall have a Repurchase Option in the event
that any of the following shall occur (a "Repurchase Event"):
(A) The termination of the Optionee's service as a
director of the Company, any Parent or any Subsidiary, voluntarily or
involuntarily, for any reason whatsoever, including death or permanent
disability. The Repurchase Period shall commence on the date the Optionee ceases
to be a director of the Company, a Parent or a Subsidiary;
(B) The receivership, bankruptcy or other creditor's
proceeding regarding the Optionee or the taking of any of the Optionee's shares
of Stock by legal process, such as a levy of execution. The Repurchase Period
shall commence on the date the Company receives actual notice of the
commencement of pendency of the receivership, bankruptcy or other creditor's
proceeding or the date of such taking, as the case may be. The fair market value
of the Option Shares shall be determined as of the last day of the month
preceding the month in which the proceeding involved commenced or the taking
occurred;
(C) The Optionee, or his or her legal representative, as
the case may be, attempts to sell, exchange, transfer (by gift or otherwise),
assign, hypothecate, pledge, grant a security interest or in any other way
dispose of or alienate any of the Option Shares, or any interest therein. The
Repurchase Period shall commence on the date the Company receives actual notice
of such attempted sale, transfer or other disposition;
(D) The distribution of shares of Stock held by the
Optionee to his or her spouse as such spouse's joint or community interest
pursuant to a decree of dissolution, property settlement agreement or for any
other reason, except as may be otherwise permitted by the Company. The
Repurchase Period shall commence on the date the Company receives actual notice
of such distribution. The fair market value of the Option Shares shall be
determined as of the last day of the month preceding the month in which the
decree, agreement or, if there is no decree or agreement, the distribution
occurred; or
(E) The Optionee violates any provision of Section 9
hereof or the Company can reasonably anticipate that the Optionee will violate
any provision of Section 9 hereof. The Repurchase Period shall commence on the
date that the Company receives actual notice of such violation or on the date
that the Board reasonably determines that such a violation may occur.
5
<PAGE> 7
(ii) The fair market value of the Option Shares, as used in
this Section 8(a), shall be the fair market value of a share of Stock multiplied
by the number of Option Shares being purchased. The fair market value of a share
of Stock shall be determined by the Board of Directors of the Company (the
"Board"). The determination by the Board of the fair market value shall, if
reasonable, be conclusive and binding notwithstanding the possibility that other
persons might reach a different, and also reasonable, determination. If the
Board determines the fair market value of a share of Stock is equal to the fair
market value of a share of Stock as set forth in an appraisal of the Company by
an independent appraiser selected by the Company, such determination shall be
conclusively determined to be reasonable if the date as of which the shares of
Stock were valued for purposes of the appraisal was within 12 months of the date
of the Repurchase Event.
(b) Right of First Refusal. If at any time, whether during the
continuance of the Optionee's service as a director of the Company, a Parent or
a Subsidiary or thereafter, the Optionee desires to sell, exchange, transfer (by
gift or otherwise), assign, hypothecate, pledge, grant as a security interest or
in any other way dispose of or alienate any of the Option Shares or any interest
therein (hereinafter referred to as a "Disposition"), the Optionee shall give
written notice to the Company of the Optionee's intent to make a Disposition of
such shares of Stock (the "First Refusal Offer"). The First Refusal Offer shall
contain a statement signed by the Optionee notifying the Company that the
Optionee desires to make a Disposition of the Option Shares or an interest
therein and shall be accompanied by a copy of the bona fide offer to purchase
such shares of Stock, in case of a sale, or a description of the proposed
transaction with respect to any other Disposition, and shall set forth the
following:
(i) The full name and address of the intended transferee (the
"Transferee");
(ii) The number of Option Shares to be purchased by, or
transferred to, the Transferee;
(iii) The price, in case of a sale, and other terms under
which the purchase or transfer is intended to be made;
(iv) A statement, in case of a sale, signed by the Transferee,
that the price and other terms specified are a bona fide offer to purchase; and
(v) A representation, in case of a sale, by the Transferee
that he or she has the financial capability necessary to complete the
transaction as proposed.
The Company shall have 30 days from the date of receipt of the First
Refusal Offer within which to exercise an option to purchase all, but not less
than all, of the Option Shares covered by such First Refusal Offer (the "First
Refusal Shares") at the same price and upon the same terms as set forth in such
First Refusal Offer (the "First Refusal Option"). The Company may, in exercising
the First Refusal Option, designate one or more assignees to purchase the First
Refusal Shares. Notwithstanding the generality of the foregoing, however, with
the consent of the Optionee, the purchase price for the First Refusal Shares
may, at the
6
<PAGE> 8
option of the Company, be paid in cash in an amount equal to the present value
of any payments to be made over a period of time according to the terms of the
First Refusal Offer, or, if the terms specified in such offer state that payment
is to be made in property, in an amount equal to the present value of the fair
market value of such property. For purposes of any computation made pursuant to
this Subsection 8(b), the present value of any amount to be paid in the future
shall be determined by the Board by discounting such amount using an interest
rate of 10% or an interest rate equal to the then effective federal reserve
discount rate, without surcharge, of the Federal Reserve Bank of San Francisco,
whichever is higher.
If the Optionee desires to make a Disposition of any of the Option Shares
other than by sale, including, without limitation, by gift, hypothecation,
pledge or the grant of a security interest, the Optionee shall obtain the prior
written approval of the Company to the proposed transfer, which approval may be
withheld by the Company in the Company's sole discretion for any or no reason.
If the First Refusal Shares are not purchased pursuant to the related
First Refusal Offer by the Company in accordance with this Subsection 8(b), in
the case of a proposed sale, or if the Company approves a Disposition other than
by sale, the Optionee may make a bona fide transfer of the First Refusal Shares
to the respective Transferee or Transferees named in the related First Refusal
Offer; provided, however, that (1) such transfer shall only be made in strict
accordance with the terms stated in such First Refusal Offer, and immediately
following such transfer, the transferor shall so certify in writing to the
Company, and (2) before any such transfer shall become effective or be recorded
in the books of the Company, each Transferee of the First Refusal Shares shall
agree in writing to hold such shares of Stock subject to the terms of this
Agreement, except that the Repurchase Events described in Subsection
8(a)(i)(B)-(E) shall refer to the Transferee and the Repurchase Event described
in Subsection 8(a)(i)(A) shall refer to the Transferee if the Transferee is an
employee or a director of the Company, a Parent or a Subsidiary and to the
Optionee if the Transferee is not an employee or a director of the Company, a
Parent or a Subsidiary. In the event the Optionee does not make such transfer
for a period of 45 days following the date of the First Refusal Offer, no
transfer of the First Refusal Shares covered by the First Refusal Offer shall be
made without a new First Refusal Offer from the Optionee to the Company in
accordance with this Subsection 8(b) and in full compliance with all the
provisions hereof.
(c) Effect of Tender of Purchase Price. Notwithstanding the failure
of the holder of any certificate evidencing all or any part of the Option Shares
to deliver the same to the Company for cancellation, and upon tender by the
Company of the purchase price for any of the Option Shares in accordance with
the terms of this Agreement, such Option Shares and the certificates
representing the same shall forthwith and without further action be deemed to be
cancelled and forfeited.
(d) Restrictions on Transfer. Except as otherwise may be permitted
by this Agreement, the Optionee shall not sell, exchange, transfer (by gift or
otherwise), assign, hypothecate, pledge, grant as a security interest or in any
other way dispose of or alienate any of the Option Shares, which at any time
would be subject to repurchase by the Company or the gift, hypothecation of,
pledge or grant of a security interest in, is subject to the approval
7
<PAGE> 9
of the Company, and the attempt to effect any such transaction shall be null and
void ab initio and of no force and effect.
(e) Legends. All certificates representing the Option Shares shall
bear a legend or legends revealing the existence of the restrictions imposed by
this Section 8.
(f) Termination of Rights. The provisions of this Section 8 shall
cease to be applicable to the Option Shares at such time as the shares of Stock
of the Company are listed on any national securities exchange, or there is an
established market therefor in the over-the-counter market and the shares of
Stock are listed in the pink or white sheets of the National Association of
Securities Dealers automated quotation system or a comparable service.
(g) Adjustments. In the event that (i) shares of Stock are changed
into or exchanged for a different class or series of securities issued by the
Company or any other corporation as the result of any merger, consolidation or
sale of assets followed by a dissolution, liquidation, reclassification or
reorganization, or (ii) any additional shares of Stock or any other securities
shall be distributed with respect to such shares as a reclassification, stock
dividend, stock split, reverse stock split or other change in the corporate
structure of the Company, then all such securities shall be subject to the terms
and provisions of this Section 8 and shall be deemed to be included in the term
the "Option Shares" as used herein. As used herein, the term "Company" shall
include any other corporation which shall succeed to substantially all of the
business and assets of the Company as the result of any reorganization, merger
or consolidation, sale of assets or sale of Stock.
9. S Corporation Status. The Optionee acknowledges that the Company has
elected to be classified as an S Corporation for federal and state income tax
purposes and, following the exercise of the Option with respect to all or any
part of the shares of Stock subject to the Option, agrees to provide to the
Company, immediately upon the Company's request, such properly signed consents
or other documents as, in the opinion of counsel for the Company, may be
necessary or useful to maintaining the Company's status as an S Corporation.
Except with the written consent of the Company specifically referring to this
Section 9, the following provisions shall apply to the shares of Stock acquired
upon the exercise of the Option until such time as the Company ceases to qualify
as an S Corporation:
(a) Restrictions in Exercise. The Option may not be exercised if
such exercise would result in the Company ceasing to qualify as an S
Corporation.
(b) Restriction on Transfer. No transfer of any shares of Stock by
the Optionee, whether voluntary or involuntary, shall be effective unless all of
the Optionee's shares are transferred to one transferee and such transferee is a
permitted shareholder of an S Corporation. Thus, for example, in the event of a
divorce of the Optionee, the former spouse of the Optionee may be awarded the
Optionee's shares of Stock if and only if the former spouse is a permitted
shareholder of an S Corporation and the former spouse is awarded all of the
shares held by the Optionee.
8
<PAGE> 10
(c) Restriction on Other Action. The Optionee shall not take any
action or fail to take any action which shall result in the Company being unable
to maintain the Company's status as an S Corporation. This provision requires,
without limitation, the Optionee (i) to notify the Company prior to the Optionee
ceasing to qualify as an eligible shareholder of an S Corporation and (ii) to
permit the Company to repurchase all shares of Stock owned by the Optionee
pursuant to Section 8(a) hereof.
(d) Transfer by Trust. If any transfer by the Optionee is by
operation of law or by right of succession under a trust, the transferees shall
be obligated to make such transfers as shall reasonably be necessary, in the
opinion of counsel for the Company, either (i) to avoid termination of the
Company's status as an S Corporation or (ii) to permit the Company to requalify
as an S Corporation as soon as possible.
(e) Other Restrictions. The provisions of this Section 9 are in
addition to the provisions of Section 8 hereof. By way of example and not
limitation, a transfer by divorce or otherwise to a permitted transferee
pursuant to this Section 9 shall be subject to the Right of First Refusal set
forth in Subsection 8(b) hereof.
(f) Legends. All certificates representing shares of Stock acquired
upon the exercise of the Option shall bear a legend revealing the existence of
the restrictions imposed by this Section 9.
(g) Termination of Restrictions. The restrictions imposed by this
Section 9 shall terminate upon the occurrence of the first of any of the
following events: (i) the written agreement of the Company and the Optionee,
(ii) the bankruptcy, receivership or complete dissolution of the Company, (iii)
a transfer or purchase of shares of Stock of the Company which results in one
shareholder holding all of the issued and outstanding shares of stock of the
Company, or (iv) at such time as the shares of Stock of the Company are listed
on any national securities exchange, or there is an established market therefor
in the over-the-counter market and the shares of Stock are listed in the pink or
white sheets of the National Association of Securities Dealers automated
quotation system or a comparable service.
10. Optionee's Service Obligations. The Optionee agrees that, during the
period of his or her service as a director of the Company, a Parent or a
Subsidiary, he or she shall faithfully and to the best of his or her ability
devote his or her time, energy or skill to the service of the Company, a Parent
or a Subsidiary, and to the promotion of its interests.
11. Notice. Any notice or other written communication required or
permitted to be given under the terms of this Agreement shall be addressed to
the Company in care of its Secretary at the principal executive offices of the
Company and any notice to be given to the Optionee shall be addressed to him or
her at the address given by him or her beneath his or her signature hereto or
such other address for a party hereto as such party may hereafter designate in
writing to the other. Any such notice shall be deemed to have been duly given
when enclosed in a properly sealed envelope addressed as aforesaid, registered
or certified and deposited (postage or registration or certification fee
prepaid) in a post office or branch post office regularly maintained by the
United States.
9
<PAGE> 1
EXHIBIT 99.7
E*TRADE GROUP, INC.
STOCK OPTION ASSUMPTION AGREEMENT
OPTIONEE: <<1>>
STOCK OPTION ASSUMPTION AGREEMENT issued as of the 29th day of
July, 1998 by E*TRADE Group, Inc., a Delaware corporation ("E*TRADE").
WHEREAS, the undersigned individual ("Optionee") holds one or
more outstanding options to purchase shares of the common stock of ShareData,
Inc., a California corporation ("ShareData"), which were granted to Optionee
under the ShareData, Inc. 1984 Amended and Restated Stock Option Plan (the
"Plan"), and are evidenced by a stock option agreement (the "Option Agreement")
between ShareData and Optionee.
WHEREAS, ShareData has been acquired by E*TRADE through the
merger of a wholly-owned E*TRADE subsidiary ("Acquisition Sub") with and into
ShareData (the "Merger") pursuant to the Agreement and Plan of Reorganization
dated as of July 6, 1998 by and among E*TRADE, Acquisition Sub and ShareData
(the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require
E*TRADE to assume all obligations of ShareData under all options outstanding
under the Plan at the consummation of the Merger and to issue to the holder of
each outstanding option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement,
the exchange ratio (the "Exchange Ratio") in effect for the Merger is
0.075376573 share of E*TRADE common stock (the "E*TRADE Stock") for each
outstanding share of ShareData common stock (the "ShareData Stock").
WHEREAS, this Agreement is to become effective immediately
upon the consummation of the Merger (the "Effective Time") in order to reflect
certain adjustments to Optionee's outstanding options under the Plan which have
become necessary by reason of the assumption of those options by E*TRADE in
connection with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The stock options held by Optionee under the Plan
immediately prior to the Effective Time (the "ShareData Options") and the
exercise price payable per share are set forth in Exhibit A hereto. E*TRADE
hereby assumes, as of the Effective Time, all the duties and obligations of
ShareData under each of the ShareData Options. In connection with such
assumption, the number of shares of E*TRADE Stock purchasable under each
ShareData Option hereby assumed and the exercise price payable thereunder have
been adjusted to reflect the Exchange Ratio at which shares of ShareData Stock
were converted into shares of E*TRADE Stock in consummation of the Merger.
Accordingly, the number of shares of E*TRADE Stock subject to each ShareData
Option hereby assumed shall be as specified for that option in attached Exhibit
B, and the adjusted exercise price payable per share of E*TRADE Stock under the
assumed ShareData Option shall be as indicated for that option in attached
Exhibit B.
<PAGE> 2
2. The intent of the foregoing adjustments to each assumed
ShareData Option is to assure that the spread between the aggregate fair market
value of the shares of E*TRADE Stock purchasable under each such option and the
aggregate exercise price as adjusted pursuant to this agreement will,
immediately after the consummation of the Merger, equal the spread which
existed, immediately prior to the Merger, between the then aggregate fair market
value of the ShareData Stock subject to the ShareData Option and the aggregate
exercise price in effect at such time under the Option Agreement. Such
adjustments are also designed to preserve, immediately after the Merger, on a
per share basis, the same ratio of exercise price per option share to fair
market value per share which existed under the ShareData Option immediately
prior to the Merger.
3. The following provisions shall govern each ShareData Option
hereby assumed by E*TRADE:
(a) Unless the context otherwise requires,
all references to the "Company" in each Option Agreement and
in the Plan shall mean E*TRADE, all references to "Stock",
"Shares" or "Common Stock" shall mean shares of E*TRADE Stock,
and all references to the "Board" or the "Committee" shall
mean the Board of Directors of E*TRADE or the Compensation
Committee of such Board.
(b) The grant date and the expiration date
of each assumed ShareData Option and all other provisions
which govern either the exercisability or the termination of
the assumed ShareData Option shall remain the same as set
forth in the Option Agreement applicable to that option and
shall accordingly govern and control Optionee's rights under
this Agreement to purchase E*TRADE Stock.
(c) Each assumed ShareData Option shall
continue to vest and become exercisable in accordance with the
same vesting/exercise schedule in effect under the applicable
Option Agreement immediately prior to the Effective Time, with
the number of shares of E*TRADE Stock subject to each such
installment adjusted to reflect the Exchange Ratio.
Accordingly, no accelerated vesting of the ShareData Options
shall be deemed to automatically occur by reason of the
Merger.
(d) For purposes of applying any and all
provisions of the Option Agreement relating to Optionee's
employment or service with ShareData, Optionee shall be deemed
to continue in employment or service for so long as Optionee
is in the employ of, or provides services to, E*TRADE or any
present or future E*TRADE subsidiary, including (without
limitation) ShareData.
(e) The adjusted exercise price payable for
the E*TRADE Stock subject to each assumed ShareData Option
shall be payable in any of the forms authorized under the
Option Agreement applicable to that option.
(f) In order to exercise each assumed
ShareData Option, Optionee must deliver to E*TRADE a written
notice of exercise in which the
<PAGE> 3
number of shares of E*TRADE Stock to be purchased thereunder
must be indicated. The exercise notice must be accompanied by
payment of the adjusted exercise price payable for the
purchased shares of E*TRADE Stock and should be delivered to
E*TRADE at the following address:
E*TRADE Group, Inc.
2400 Geng Road
Palo Alto, CA 94303
Attention: Option Plan Administrator
4. Except to the extent specifically modified by this Option
Assumption Agreement, all of the terms and conditions of each Option Agreement
as in effect immediately prior to the Merger shall continue in full force and
effect and shall not in any way be amended, revised or otherwise affected by
this Stock Option Assumption Agreement.
<PAGE> 4
IN WITNESS WHEREOF, E*TRADE Group, Inc. has caused this Stock
Option Assumption Agreement to be executed on its behalf by its duly-authorized
officer as of the 29th day of July, 1998.
E*TRADE GROUP, INC.
By: ___________________________________________
Name: _________________________________________
Title:_________________________________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock
Option Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her ShareData Options hereby assumed by E*TRADE Group,
Inc. are as set forth in the Option Agreement, the Plan and such Stock Option
Assumption Agreement.
----------------------------------------------
<<1>>, OPTIONEE
DATED: __________________, 199__
<PAGE> 5
EXHIBIT A
Optionee's Outstanding Options to Purchase Shares of
ShareData, Inc.
Common Stock (Pre-Merger)
<TABLE>
<CAPTION>
Number of Option Shares Exercise Price
----------------------- --------------
<S> <C>
<<2>> <<3>>
</TABLE>
<PAGE> 6
EXHIBIT B
Optionee's Outstanding Options to Purchase Shares of
E*TRADE Group, Inc.
Common Stock (Post-Merger)
<TABLE>
<CAPTION>
Number of Option Shares Exercise Price
----------------------- --------------
<S> <C>
<<4>> <<5>>
</TABLE>
<PAGE> 1
EXHIBIT 99.8
SHAREDATA, INC.
OFFICER AND DIRECTOR
STOCK OPTION PLAN
1. Establishment. On ________________________, 1993, ShareData, Inc., a
California corporation (the "Company"), established its Officer and Director
Stock Option Plan under which options may be granted to Eligible Persons to
purchase shares of the Company's Common Stock. It is expressly intended that
options granted pursuant to this Officer and Director Stock Option Plan may
constitute incentive stock options ("Incentive Options") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
may constitute non-qualified stock options ("Non-Qualified Options").
2. Purpose. This Officer and Director Stock Option Plan is designed to
enable the Company to attract, retain and motivate directors and officers of the
Company, a Parent or a Subsidiary by providing for or increasing the proprietary
interest of such persons in the Company and thereby provide an incentive to such
persons to work toward the future financial security and success of the Company.
Options may also be granted under this Officer and Director Stock Option Plan in
connection with the acquisition, by purchase, lease, merger, consolidation or
otherwise, of the business and assets of any corporation, firm or association,
including options granted to persons who become a director or officer of the
Company, a Parent or a Subsidiary.
3. Definitions.
(a) Plan. This Officer and Director Stock Option Plan as the same may
be amended from time to time as provided hereinafter.
(b) Parent. Any corporation in an unbroken chain of corporations
ending with the Company each of which, other than the Company, owns 50% or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
(c) Subsidiary. Any corporation in an unbroken chain of corporations
beginning with the Company each of which, other than the last corporation in the
unbroken chain, owns 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
(d) Board. The Board of Directors of the Company.
(e) Committee. The Committee of the Board established to direct and
administer the Plan as provided in Section 4 hereof.
(f) Stock. Shares of the Common Stock of the Company, and such other
stock as may be substituted therefor as provided in the adjustment provisions of
Sections 16 and 17 hereof.
(g) Eligible Person. A person who is eligible to be granted an Option.
A person is eligible to be granted an Option if (i) such person is (x) an
officer of the Company, a Parent or a Subsidiary and/or (y) a director of the
Company, a Parent or a Subsidiary and (ii) an
<PAGE> 2
offer or sale of any security to such per-son is eligible for exemption from the
provisions of Section 25130 of the California Corporations Code by reason of
Section 25102(f) of such Code.
(h) Optionee. The person to whom an Option under the Plan has been or
is to be granted.
(i) Date of Grant. The date on which the Board or the Committee
completes the corporate action constituting authorization of the Option for a
specified Optionee.
(j) Option. A right granted under the Plan to purchase Stock.
(k) Exercise Price. The price at which Stock may be purchased on
exercise of an Option granted under the Plan.
(l) Fair Market Value. If the Stock is not publicly traded, fair
market value shall be determined by the Board or the Committee and may be
computed by any method as the Board or the Committee in good faith believes will
reflect the fair market value of the Stock on the day in question. If the Stock
is publicly traded, fair market value shall be the closing sale price per share
of the Stock, for securities listed on a .national securities exchange, or the
closing bid price per share of the Stock, for securities quoted by NASDAQ, on
the day in question (or, if such day is not a trading day or if no sales of or
bids on the Stock were made on such day, on the nearest preceding trading day on
which sales of or bids on the Stock were made), as reported in The Wall Street
Journal, or, if trading in the Stock is then not reported in The Wall Street
Journal, at such closing sale or bid price as may then appear in what the Board
or the Committee in its judgment then deems to be the most nearly comparable
listing or reporting service.
4. Administration. The Plan shall be administered by the Board or, in the
discretion of the Board, by a Committee of not less than three persons selected
by the Board. The Board may from time to time remove members from, or add
members to, the Committee. Vacancies on the Committee, howsoever caused, shall
be filled by the Board. The Committee may select one of its members as its
chairman and shall hold its meetings at such times and places as it may
determine. A majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by not less than a majority of its
members. Any decision or determination reduced to writing and signed by all the
members of the Committee shall be fully as effective as if it had been made by a
majority vote at a meeting duly called and held. The Committee may appoint a
secretary, shall keep minutes of its meetings, and shall make such rules and
regulations for the conduct of its business as it shall deem advisable.
The interpretation and construction by the Committee of any provision
of the Plan or of any Option granted under the Plan shall be final and binding
upon Optionees and their respective successors, unless otherwise determined by
the Board, in which case such determination of the Board shall be final and
binding. No member of the Board or the Committee shall be liable for any action
or determination made in good faith. The Board or the Committee may from time to
time adopt rules and regulations for carrying out the Plan and, subject to the
provisions of the Plan, may prescribe the form or forms of the instruments
evidencing any Option granted under the Plan.
2
<PAGE> 3
Subject to the provisions of the Plan, the Board or the Committee
shall have full and final authority in its discretion to select the Eligible
Persons to be granted an Option, to grant such Option, and to determine the
number of shares of Stock to be subject thereto, whether the Option shall be an
Incentive Option or a Non-Qualified Option, the Exercise Price, the terms of
exercise, the expiration date, and such other terms and provisions thereof as it
may authorize, each of which terms may be different for each Option.
5. Stock Subject To The Plan. Subject to the adjustments provided in
Sections 16 and 17 hereof, the aggregate number of shares of Stock which may be
subject to Options granted under the Plan shall be 1,000,000 shares. Shares of
Stock subject to the unexercised portion of any Option granted under the Plan
which expires or terminates or is canceled shall again become available for
purposes of the Plan. Shares of Stock deliverable upon the exercise of any
Option granted under the Plan may be authorized and unissued Stock or previously
outstanding Stock which has been reacquired by the Company. No Option shall be
exercisable except in respect of whole shares of Stock.
6. Limitation On Incentive Options. With respect to Incentive Options,
subject to the overall limitations of Section 5 hereof, the aggregate Fair
Market Value (determined as of the time the Option is granted) of the shares of
Stock for which Incentive Options held by an Optionee may become exercisable for
the first time during any calendar year (under the Plan and all other stock
option plans of the Company, any Parent, and any Subsidiary) shall not be at a
rate in excess of $100,000 as provided in Section 422(d) of the Code.
7. Participants. Subject to the provisions of the Plan, the Board or the
Committee shall, from time to time, select from among the Eligible Persons those
persons to whom Options may be granted. No Incentive Option shall be granted to
any Eligible Person who is not an employee of the Company, a Parent or a
Subsidiary.
8. Employment Obligations For Incentive Options. As consideration for the
granting of any Incentive Option hereunder, the Optionee shall agree in the
applicable Incentive Stock Option Agreement or any other written agreement
between the Optionee and the Company, a Parent or a Subsidiary that, during the
period of his or her employment by or association with the Company, a Parent or
a Subsidiary, he or she shall faithfully and to the best of his or her ability
devote his or her time, energy, and skill during all of his or her working hours
for the Company to the service of the Company, a Parent or a Subsidiary, and the
promotion of its interests, subject to vacations, military service leave, sick
leave, and other bona fide absences in accordance with the regular policies and
practices of the Company, a Parent or a Subsidiary, or any written agreement
between the Optionee and the Company, a Parent or a Subsidiary. Nothing herein
or in an Incentive Stock Option Agreement shall confer upon an Optionee any
right with respect to continued employment or limit his or her rights to
terminate his or her employment.
9. Duration of Plan. Options may be granted as provided in the Plan at
such time or times as may be determined by the Board or the Committee, but any
such grants must be made at or prior to the close of business on the tenth
anniversary date of the effective date of the Plan or the approval of the Plan
by the shareholders of the Company, whichever is earlier. All Options
3
<PAGE> 4
outstanding on that date may thereafter be exercised in accordance with their
respective terms. However, no Option shall be granted under the Plan after such
date.
10. Option Period. No Option granted under the Plan may be exercised in
whole or in part more than ten years after its Date of Grant. The expiration
date of any Incentive Option granted to an Eligible Person who, on the Date of
Grant of the Option, owns, directly or indirectly, more than 10% of the total
combined voting power of all classes of stock of the Company, a Parent or a
Subsidiary (as interpreted under Section 422(b)(6) of the Code), shall be not
later than the fifth anniversary date of the Date of Grant. For purposes of
determining whether such 10% stock ownership exists, the attribution rules of
Section 424(d) of the Code shall apply.
11. Payment of Option Exercise Price. Payment for shares of Stock
purchased upon the exercise of an Option shall be made in full in cash or by
check, bank draft or postal or express money order payable, in each case, to the
order of the Company in lawful money of the United States at the time of
exercise, or an Optionee may deliver shares of Stock of the Company which he or
she has previously acquired or, if the Stock Option Agreement with respect to
the Option so provides, a promissory note having such terms as the Board or the
Committee shall, in its discretion, establish, to satisfy in whole or in part
the Exercise Price of the Option. Any shares of Stock delivered to exercise an
Option shall be valued at the aggregate Fair Market Value of the Stock
determined as of the date such Option is exercised.
12. Option Exercise Price. The Exercise Price of the Stock for each Option
granted under the Plan shall be at least 100% of the Fair Market Value of the
Stock at the Date of Grant of the Option; provided, however, if, at the time an
Option is granted, the Eligible Person to whom it is granted owns, directly or
indirectly, more than 10% of the total combined voting power of all classes of
stock of the Company, a Parent or a Subsidiary (as interpreted under Section
422(b)(6) of the Code and applying the attribution rules of Section 424(d) of
the Code), the Exercise Price of the Stock for such Option shall be at least
110% of the Fair Market Value of the Stock at the Date of Grant of such Option.
Subject to the general limitations of the 'Plan, and with the consent of the
Optionee, the Board or the Committee may make any adjustment in the Exercise
Price, the number of shares of Stock subject to or the term of an Option by
cancellation of an outstanding Option and a subsequent regranting of an Option,
or by amendment or substitution of an outstanding Option. An Option which has
been so amended, substituted or regranted may have a higher or lower Exercise
Price, cover a greater or lesser number of shares of Stock, or have a longer or
shorter term than the Option it replaced, but its Exercise Price shall in no
event be less than 100% or 110%, as the case may be, of the Fair Market Value of
the Stock at the date of amendment, substitution or regrant of the Option.
13. Exercise Of Options. The Board or the Committee shall have full
authority, in its discretion, to prescribe in any Stock Option Agreement subject
to the provisions of the Plan that the subject Option will be exercisable in
full at any time or from time to time during the term of the Option, to provide
that the subject Option will be exercisable in such installments and at such
times during the term of the Option as the Board or the Committee may determine,
to provide that the subject Option will be exercisable following termination of
the Optionee's employment by or association with the Company, a Parent or a
Subsidiary for any reason (subject to the overall limitations of Section 10
hereof) or to specify additional conditions which the Optionee
4
<PAGE> 5
must fulfill in order to exercise the Option. The holder of an Option shall not
have any of the rights of a shareholder with respect to the shares of Stock
covered by the Option until such shares are issued to him or her upon the
exercise of the Option.
14. Rights of Repurchase. So long as the Stock is not listed on any
national securities exchange, or so long as the Stock is not traded on a regular
basis, as determined by the Company, in the over-the-counter market, the Company
may reserve for itself (a) a right of first refusal on any sale or disposition
of shares of Stock acquired upon the exercise of an Option (if the Company
chooses to repurchase such shares of Stock, it will do so on terms equivalent to
those offered by the intended transferee), and (b) a right to repurchase shares
of Stock acquired upon the exercise of an Option if an Optionee's employment by
or association with the Company, a Parent or a Subsidiary is terminated for any
reason, or in other circumstances (whether or not such shares of Stock are
vested or unvested), at a price at least equal to the Exercise Price of such
shares of Stock. Unless and until a public market exists for the Stock, each
certificate representing shares of Stock subject to such provisions shall bear a
legend to the effect that such shares are subject to certain repurchase rights
in favor of the Company.
15. Nontransferability of Options. Any Option granted under the Plan shall
by its terms be nontransferable by the Optionee other than by will or according
to the laws of descent and distribution and is exercisable during the Optionee's
lifetime only by him or her.
16. Adjustments. If outstanding shares of Stock are increased or
decreased, or are changed into or exchanged for a different number or kind of
shares or securities of the Company, through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
change in the corporate structure of the Company, an appropriate and
proportionate adjustment shall be made in the maximum number and/or type of
shares or securities as to which Options may be granted under the Plan. A
corresponding adjustment changing the number and/or type of shares or securities
allocated to unexercised Options, or portions thereof, which shall have been
granted prior to any such change, shall likewise be made. Any such adjustment in
outstanding Options shall be made without change in the aggregate Exercise Price
applicable to the unexercised portion of such Options, but a corresponding
adjustment in the Exercise Price for each share or other unit of any security
covered by the Option shall be made. Adjustments under this Section 16 shall be
made by the Board, and its determinations as to what adjustments shall be made,
and the extent thereof, shall be final and binding.
17. Terminating Transactions. Except as provided in this Section 17, upon
the dissolution or liquidation of the Company, upon a reorganization, merger or
consolidation of the Company with one or more corporations as a result of which
the Company is not the surviving corporation or as a result of which the
outstanding shares of Stock are exchanged or converted into cash or property or
securities not issued by the Company, or upon a sale of substantially all the
property of the Company or the acquisition of Stock representing more than 80%
of the voting power of the then outstanding securities of the Company by another
corporation (any of which shall be deemed hereunder to constitute a "Terminating
Transaction"), the Plan shall terminate. Any Option theretofore granted under
the Plan shall then terminate, unless provision is made in writing in connection
with such Terminating Transaction for the continuance of the Plan and/or for the
assumption of the Options theretofore granted, or the substitution for such
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<PAGE> 6
Options of options covering the securities of a surviving or acquiring
corporation, or a parent or a subsidiary thereof, with appropriate adjustments
as to the numbers and/or types of shares and prices, in which event the Plan
and/or Options theretofore granted shall continue in the manner and under the
terms so provided. If the Plan and/or Options terminate pursuant to this Section
17, all persons entitled to exercise any unexercised portions of Options then
outstanding shall have the right, at such time prior to the consummation of the
Terminating Transaction as the Company shall designate, to exercise the
unexercised portions of their Options then exercisable.
18. Government and Stock Exchange Regulations. The Company shall not be
required to issue any shares of Stock upon the exercise of any Option unless and
until any then applicable requirements of the Securities and Exchange
Commission, the Department of Corporations of the State of California and/or
other regulatory agencies having jurisdiction with respect to such issuance, and
of any national securities exchanges upon which the Stock may be listed, shall
have been fully complied with.
Upon the exercise of an Option at a time when there is not in effect a
registration statement under the Securities Act of 1933, as amended, or any
successor statute thereto (the "Securities Act"), relating to the shares of
Stock issuable upon exercise thereof and available for delivery a prospectus
meeting the requirements of Section 10(a)(3) of the Securities Act, or, if the
rules or interpretations of the Securities and Exchange Commission so require,
such shares may be issued only if the Optionee represents and warrants in
writing to the Company that the shares are being acquired for investment and not
with a view to the distribution thereof, and any certificates issued upon
exercise of the Option shall bear appropriate legends setting forth the
restrictions on transfer of such shares.
19. Withholding Taxes. Whenever shares of Stock are to be issued by reason
of the exercise of an Option, the Company, in its discretion, may require the
Optionee to remit to the Company, prior to the delivery of any certificate or
certificates for such shares, all or any part of an amount determined by the
Company, in its discretion, to be sufficient to satisfy federal, state, and
local withholding tax requirements which the Company, or counsel for the
Company, determine may be payable with respect to such exercise.
20. Amendment and Termination Of The Plan. The Board may alter, amend,
suspend or terminate the Plan, provided that no such action shall deprive an
Optionee, without his or her consent, of any Option or any of the rights
thereunder granted to the Optionee pursuant to the Plan. Except as herein
provided, no such action of the Board, unless taken with the approval of the
shareholders of the Company holding a majority of its voting power, may:
(a) increase the total number of shares of Stock reserved for the
purposes of the Plan, other than pursuant to adjustments under
Sections 16 and 17 hereof;
(b) reduce the minimum permissible Exercise Price;
(c) extend the termination date of the Plan set forth herein; or
(d) alter the class of persons eligible to receive Options under the
Plan.
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<PAGE> 7
21. Provision of Information. The Company shall make available to each
Optionee, at least annually during the period for which such Optionee has one or
more Options outstanding, copies of the Company's balance sheet and income
statement for the just completed fiscal year. The Company shall not be required
to provide such information to any Optionee whose duties in connection with the
Company assure their access to equivalent information.
22. Effectiveness of The Plan. The effective date of the Plan is April 6,
1993. However, implementation of the Plan is subject to approval of the Plan by
shareholders of the Company holding a majority of its voting power within 12
months before or after the effective date of the Plan as above set forth.
Options may be granted under the Plan prior to such qualification and approval,
but each Option so granted shall expressly provide that it is subject to the
aforementioned conditions and in no event may any such Option be exercised in
whole or in part prior to such qualification and approval.
IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that
the foregoing ShareData, Inc. Officer and Director Stock Option Plan was duly
adopted by the Board of Directors of the Company as provided herein on the
_________day of _____________________, 1993.
---------------------------
Patrick N. Ontko
7
<PAGE> 1
EXHIBIT 99.9
SHAREDATA, INC.
NOTICE OF GRANT OF STOCK OPTION
AND GRANT AGREEMENT
[Name and Address]
You have been granted an option to purchase ShareData, Inc. stock as
follows:
<TABLE>
<S> <C>
Incentive Stock Option Grant No.
-------------
Date of Grant
-------------
Vesting Commencement Date
-------------
Stock Option Plan Officer and Director
Exercise Price per Share $
-------------
Total Number of Shares Granted
-------------
Total Price of Shares Granted $
-------------
</TABLE>
By your signature and the signature of the Company's authorized
representative to the attached Incentive Stock Option Agreement, you and
ShareData, Inc. agree that this option is granted under and governed by the
terms and conditions of the ShareData, Inc. Officer and Director Stock Option
Plan and the Incentive Stock Option Agreement, both of which are attached and
made a part of this document.
<PAGE> 2
INCENTIVE STOCK OPTION AGREEMENT
UNDER THE SHAREDATA, INC.
OFFICER AND DIRECTOR STOCK OPTION PLAN
RECITALS
WHEREAS, ShareData, Inc. (the "Company") has adopted the Officer and
Director Stock Option Plan (the "Plan"), which Plan is incorporated herein by
reference and made a part of this Incentive Stock Option Agreement (this
"Agreement"); and
WHEREAS, the Optionee is an employee of the Company, a Parent or a
Subsidiary, as defined in the Plan, and the Company has determined that it would
be to the advantage and interest of the Company and its shareholders to grant to
the Optionee the option (i) described in the cover sheet of this Agreement which
is hereby incorporated by reference and (ii) subject to the terms and conditions
provided for herein and in the Plan, as an inducement to remain in the service
of the Company, a Parent or a Subsidiary and as an incentive for increased
efforts during such service.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and the
terms, conditions, and covenants contained herein, the parties hereby agree as
follows:
1. Grant of Option. The Company hereby grants to the Optionee the right
and option to purchase, on the terms and conditions hereinafter set forth, all
or any part of the number of shares of the common stock of the Company (the
"Stock") set forth on the cover sheet of this Agreement at the exercise price
set forth thereon (the "Option"). The number of shares of Stock subject to the
Option and the exercise price are subject to adjustment under certain
circumstances, as provided in the Plan.
2. Term and Exercisability of Option.
(a) Term of Option. The Option shall be exercisable in whole or
in part at any time beginning on the first anniversary date of the vesting
commencement date as set forth on the cover sheet of this Agreement and prior to
the tenth anniversary date of the date of grant as set forth on the cover sheet
of this Agreement (the "Termination Date"), unless sooner terminated in
accordance with the provisions of Sections 3 and 5 hereof, pursuant to the
schedule set forth in Subsection 2(b) hereof. In no event shall the Company be
required to issue fractional shares.
(b) Exercisability of Option. For the purposes of this Section 2,
the Option shall be exercisable during its term according to the following
schedule:
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<PAGE> 3
(i) As to one-fourth of the shares of Stock subject to
the Option, after the first anniversary date of the vesting commencement date;
(ii) As to an additional one-fourth of the shares of Stock
subject to the Option, after the second anniversary date of the vesting
commencement date;
(iii) As to an additional one-fourth of the shares of
Stock subject to the Option, after the third anniversary date of the vesting
commencement date; and
(iv) As to the remaining one-fourth of the shares of Stock
subject to the Option, after the fourth anniversary date of the vesting
commencement date.
3. Expiration of Option. The period for exercising the Option (the
"Option Period") will end on the Termination Date, unless sooner terminated as
provided in Subsections (a), (b) or (c) below:
(a) If the Optionee ceases to be a bona fide employee of the
Company, a Parent or Subsidiary (other than by death or disability) during the
Option Period, the Option shall thereafter be exercisable for a period of 30
days after termination of the Optionee's employment, but only if, and to the
extent that, the Option was exercisable by the Optionee under the provisions of
Section 2 hereof at the time of such cessation of employment and only prior to
the Termination Date. If the Optionee is absent from work with the Company, a
Parent or a Subsidiary because of his or her disability or if he or she is on
leave of absence for the purpose of serving the government of the country in
which the principal place of employment of the Optionee is located, either in a
military or civilian capacity, or for such other purpose or reason as the Board
of Directors of the Company (the "Board") or the Committee administering the
Plan (the "Committee") may approve, the Optionee shall not be deemed during the
period of any such absence, by virtue of such absence alone, to have terminated
his or her employment with the Company, a Parent or a Subsidiary, except as the
Board or the Committee may otherwise expressly provide.
(b) If the Optionee should die while in the employ of the
Company, a Parent or a Subsidiary, or within the period referred to in
Subsection 3(a) hereof, the Option may, within a period of one year from the
date of the Optionee's death, be exercised by the Optionee's legal
representative, or by the person or persons to whom the Optionee's rights under
the Option shall pass by will or by the applicable laws of descent and
distribution, but only if, and to the extent that, the Option was exercisable by
the Optionee under the provisions of Section 2 hereof at the time of his or her
death and only prior to the Termination Date.
(c) If the Optionee should become disabled within the meaning of
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code")
while in the employ of the Company, a Parent or a Subsidiary, the Option may,
within a period of 180 days after the termination of the Optionee's employment,
be exercised by the Optionee, but only if, and to the extent that, the Option
was exercisable by the Optionee under the
2
<PAGE> 4
provisions of Section 2 hereof at the time of such cessation of employment and
only prior to the Termination Date.
4. Manner of Exercise. The Optionee may exercise the Option with respect
to all or any part of the shares of Stock then subject to such exercise as
follows:
(a) By giving the Company written notice of such exercise
specifying the number of shares of Stock as to which the Option is so exercised
and accompanied by an amount equal to the aggregate exercise price of such
shares, in the form of any one or combination of (i) cash or a check, bank draft
or postal or express money order payable to the order of the Company in lawful
money of the United States or (ii) shares of Stock of the Company previously
acquired by the Optionee. Any shares of Stock delivered to exercise the Option
shall be valued at their aggregate Fair Market Value (as defined in the Plan) on
the date of exercise.
(b) If required by the Company, by giving satisfactory assurance
in writing, signed by the Optionee or his or her legal representative, as the
case may be, that such shares of Stock are being purchased for investment only
and not with a view to the distribution thereof; provided, however, that such
assurance shall be deemed inapplicable to (i) any sale of such shares by the
Optionee subject to a registration statement covering such sale, which has
heretofore been (or may hereafter be) filed and become effective under the
Securities Act of 1933, as amended (the "Securities Act"), and is current and
with respect to which no stop order suspending the effectiveness thereof has
been issued, and (ii) any other sale of such shares with respect to which, in
the opinion of counsel for the Company, such assurance is not required to be
given in order to comply with the provisions of the Securities Act.
As soon as practicable after receipt of such written notice of exercise
from the Optionee, the Company shall, without transfer or issue tax or other
incidental expenses to the Optionee, deliver to the Optionee at the office of
the Company, or such other place as may be mutually acceptable to the Company
and the Optionee, a certificate or certificates for such shares of Stock, which
certificate or certificates may bear such legend or legends with respect to
restrictions on transfer thereof as counsel for the Company deems to be required
by applicable provisions of law and this Agreement; provided, however, that
nothing herein shall be deemed to impose upon the Company any obligation to
deliver any shares of Stock to the Optionee if, in the opinion of counsel for
the Company, doing so would violate any provision of: (1) the Securities Act;
(2) the Securities Exchange Act of 1934, as amended; (3) any applicable listing
requirements of any national securities exchange; (4) any state securities
regulation or "Blue Sky" laws; or (5) requirements under any other law or
regulation applicable to the issuance or transfer of such shares. In no event
shall the Company be required to take any affirmative action to comply with any
of such laws, regulations or requirements, nor shall the Company be liable for
any failure to deliver shares of Stock because such shares have not been
registered or because a registration statement with respect thereto is not
current or because such delivery would otherwise be in violation of any
applicable law or regulation.
3
<PAGE> 5
The term "current" when used herein to refer to a registration statement
shall mean a registration statement that, in the opinion of counsel for the
Company, does not include any untrue statement of a material fact and that
includes all material facts required to be stated therein or that are necessary
to make the statements therein not misleading.
5. Adjustments. If outstanding shares of Stock are increased or
decreased, or are changed into or exchanged for a different number or kind of
shares or securities of the Company, through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
change in the corporate structure of the Company, an appropriate and
proportionate adjustment shall be made by the Company in the number and/or type
of the shares of Stock subject to this Agreement and in the exercise price in
order to preserve, but not increase, the benefit to the Optionee. Anything
herein contained to the contrary notwithstanding, (a) upon dissolution or
liquidation of the Company, other than in connection with a Terminating
Transaction (as defined in the Plan), or (b) upon dissolution or liquidation of
the Company, in connection with a Terminating Transaction where the surviving or
acquiring corporation does not, prior to or concurrent with the succession to
the business of the Company, assume the Option (subject to any applicable
provisions of the Code), or substitute a new option of comparable value for the
Option, the Option, in either case, shall terminate and thereupon become null
and void; provided, however, that the Optionee shall have the right, at such
time prior to the consummation of such dissolution, liquidation or Terminating
Transaction, as the case may be, as the Company shall designate, to exercise any
unexercised portion of the Option to the full extent then exercisable.
6. Assignment or Transfer. The Option shall, during the Optionee's
lifetime, be exercisable only by him or her, and neither the Option nor any
right hereunder shall be transferable by the Optionee by operation of law or
otherwise other than by will or according to the laws of descent and
distribution. In the event of any attempt by the Optionee to alienate, assign,
pledge, hypothecate or otherwise dispose of the Option or of any right
hereunder, except as provided for herein, or in the event of the levy of any
attachment, execution or similar process upon the rights or interest hereby
conferred, the Option shall thereupon become null and void and of no effect.
7. No Rights as a Shareholder. Neither the Optionee nor any person
entitled to exercise the Optionee's rights in the event of his or her death
shall have any of the rights of a shareholder with respect to the shares of
Stock subject to the Option except to the extent the certificates for such
shares, or a portion thereof, shall have issued upon the exercise of the Option.
8. Right of Repurchase and First Refusal.
(a) Right of Repurchase. In the event that a Repurchase Event (as
defined in Subsection 8(a)(i) hereof) occurs, then the Company shall have the
option, but not the obligation, to repurchase all, but not less than all, of the
shares of Stock acquired upon the exercise of the Option (the "Option Shares")
from the Optionee, or his or her legal representative, as the case may be (the
"Repurchase Option"). The Repurchase Option shall commence on the date set forth
in Subsection 8(a)(i) hereof for the particular Repurchase
4
<PAGE> 6
Event and shall expire as to a particular Repurchase Event 60 days after the
applicable starting date for the Repurchase Event (the "Repurchase Period");
provided, however, that if the Option is exercised in whole or in part during
the Repurchase Period, the Repurchase Period shall be extended until 60 days
after the last exercise of the Option during the Repurchase Period. The
Repurchase Option shall be exercised by the Company giving the Optionee, or his
or her legal representative, as the case may be, written notice of its intention
to exercise the Repurchase Option on or before the last day of the Repurchase
Period, and, together with such notice, tendering to the Optionee, or his or her
legal representative, as the case may be, an amount equal to the greater of the
Optionee's original cost per share (as adjusted pursuant to Section 5 hereof) or
the fair market value of the Option Shares. The Company may, in exercising the
Repurchase Option, designate one or more assignees to purchase the Option
Shares. Upon timely exercise of the Repurchase Option in the manner provided in
this Subsection 8(a), the Optionee, or his or her legal representative, as the
case may be, shall deliver to the Company the certificate or certificates
representing the Option Shares, duly endorsed and free and clear of any and all
liens, charges, and encumbrances. If the Repurchase Option is not exercised as
provided in this Subsection 8(a) during the Repurchase Period, the Repurchase
Option shall not thereafter be exercisable unless and until there is a
subsequent Repurchase Event. If there is a subsequent Repurchase Event, the
Repurchase Option shall again become exercisable in full as provided in this
Section 8.
(i) The Company shall have a Repurchase Option in the
event that any of the following shall occur (a "Repurchase Event"):
(A) The termination of the Optionee's employment
with the Company, any Parent or any Subsidiary, voluntarily or involuntarily,
for any reason whatsoever, including death or permanent disability. The
Repurchase Period shall commence on the date the Optionee ceases to be an
employee of the Company, a Parent or a Subsidiary;
(B) The receivership, bankruptcy or other
creditor's proceeding regarding the Optionee or the taking of any of the
Optionee's shares of Stock by legal process, such as a levy of execution. The
Repurchase Period shall commence on the date the Company receives actual notice
of the commencement of pendency of the receivership, bankruptcy or other
creditor's proceeding or the date of such taking, as the case may be. The fair
market value of the Option Shares shall be determined as of the last day of the
month preceding the month in which the proceeding involved commenced or the
taking occurred;
(C) The Optionee, or his or her legal
representative, as the case may be, attempts to sell, exchange, transfer (by
gift or otherwise), assign, hypothecate, pledge, grant a security interest or in
any other way dispose of or alienate any of the Option Shares, or any interest
therein. The Repurchase Period shall commence on the date the Company receives
actual notice of such attempted sale, transfer or other disposition;
(D) The distribution of shares of Stock held by the
Optionee to his or her spouse as such spouse's joint or community interest
pursuant to a decree of dissolution, property settlement agreement or for any
other reason, except as may be otherwise
5
<PAGE> 7
permitted by the Company. The Repurchase Period shall commence on the date the
Company receives actual notice of such distribution. The fair market value of
the Option Shares shall be determined as of the last day of the month preceding
the month in which the decree, agreement or, if there is no decree or agreement,
the distribution occurred; or
(E) The Optionee violates any provision of Section
9 hereof or the Company can reasonably anticipate that the Optionee will violate
any provision of Section 9 hereof. The Repurchase Period shall commence on the
date that the Company receives actual notice of such violation or on the date
that the Board reasonably determines that such a violation may occur.
(ii) The fair market value of the Option Shares, as used
in this Section 8(a), shall be the fair market value of a share of Stock
multiplied by the number of Option Shares being purchased. The fair market value
of a share of Stock shall be determined by the Board. The determination by the
Board of the fair market value shall, if reasonable, be conclusive and binding
notwithstanding the possibility that other persons might reach a different, and
also reasonable, determination. If the Board determines the fair market value of
a share of Stock is equal to the fair market value of a share of Stock as set
forth in an appraisal of the Company by an independent appraiser selected by the
Company, such determination shall be conclusively determined to be reasonable if
the date as of which the shares of Stock were valued for purposes of the
appraisal was within 12 months of the date of the Repurchase Event.
(b) Right of First Refusal. If at any time, whether during the
continuance of the Optionee's employment by the Company, a Parent or a
Subsidiary or thereafter, the Optionee desires to sell, exchange, transfer (by
gift or otherwise), assign, hypothecate, pledge, grant as a security interest or
in any other way dispose of or alienate any of the Option Shares or any interest
therein (hereinafter referred to as a "Disposition"), the Optionee shall give
written notice to the Company of the Optionee's intent to make a Disposition of
such shares of Stock (the "First Refusal Offer"). The First Refusal Offer shall
contain a statement signed by the Optionee notifying the Company that the
Optionee desires to make a Disposition of the Option Shares or an interest
therein and shall be accompanied by a copy of the bona fide offer to purchase
such shares of Stock, in case of a sale, or a description of the proposed
transaction with respect to any other Disposition, and shall set forth the
following:
(i) The full name and address of the intended transferee
(the "Transferee");
(ii) The number of Option Shares to be purchased by, or
transferred to, the Transferee;
(iii) The price, in case of a sale, and other terms under
which the purchase or transfer is intended to be made;
(iv) A statement, in case of a sale, signed by the
Transferee, that the price and other terms specified are a bona fide offer to
purchase; and
6
<PAGE> 8
(v) A representation, in case of a sale, by the Transferee
that he or she has the financial capability necessary to complete the
transaction as proposed.
The Company shall have 30 days from the date of receipt of the First
Refusal Offer within which to exercise an option to purchase all, but not less
than all, of the Option Shares covered by such First Refusal Offer (the "First
Refusal Shares") at the same price and upon the same terms as set forth in such
First Refusal Offer (the "First Refusal Option"). The Company may, in exercising
the First Refusal Option, designate one or more assignees to purchase the First
Refusal Shares. Notwithstanding the generality of the foregoing, however, with
the consent of the Optionee, the purchase price for the First Refusal Shares
may, at the option of the Company, be paid in cash in an amount equal to the
present value of any payments to be made over a period of time according to the
terms of the First Refusal Offer, or, if the terms specified in such offer state
that payment is to be made in property, in an amount equal to the present value
of the fair market value of such property. For purposes of any computation made
pursuant to this Subsection 8(b), the present value of any amount to be paid in
the future shall be determined by the Board by discounting such amount using an
interest rate of 10% or an interest rate equal to the then effective federal
reserve discount rate, without surcharge, of the Federal Reserve Bank of San
Francisco, whichever is higher.
If the Optionee desires to make a Disposition of any of the Option
Shares other than by sale, including, without limitation, by gift,
hypothecation, pledge or the grant of a security interest, the Optionee shall
obtain the prior written approval of the Company to the proposed transfer, which
approval may be withheld by the Company in the Company's sole discretion for any
or no reason.
If the First Refusal Shares are not purchased pursuant to the related
First Refusal Offer by the Company in accordance with this Subsection 8(b), in
the case of a proposed sale, or if the Company approves a Disposition other than
by sale, the Optionee may make a bona fide transfer of the First Refusal Shares
to the respective Transferee or Transferees named in the related First Refusal
Offer; provided, however, that (1) such transfer shall only be made in strict
accordance with the terms stated in such First Refusal Offer, and immediately
following such transfer, the transferor shall so certify in writing to the
Company, and (2) before any such transfer shall become effective or be recorded
in the books of the Company, each Transferee of the First Refusal Shares shall
agree in writing to hold such shares of Stock subject to the terms of this
Agreement, except that the Repurchase Events described in Subsection
8(a)(i)(B)-(E) shall refer to the Transferee and the Repurchase Event described
in Subsection 8(a)(i)(A) shall refer to the Transferee if the Transferee is an
employee or a director of the Company, a Parent or a Subsidiary and to the
Optionee if the Transferee is not an employee or a director of the Company, a
Parent or a Subsidiary. In the event the Optionee does not make such transfer
for a period of 45 days following the date of the First Refusal Offer, no
transfer of the First Refusal Shares covered by the First Refusal Offer shall be
made without a new First Refusal Offer from the Optionee to the Company in
accordance with this Subsection 8(b) and in full compliance with all the
provisions hereof.
(c) Effect of Tender of Purchase Price. Notwithstanding the
failure of the holder of any certificate evidencing all or any part of the
Option Shares to deliver the same to
7
<PAGE> 9
the Company for cancellation, and upon tender by the Company of the purchase
price for any of the Option Shares in accordance with the terms of this
Agreement, such Option Shares and the certificates representing the same shall
forthwith and without further action be deemed to be canceled and forfeited.
(d) Restrictions on Transfer. Except as otherwise may be
permitted by this Agreement, the Optionee shall not sell, exchange, transfer (by
gift or otherwise), assign, hypothecate, pledge, grant as a security interest or
in any other way dispose of or alienate any of the Option Shares, which at any
time would be subject to repurchase by the Company or the gift, hypothecation
of, pledge or grant of a security interest in, is subject to the approval of the
Company, and the attempt to effect any such transaction shall be null and void
ab initio and of no force and effect.
(e) Legends. All certificates representing the Option Shares
shall bear a legend or legends revealing the existence of the restrictions
imposed by this Section 8.
(f) Termination of Rights. The provisions of this Section 8 shall
cease to be applicable to the Option Shares at such time as the shares of Stock
of the Company are listed on any national securities exchange, or there is an
established market therefor in the over-the-counter market and the shares of
Stock are listed in the pink or white sheets of the National Association of
Securities Dealers automated quotation system or a comparable service.
(g) Adjustments. In the event that (i) shares of Stock are
changed into or exchanged for a different class or series of securities issued
by the Company or any other corporation as the result of any merger,
consolidation or sale of assets followed by a dissolution, liquidation,
reclassification or reorganization, or (ii) any additional shares of Stock or
any other securities shall be distributed with respect to such shares as a
reclassification, stock dividend, stock split, reverse stock split or other
change in the corporate structure of the Company, then all such securities shall
be subject to the terms and provisions of this Section 8 and shall be deemed to
be included in the term the "Option Shares" as used herein. As used herein, the
term "Company" shall include any other corporation which shall succeed to
substantially all of the business and assets of the Company as the result of any
reorganization, merger or consolidation, sale of assets or sale of Stock.
9. S Corporation Status. The Optionee acknowledges that the Company has
elected to be classified as an S Corporation for federal and state income tax
purposes and, following the exercise of the Option with respect to all or any
part of the shares of Stock subject to the Option, agrees to provide to the
Company, immediately upon the Company's request, such properly signed consents
or other documents as, in the opinion of counsel for the Company, may be
necessary or useful to maintaining the Company's status as an S Corporation.
Except with the written consent of the Company specifically referring to this
Section 9, the following provisions shall apply to the shares of Stock acquired
upon the exercise of the Option until such time as the Company ceases to qualify
as an S Corporation:
8
<PAGE> 10
(a) Restrictions in Exercise. The Option may not be exercised if
such exercise would result in the Company ceasing to qualify as an S
Corporation.
(b) Restriction on Transfer. No transfer of any shares of Stock
by the Optionee, whether voluntary or involuntary, shall be effective unless all
of the Optionee's shares are transferred to one transferee and such transferee
is a permitted shareholder of an S Corporation. Thus, for example, in the event
of a divorce of the Optionee, the former spouse of the Optionee may be awarded
the Optionee's shares of Stock if and only if the former spouse is a permitted
shareholder of an S Corporation and the former spouse is awarded all of the
shares held by the Optionee.
(c) Restriction on Other Action. The Optionee shall not take any
action or fail to take any action which shall result in the Company being unable
to maintain the Company's status as an S Corporation. This provision requires,
without limitation, the Optionee (i) to notify the Company prior to the Optionee
ceasing to qualify as an eligible shareholder of an S Corporation and (ii) to
permit the Company to repurchase all shares of Stock owned by the Optionee
pursuant to Section 8(a) hereof.
(d) Transfer by Trust. If any transfer by the Optionee is by
operation of law or by right of succession under a trust, the transferees shall
be obligated to make such transfers as shall reasonably be necessary, in the
opinion of counsel for the Company, either (i) to avoid termination of the
Company's status as an S Corporation or (ii) to permit the Company to requalify
as an S Corporation as soon as possible.
(e) Other Restrictions. The provisions of this Section 9 are in
addition to the provisions of Section 8 hereof. By way of example and not
limitation, a transfer by divorce or otherwise to a permitted transferee
pursuant to this Section 9 shall be subject to the Right of First Refusal set
forth in Subsection 8(b) hereof.
(f) Legends. All certificates representing shares of Stock
acquired upon the exercise of the Option shall bear a legend revealing the
existence of the restrictions imposed by this Section 9.
(g) Termination of Restrictions. The restrictions imposed by this
Section 9 shall terminate upon the occurrence of the first of any of the
following events: (i) the written agreement of the Company and the Optionee,
(ii) the bankruptcy, receivership or complete dissolution of the Company, (iii)
a transfer or purchase of shares of Stock of the Company which results in one
shareholder holding all of the issued and outstanding shares of Stock of the
Company, or (iv) at such time as the shares of Stock of the Company are listed
on any national securities exchange, or there is an established market therefor
in the over-the-counter market and the shares of Stock are listed in the pink or
white sheets of the National Association of Securities Dealers automated
quotation system or a comparable service.
10. Optionee's Employment Obligations. The Optionee agrees that, during
the period of his or her employment by the Company, a Parent or a Subsidiary, he
or she shall faithfully and to the best of his or her ability devote his or her
time, energy or skill to the
9
<PAGE> 11
service of the Company, a Parent or a Subsidiary, and to the promotion of its
interests, subject to vacations, military service leave, sick leave, and other
bona fide absences in accordance with the regular policies and practices of, or
any written agreement between the Optionee and, the Company, a Parent or a
Subsidiary which employs the Optionee. Subject to any contrary terms of any
employment contract, the Company, the Parent or the Subsidiary which employs the
Optionee shall have the right to terminate or change the terms of employment of
the Optionee at any time and for any reason whatsoever. Nothing herein shall
limit the Optionee's right to terminate his or her employment.
11. Notice. Any notice or other written communication required or
permitted to be given under the terms of this Agreement shall be addressed to
the Company in care of its Secretary at the principal executive offices of the
Company and any notice to be given to the Optionee shall be addressed to him or
her at the address given by him or her beneath his or her signature hereto or
such other address for a party hereto as such party may hereafter designate in
writing to the other. Any such notice shall be deemed to have been duly given
when enclosed in a properly sealed envelope addressed as aforesaid, registered
or certified and deposited (postage or registration or certification fee
prepaid) in a post office or branch post office regularly maintained by the
United States.
12. Finality of Decisions. All decisions of the Board or the Committee
upon any question arising under the Plan or under this Agreement shall be final
and binding.
13. Participation in Other Plans. Nothing herein contained shall affect
the Optionee's right to participate in and receive benefits from and in
accordance with the then current provisions of any pension, insurance, or other
employment welfare plan or program of the Company.
14. Binding Effect of Agreement. Except as set forth in Section 5
hereof, this Agreement shall be binding upon and inure to the benefit of any
successor or successors of the Company.
15. Agreement Subject to Plan. This Agreement is entered into pursuant
to, and is subject to, the provisions of the Plan. Terms not otherwise defined
herein shall have the meanings given them in the Plan.
16. Governing Law. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of California.
17. Tax Information and Notice of Disqualifying Disposition. The Option
is intended to be eligible for treatment as an Incentive Stock Option under
Section 422 of the Code. Whether the Option will receive such tax treatment will
depend, in part, on actions by the Optionee after exercise of the Option. If the
Optionee disposes of any of the shares of Stock within two years after the date
of grant of the Option or within one year of the date of exercise of the Option
with respect to such shares, the Optionee may lose the benefits of Section 422.
Other factors not discussed herein may also affect the tax consequences of this
transaction. Accordingly, the Company makes no representation, by way of the
Plan, this
10
<PAGE> 12
Agreement or otherwise, with respect to the actual tax effect of the grant or
exercise of the Option or the subsequent disposition, including, without
limitation, repurchase by the Company or its designee pursuant to Section 8
hereof, of any of the shares of Stock.
If the Optionee sells or makes a disposition (within the meaning of
Section 422 of the Code) of any of the shares of Stock acquired pursuant to
exercise of the Option prior to the later of (a) one year from the date such
shares were acquired, or (b) two years from the date of grant of the Option,
then the Optionee agrees to give written notice to the Company of such
disposition. The notice shall include the Optionee's name, the number, exercise
price, and exercise date of the shares disposed of, and the date of disposition.
18. Withholding Taxes. By accepting the Option, the Optionee, for
himself or herself and his or her transferees by will or the laws of descent and
distribution, agrees that whenever shares of Stock are to be issued by reason of
the exercise of the Option, the Optionee or such other person who is to receive
such shares of Stock will remit to the Company, prior to the delivery of any
certificate or certificates for such shares, all or any part of an amount
determined by the Company in its discretion to be sufficient to satisfy federal,
state, and local withholding tax requirements which the Company, or counsel for
the Company, determine may be payable with respect to such exercise.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed on its behalf, and the Optionee has hereunto set his or her hand,
effective the day and year first above written on the cover sheet of this
Agreement, which is the date of grant of the Option.
SHAREDATA, INC.
By:
----------------------------------------
OPTIONEE
--------------------------------------------
--------------------------------------------
--------------------------------------------
Address
11
<PAGE> 1
EXHIBIT 99.10
SHAREDATA, INC.
NOTICE OF GRANT OF STOCK OPTION
AND GRANT AGREEMENT
[Name and Address]
You have been granted an option to purchase ShareData, Inc. stock as
follows:
Non-Qualified Stock Option Grant No.
Date of Grant _____________
Vesting Commencement Date _____________
Stock Option Plan Officer and Director Plan
Exercise Price per Share $ _____________
Total Number of Shares Granted
Total Price of Shares Granted $ _____________
By your signature and the signature of the Company's authorized
representative to the attached Non-Qualified Stock Option Agreement, you and
ShareData, Inc. agree that this option is granted under and governed by the
terms and conditions of the ShareData, Inc. Officer and Director Stock Option
Plan and the Non-Qualified Stock Option Agreement, both of which are attached
and made a part of this document.
<PAGE> 2
NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE SHAREDATA, INC.
OFFICER AND DIRECTOR STOCK OPTION PLAN
(NON-EMPLOYEE DIRECTOR)
RECITALS
WHEREAS, ShareData, Inc. (the "Company") has adopted the Officer and
Director Stock Option Plan (the "Plan"), which Plan is incorporated herein by
reference and made a part of this Non-Qualified Stock Option Agreement (this
"Agreement"); and
WHEREAS, the Optionee is a director of the Company, a Parent or a
Subsidiary, as defined in the Plan, and the Company has determined that it would
be to the advantage and interest of the Company and its shareholders to grant to
the Optionee the option (i) described in the cover sheet of this Agreement which
is hereby incorporated by reference and (ii) subject to the terms and conditions
provided for herein and in the Plan, as an inducement to remain in the service
of the Company, a Parent or a Subsidiary and as an incentive for increased
efforts during such service.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and the
terms, conditions, and covenants contained herein, the parties hereby agree as
follows:
1. Grant of Option. The Company hereby grants to the Optionee the right
and option to purchase, on the terms and conditions hereinafter set forth, all
or any part of the number of shares of the common stock of the Company (the
"Stock") set forth on the cover sheet of this Agreement at the exercise price
set forth thereon (the "Option"). The number of shares of Stock subject to the
Option and the exercise price are subject to adjustment under certain
circumstances, as provided in the Plan.
2. Term and Exercisability of Option.
(a) Term of Option. Except as set forth in Subsection 2(c) hereof,
the Option shall be exercisable in whole or in part at any time beginning on the
first anniversary date of the vesting commencement date as set forth on the
cover sheet of this Agreement and prior to the tenth anniversary date of the
date of grant as set forth on the cover sheet of this Agreement (the
"Termination Date"), unless sooner terminated in accordance with the provisions
of Sections 3 and 5 hereof, pursuant to the schedule set forth in Subsection
2(b) hereof. In no event shall the Company be required to issue fractional
shares.
<PAGE> 3
(b) Exercisability of Option. Except as set forth in Subsection 2(c)
hereof, for the purposes of this Section 2, the Option shall be exercisable
during its term according to the following schedule:
(i) As to one-fourth of the shares of Stock subject to the
Option, after the first anniversary date of the vesting commencement date;
(ii) As to an additional one-fourth of the shares of Stock
subject to the Option, after the second anniversary date of the vesting
commencement date;
(iii) As to an additional one-fourth of the shares of Stock
subject to the Option, after the third anniversary date of the vesting
commencement date; and
(iv) As to the remaining one-fourth of the shares of Stock
subject to the Option, after the fourth anniversary date of the vesting
commencement date.
(c) Acceleration of Exercisability. Notwithstanding Subsection 2(b)
hereof, in the event of a reorganization, merger or consolidation of the Company
with one or more corporations as a result of which the Company is not the
surviving corporation or as a result of which the outstanding shares of Stock
are exchanged or converted into cash or property or securities not issued by the
Company, or upon a sale of substantially all the property of the Company or the
acquisition of Stock representing more than 80% of the voting power of the then
outstanding securities of the Company by another corporation (an "Acquisition"),
the Option shall be exercisable as follows:
(i) If the consummation of the Acquisition occurs within
twenty-four (24) months of the Date of Grant of the Option set forth on the
cover sheet of this Agreement, the Option shall be exercisable prior to the
consummation of such Acquisition (A) as to that number of shares of Stock for
which the Option is exercisable as determined under Subsection 2(b) hereof (less
any shares of Stock that have been previously purchased by the Optionee), plus
(B) an additional one-fourth of the shares of Stock subject to the Option.
(ii) If the consummation of the Acquisition occurs twenty-four
(24) months or more after the Date of Grant of the Option set forth on the cover
sheet of this Agreement, the Option shall be exercisable prior to the
consummation of such Acquisition as to all of the shares of Stock subject to the
Option.
3. Expiration of Option. The period for exercising the Option (the
"Option Period") will end on the Termination Date, unless sooner terminated as
provided in Subsections (a), (b) or (c) below:
(a) If the Optionee ceases to be a director of the Company, a Parent
or Subsidiary (other than by death or disability) during the Option Period, the
Option shall thereafter be exercisable for a period of 30 days after termination
of the Optionee's service as a director, but only if, and to the extent that,
the Option was exercisable by the Optionee under the
<PAGE> 4
provisions of Section 2 hereof at the time of such termination of service and
only prior to the Termination Date.
(b) If the Optionee should die while a director of the Company, a
Parent or a Subsidiary, or within the period referred to in Subsections 3(a) and
3(c) hereof, the Option may, within a period of one year from the date of the
Optionee's death, be exercised by the Optionee's legal representative, or by the
person or persons to whom the Optionee's rights under the Option shall pass by
will or by the applicable laws of descent and distribution, but only if, and to
the extent that, the Option was exercisable by the Optionee under the provisions
of Section 2 hereof at the time of his or her death and only prior to the
Termination Date.
(c) If the Optionee should become disabled within the meaning of
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code")
while serving as a director of the Company, a Parent or a Subsidiary, the Option
may, within a period of 180 days after the termination of the Optionee's service
as a director, be exercised by the Optionee, but only if, and to the extent
that, the Option was exercisable by the Optionee under the provisions of Section
2 hereof at the time of such termination of service and only prior to the
Termination Date.
4. Manner of Exercise. The Optionee may exercise the Option with
respect to all or any part of the shares of Stock then subject to such exercise
as follows:
(a) By giving the Company written notice of such exercise specifying
the number of shares of Stock as to which the Option is so exercised and
accompanied by an amount equal to the aggregate exercise price of such shares,
in the form of any one or combination of (i) cash or a check, bank draft or
postal or express money order payable to the order of the Company in lawful
money of the United States or (ii) shares of Stock of the Company previously
acquired by the Optionee. Any shares of Stock delivered to exercise the Option
shall be valued at their aggregate Fair Market Value (as defined in the Plan) on
the date of exercise.
(b) If required by the Company, by giving satisfactory assurance in
writing, signed by the Optionee or his or her legal representative, as the case
may be, that such shares of Stock are being purchased for investment only and
not with a view to the distribution thereof; provided, however, that such
assurance shall be deemed inapplicable to (i) any sale of such shares by the
Optionee subject to a registration statement covering such sale, which has
heretofore been (or may hereafter be) filed and become effective under the
Securities Act of 1933, as amended (the "Securities Act"), and is current and
with respect to which no stop order suspending the effectiveness thereof has
been issued, and (ii) any other sale of such shares with respect to which, in
the opinion of counsel for the Company, such assurance is not required to be
given in order to comply with the provisions of the Securities Act.
As soon as practicable after receipt of such written notice of exercise
from the Optionee, the Company shall, without transfer or issue tax or other
incidental expenses to the Optionee, deliver to the Optionee at the office of
the Company, or such other place as may be mutually acceptable to the Company
and the Optionee, a certificate or certificates for such shares of Stock, which
certificate or certificates may bear such legend or legends with respect to
restrictions on
<PAGE> 5
transfer thereof as counsel for the Company deems to be required by applicable
provisions of law and this Agreement; provided, however, that nothing herein
shall be deemed to impose upon the Company any obligation to deliver any shares
of Stock to the Optionee if, in the opinion of counsel for the Company, doing so
would violate any provision of: (1) the Securities Act; (2) the Securities
Exchange Act of 1934, as amended; (3) any applicable listing requirements of any
national securities exchange; (4) any state securities regulation or "Blue Sky"
laws; or (5) requirements under any other law or regulation applicable to the
issuance or transfer of such shares. In no event shall the Company be required
to take any affirmative action to comply with any of such laws, regulations or
requirements, nor shall the Company be liable for any failure to deliver shares
of Stock because such shares have not been registered or because a registration
statement with respect thereto is not current or because such delivery would
otherwise be in violation of any applicable law or regulation.
The term "current" when used herein to refer to a registration
statement shall mean a registration statement that, in the opinion of counsel
for the Company, does not include any untrue statement of a material fact and
that includes all material facts required to be stated therein or that are
necessary to make the statements therein not misleading.
5. Adjustments. If outstanding shares of Stock are increased or
decreased, or are changed into or exchanged for a different number or kind of
shares or securities of the Company, through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
change in the corporate structure of the Company, an appropriate and
proportionate adjustment shall be made by the Company in the number and/or type
of the shares of Stock subject to this Agreement and in the exercise price in
order to preserve, but not increase, the benefit to the Optionee. Anything
herein contained to the contrary notwithstanding, (a) upon dissolution or
liquidation of the Company, other than in connection with a Terminating
Transaction (as defined in the Plan), or (b) upon dissolution or liquidation of
the Company, in connection with a Terminating Transaction where the surviving or
acquiring corporation does not, prior to or concurrent with the succession to
the business of the Company, assume the Option (subject to any applicable
provisions of the Code), or substitute a new option of comparable value for the
Option, the Option, in either case, shall terminate and thereupon become null
and void; provided, however, that the Optionee shall have the right, at such
time prior to the consummation of such dissolution, liquidation or Terminating
Transaction, as the case may be, as the Company shall designate, to exercise any
unexercised portion of the Option to the full extent then exercisable.
6. Assignment or Transfer. The Option shall, during the Optionee's
lifetime, be exercisable only by him or her, and neither the Option nor any
right hereunder shall be transferable by the Optionee by operation of law or
otherwise other than by will or the laws of descent and distribution. In the
event of any attempt by the Optionee to alienate, assign, pledge, hypothecate or
otherwise dispose of the Option or of any right hereunder, except as provided
for herein, or in the event of the levy of any attachment, execution or similar
process upon the rights or interest hereby conferred, the Option shall thereupon
become null and void and of no effect.
<PAGE> 6
7. No Rights as a Shareholder. Neither the Optionee nor any person
entitled to exercise the Optionee's rights in the event of his or her death
shall have any of the rights of a shareholder with respect to the shares of
Stock subject to the Option except to the extent the certificates for such
shares, or a portion thereof, shall have issued upon the exercise of the Option.
8. Right of Repurchase and First Refusal.
(a) Right of Repurchase. In the event that a Repurchase Event (as
defined in Subsection 8(a)(i) hereof) occurs, then the Company shall have the
option, but not the obligation, to repurchase all, but not less than all, of the
shares of Stock acquired upon the exercise of the Option (the "Option Shares")
from the Optionee, or his or her legal representative, as the case may be (the
"Repurchase Option"). Except as set forth in Subsections 8(a)(i)(A)(2) and (3)
hereof, the Repurchase Option shall commence on the date set forth in Subsection
8(a)(i) hereof for the particular Repurchase Event and shall expire as to a
particular Repurchase Event 60 days after the applicable starting date for the
Repurchase Event (the "Repurchase Period"); provided, however, that if the
Option is exercised in whole or in part during the Repurchase Period, the
Repurchase Period shall be extended until 60 days after the last exercise of the
Option during the Repurchase Period. The Repurchase Option shall be exercised by
the Company giving the Optionee, or his or her legal representative, as the case
may be, written notice of its intention to exercise the Repurchase Option on or
before the last day of the Repurchase Period, and, together with such notice,
tendering to the Optionee, or his or her legal representative, as the case may
be, an amount equal to the greater of the Optionee's original cost per share (as
adjusted pursuant to Section 5 hereof) or the fair market value of the Option
Shares. The Company may, in exercising the Repurchase Option, designate one or
more assignees to purchase the Option Shares. Upon timely exercise of the
Repurchase Option in the manner provided in this Subsection 8(a), the Optionee,
or his or her legal representative, as the case may be, shall deliver to the
Company the certificate or certificates representing the Option Shares, duly
endorsed and free and clear of any and all liens, charges, and encumbrances. If
the Repurchase Option is not exercised as provided in this Subsection 8(a)
during the Repurchase Period, the Repurchase Option shall not thereafter be
exercisable unless and until there is a subsequent Repurchase Event. If there is
a subsequent Repurchase Event, the Repurchase Option shall again become
exercisable in full as provided in this Section 8.
(i) The Company shall have a Repurchase Option in the event that
any of the following shall occur (a "Repurchase Event"):
(A) The termination of the Optionee's service as a director
of the Company, any Parent or any Subsidiary, voluntarily or involuntarily, for
any reason whatsoever, including death or permanent disability. In the event of
the termination of the Optionee's service as a director, the Repurchase Period
shall commence as follows:
(1) If the termination of the Optionee's service as a
director of the Company occurs prior to the Optionee having served as a director
for at least twenty-four (24) months from the date of Optionee's election to the
Board of Directors of the
<PAGE> 7
Company, the Repurchase Period shall commence on the date the Optionee ceases to
be a director of the Company, a Parent or a Subsidiary.
(2) If the termination of the Optionee's service as a
director of the Company occurs after the Optionee has served as a director for
twenty-four (24) months or more from the date of Optionee's election to the
Board of Directors of the Company, the Repurchase Period shall commence on the
date two (2) years after the date that the Optionee ceased to be a director of
the Company and shall expire sixty (60) days after such applicable starting
date.
(3) If the termination of the Optionee's service as a
director of the Company occurs after the Optionee has served as a director for
forty-eight (48) months or more from the date of Optionee's election to the
Board of Directors of the Company, the Repurchase Period shall commence on the
date four (4) years after the date that the Optionee ceased to be a director of
the Company and shall expire sixty (60) days after such applicable starting
date.
(4) Notwithstanding the foregoing, the Optionee and the
Company may mutually agree that the Repurchase Period shall commence on any date
prior to the dates provided for in Subsections 8(a)(i)(A)(2) and (3) hereof.
(B) The receivership, bankruptcy or other creditor's
proceeding regarding the Optionee or the taking of any of the Optionee's shares
of Stock by legal process, such as a levy of execution. The Repurchase Period
shall commence on the date the Company receives actual notice of the
commencement of pendency of the receivership, bankruptcy or other creditor's
proceeding or the date of such taking, as the case may be. The fair market value
of the Option Shares shall be determined as of the last day of the month
preceding the month in which the proceeding involved commenced or the taking
occurred;
(C) The Optionee, or his or her legal representative, as
the case may be, attempts to sell, exchange, transfer (by gift or otherwise),
assign, hypothecate, pledge, grant a security interest or in any other way
dispose of or alienate any of the Option Shares, or any interest therein. The
Repurchase Period shall commence on the date the Company receives actual notice
of such attempted sale, transfer or other disposition;
(D) The distribution of shares of Stock held by the
Optionee to his or her spouse as such spouse's joint or community interest
pursuant to a decree of dissolution, property settlement agreement or for any
other reason, except as may be otherwise permitted by the Company. The
Repurchase Period shall commence on the date the Company receives actual notice
of such distribution. The fair market value of the Option Shares shall be
determined as of the last day of the month preceding the month in which the
decree, agreement or, if there is no decree or agreement, the distribution
occurred; or
(E) The Optionee violates any provision of Section 9 hereof
or the Company can reasonably anticipate that the Optionee will violate any
provision of Section 9
<PAGE> 8
hereof. The Repurchase Period shall commence on the date that the Company
receives actual notice of such violation or on the date that the Board
reasonably determines that such a violation may occur.
(ii) The fair market value of the Option Shares, as used in this
Section 8(a), shall be the fair market value of a share of Stock multiplied by
the number of Option Shares being purchased. The fair market value of a share of
Stock shall be determined by the Board of Directors of the Company (the
"Board"). The determination by the Board of the fair market value shall, if
reasonable, be conclusive and binding notwithstanding the possibility that other
persons might reach a different, and also reasonable, determination. If the
Board determines the fair market value of a share of Stock is equal to the fair
market value of a share of Stock as set forth in an appraisal of the Company by
an independent appraiser selected by the Company, such determination shall be
conclusively determined to be reasonable if the date as of which the shares of
Stock were valued for purposes of the appraisal was within 12 months of the date
of the Repurchase Event (or, in the case of Subsections 8(a)(i)(A)(2) and (3)
hereof, within 12 months of the date that the Repurchase Period commenced).
(b) Right of First Refusal. If at any time, whether during the
continuance of the Optionee's service as a director of the Company, a Parent or
a Subsidiary or thereafter, the Optionee desires to sell, exchange, transfer (by
gift or otherwise), assign, hypothecate, pledge, grant as a security interest or
in any other way dispose of or alienate any of the Option Shares or any interest
therein (hereinafter referred to as a "Disposition"), the Optionee shall give
written notice to the Company of the Optionee's intent to make a Disposition of
such shares of Stock (the "First Refusal Offer"). The First Refusal Offer shall
contain a statement signed by the Optionee notifying the Company that the
Optionee desires to make a Disposition of the Option Shares or an interest
therein and shall be accompanied by a copy of the bona fide offer to purchase
such shares of Stock, in case of a sale, or a description of the proposed
transaction with respect to any other Disposition, and shall set forth the
following:
(i) The full name and address of the intended transferee (the
"Transferee");
(ii) The number of Option Shares to be purchased by, or
transferred to, the Transferee;
(iii) The price, in case of a sale, and other terms under which
the purchase or transfer is intended to be made;
(iv) A statement, in case of a sale, signed by the Transferee,
that the price and other terms specified are a bona fide offer to purchase; and
(v) A representation, in case of a sale, by the Transferee that
he or she has the financial capability necessary to complete the transaction as
proposed.
The Company shall have 30 days from the date of receipt of the First
Refusal Offer within which to exercise an option to purchase all, but not less
than all, of the Option Shares
<PAGE> 9
covered by such First Refusal Offer (the "First Refusal Shares") at the same
price and upon the same terms as set forth in such First Refusal Offer (the
"First Refusal Option"). The Company may, in exercising the First Refusal
Option, designate one or more assignees to purchase the First Refusal Shares.
Notwithstanding the generality of the foregoing, however, with the consent of
the Optionee, the purchase price for the First Refusal Shares may, at the option
of the Company, be paid in cash in an amount equal to the present value of any
payments to be made over a period of time according to the terms of the First
Refusal Offer, or, if the terms specified in such offer state that payment is to
be made in property, in an amount equal to the present value of the fair market
value of such property. For purposes of any computation made pursuant to this
Subsection 8(b), the present value of any amount to be paid in the future shall
be determined by the Board by discounting such amount using an interest rate of
10% or an interest rate equal to the then effective federal reserve discount
rate, without surcharge, of the Federal Reserve Bank of San Francisco, whichever
is higher.
If the Optionee desires to make a Disposition of any of the Option
Shares other than by sale, including, without limitation, by gift,
hypothecation, pledge or the grant of a security interest, the Optionee shall
obtain the prior written approval of the Company to the proposed transfer, which
approval may be withheld by the Company in the Company's sole discretion for any
or no reason.
If the First Refusal Shares are not purchased pursuant to the related
First Refusal Offer by the Company in accordance with this Subsection 8(b), in
the case of a proposed sale, or if the Company approves a Disposition other than
by sale, the Optionee may make a bona fide transfer of the First Refusal Shares
to the respective Transferee or Transferees named in the related First Refusal
Offer; provided, however, that (1) such transfer shall only be made in strict
accordance with the terms stated in such First Refusal Offer, and immediately
following such transfer, the transferor shall so certify in writing to the
Company, and (2) before any such transfer shall become effective or be recorded
in the books of the Company, each Transferee of the First Refusal Shares shall
agree in writing to hold such shares of Stock subject to the terms of this
Agreement, except that the Repurchase Events described in Subsection
8(a)(i)(B)-(E) shall refer to the Transferee and the Repurchase Event described
in Subsection 8(a)(i)(A) shall refer to the Transferee if the Transferee is an
employee or a director of the Company, a Parent or a Subsidiary and to the
Optionee if the Transferee is not an employee or a director of the Company, a
Parent or a Subsidiary. In the event the Optionee does not make such transfer
for a period of 45 days following the date of the First Refusal Offer, no
transfer of the First Refusal Shares covered by the First Refusal Offer shall be
made without a new First Refusal Offer from the Optionee to the Company in
accordance with this Subsection 8(b) and in full compliance with all the
provisions hereof.
(c) Effect of Tender of Purchase Price. Notwithstanding the failure
of the holder of any certificate evidencing all or any part of the Option Shares
to deliver the same to the Company for cancellation, and upon tender by the
Company of the purchase price for any of the Option Shares in accordance with
the terms of this Agreement, such Option Shares and the certificates
representing the same shall forthwith and without further action be deemed to be
cancelled and forfeited.
<PAGE> 10
(d) Restrictions on Transfer. Except as otherwise may be permitted
by this Agreement, the Optionee shall not sell, exchange, transfer (by gift or
otherwise), assign, hypothecate, pledge, grant as a security interest or in any
other way dispose of or alienate any of the Option Shares, which at any time
would be subject to repurchase by the Company or the gift, hypothecation of,
pledge or grant of a security interest in, is subject to the approval of the
Company, and the attempt to effect any such transaction shall be null and void
ab initio and of no force and effect.
(e) Legends. All certificates representing the Option Shares shall
bear a legend or legends revealing the existence of the restrictions imposed by
this Section 8.
(f) Termination of Rights. The provisions of this Section 8 shall
cease to be applicable to the Option Shares at such time as the shares of Stock
of the Company are listed on any national securities exchange, or there is an
established market therefor in the over-the-counter market and the shares of
Stock are listed in the pink or white sheets of the National Association of
Securities Dealers automated quotation system or a comparable service.
(g) Adjustments. In the event that (i) shares of Stock are changed
into or exchanged for a different class or series of securities issued by the
Company or any other corporation as the result of any merger, consolidation or
sale of assets followed by a dissolution, liquidation, reclassification or
reorganization, or (ii) any additional shares of Stock or any other securities
shall be distributed with respect to such shares as a reclassification, stock
dividend, stock split, reverse stock split or other change in the corporate
structure of the Company, then all such securities shall be subject to the terms
and provisions of this Section 8 and shall be deemed to be included in the term
the "Option Shares" as used herein. As used herein, the term "Company" shall
include any other corporation which shall succeed to substantially all of the
business and assets of the Company as the result of any reorganization, merger
or consolidation, sale of assets or sale of Stock.
9. S Corporation Status. The Optionee acknowledges that the Company has
elected to be classified as an S Corporation for federal and state income tax
purposes and, following the exercise of the Option with respect to all or any
part of the shares of Stock subject to the Option, agrees to provide to the
Company, immediately upon the Company's request, such properly signed consents
or other documents as, in the opinion of counsel for the Company, may be
necessary or useful to maintaining the Company's status as an S Corporation.
Except with the written consent of the Company specifically referring to this
Section 9, the following provisions shall apply to the shares of Stock acquired
upon the exercise of the Option until such time as the Company ceases to qualify
as an S Corporation:
(a) Restrictions in Exercise. The Option may not be exercised if
such exercise would result in the Company ceasing to qualify as an S
Corporation.
(b) Restriction on Transfer. No transfer of any shares of Stock by
the Optionee, whether voluntary or involuntary, shall be effective unless all of
the Optionee's shares are transferred to one transferee and such transferee is a
permitted shareholder of an S Corporation. Thus, for example, in the event of a
divorce of the Optionee, the former spouse
<PAGE> 11
of the Optionee may be awarded the Optionee's shares of Stock if and only if the
former spouse is a permitted shareholder of an S Corporation and the former
spouse is awarded all of the shares held by the Optionee.
(c) Restriction on Other Action. The Optionee shall not take any
action or fail to take any action which shall result in the Company being unable
to maintain the Company's status as an S Corporation. This provision requires,
without limitation, the Optionee (i) to notify the Company prior to the Optionee
ceasing to qualify as an eligible shareholder of an S Corporation and (ii) to
permit the Company to repurchase all shares of Stock owned by the Optionee
pursuant to Section 8(a) hereof.
(d) Transfer by Trust. If any transfer by the Optionee is by
operation of law or by right of succession under a trust, the transferees shall
be obligated to make such transfers as shall reasonably be necessary, in the
opinion of counsel for the Company, either (i) to avoid termination of the
Company's status as an S Corporation or (ii) to permit the Company to requalify
as an S Corporation as soon as possible.
(e) Other Restrictions. The provisions of this Section 9 are in
addition to the provisions of Section 8 hereof. By way of example and not
limitation, a transfer by divorce or otherwise to a permitted transferee
pursuant to this Section 9 shall be subject to the Right of First Refusal set
forth in Subsection 8(b) hereof.
(f) Legends. All certificates representing shares of Stock acquired
upon the exercise of the Option shall bear a legend revealing the existence of
the restrictions imposed by this Section 9.
(g) Termination of Restrictions. The restrictions imposed by this
Section 9 shall terminate upon the occurrence of the first of any of the
following events: (i) the written agreement of the Company and the Optionee,
(ii) the bankruptcy, receivership or complete dissolution of the Company, (iii)
a transfer or purchase of shares of Stock of the Company which results in one
shareholder holding all of the issued and outstanding shares of stock of the
Company, or (iv) at such time as the shares of Stock of the Company are listed
on any national securities exchange, or there is an established market therefor
in the over-the-counter market and the shares of Stock are listed in the pink or
white sheets of the National Association of Securities Dealers automated
quotation system or a comparable service.
10. Optionee's Service Obligations. The Optionee agrees that, during
the period of his or her service as a director of the Company, a Parent or a
Subsidiary, he or she shall faithfully and to the best of his or her ability
devote his or her time, energy or skill to the service of the Company, a Parent
or a Subsidiary, and to the promotion of its interests.
11. Notice. Any notice or other written communication required or
permitted to be given under the terms of this Agreement shall be addressed to
the Company in care of its Secretary at the principal executive offices of the
Company and any notice to be given to the Optionee shall be addressed to him or
her at the address given by him or her beneath his or her signature hereto or
such other address for a party hereto as such party may hereafter designate in
<PAGE> 12
writing to the other. Any such notice shall be deemed to have been duly given
when enclosed in a properly sealed envelope addressed as aforesaid, registered
or certified and deposited (postage or registration or certification fee
prepaid) in a post office or branch post office regularly maintained by the
United States.
12. Finality of Decisions. All decisions of the Board or the Committee
administering the Plan upon any question arising under the Plan or under this
Agreement shall be final and binding.
13. Participation in Other Plans. Nothing herein contained shall affect
the Optionee's right to participate in and receive benefits from and in
accordance with the then current provisions of any pension, insurance, or other
employment welfare plan or program of the Company.
14. Binding Effect of Agreement. Except as set forth in Section 5
hereof, this Agreement shall be binding upon and inure to the benefit of any
successor or successors of the Company.
15. Agreement Subject to Plan. This Agreement is entered into pursuant
to, and is subject to, the provisions of the Plan. Terms not otherwise defined
herein shall have the meanings given them in the Plan.
16. Governing Law. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of California.
17. Withholding Taxes. By accepting the Option, the Optionee, for
himself or herself and his or her transferees by will or the laws of descent and
distribution, agrees that whenever shares of Stock are to be issued by reason of
the exercise of the Option, the Optionee or such other person who is to receive
such shares of Stock will remit to the Company, if requested, prior to the
delivery of any certificate or certificates for such shares, all or any part of
an amount determined by the Company in its discretion to be sufficient to
satisfy federal, state, and local withholding tax requirements which the
Company, or counsel for the Company, determine may be payable with respect to
such exercise.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed on its behalf, and the Optionee has hereunto set his or her hand,
effective the day and year first above written on the cover sheet of this
Agreement, which is the date of grant of the Option.
SHAREDATA, INC.
By:
----------------------------------
OPTIONEE
<PAGE> 13
----------------------------------
----------------------------------
----------------------------------
Address
<PAGE> 1
EXHIBIT 99.11
SHAREDATA, INC.
NOTICE OF GRANT OF STOCK OPTION
AND GRANT AGREEMENT
[Name and Address]
You have been granted an option to purchase ShareData, Inc. stock as
follows:
Non-Qualified Stock Option Grant No.
----------------
Date of Grant
----------------
Vesting Commencement Date
----------------
Stock Option Plan Officer and Director
Exercise Price per Share $
----------------
Total Number of Shares Granted
----------------
Total Price of Shares Granted $
----------------
By your signature and the signature of the Company's authorized
representative to the attached Non-Qualified Stock Option Agreement, you and
ShareData, Inc. agree that this option is granted under and governed by the
terms and conditions of the ShareData, Inc. Officer and Director Stock Option
Plan and the Non-Qualified Stock Option Agreement, both of which are attached
and made a part of this document.
<PAGE> 2
NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE SHAREDATA, INC.
OFFICER AND DIRECTOR STOCK OPTION PLAN
(NON-EMPLOYEE DIRECTOR)
RECITALS
WHEREAS, ShareData, Inc. (the "Company") has adopted the Officer and
Director Stock Option Plan (the "Plan"), which Plan is incorporated herein by
reference and made a part of this Non-Qualified Stock Option Agreement (this
"Agreement"); and
WHEREAS, the Optionee is a director of the Company, a Parent or a
Subsidiary, as defined in the Plan, and the Company has determined that it would
be to the advantage and interest of the Company and its shareholders to grant to
the Optionee the option (i) described in the cover sheet of this Agreement which
is hereby incorporated by reference and (ii) subject to the terms and conditions
provided for herein and in the Plan, as an inducement to remain in the service
of the Company, a Parent or a Subsidiary and as an incentive for increased
efforts during such service.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and the
terms, conditions, and covenants contained herein, the parties hereby agree as
follows:
1. Grant of Option. The Company hereby grants to the Optionee the right
and option to purchase, on the terms and conditions hereinafter set forth, all
or any part of the number of shares of the common stock of the Company (the
"Stock") set forth on the cover sheet of this Agreement at the exercise price
set forth thereon (the "Option"). The number of shares of Stock subject to the
Option and the exercise price are subject to adjustment under certain
circumstances, as provided in the Plan.
2. Term and Exercisability of Option.
(a) Term of Option. The Option shall be exercisable in whole or
in part at any time beginning on the first anniversary date of the vesting
commencement date as set forth on the cover sheet of this Agreement and prior to
the tenth anniversary date of the date of grant as set forth on the cover sheet
of this Agreement (the "Termination Date"), unless sooner terminated in
accordance with the provisions of Sections 3 and 5 hereof, pursuant to the
schedule set forth in Subsection 2(b) hereof. In no event shall the Company be
required to issue fractional shares.
(b) Exercisability of Option. For the purposes of this Section 2,
the Option shall be exercisable during its term according to the following
schedule:
1
<PAGE> 3
(i) As to one-fourth of the shares of Stock subject to
the Option, after the first anniversary date of the vesting commencement date;
(ii) As to an additional one-fourth of the shares of
Stock subject to the Option, after the second anniversary date of the vesting
commencement date;
(iii) As to an additional one-fourth of the shares of
Stock subject to the Option, after the third anniversary date of the vesting
commencement date; and
(iv) As to the remaining one-fourth of the shares of
Stock subject to the Option, after the fourth anniversary date of the vesting
commencement date.
3. Expiration of Option. The period for exercising the Option (the
"Option Period") will end on the Termination Date, unless sooner terminated as
provided in Subsections (a), (b) or (c) below:
(a) If the Optionee ceases to be a director of the Company, a
Parent or Subsidiary (other than by death or disability) during the Option
Period, the Option shall thereafter be exercisable for a period of 30 days after
termination of the Optionee's service as a director, but only if, and to the
extent that, the Option was exercisable by the Optionee under the provisions of
Section 2 hereof at the time of such termination of service and only prior to
the Termination Date.
(b) If the Optionee should die while a director of the Company, a
Parent or a Subsidiary, or within the period referred to in Subsections 3(a) and
3(c) hereof, the Option may, within a period of one year from the date of the
Optionee's death, be exercised by the Optionee's legal representative, or by the
person or persons to whom the Optionee's rights under the Option shall pass by
will or by the applicable laws of descent and distribution, but only if, and to
the extent that, the Option was exercisable by the Optionee under the provisions
of Section 2 hereof at the time of his or her death and only prior to the
Termination Date.
(c) If the Optionee should become disabled within the meaning of
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code")
while serving as a director of the Company, a Parent or a Subsidiary, the Option
may, within a period of 180 days after the termination of the Optionee's service
as a director, be exercised by the Optionee, but only if, and to the extent
that, the Option was exercisable by the Optionee under the provisions of Section
2 hereof at the time of such termination of service and only prior to the
Termination Date.
4. Manner of Exercise. The Optionee may exercise the Option with respect
to all or any part of the shares of Stock then subject to such exercise as
follows:
(a) By giving the Company written notice of such exercise
specifying the number of shares of Stock as to which the Option is so exercised
and accompanied by an amount equal to the aggregate exercise price of such
shares, in the form of any one or
2
<PAGE> 4
combination of (i) cash or a check, bank draft or postal or express money order
payable to the order of the Company in lawful money of the United States or (ii)
shares of Stock of the Company previously acquired by the Optionee. Any shares
of Stock delivered to exercise the Option shall be valued at their aggregate
Fair Market Value (as defined in the Plan) on the date of exercise.
(b) If required by the Company, by giving satisfactory assurance
in writing, signed by the Optionee or his or her legal representative, as the
case may be, that such shares of Stock are being purchased for investment only
and not with a view to the distribution thereof; provided, however, that such
assurance shall be deemed inapplicable to (i) any sale of such shares by the
Optionee subject to a registration statement covering such sale, which has
heretofore been (or may hereafter be) filed and become effective under the
Securities Act of 1933, as amended (the "Securities Act"), and is current and
with respect to which no stop order suspending the effectiveness thereof has
been issued, and (ii) any other sale of such shares with respect to which, in
the opinion of counsel for the Company, such assurance is not required to be
given in order to comply with the provisions of the Securities Act.
As soon as practicable after receipt of such written notice of exercise
from the Optionee, the Company shall, without transfer or issue tax or other
incidental expenses to the Optionee, deliver to the Optionee at the office of
the Company, or such other place as may be mutually acceptable to the Company
and the Optionee, a certificate or certificates for such shares of Stock, which
certificate or certificates may bear such legend or legends with respect to
restrictions on transfer thereof as counsel for the Company deems to be required
by applicable provisions of law and this Agreement; provided, however, that
nothing herein shall be deemed to impose upon the Company any obligation to
deliver any shares of Stock to the Optionee if, in the opinion of counsel for
the Company, doing so would violate any provision of: (1) the Securities Act;
(2) the Securities Exchange Act of 1934, as amended; (3) any applicable listing
requirements of any national securities exchange; (4) any state securities
regulation or "Blue Sky" laws; or (5) requirements under any other law or
regulation applicable to the issuance or transfer of such shares. In no event
shall the Company be required to take any affirmative action to comply with any
of such laws, regulations or requirements, nor shall the Company be liable for
any failure to deliver shares of Stock because such shares have not been
registered or because a registration statement with respect thereto is not
current or because such delivery would otherwise be in violation of any
applicable law or regulation.
The term "current" when used herein to refer to a registration statement
shall mean a registration statement that, in the opinion of counsel for the
Company, does not include any untrue statement of a material fact and that
includes all material facts required to be stated therein or that are necessary
to make the statements therein not misleading.
5. Adjustments. If outstanding shares of Stock are increased or
decreased, or are changed into or exchanged for a different number or kind of
shares or securities of the Company, through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
change in the corporate structure of the Company, an appropriate and
proportionate adjustment shall be made by the Company in the number and/or type
of the
3
<PAGE> 5
shares of Stock subject to this Agreement and in the exercise price in order to
preserve, but not increase, the benefit to the Optionee. Anything herein
contained to the contrary notwithstanding, (a) upon dissolution or liquidation
of the Company, other than in connection with a Terminating Transaction (as
defined in the Plan), or (b) upon dissolution or liquidation of the Company, in
connection with a Terminating Transaction where the surviving or acquiring
corporation does not, prior to or concurrent with the succession to the business
of the Company, assume the Option (subject to any applicable provisions of the
Code), or substitute a new option of comparable value for the Option, the
Option, in either case, shall terminate and thereupon become null and void;
provided, however, that the Optionee shall have the right, at such time prior to
the consummation of such dissolution, liquidation or Terminating Transaction, as
the case may be, as the Company shall designate, to exercise any unexercised
portion of the Option to the full extent then exercisable.
6. Assignment or Transfer. The Option shall, during the Optionee's
lifetime, be exercisable only by him or her, and neither the Option nor any
right hereunder shall be transferable by the Optionee by operation of law or
otherwise other than by will or the laws of descent and distribution. In the
event of any attempt by the Optionee to alienate, assign, pledge, hypothecate or
otherwise dispose of the Option or of any right hereunder, except as provided
for herein, or in the event of the levy of any attachment, execution or similar
process upon the rights or interest hereby conferred, the Option shall thereupon
become null and void and of no effect.
7. No Rights as a Shareholder. Neither the Optionee nor any person
entitled to exercise the Optionee's rights in the event of his or her death
shall have any of the rights of a shareholder with respect to the shares of
Stock subject to the Option except to the extent the certificates for such
shares, or a portion thereof, shall have issued upon the exercise of the Option.
8. Right of Repurchase and First Refusal.
(a) Right of Repurchase. In the event that a Repurchase Event (as
defined in Subsection 8(a)(i) hereof) occurs, then the Company shall have the
option, but not the obligation, to repurchase all, but not less than all, of the
shares of Stock acquired upon the exercise of the Option (the "Option Shares")
from the Optionee, or his or her legal representative, as the case may be (the
"Repurchase Option"). The Repurchase Option shall commence on the date set forth
in Subsection 8(a)(i) hereof for the particular Repurchase Event and shall
expire as to a particular Repurchase Event 60 days after the applicable starting
date for the Repurchase Event (the "Repurchase Period"); provided, however, that
if the Option is exercised in whole or in part during the Repurchase Period, the
Repurchase Period shall be extended until 60 days after the last exercise of the
Option during the Repurchase Period. The Repurchase Option shall be exercised by
the Company giving the Optionee, or his or her legal representative, as the case
may be, written notice of its intention to exercise the Repurchase Option on or
before the last day of the Repurchase Period, and, together with such notice,
tendering to the Optionee, or his or her legal representative, as the case may
be, an amount equal to the greater of the Optionee's original cost per share (as
adjusted pursuant to Section 5 hereof) or the fair market value of the Option
Shares. The
4
<PAGE> 6
Company may, in exercising the Repurchase Option, designate one or more
assignees to purchase the Option Shares. Upon timely exercise of the Repurchase
Option in the manner provided in this Subsection 8(a), the Optionee, or his or
her legal representative, as the case may be, shall deliver to the Company the
certificate or certificates representing the Option Shares, duly endorsed and
free and clear of any and all liens, charges, and encumbrances. If the
Repurchase Option is not exercised as provided in this Subsection 8(a) during
the Repurchase Period, the Repurchase Option shall not thereafter be exercisable
unless and until there is a subsequent Repurchase Event. If there is a
subsequent Repurchase Event, the Repurchase Option shall again become
exercisable in full as provided in this Section 8.
(i) The Company shall have a Repurchase Option in the
event that any of the following shall occur (a "Repurchase Event"):
(A) The termination of the Optionee's service as
a director of the Company, any Parent or any Subsidiary, voluntarily or
involuntarily, for any reason whatsoever, including death or permanent
disability. The Repurchase Period shall commence on the date the Optionee ceases
to be a director of the Company, a Parent or a Subsidiary;
(B) The receivership, bankruptcy or other
creditor's proceeding regarding the Optionee or the taking of any of the
Optionee's shares of Stock by legal process, such as a levy of execution. The
Repurchase Period shall commence on the date the Company receives actual notice
of the commencement of pendency of the receivership, bankruptcy or other
creditor's proceeding or the date of such taking, as the case may be. The fair
market value of the Option Shares shall be determined as of the last day of the
month preceding the month in which the proceeding involved commenced or the
taking occurred;
(C) The Optionee, or his or her legal
representative, as the case may be, attempts to sell, exchange, transfer (by
gift or otherwise), assign, hypothecate, pledge, grant a security interest or in
any other way dispose of or alienate any of the Option Shares, or any interest
therein. The Repurchase Period shall commence on the date the Company receives
actual notice of such attempted sale, transfer or other disposition;
(D) The distribution of shares of Stock held by
the Optionee to his or her spouse as such spouse's joint or community interest
pursuant to a decree of dissolution, property settlement agreement or for any
other reason, except as may be otherwise permitted by the Company. The
Repurchase Period shall commence on the date the Company receives actual notice
of such distribution. The fair market value of the Option Shares shall be
determined as of the last day of the month preceding the month in which the
decree, agreement or, if there is no decree or agreement, the distribution
occurred; or
(E) The Optionee violates any provision of
Section 9 hereof or the Company can reasonably anticipate that the Optionee will
violate any provision of Section 9 hereof. The Repurchase Period shall commence
on the date that the Company receives actual notice of such violation or on the
date that the Board reasonably determines that such a violation may occur.
5
<PAGE> 7
(ii) The fair market value of the Option Shares, as used
in this Section 8(a), shall be the fair market value of a share of Stock
multiplied by the number of Option Shares being purchased. The fair market value
of a share of Stock shall be determined by the Board of Directors of the Company
(the "Board"). The determination by the Board of the fair market value shall, if
reasonable, be conclusive and binding notwithstanding the possibility that other
persons might reach a different, and also reasonable, determination. If the
Board determines the fair market value of a share of Stock is equal to the fair
market value of a share of Stock as set forth in an appraisal of the Company by
an independent appraiser selected by the Company, such determination shall be
conclusively determined to be reasonable if the date as of which the shares of
Stock were valued for purposes of the appraisal was within 12 months of the date
of the Repurchase Event.
(b) Right of First Refusal. If at any time, whether during the
continuance of the Optionee's service as a director of the Company, a Parent or
a Subsidiary or thereafter, the Optionee desires to sell, exchange, transfer (by
gift or otherwise), assign, hypothecate, pledge, grant as a security interest or
in any other way dispose of or alienate any of the Option Shares or any interest
therein (hereinafter referred to as a "Disposition"), the Optionee shall give
written notice to the Company of the Optionee's intent to make a Disposition of
such shares of Stock (the "First Refusal Offer"). The First Refusal Offer shall
contain a statement signed by the Optionee notifying the Company that the
Optionee desires to make a Disposition of the Option Shares or an interest
therein and shall be accompanied by a copy of the bona fide offer to purchase
such shares of Stock, in case of a sale, or a description of the proposed
transaction with respect to any other Disposition, and shall set forth the
following:
(i) The full name and address of the intended transferee
(the "Transferee");
(ii) The number of Option Shares to be purchased by, or
transferred to, the Transferee;
(iii) The price, in case of a sale, and other terms
under which the purchase or transfer is intended to be made;
(iv) A statement, in case of a sale, signed by the
Transferee, that the price and other terms specified are a bona fide offer to
purchase; and
(v) A representation, in case of a sale, by the
Transferee that he or she has the financial capability necessary to complete the
transaction as proposed.
The Company shall have 30 days from the date of receipt of the First
Refusal Offer within which to exercise an option to purchase all, but not less
than all, of the Option Shares covered by such First Refusal Offer (the "First
Refusal Shares") at the same price and upon the same terms as set forth in such
First Refusal Offer (the "First Refusal Option"). The Company may, in exercising
the First Refusal Option, designate one or more assignees to purchase the First
Refusal Shares. Notwithstanding the generality of the foregoing, however, with
the consent of the Optionee, the purchase price for the First Refusal Shares
may, at the
6
<PAGE> 8
option of the Company, be paid in cash in an amount equal to the present value
of any payments to be made over a period of time according to the terms of the
First Refusal Offer, or, if the terms specified in such offer state that payment
is to be made in property, in an amount equal to the present value of the fair
market value of such property. For purposes of any computation made pursuant to
this Subsection 8(b), the present value of any amount to be paid in the future
shall be determined by the Board by discounting such amount using an interest
rate of 10% or an interest rate equal to the then effective federal reserve
discount rate, without surcharge, of the Federal Reserve Bank of San Francisco,
whichever is higher.
If the Optionee desires to make a Disposition of any of the Option
Shares other than by sale, including, without limitation, by gift,
hypothecation, pledge or the grant of a security interest, the Optionee shall
obtain the prior written approval of the Company to the proposed transfer, which
approval may be withheld by the Company in the Company's sole discretion for any
or no reason.
If the First Refusal Shares are not purchased pursuant to the related
First Refusal Offer by the Company in accordance with this Subsection 8(b), in
the case of a proposed sale, or if the Company approves a Disposition other than
by sale, the Optionee may make a bona fide transfer of the First Refusal Shares
to the respective Transferee or Transferees named in the related First Refusal
Offer; provided, however, that (1) such transfer shall only be made in strict
accordance with the terms stated in such First Refusal Offer, and immediately
following such transfer, the transferor shall so certify in writing to the
Company, and (2) before any such transfer shall become effective or be recorded
in the books of the Company, each Transferee of the First Refusal Shares shall
agree in writing to hold such shares of Stock subject to the terms of this
Agreement, except that the Repurchase Events described in Subsection
8(a)(i)(B)-(E) shall refer to the Transferee and the Repurchase Event described
in Subsection 8(a)(i)(A) shall refer to the Transferee if the Transferee is an
employee or a director of the Company, a Parent or a Subsidiary and to the
Optionee if the Transferee is not an employee or a director of the Company, a
Parent or a Subsidiary. In the event the Optionee does not make such transfer
for a period of 45 days following the date of the First Refusal Offer, no
transfer of the First Refusal Shares covered by the First Refusal Offer shall be
made without a new First Refusal Offer from the Optionee to the Company in
accordance with this Subsection 8(b) and in full compliance with all the
provisions hereof.
(c) Effect of Tender of Purchase Price. Notwithstanding the
failure of the holder of any certificate evidencing all or any part of the
Option Shares to deliver the same to the Company for cancellation, and upon
tender by the Company of the purchase price for any of the Option Shares in
accordance with the terms of this Agreement, such Option Shares and the
certificates representing the same shall forthwith and without further action be
deemed to be cancelled and forfeited.
(d) Restrictions on Transfer. Except as otherwise may be
permitted by this Agreement, the Optionee shall not sell, exchange, transfer (by
gift or otherwise), assign, hypothecate, pledge, grant as a security interest or
in any other way dispose of or alienate any of the Option Shares, which at any
time would be subject to repurchase by the Company or the gift, hypothecation
of, pledge or grant of a security interest in, is subject to the approval
7
<PAGE> 9
of the Company, and the attempt to effect any such transaction shall be null and
void ab initio and of no force and effect.
(e) Legends. All certificates representing the Option Shares
shall bear a legend or legends revealing the existence of the restrictions
imposed by this Section 8.
(f) Termination of Rights. The provisions of this Section 8 shall
cease to be applicable to the Option Shares at such time as the shares of Stock
of the Company are listed on any national securities exchange, or there is an
established market therefor in the over-the-counter market and the shares of
Stock are listed in the pink or white sheets of the National Association of
Securities Dealers automated quotation system or a comparable service.
(g) Adjustments. In the event that (i) shares of Stock are
changed into or exchanged for a different class or series of securities issued
by the Company or any other corporation as the result of any merger,
consolidation or sale of assets followed by a dissolution, liquidation,
reclassification or reorganization, or (ii) any additional shares of Stock or
any other securities shall be distributed with respect to such shares as a
reclassification, stock dividend, stock split, reverse stock split or other
change in the corporate structure of the Company, then all such securities shall
be subject to the terms and provisions of this Section 8 and shall be deemed to
be included in the term the "Option Shares" as used herein. As used herein, the
term "Company" shall include any other corporation which shall succeed to
substantially all of the business and assets of the Company as the result of any
reorganization, merger or consolidation, sale of assets or sale of Stock.
9. S Corporation Status. The Optionee acknowledges that the Company has
elected to be classified as an S Corporation for federal and state income tax
purposes and, following the exercise of the Option with respect to all or any
part of the shares of Stock subject to the Option, agrees to provide to the
Company, immediately upon the Company's request, such properly signed consents
or other documents as, in the opinion of counsel for the Company, may be
necessary or useful to maintaining the Company's status as an S Corporation.
Except with the written consent of the Company specifically referring to this
Section 9, the following provisions shall apply to the shares of Stock acquired
upon the exercise of the Option until such time as the Company ceases to qualify
as an S Corporation:
(a) Restrictions in Exercise. The Option may not be exercised if
such exercise would result in the Company ceasing to qualify as an S
Corporation.
(b) Restriction on Transfer. No transfer of any shares of Stock
by the Optionee, whether voluntary or involuntary, shall be effective unless all
of the Optionee's shares are transferred to one transferee and such transferee
is a permitted shareholder of an S Corporation. Thus, for example, in the event
of a divorce of the Optionee, the former spouse of the Optionee may be awarded
the Optionee's shares of Stock if and only if the former spouse is a permitted
shareholder of an S Corporation and the former spouse is awarded all of the
shares held by the Optionee.
8
<PAGE> 10
(c) Restriction on Other Action. The Optionee shall not take any
action or fail to take any action which shall result in the Company being unable
to maintain the Company's status as an S Corporation. This provision requires,
without limitation, the Optionee (i) to notify the Company prior to the Optionee
ceasing to qualify as an eligible shareholder of an S Corporation and (ii) to
permit the Company to repurchase all shares of Stock owned by the Optionee
pursuant to Section 8(a) hereof.
(d) Transfer by Trust. If any transfer by the Optionee is by
operation of law or by right of succession under a trust, the transferees shall
be obligated to make such transfers as shall reasonably be necessary, in the
opinion of counsel for the Company, either (i) to avoid termination of the
Company's status as an S Corporation or (ii) to permit the Company to requalify
as an S Corporation as soon as possible.
(e) Other Restrictions. The provisions of this Section 9 are in
addition to the provisions of Section 8 hereof. By way of example and not
limitation, a transfer by divorce or otherwise to a permitted transferee
pursuant to this Section 9 shall be subject to the Right of First Refusal set
forth in Subsection 8(b) hereof.
(f) Legends. All certificates representing shares of Stock
acquired upon the exercise of the Option shall bear a legend revealing the
existence of the restrictions imposed by this Section 9.
(g) Termination of Restrictions. The restrictions imposed by this
Section 9 shall terminate upon the occurrence of the first of any of the
following events: (i) the written agreement of the Company and the Optionee,
(ii) the bankruptcy, receivership or complete dissolution of the Company, (iii)
a transfer or purchase of shares of Stock of the Company which results in one
shareholder holding all of the issued and outstanding shares of stock of the
Company, or (iv) at such time as the shares of Stock of the Company are listed
on any national securities exchange, or there is an established market therefor
in the over-the-counter market and the shares of Stock are listed in the pink or
white sheets of the National Association of Securities Dealers automated
quotation system or a comparable service.
10. Optionee's Service Obligations. The Optionee agrees that, during the
period of his or her service as a director of the Company, a Parent or a
Subsidiary, he or she shall faithfully and to the best of his or her ability
devote his or her time, energy or skill to the service of the Company, a Parent
or a Subsidiary, and to the promotion of its interests.
11. Notice. Any notice or other written communication required or
permitted to be given under the terms of this Agreement shall be addressed to
the Company in care of its Secretary at the principal executive offices of the
Company and any notice to be given to the Optionee shall be addressed to him or
her at the address given by him or her beneath his or her signature hereto or
such other address for a party hereto as such party may hereafter designate in
writing to the other. Any such notice shall be deemed to have been duly given
when enclosed in a properly sealed envelope addressed as aforesaid, registered
or certified and deposited (postage or registration or certification fee
prepaid) in a post office or branch post office regularly maintained by the
United States.
9
<PAGE> 11
12. Finality of Decisions. All decisions of the Board or the Committee
administering the Plan upon any question arising under the Plan or under this
Agreement shall be final and binding.
13. Participation in Other Plans. Nothing herein contained shall affect
the Optionee's right to participate in and receive benefits from and in
accordance with the then current provisions of any pension, insurance, or other
employment welfare plan or program of the Company.
14. Binding Effect of Agreement. Except as set forth in Section 5
hereof, this Agreement shall be binding upon and inure to the benefit of any
successor or successors of the Company.
15. Agreement Subject to Plan. This Agreement is entered into pursuant
to, and is subject to, the provisions of the Plan. Terms not otherwise defined
herein shall have the meanings given them in the Plan.
16. Governing Law. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of California.
17. Withholding Taxes. By accepting the Option, the Optionee, for
himself or herself and his or her transferees by will or the laws of descent and
distribution, agrees that whenever shares of Stock are to be issued by reason of
the exercise of the Option, the Optionee or such other person who is to receive
such shares of Stock will remit to the Company, if requested, prior to the
delivery of any certificate or certificates for such shares, all or any part of
an amount determined by the Company in its discretion to be sufficient to
satisfy federal, state, and local withholding tax requirements which the
Company, or counsel for the Company, determine may be payable with respect to
such exercise.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed on its behalf, and the Optionee has hereunto set his or her hand,
effective the day and year first above written on the cover sheet of this
Agreement, which is the date of grant of the Option.
SHAREDATA, INC.
By:
----------------------------------------
OPTIONEE
-------------------------------------------
-------------------------------------------
--------------------------------------------
Address
10
<PAGE> 1
EXHIBIT 99.12
E*TRADE GROUP, INC.
STOCK OPTION ASSUMPTION AGREEMENT
OFFICERS AND DIRECTORS
OPTIONEE: [1]
STOCK OPTION ASSUMPTION AGREEMENT issued as of the 29th day of July,
1998 by E*TRADE Group, Inc., a Delaware corporation ("E*TRADE").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of ShareData, Inc., a
California corporation ("ShareData"), which were granted to Optionee under the
ShareData, Inc. Officer and Director Stock Option Plan (the "Plan"), and are
evidenced by a stock option agreement (the "Option Agreement") between ShareData
and Optionee.
WHEREAS, ShareData has been acquired by E*TRADE through the merger of a
wholly-owned E*TRADE subsidiary ("Acquisition Sub") with and into ShareData (the
"Merger") pursuant to the Agreement and Plan of Reorganization dated as of July
6, 1998 by and among E*TRADE, Acquisition Sub and ShareData (the "Merger
Agreement").
WHEREAS, the provisions of the Merger Agreement require E*TRADE to
assume all obligations of ShareData under all options outstanding under the Plan
at the consummation of the Merger and to issue to the holder of each outstanding
option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is 0.075376573
share of E*TRADE common stock (the "E*TRADE Stock") for each outstanding share
of ShareData common stock (the "ShareData Stock").
WHEREAS, this Agreement is to become effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options under the Plan which have become
necessary by reason of the assumption of those options by E*TRADE in connection
with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The stock options held by Optionee under the Plan immediately prior
to the Effective Time (the "ShareData Options") and the exercise price payable
per share are set forth in Exhibit A hereto. E*TRADE hereby assumes, as of the
Effective Time, all the duties and obligations of ShareData under each of the
ShareData Options. In connection with such assumption, the number of shares of
E*TRADE Stock purchasable under each ShareData Option hereby assumed and the
exercise price payable thereunder have been adjusted to reflect the Exchange
Ratio at which shares of ShareData Stock were converted into shares of E*TRADE
Stock in consummation of the Merger. Accordingly, the number of shares of
E*TRADE Stock subject to each ShareData Option hereby assumed shall be as
specified for that option in attached
<PAGE> 2
Exhibit B, and the adjusted exercise price payable per share of E*TRADE Stock
under the assumed ShareData Option shall be as indicated for that option in
attached Exhibit B.
2. The intent of the foregoing adjustments to each assumed ShareData
Option is to assure that the spread between the aggregate fair market value of
the shares of E*TRADE Stock purchasable under each such option and the aggregate
exercise price as adjusted pursuant to this agreement will, immediately after
the consummation of the Merger, equal the spread which existed, immediately
prior to the Merger, between the then aggregate fair market value of the
ShareData Stock subject to the ShareData Option and the aggregate exercise price
in effect at such time under the Option Agreement. Such adjustments are also
designed to preserve, immediately after the Merger, on a per share basis, the
same ratio of exercise price per option share to fair market value per share
which existed under the ShareData Option immediately prior to the Merger.
3. The following provisions shall govern each ShareData Option hereby
assumed by E*TRADE:
(a) Unless the context otherwise requires, all references to the
"Company" in each Option Agreement and in the Plan shall mean E*TRADE,
all references to "Stock", "Shares" or "Common Stock" shall mean shares
of E*TRADE Stock, and all references to the "Board" or the "Committee"
shall mean the Board of Directors of E*TRADE or the Compensation
Committee of such Board.
(b) The grant date and the expiration date of each assumed
ShareData Option and all other provisions which govern either the
exercisability or the termination of the assumed ShareData Option shall
remain the same as set forth in the Option Agreement applicable to that
option and shall accordingly govern and control Optionee's rights under
this Agreement to purchase E*TRADE Stock.
(c) Except as otherwise provided in the applicable Option
Agreement, each assumed ShareData Option shall continue to vest and
become exercisable in accordance with the same vesting/exercise schedule
in effect under the applicable Option Agreement immediately prior to the
Effective Time, with the number of shares of E*TRADE Stock subject to
each such installment adjusted to reflect the Exchange Ratio.
(d) For purposes of applying any and all provisions of the
Option Agreement relating to Optionee's employment or service with
ShareData, Optionee shall be deemed to employed or continue in service
for so long as Optionee is in the employ of, or renders services to,
E*TRADE or any present or future E*TRADE subsidiary, including (without
limitation) ShareData.
(e) The adjusted exercise price payable for the E*TRADE Stock
subject to each assumed ShareData Option shall be payable in any of the
forms authorized under the Option Agreement applicable to that option.
<PAGE> 3
(f) In order to exercise each assumed ShareData Option, Optionee
must deliver to E*TRADE a written notice of exercise in which the number
of shares of E*TRADE Stock to be purchased thereunder must be indicated.
The exercise notice must be accompanied by payment of the adjusted
exercise price payable for the purchased shares of E*TRADE Stock and
should be delivered to E*TRADE at the following address:
E*TRADE Group, Inc.
2400 Geng Road
Palo Alto, CA 94303
Attention: Option Plan Administrator
4. Except to the extent specifically modified by this Option Assumption
Agreement, all of the terms and conditions of each Option Agreement as in effect
immediately prior to the Merger shall continue in full force and effect and
shall not in any way be amended, revised or otherwise affected by this Stock
Option Assumption Agreement.
<PAGE> 4
IN WITNESS WHEREOF, E*TRADE Group, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the 29th day of July, 1998.
E*TRADE GROUP, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her ShareData Options hereby assumed by E*TRADE Group,
Inc. are as set forth in the Option Agreement, the Plan and such Stock Option
Assumption Agreement.
------------------------------------------
[1] OPTIONEE
DATED: __________________, 199
<PAGE> 5
EXHIBIT A
Optionee's Outstanding Options to Purchase Shares of
ShareData, Inc.
Common Stock (Pre-Merger)
<TABLE>
<CAPTION>
Number of Option Shares Exercise Price
<S> <C>
[2] [3]
</TABLE>
<PAGE> 6
EXHIBIT B
Optionee's Outstanding Options to Purchase Shares of
E*TRADE Group, Inc.
Common Stock (Post-Merger)
<TABLE>
<CAPTION>
Number of Option Shares Exercise Price
<S> <C>
[4] [5]
</TABLE>
<PAGE> 1
Exhibit 99.13
SHAREDATA, INC.
NOTICE OF GRANT OF STOCK OPTION
AND GRANT AGREEMENT
[Name and Address]
You have been granted an option to purchase ShareData, Inc. stock as
follows:
Non-Qualified Stock Option Grant No. ___________
Date of Grant
Vesting Commencement Date ___________
Stock Option Plan
Exercise Price per Share
Total Number of Shares Granted
Total Price of Shares Granted $___________
By your signature and the signature of the Company's authorized
representative to the attached Non-Qualified Stock Option Agreement, you and
ShareData, Inc. agree that this option is granted under and governed by the
terms and conditions of the ShareData, Inc. Officer and Director Stock Option
Plan and the Non-Qualified Stock Option Agreement, both of which are attached
and made a part of this document.
<PAGE> 2
ROFR ONLY
NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE SHAREDATA, INC.
OFFICER AND DIRECTOR STOCK OPTION PLAN
RECITALS
WHEREAS, ShareData, Inc. (the "Company") has adopted the Officer and
Director Stock Option Plan (the "Plan"), which Plan is incorporated herein by
reference and made a part of this Non-Qualified Stock Option Agreement (this
"Agreement"); and
WHEREAS, the Optionee is an employee of the Company, a Parent or a
Subsidiary, as defined in the Plan, and the Company has determined that it would
be to the advantage and interest of the Company and its shareholders to grant to
the Optionee the option (i) described in the cover sheet of this Agreement which
is hereby incorporated by reference and (ii) subject to the terms and conditions
provided for herein and in the Plan, as an inducement to remain in the service
of the Company, a Parent or a Subsidiary and as an incentive for increased
efforts during such service.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and the terms,
conditions, and covenants contained herein, the parties hereby agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee the right
and option to purchase, on the terms and conditions hereinafter set forth, all
or any part of the number of shares of the common stock of the Company (the
"Stock") set forth on the cover sheet of this Agreement at the exercise price
set forth thereon (the "Option"). The number of shares of Stock subject to the
Option and the exercise price are subject to adjustment under certain
circumstances, as provided in the Plan.
2. Term and Exercisability of Option.
(a) Term of Option. The Option shall be immediately exercisable in
its entirety at any time beginning on the date of grant of the Option as set
forth on the cover sheet of this Agreement and prior to the tenth anniversary
date of the date of grant of the Option as set forth on the cover sheet of this
Agreement (the "Termination Date"), unless sooner terminated in accordance with
the provisions of Sections 3 and 5 hereof, subject to the Optionee's agreement
that any shares of Stock purchased upon exercise are subject to the Company's
Unvested Share Repurchase Option as set forth in Section 9 hereof (which
Unvested Share Repurchase Option shall be subject to expiration as set forth in
Subsection 2(b) hereof). In no event shall the Company be required to issue
fractional shares.
1
<PAGE> 3
(b) Expiration of Unvested Share Repurchase Option. For the purposes
of this Section 2, the Company's Unvested Share Repurchase Option as set forth
in Section 9 hereof shall expire and shall no longer be exercisable as to that
number of shares of Stock subject to the Option according to the following
schedule:
(i) As to one-fourth of the shares of Stock subject to the
Option, after the first anniversary date of the date of grant of the Option;
(ii) As to an additional one-fourth of the shares of Stock
subject to the Option, after the second anniversary date of the date of grant of
the Option;
(iii) As to an additional one-fourth of the shares of Stock
subject to the Option, after the third anniversary date of the date of grant of
the Option; and
(iv) As to the remaining one-fourth of the shares of Stock
subject to the Option, after the fourth anniversary date of the date of grant of
the Option.
3. Expiration of Option. The period for exercising the Option (the
"Option Period") will end on the Termination Date, unless sooner terminated as
provided in Subsections (a), (b) or (c) below:
(a) If the Optionee ceases to be a bona fide employee of the Company,
a Parent or Subsidiary (other than by death or disability) during the Option
Period, the Option shall thereafter be exercisable for a period of 30 days after
termination of the Optionee's employment, but, subject to the following
sentence, only if, and to the extent that, the Option was exercisable by the
Optionee under the provisions of Section 2 hereof at the time of such cessation
of employment and only prior to the Termination Date. Notwithstanding the
provisions of this Subsection 3(a), the Option may not be exercised after the
Optionee's cessation of employment if the shares of Stock to be acquired on
exercise of the Option would be subject to the Company's Unvested Share
Repurchase Option as set forth in Section 9 hereof at the time of such cessation
of employment. Except as the Company and the Optionee otherwise agree, exercise
of the Option pursuant to this Subsection 3(a) may not be made by delivery of a
promissory note as provided in Subsection 4(a)(iii) hereof. If the Optionee is
absent from work with the Company, a Parent or a Subsidiary because of his or
her disability or if he or she is on leave of absence for the purpose of serving
the government of the country in which the principal place of employment of the
Optionee is located, either in a military or civilian capacity, or for such
other purpose or reason as the Board of Directors of the Company (the "Board")
or the Committee administering the Plan (the "Committee") may approve, the
Optionee shall not be deemed during the period of any such absence, by virtue of
such absence alone, to have terminated his or her employment with the Company, a
Parent or a Subsidiary, except as the Board or the Committee may otherwise
expressly provide.
(b) If the Optionee should die while in the employ of the Company, a
Parent or a Subsidiary, or within the period referred to in Subsection 3(a)
hereof, the Option may, within a period of one year from the date of the
Optionee's death, be exercised by the Optionee's legal representative, or by the
person or persons to whom the Optionee's rights under the Option shall
2
<PAGE> 4
pass by will or by the applicable laws of descent and distribution, but, subject
to the following sentence, only if, and to the extent that, the Option was
exercisable by the Optionee under the provisions of Section 2 hereof at the time
of his or her death and only prior to the Termination Date. Notwithstanding the
provisions of this Subsection 3(b), the Option may not be exercised after the
Optionee's death if the shares of Stock to be acquired on exercise of the Option
would be subject to the Company's Unvested Share Repurchase Option as set forth
in Section 9 hereof at the time of his or her death. Except as the Company and
the Optionee's legal representatives otherwise agree, exercise of the Option
pursuant to this Subsection 3(b) may not be made by delivery of a promissory
note as provided in Subsection 4(a)(iii) hereof.
(c) If the Optionee should become disabled within the meaning of
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code")
while in the employ of the Company, a Parent or a Subsidiary, the Option may,
within a period of 180 days after the termination of the Optionee's employment,
be exercised by the Optionee, but, subject to the following sentence, only if,
and to the extent that, the Option was exercisable by the Optionee under the
provisions of Section 2 hereof at the time of such cessation of employment and
only prior to the Termination Date. Notwithstanding the provisions of this
Subsection 3(c), the Option may not be exercised after the Optionee's cessation
of employment if the shares of Stock to be acquired on exercise of the Option
would be subject to the Company's Unvested Share Repurchase Option as set forth
in Section 9 hereof at the time of such cessation of employment. Except as the
Company and the Optionee otherwise agree, exercise of the Option pursuant to
this Subsection 3(c) may not be made by delivery of a promissory note as
provided in Subsection 4(a)(iii) hereof.
4. Manner of Exercise. The Optionee may exercise the Option with respect
to all or any part of the shares of Stock then subject to such exercise as
follows:
(a) By giving the Company written notice of such exercise specifying
the number of shares of Stock as to which the Option is so exercised and
accompanied by an amount equal to the aggregate exercise price of such shares,
in the form of any one or combination of (i) cash or a check, bank draft or
postal or express money order payable to the order of the Company in lawful
money of the United States, (ii) shares of Stock of the Company previously
acquired by the Optionee or (iii) the Optionee's promissory note. Any shares of
Stock delivered to exercise the Option shall be valued at their aggregate Fair
Market Value (as defined in the Plan) on the date of exercise. Unless otherwise
specified by the Board of Directors of the Company at the time the Option is
granted, the promissory note permitted in clause (iii) above shall not exceed
the amount permitted by law to be paid by a promissory note and shall be a full
recourse note in a form satisfactory to the Company, with principal payable in
installments with the last installment due four (4) years from the date the
Option is granted; provided, however, that the Optionee shall tender payment of,
and the principal balance of the promissory note shall be reduced by, all
principal which would have become due and payable as of the date or dates on
which the Company's Unvested Share Repurchase Option expires (but six months
after the Company's Unvested Share Repurchase Option expires in the case of the
initial one-fourth of the shares of Stock subject to the Option) assuming the
promissory note had been delivered on the date the Option was granted. Interest
on the principal balance of the promissory note shall be payable in
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<PAGE> 5
annual installments at the minimum interest rate necessary to avoid imputed
interest pursuant to all applicable sections of the Internal Revenue Code of
1986, as amended. Such recourse promissory note shall be secured by the shares
of Stock acquired pursuant to the then current form of security agreement as
approved by the Company. In the event the Company at any time becomes subject to
the regulations promulgated by the Board of Governors of the Federal Reserve
System or any other governmental entity affecting the extension of credit in
connection with the Company's securities, any promissory note shall comply with
such applicable regulations, and the Optionee shall pay the unpaid principal and
accrued interest, if any, to the extent necessary to comply with such applicable
regulations. Except as the Company in its sole discretion shall determine, the
Optionee shall pay the unpaid principal balance of the promissory note and any
accrued interest thereon upon termination of the Optionee's employment with the
Company, a Parent or Subsidiary for any reason, with or without cause.
(b) If required by the Company, by giving satisfactory assurance in
writing, signed by the Optionee or his or her legal representative, as the case
may be, that such shares of Stock are being purchased for investment only and
not with a view to the distribution thereof; provided, however, that such
assurance shall be deemed inapplicable to (i) any sale of such shares by the
Optionee subject to a registration statement covering such sale, which has
heretofore been (or may hereafter be) filed and become effective under the
Securities Act of 1933, as amended (the "Securities Act"), and is current and
with respect to which no stop order suspending the effectiveness thereof has
been issued, and (ii) any other sale of such shares with respect to which, in
the opinion of counsel for the Company, such assurance is not required to be
given in order to comply with the provisions of the Securities Act.
As soon as practicable after receipt of such written notice of exercise
from the Optionee, the Company shall, without transfer or issue tax or other
incidental expenses to the Optionee, deliver to the Optionee at the office of
the Company, or such other place as may be mutually acceptable to the Company
and the Optionee, a certificate or certificates for such shares of Stock, which
certificate or certificates may bear such legend or legends with respect to
restrictions on transfer thereof as counsel for the Company deems to be required
by applicable provisions of law and this Agreement; provided, however, that
nothing herein shall be deemed to impose upon the Company any obligation to
deliver any shares of Stock to the Optionee if, in the opinion of counsel for
the Company, doing so would violate any provision of: (1) the Securities Act;
(2) the Securities Exchange Act of 1934, as amended; (3) any applicable listing
requirements of any national securities exchange; (4) any state securities
regulation or "Blue Sky" laws; or (5) requirements under any other law or
regulation applicable to the issuance or transfer of such shares. In no event
shall the Company be required to take any affirmative action to comply with any
of such laws, regulations or requirements, nor shall the Company be liable for
any failure to deliver shares of Stock because such shares have not been
registered or because a registration statement with respect thereto is not
current or because such delivery would otherwise be in violation of any
applicable law or regulation.
The term "current" when used herein to refer to a registration statement
shall mean a registration statement that, in the opinion of counsel for the
Company, does not include any
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<PAGE> 6
untrue statement of a material fact and that includes all material facts
required to be stated therein or that are necessary to make the statements
therein not misleading.
5. Adjustments. If outstanding shares of Stock are increased or
decreased, or are changed into or exchanged for a different number or kind of
shares or securities of the Company, through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
change in the corporate structure of the Company, an appropriate and
proportionate adjustment shall be made by the Company in the number and/or type
of the shares of Stock subject to this Agreement and in the exercise price in
order to preserve, but not increase, the benefit to the Optionee. Anything
herein contained to the contrary notwithstanding, (a) upon dissolution or
liquidation of the Company, other than in connection with a Terminating
Transaction (as defined in the Plan), or (b) upon dissolution or liquidation of
the Company, in connection with a Terminating Transaction where the surviving or
acquiring corporation does not, prior to or concurrent with the succession to
the business of the Company, assume the Option (subject to any applicable
provisions of the Code), or substitute a new option of comparable value for the
Option, the Option, in either case, shall terminate and thereupon become null
and void; provided, however, that the Optionee shall have the right, at such
time prior to the consummation of such dissolution, liquidation or Terminating
Transaction, as the case may be, as the Company shall designate, to exercise any
unexercised portion of the Option to the full extent then exercisable; provided,
however, that the Option may not be exercised prior to the consummation of such
dissolution, liquidation or Terminating Transaction, as the case may be, if the
shares of Stock to be acquired on exercise of the Option would be subject to the
Company's Unvested Share Repurchase Option as set forth in Section 9 hereof.
6. Assignment or Transfer. The Option shall, during the Optionee's
lifetime, be exercisable only by him or her, and neither the Option nor any
right hereunder shall be transferable by the Optionee by operation of law or
otherwise other than by will or according to the laws of descent and
distribution. In the event of any attempt by the Optionee to alienate, assign,
pledge, hypothecate or otherwise dispose of the Option or of any right
hereunder, except as provided for herein, or in the event of the levy of any
attachment, execution or similar process upon the rights or interest hereby
conferred, the Option shall thereupon become null and void and of no effect.
7. No Rights as a Shareholder. Neither the Optionee nor any person
entitled to exercise the Optionee's rights in the event of his or her death
shall have any of the rights of a shareholder with respect to the shares of
Stock subject to the Option except to the extent the certificates for such
shares, or a portion thereof, shall have issued upon the exercise of the Option.
8. Right of First Refusal.
(a) Right of First Refusal. If at any time, whether during the
continuance of the Optionee's employment by the Company, a Parent or a
Subsidiary or thereafter, the Optionee desires to sell, exchange, transfer (by
gift or otherwise), assign, hypothecate, pledge, grant as a security interest or
in any other way dispose of or alienate any of the Option Shares or any
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<PAGE> 7
interest therein (hereinafter referred to as a "Disposition"), the Optionee
shall give written notice to the Company of the Optionee's intent to make a
Disposition of such shares of Stock (the "First Refusal Offer"). The First
Refusal Offer shall contain a statement signed by the Optionee notifying the
Company that the Optionee desires to make a Disposition of the Option Shares or
an interest therein and shall be accompanied by a copy of the bona fide offer to
purchase such shares of Stock, in case of a sale, or a description of the
proposed transaction with respect to any other Disposition, and shall set forth
the following:
(i) The full name and address of the intended transferee (the
"Transferee");
(ii) The number of Option Shares to be purchased by, or
transferred to, the Transferee;
(iii) The price, in case of a sale, and other terms under which
the purchase or transfer is intended to be made;
(iv) A statement, in case of a sale, signed by the Transferee,
that the price and other terms specified are a bona fide offer to purchase; and
(v) A representation, in case of a sale, by the Transferee that
he or she has the financial capability necessary to complete the transaction as
proposed.
The Company shall have 30 days from the date of receipt of the First
Refusal Offer within which to exercise an option to purchase all, but not less
than all, of the Option Shares covered by such First Refusal Offer (the "First
Refusal Shares") at the same price and upon the same terms as set forth in such
First Refusal Offer (the "First Refusal Option"). The Company may, in exercising
the First Refusal Option, designate one or more assignees to purchase the First
Refusal Shares. Notwithstanding the generality of the foregoing, however, with
the consent of the Optionee, the purchase price for the First Refusal Shares
may, at the option of the Company, be paid in cash in an amount equal to the
present value of any payments to be made over a period of time according to the
terms of the First Refusal Offer, or, if the terms specified in such offer state
that payment is to be made in property, in an amount equal to the present value
of the fair market value of such property. For purposes of any computation made
pursuant to this Subsection 8(a), the present value of any amount to be paid in
the future shall be determined by the Board by discounting such amount using an
interest rate of 10% or an interest rate equal to the then effective federal
reserve discount rate, without surcharge, of the Federal Reserve Bank of San
Francisco, whichever is higher.
If the Optionee desires to make a Disposition of any of the Option Shares
other than by sale, including, without limitation, by gift, hypothecation,
pledge or the grant of a security interest, the Optionee shall obtain the prior
written approval of the Company to the proposed transfer, which approval may be
withheld by the Company in the Company's sole discretion for any or no reason.
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<PAGE> 8
If the First Refusal Shares are not purchased pursuant to the related First
Refusal Offer by the Company in accordance with this Subsection 8(a), in the
case of a proposed sale, or if the Company approves a Disposition other than by
sale, the Optionee may make a bona fide transfer of the First Refusal Shares to
the respective Transferee or Transferees named in the related First Refusal
Offer; provided, however, that (1) such transfer shall only be made in strict
accordance with the terms stated in such First Refusal Offer, and immediately
following such transfer, the transferor shall so certify in writing to the
Company, and (2) before any such transfer shall become effective or be recorded
in the books of the Company, each Transferee of the First Refusal Shares shall
agree in writing to hold such shares of Stock subject to the terms of this
Agreement and subject to a Right of Repurchase in favor of the Company as set
forth in the Company's standard form of stock option agreement, except that the
Repurchase Events described in such Right of Repurchase shall refer to the
Transferee and the Repurchase Event involving termination of employment shall
refer to the Transferee if the Transferee is an employee or a director of the
Company, a Parent or a Subsidiary and to the Optionee if the Transferee is not
an employee or a director of the Company, a Parent or a Subsidiary. In the event
the Optionee does not make such transfer for a period of 45 days following the
date of the First Refusal Offer, no transfer of the First Refusal Shares covered
by the First Refusal Offer shall be made without a new First Refusal Offer from
the Optionee to the Company in accordance with this Subsection 8(a) and in full
compliance with all the provisions hereof.
(b) Effect of Tender of Purchase Price. Notwithstanding the failure
of the holder of any certificate evidencing all or any part of the Option Shares
to deliver the same to the Company for cancellation, and upon tender by the
Company of the purchase price for any of the Option Shares in accordance with
the terms of this Agreement, such Option Shares and the certificates
representing the same shall forthwith and without further action be deemed to be
canceled and forfeited.
(c) Restrictions on Transfer. Except as otherwise may be permitted by
this Agreement, the Optionee shall not sell, exchange, transfer (by gift or
otherwise), assign, hypothecate, pledge, grant as a security interest or in any
other way dispose of or alienate any of the Option Shares, which at any time
would be subject to repurchase by the Company or the gift, hypothecation of,
pledge or grant of a security interest in, is subject to the approval of the
Company, and the attempt to effect any such transaction shall be null and void
ab initio and of no force and effect.
(d) Legends. All certificates representing the Option Shares shall
bear a legend or legends revealing the existence of the restrictions imposed by
this Section 8.
(e) Termination of Rights. The provisions of this Section 8 shall
cease to be applicable to the Option Shares at such time as the shares of Stock
of the Company are listed on any national securities exchange, or there is an
established market therefor in the over-the-counter market and the shares of
Stock are listed in the pink or white sheets of the National Association of
Securities Dealers automated quotation system or a comparable service.
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<PAGE> 9
(f) Adjustments. In the event that (i) shares of Stock are changed
into or exchanged for a different class or series of securities issued by the
Company or any other corporation as the result of any merger, consolidation or
sale of assets followed by a dissolution, liquidation, reclassification or
reorganization, or (ii) any additional shares of Stock or any other securities
shall be distributed with respect to such shares as a reclassification, stock
dividend, stock split, reverse stock split or other change in the corporate
structure of the Company, then all such securities shall be subject to the terms
and provisions of this Section 8 and shall be deemed to be included in the term
the "Option Shares" as used herein. As used herein, the term "Company" shall
include any other corporation which shall succeed to substantially all of the
business and assets of the Company as the result of any reorganization, merger
or consolidation, sale of assets or sale of Stock.
9. Unvested Share Repurchase Right and Escrow.
(a) Unvested Share Repurchase Right.
(i) Unvested Share Repurchase Right. In the event of the
termination of the Optionee's employment with the Company, any Parent or any
Subsidiary, voluntarily or involuntarily, for any reason whatsoever, including
death or permanent disability, then the Company shall have the option, but not
the obligation, to repurchase the shares of Stock acquired upon the exercise of
the Option (the "Option Shares") from the Optionee, or his or her legal
representative, as the case may be, over which the Unvested Share Repurchase
Right has not yet expired as set forth in Subsection 2(b) hereof (the "Unvested
Share Repurchase Option").
(ii) Repurchase Period. The Unvested Share Repurchase Option
shall commence on the date the Optionee ceases to be an employee of the Company,
a Parent or a Subsidiary and shall expire 60 days after the date the Optionee
ceases to be an employee of the Company, a Parent or a Subsidiary (the
"Repurchase Period"); provided, however, that if the Option is exercised in
whole or in part during the Repurchase Period, the Repurchase Period shall be
extended until 60 days after the last exercise of the Option during the
Repurchase Period.
(iii) Exercise of Unvested Share Repurchase Option and Payment
for Shares. The Unvested Share Repurchase Option shall be exercised by the
Company giving the Optionee, or his or her legal representative, as the case may
be, written notice of its intention to exercise the Unvested Share Repurchase
Option on or before the last day of the Repurchase Period, and, together with
such notice, tendering to the Optionee, or his or her legal representative, as
the case may be, an amount equal to the Optionee's original cost per share (as
adjusted pursuant to Section 5 hereof). For purposes of the foregoing,
cancellation of any indebtedness of the Optionee to the Company shall be treated
as payment to the Optionee in cash to the extent of the unpaid principal and any
accrued interest cancelled. If the Company fails to give notice within the
Repurchase Period, the Unvested Share Repurchase Option shall terminate unless
the Company and the Optionee have extended the time for the exercise of the
Unvested Share Repurchase Option. The Unvested Share Repurchase Option must be
exercised, if at all, for all of the shares of Stock subject to the Unvested
Share Repurchase Option except as the Company and the Optionee otherwise agree.
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(iv) Return of Shares. Upon timely exercise of the Unvested Share
Repurchase Option in the manner provided in this Section 9, the Optionee, or his
or her legal representative, as the case may be, shall deliver to the Company
the certificate or certificates representing the Option Shares, duly endorsed
and free and clear of any and all liens, charges, and encumbrances.
(v) Assignment of Unvested Share Repurchase Option. In the event
the Company is unable to exercise the Unvested Share Repurchase Option pursuant
to the provisions of any law, regulation or agreement restricting the redemption
of the Company's common stock, the Company shall have the right to assign the
Unvested Share Repurchase Option to one or more persons as may be selected by
the Company.
(vi) Adjustments. In the event that (x) shares of Stock are
changed into or exchanged for a different class or series of securities issued
by the Company or any other corporation as the result of any merger,
consolidation or sale of assets followed by a dissolution, liquidation,
reclassification or reorganization, or (y) any additional shares of Stock or any
other securities shall be distributed with respect to such shares as a
reclassification, stock dividend, stock split, reverse stock split or other
change in the corporate structure of the Company, then all such securities shall
be subject to the terms and provisions of this Section 9 and shall be deemed to
be included in the term the "Option Shares" as used herein. As used herein, the
term "Company" shall include any other corporation which shall succeed to
substantially all of the business and assets of the Company as the result of any
reorganization, merger or consolidation, sale of assets or sale of Stock.
(b) Escrow.
(i) Establishment of Escrow. To insure shares of Stock subject
to the Company's Unvested Share Repurchase Right, Right of First Refusal, and
security for any promissory note will be available for repurchase, the Company
may require the Optionee to deposit the certificate or certificates evidencing
the shares of Stock which the Optionee purchases upon exercise of the Option
with an agent designated by the Company under the terms and conditions of escrow
and security agreements approved by the Company. If the Company does not require
such deposit as a condition of exercise of the Option, the Company reserves the
right at any time to require the Optionee to so deposit the certificate or
certificates in escrow. The Company shall bear the expenses of the escrow.
(ii) Delivery of Shares to Optionee. As soon as practicable after
the expiration of the Unvested Share Repurchase Right and the Right of First
Refusal, and after full repayment on any promissory note secured by the shares
of Stock in escrow, but not more frequently than twice each calendar year, the
agent shall deliver to the Optionee the shares no longer subject to such
restrictions and no longer security for any promissory note.
(iii) Notices and Payments. In the event the shares of Stock held
in escrow are subject to the Company's exercise of the Unvested Share Repurchase
Right or the
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Right of First Refusal, the notices required to be given to the Optionee shall
be given to the agent and any payment required to be given to the Optionee shall
be given to the agent. Within 30 days after payment by the Company. The agent
shall deliver the shares of Stock which the Company has purchased to the Company
and shall deliver the payment received from the Company to the Optionee.
10. S Corporation Status. The Optionee acknowledges that the Company has
elected to be classified as an S Corporation for federal and state income tax
purposes and, following the exercise of the Option with respect to all or any
part of the shares of Stock subject to the Option, agrees to provide to the
Company, immediately upon the Company's request, such properly signed consents
or other documents as, in the opinion of counsel for the Company, may be
necessary or useful to maintaining the Company's status as an S Corporation.
Except with the written consent of the Company specifically referring to this
Section 10, the following provisions shall apply to the shares of Stock acquired
upon the exercise of the Option until such time as the Company ceases to qualify
as an S Corporation:
(a) Restrictions in Exercise. The Option may not be exercised if such
exercise would result in the Company ceasing to qualify as an S Corporation.
(b) Restriction on Transfer. No transfer of any shares of Stock by
the Optionee, whether voluntary or involuntary, shall be effective unless all of
the Optionee's shares are transferred to one transferee and such transferee is a
permitted shareholder of an S Corporation. Thus, for example, in the event of a
divorce of the Optionee, the former spouse of the Optionee may be awarded the
Optionee's shares of Stock if and only if the former spouse is a permitted
shareholder of an S Corporation and the former spouse is awarded all of the
shares held by the Optionee.
(c) Restriction on Other Action. The Optionee shall not take any
action or fail to take any action which shall result in the Company being unable
to maintain the Company's status as an S Corporation. This provision requires,
without limitation, the Optionee (i) to notify the Company prior to the Optionee
ceasing to qualify as an eligible shareholder of an S Corporation and (ii) to
permit the Company to repurchase all shares of Stock owned by the Optionee
pursuant to Section 8(a) hereof.
(d) Transfer by Trust. If any transfer by the Optionee is by
operation of law or by right of succession under a trust, the transferees shall
be obligated to make such transfers as shall reasonably be necessary, in the
opinion of counsel for the Company, either (i) to avoid termination of the
Company's status as an S Corporation or (ii) to permit the Company to requalify
as an S Corporation as soon as possible.
(e) Other Restrictions. The provisions of this Section 10 are in
addition to the provisions of Section 8 hereof. By way of example and not
limitation, a transfer by divorce or otherwise to a permitted transferee
pursuant to this Section 10 shall be subject to the Right of First Refusal set
forth in Subsection 8(a) hereof.
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<PAGE> 12
(f) Legends. All certificates representing shares of Stock acquired
upon the exercise of the Option shall bear a legend revealing the existence of
the restrictions imposed by this Section 10.
(g) Termination of Restrictions. The restrictions imposed by this
Section 10 shall terminate upon the occurrence of the first of any of the
following events: (i) the written agreement of the Company and the Optionee,
(ii) the bankruptcy, receivership or complete dissolution of the Company, (iii)
a transfer or purchase of shares of Stock of the Company which results in one
shareholder holding all of the issued and outstanding shares of Stock of the
Company, or (iv) at such time as the shares of Stock of the Company are listed
on any national securities exchange, or there is an established market therefor
in the over-the-counter market and the shares of Stock are listed in the pink or
white sheets of the National Association of Securities Dealers automated
quotation system or a comparable service.
11. Optionee's Employment Obligations. The Optionee agrees that, during
the period of his or her employment by the Company, a Parent or a Subsidiary, he
or she shall faithfully and to the best of his or her ability devote his or her
time, energy or skill to the service of the Company, a Parent or a Subsidiary,
and to the promotion of its interests, subject to vacations, military service
leave, sick leave, and other bona fide absences in accordance with the regular
policies and practices of, or any written agreement between the Optionee and,
the Company, a Parent or a Subsidiary which employs the Optionee. Subject to any
contrary terms of any employment contract, the Company, the Parent or the
Subsidiary which employs the Optionee shall have the right to terminate or
change the terms of employment of the Optionee at any time and for any reason
whatsoever. Nothing herein shall limit the Optionee's right to terminate his or
her employment.
12. Notice. Any notice or other written communication required or
permitted to be given under the terms of this Agreement shall be addressed to
the Company in care of its Secretary at the principal executive offices of the
Company and any notice to be given to the Optionee shall be addressed to him or
her at the address given by him or her beneath his or her signature hereto or
such other address for a party hereto as such party may hereafter designate in
writing to the other. Any such notice shall be deemed to have been duly given
when enclosed in a properly sealed envelope addressed as aforesaid, registered
or certified and deposited (postage or registration or certification fee
prepaid) in a post office or branch post office regularly maintained by the
United States.
13. Finality of Decisions. All decisions of the Board or the Committee
upon any question arising under the Plan or under this Agreement shall be final
and binding.
14. Participation in Other Plans. Nothing herein contained shall affect
the Optionee's right to participate in and receive benefits from and in
accordance with the then current provisions of any pension, insurance, or other
employment welfare plan or program of the Company.
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15. Binding Effect of Agreement. Except as set forth in Section 5 hereof,
this Agreement shall be binding upon and inure to the benefit of any successor
or successors of the Company.
16. Agreement Subject to Plan. This Agreement is entered into pursuant to,
and is subject to, the provisions of the Plan. Terms not otherwise defined
herein shall have the meanings given them in the Plan.
17. Governing Law. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of California.
18. Tax Information. The Option is not intended to be eligible for
treatment as an Incentive Stock Option under Section 422 of the Code.
19. Withholding Taxes. By accepting the Option, the Optionee, for himself
or herself and his or her transferees by will or the laws of descent and
distribution, agrees that whenever shares of Stock are to be issued by reason of
the exercise of the Option, the Optionee or such other person who is to receive
such shares of Stock will remit to the Company, prior to the delivery of any
certificate or certificates for such shares, all or any part of an amount
determined by the Company in its discretion to be sufficient to satisfy federal,
state, and local withholding tax requirements which the Company, or counsel for
the Company, determine may be payable with respect to such exercise.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed
on its behalf, and the Optionee has hereunto set his or her hand, effective the
day and year first above written on the cover sheet of this Agreement, which is
the date of grant of the Option.
SHAREDATA, INC.
By:
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OPTIONEE
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Address
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