Exhibit 10.05
ONEDENTIST RESOURCES, INC.
2000 Stock Option Plan
1. Purpose. The purpose of this Plan is to promote share ownership by key
employees, directors and consultants of OneDentist Resources, Inc. (the
"Company"), thereby reinforcing a mutuality of interest with other shareholders,
and to enable the Company to attract, retain and motivate key employees,
directors and consultants by permitting them to share in its growth.
2. Definitions. As used in this Plan,
"Board" means the Board of Directors of the Company and, to the extent
of any delegation by the Board to a committee (or subcommittee thereof) pursuant
to Section 13 of this Plan, such committee (or subcommittee).
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
"Common Shares" means shares of the Common Stock, no par value per
share, of OneDentist Resources, Inc.
"Company" means OneDentist Resources, Inc., a Colorado corporation.
"Date of Grant" means the date specified by the Board on which a grant
of Options shall become effective.
"Director" means a member of the Board of Directors of the Company.
"Fair Market Value" means, as of any given day, the amount determined by
the Board to be the fair market value of a Common Share on such day.
"Incentive Stock Options" means Options that are intended to qualify as
"incentive stock options" under Section 422 of the Code or any successor
provision.
"Initial Public Offering" means the first public offering of the
Company's equity securities registered under the Securities Act of 1933, as
amended, or any successor statute, or such other event as a result of which
outstanding equity securities of the Company (or any successor entity) shall be
publicly traded.
"Option" means the right to purchase Common Shares upon exercise of an
option granted pursuant to Section 4 of this Plan.
"Optionee" means the optionee named in an agreement evidencing an
outstanding Option.
"Option Price" means the purchase price payable on exercise of an
Option.
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"Option Shares" means Common Shares acquired upon the exercise of an
Option.
"Participant" means a person who is selected by the Board to receive
benefits under this Plan and who is at the time an employee, Director or
consultant of the Company or a Subsidiary, or who has agreed to commence serving
in any of such capacities within 30 days of the Date of Grant.
"Plan" means this 2000 Stock Option Plan of the Company, as amended from
time to time.
"Repurchase Right" means the Company's right to repurchase Option Shares
as set forth in Section 5 of this Plan.
"Right of First Refusal" means the Company's right of first refusal as
set forth in Section 6 of this Plan.
"Stock Option Agreement" means the agreement entered into by the Company
and Optionee pursuant to Section 8 of this Plan.
"Subsidiary" means a corporation, company or other entity (i) more than
50 percent of whose outstanding shares or securities (representing the right to
vote for the election of directors or other managing authority) are, or (ii)
which does not have outstanding shares or securities (as may be the case in a
partnership, joint venture or unincorporated association), but more than 50
percent of whose ownership interest representing the right generally to make
decisions for such other entity is, now or hereafter, owned or controlled,
directly or indirectly, by the Company, except that for purposes of determining
whether any person may be a Participant for purposes of any grant of Incentive
Stock Options, "Subsidiary" means any corporation in which at the time the
Company owns or controls, directly or indirectly, more than 50 percent of the
total combined voting power represented by all classes of stock issued by such
corporation.
3. Shares Available. Subject to adjustment as provided in Section 7 of this
Plan, the total number of Common Shares which may be issued and sold under
Options granted pursuant to this Plan shall not exceed 500,000 Common Shares.
Such shares may be treasury shares or shares of original issue or a combination
of the foregoing.
4. Options. The Board may, from time to time and upon such terms and
conditions as it may determine, authorize the granting of Options to
Participants. Each such grant shall be subject to all of the requirements
contained in the following provisions and such other terms as the Board shall
determine:
(a) Each grant shall specify the number of Common Shares to which it
pertains, subject to the limitations set forth in Section 3 of this Plan.
(b) Each grant shall specify an Option Price per share, which, in the
case of an Incentive Stock Option, may not be less than the Fair Market Value on
the Date of Grant, but otherwise may be less than the Fair Market Value on the
Date of Grant.
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(c) The Option Price shall be payable (i) in cash or by other
consideration acceptable to the Company, (ii) by the actual or constructive
transfer to the Company of Common Shares owned by the Optionee for at least 6
months having a value at the time of exercise equal to the total Option Price,
or (iii) by a combination of such methods of payment.
(d) Any grant may provide for deferred payment of the Option Price from
the proceeds of sale through a broker on a date satisfactory to the Company of
some or all of the Common Shares to which such exercise relates.
(e) Successive grants may be made to the same Optionee whether or not
any Options previously granted to such Optionee remain unexercised.
(f) (i) Each grant shall specify the period or periods of continuous
service by the Optionee with the Company or any of its Subsidiaries that is
necessary before the Options or installments thereof will become exercisable and
may provide for earlier exercise of the Option, including, without limitation,
in the event of a change in control of the Company or similar event.
(ii) Notwithstanding the foregoing, any grant of Options may provide
for the immediate exercisability of the Options, subject to the additional
restrictions described in this paragraph (f)(ii). Option Shares so acquired may
not be transferred, sold, pledged, exchanged, assigned or otherwise encumbered
or disposed of by the Optionee, except to the Company, until they have become
vested in accordance with a vesting schedule set forth in the agreement
evidencing the grant. Should the Optionee cease Service while holding Option
Shares that have not become vested, the Company shall have the right to
repurchase, at the Option Price paid per share, any or all of those unvested
Option shares. The terms upon which such repurchase right shall be exercisable
(including the period and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the Board and set
forth in the document evidencing such repurchase right. Unless otherwise
directed by the Board, all certificates representing unvested Option Shares
shall be held in custody by the Company until all restrictions thereon have
lapsed, together with a stock power or powers, executed by the Optionee in whose
name such certificates are registered, endorsed in blank and covering such
Option Shares. The repurchase rights described in this paragraph (f)(ii) shall
be in addition to the Repurchase Right described in Section 5 of this Plan.
(g) Unless otherwise approved by the Board, each Option shall be subject
to the Repurchase Right and the Right of First Refusal in favor of the Company
as specified in Sections 5 and 6 of this Plan, respectively.
(h) Options granted under this Plan may be (i) options that are intended
to qualify under particular provisions of the Code, including, without
limitation, Incentive Stock Options, (ii) options that are not intended so to
qualify under the Code, or (iii) combinations of the foregoing.
(i) Except as otherwise determined by the Board, no Option shall be
transferable by the Optionee except by will or the laws of descent and
distribution. Except as otherwise determined by the Board, Options shall be
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exercisable during the Optionee's lifetime only by the Optionee or, in the event
of the Optionee's legal incapacity to do so, the Optionee's guardian or legal
representative acting on behalf of the Optionee in a fiduciary capacity under
state law and court supervision.
(j) No Option shall be exercisable more than 10 years from the Date of
Grant.
(k) An Optionee may exercise an Option in whole or in part at any time
and from time to time during the period within which an Option may be exercised.
To exercise an Option, an Optionee shall give written notice to the Company
specifying the number of Common Shares to be purchased and provide payment of
the Option Price and any other documentation that may be required by the
Company.
(l) An Optionee shall be treated for all purposes as the owner of record
of the number of Common Shares purchased pursuant to exercise of the Option (in
whole or in part) as of the date the conditions set forth in Section 4(k) are
satisfied.
(m) To the extent required for "Incentive Stock Option" status under
Section 422 of the Code, the aggregate Fair Market Value (determined as of the
Date of Grant) of the Common Shares with respect to which Incentive Stock
Options are exercisable for the first time by the Optionee during any calendar
year under the Plan and/or any other stock option plan of the Company (within
the meaning of Section 424 of the Code) shall not exceed $1,000,000.
(n) The Board may permit Optionees to elect to defer the issuance of
Common Shares under this Plan pursuant to such rules, procedures or programs as
it may establish for purposes of this Plan. The Board also may provide that
deferred issuances and settlements include the payment or crediting of dividend
equivalents or interest on the deferral amounts.
(o) Any grant may specify performance conditions that must be satisfied
as a condition to the exercise or early exercise of the Option.
(p) Any grant may require, as a condition to the exercise of the Option,
that the Optionee agree to be bound by any shareholders agreement among all or
certain shareholders of the Company that may be in effect at the time of
exercise, or certain provisions of any such agreement that may be specified by
the Company either in addition to or in lieu of the provisions of Sections 5 and
6 of this Plan (as determined by the Company).
5. Company's Repurchase Right.
(a) The Company shall have the right to repurchase some or all of the
Option Shares of an Optionee upon the occurrence of any of the events specified
in Section 5(b) below (the "Repurchase Event"). The Repurchase Right may be
exercised by the Company within 180 days following the date of such event (the
"Repurchase Period"). The Repurchase Right shall be exercised by the Company by
giving the holder written notice on or before the last day of the Repurchase
Period of its intention to exercise the Repurchase Right, and, together with
such notice, tendering to the holder an amount equal to the Fair Market Value of
the Option Shares, as provided in Section 5(c). The Company may assign the
Repurchase Right to one or more persons. Upon exercise of the Repurchase Right
in the manner provided in this Section 5(a), the Optionee shall deliver to the
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Company the stock certificate or certificates representing the Option Shares
being repurchased, duly endorsed and free and clear of any and all liens,
charges and encumbrances.
If Option Shares are not purchased under the Repurchase Right, the
Optionee and his or her successor in interest, if any, will hold any such shares
in his or her possession subject to all of the provisions of this Section 5 and
Section 6 hereof.
The Repurchase Right described in this Section 5 of the Plan shall be in
addition to the rights of the Company described in Section 4(f)(ii) of the Plan.
(b) Company's Right to Exercise Repurchase Right. The Company shall have
the Repurchase Right in the event that any of the following events shall occur:
(i) The termination of the Optionee's employment or other
service with the Company and its Subsidiaries for any reason
whatsoever, regardless of the circumstances thereof, and
including without limitation upon death, disability,
retirement, discharge or resignation for any reason, whether
voluntary or involuntarily; or
(ii) The (x) filing of a voluntary petition under any bankruptcy
or insolvency law, or a petition for the appointment of a
receiver or the making of an assignment for the benefit of
creditors, with respect to the Optionee, or (y) the Optionee
being subjected involuntarily to a petition or assignment or
to an attachment or other legal or equitable interest with
respect to his or her assets, which involuntary petition or
assignment or attachment is not discharged within 60 days
after its date or (z) the Optionee being subject to a
transfer of Option Shares by operation of law, except by
reason of death.
(c) Determination of Fair Market Value. For purposes of this Section 5,
the Fair Market Value of the Option Shares shall be determined as of the date of
the Repurchase Event by the Board.
6. Company's Right of First Refusal.
(a) Exercise of Right. If at a time other than within the period
specified in Section 5(a) the Optionee desires to transfer all or any part of
the Option Shares to any person other than the Company (an "Offeror"), the
Optionee shall: (i) obtain in writing an irrevocable and unconditional bona fide
offer (the "Offer") for the purchase thereof from the Offeror; and (ii) give
written notice (the "Option Notice") to the Company setting forth the Optionee's
desire to transfer such shares, which Option Notice shall be accompanied by a
photocopy of the Offer and shall set forth the name and address of the Offeror
and the price and terms of the Offer. Upon receipt of the Option Notice, the
Company shall have an assignable option to purchase any or all of such Option
Shares (the "Company Option Shares") specified in the Option Notice, such option
to be exercisable by giving, within 10 days after receipt of the Option Notice,
a written counter notice to the Optionee. If the Company elects to purchase any
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or all of such Company Option Shares, it shall be obligated to purchase, and the
Optionee shall be obligated to sell to the Company, such Company Option Shares
at the price and terms indicated in the Offer within 30 days from the date of
delivery by the Company of such counter notice.
(b) Sale of Option Shares to Offeror. The Optionee may, for 60 days
after the expiration of the 10-day option period as set forth in Section 6(a),
sell to the Offeror, pursuant to the terms of the Offer, any or all of such
Company Option Shares not purchased or agreed to be purchased by the Company or
its assignee. If any or all of such Company Option Shares are not sold pursuant
to an Offer within the time permitted above, the unsold Company Option Shares
shall remain subject to the terms of this Section 6.
(c) Adjustments for Changes in Capital Structure. If there shall be any
change in the Common Shares of the Company through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, combination or
exchange of shares, or the like, the restrictions contained in this Section 6
shall apply with equal force to additional and/or substitute securities, if any,
received by the Optionee in exchange for, or by virtue of his or her ownership
of, Option Shares.
(d) Failure to Deliver Option Shares. If the Optionee fails or refuses
to deliver on a timely basis duly endorsed certificates representing Company
Option Shares to be sold to the Company or its assignee pursuant to this Section
6, the Company shall have the right to deposit the purchase price for such
Company Option Shares in a special account with any bank or trust company,
giving notice of such deposit to the Optionee, whereupon such Company Option
Shares shall be deemed to have been purchased by the Company. All such monies
shall be held by the bank or trust company for the benefit of the Optionee. All
monies deposited with the bank or trust company but remaining unclaimed for two
years after the date of deposit shall be repaid by the bank or trust company to
the Company on demand, and the Optionee shall thereafter look only to the
Company for payment. The Company may place a legend on any certificate for
Option Shares delivered to the Optionee reflecting the restrictions on transfer
provided in this Section 6.
7. Adjustments. The Board may make or provide for such adjustments in the
Option Price and in the number or kind of shares or other securities covered by
outstanding Options as the Board in its sole discretion may in good faith
determine to be equitably required in order to prevent dilution or enlargement
of the rights of Optionees that would otherwise result from any (a) stock
dividend, stock split, combination of shares, recapitalization or other change
in the capital structure of the Company, (b) merger, consolidation, separation,
reorganization, partial or complete liquidation, issuance of rights or warrants
to purchase stock or (c) other corporate transaction or event having an effect
similar to any of the foregoing. Moreover, in the event of any such transaction
or event, the Board, in its discretion, may provide in substitution for any or
all outstanding Options under this Plan such alternative consideration as it, in
good faith, may determine to be equitable in the circumstances and may require
in connection therewith the surrender of all Options so replaced. The Board may
also make or provide for such adjustments in the number of shares specified in
Section 3 of this Plan as the Board in its sole discretion, exercised in good
faith, may determine is appropriate to reflect any transaction or event
described in this Section 7; provided, however, that any such adjustment to the
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number specified in Section 3 shall be made only if and to the extent that such
adjustment would not cause any Option intended to qualify as an Incentive Stock
Option to fail so to qualify.
8. Stock Option Agreement. The form of each Stock Option Agreement shall be
prescribed, and any Stock Option Agreement evidencing an outstanding Option may
with the concurrence of the affected Optionee be amended, by the Board, provided
that the terms and conditions of each Stock Option Agreement and amendment are
not inconsistent with this Plan and that no amendment shall adversely affect the
rights of the Optionee with respect to any outstanding Option without the
Optionee's consent.
9. Cancellation of Options. The Board may, with the concurrence of the
affected Optionee, cancel any Option granted under this Plan. In the event of
any such cancellation, the Board may authorize the granting of new Options
(which may or may not cover the same number of Common Shares that had been the
subject of any prior option) in such manner, at such Option Price and subject to
the same terms, conditions and discretion as would have been applicable under
this Plan had the cancelled Options not been granted.
10. Withholding. No later than the date as of which an amount first becomes
includible in the gross income of the Optionee for applicable income tax
purposes with respect to any Option under the Plan, the Optionee shall pay to
the Company, or make arrangements satisfactory to the Board regarding the
payment of, any Federal, state or local taxes of any kind required by law to be
withheld with respect to such amount. Unless otherwise determined by the Board,
the minimum required withholding obligations may be settled with Common Shares,
including Common Shares that are part of the award that gives rise to the
withholding requirement. The obligations of the Company under this Plan shall be
conditional on such payment or arrangements and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the Optionee.
11. Governing Law. The Plan and all Options granted and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of Colorado.
12. Fractional Shares. The Company shall not be required to issue any
fractional Common Shares pursuant to this Plan. The Board may provide for the
elimination of fractional Common Shares or for the settlement of fractional
Common Shares for cash.
13. Administration. This Plan shall be administered by the Board, which may
from time to time delegate all or any part of its authority under this Plan to a
committee of not less than two Directors appointed by the Board. To the extent
of any such delegation, references in this Plan to the Board shall also refer to
the committee. A majority of the members of the committee shall constitute a
quorum, and any action taken by a majority of the members of the committee who
are present at any meeting of the committee at which a quorum is present, or any
actions of the committee that are unanimously approved by the members of the
committee in writing, shall be the acts of the committee. Any determination by
the Board pursuant to any provision of this Plan shall be final and conclusive.
No member of the Board shall be liable for any such determination made in good
faith.
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14. Lock-Up Agreement. The Company may, in its discretion, require in
connection with an Initial Public Offering that a Participant agree that any
Option Share not be sold, offered for sale or otherwise disposed of for a period
of time as determined by the Board, provided at least a majority of the
Company's Directors and officers who hold Option Rights or Common Shares at such
time are similarly bound.
15. Foreign Employees. In order to facilitate the making of any grant or
combination of grants under this Plan, the Board may provide for such special
terms for awards to Participants who are foreign nationals or who are employed
by the Company or any Subsidiary outside of the United States of America as the
Board may consider necessary or appropriate to accommodate differences in local
law, tax policy or custom. Moreover, the Board may approve such sub-plans or
supplements to or amendments, restatements or alternative versions of this Plan
as it may consider necessary or appropriate for such purposes, without thereby
affecting the terms of this Plan as in effect for any other purpose, and the
Secretary or other appropriate officer of the Company may certify any such
document as having been approved and adopted in the same manner as this Plan.
16. Amendment, Etc.
(a) The Board may at any time and from time to time amend the Plan in
whole or in part.
(b) The Board may condition the grant of any award or combination of
awards authorized under this Plan on the surrender or deferral by the
Participant of his or her right to receive a cash bonus or other compensation
otherwise payable by the Company or a Subsidiary to the Participant.
(c) In case of termination of employment or other service by reason of
death, disability or normal or early retirement, or in the case of hardship or
other special circumstances, of an Optionee who holds an Option not immediately
exercisable in full, the Board may, in its sole discretion, accelerate the time
at which such Option may be exercised
(d) This Plan shall not confer upon any Participant any right with
respect to continuance of employment or other service with the Company or any
Subsidiary, nor shall it interfere in any way with any right the Company or any
Subsidiary would otherwise have to terminate such Participant's employment or
other service at any time.
(e) To the extent that any provision of this Plan would prevent any
Option Right that was intended to qualify as an Incentive Stock Option from
qualifying as such, that provision shall be null and void with respect to such
Option. Such provision, however, shall remain in effect for other Options and
there shall be no further effect on any provision of this Plan.
17. Effective Date. This Plan shall be effective immediately; provided,
however, that the effectiveness of this Plan is conditioned on its approval by
the shareholders of the Company in accordance with applicable law within 12
months after the date this Plan is adopted by the Board. All awards under this
Plan shall be null and void if the Plan is not approved by the shareholders
within such 12-month period.
18. Term. No Option shall be granted pursuant to this Plan on or after the
tenth anniversary of the date this Plan is adopted by the Board, but awards
granted prior to such tenth anniversary may extend beyond that. The date this
Plan is adopted by the Board shall be August 15, 2000.
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INCENTIVE STOCK OPTION AGREEMENT
Name of Optionee: _______________________________________
Date of Grant: _______________________________________
Expiration Date: _______________________________________
Number of Optioned
Shares: _______________________________________
Option Price: _______________________________________
Right to Exercise: The Option shall become exercisable to the extent of
thirty-three and one-third percent (33-1/3%) of the Common
Shares covered by the Option on each of the first, second
and third anniversaries of the Date of Grant, if the
Optionee remains in the continuous employment of the
Company. The Option also shall become exercisable upon the
death or permanent and total disability (as determined by
the Board) of the Optionee, and upon certain Sale Events (as
defined below in the Agreement), if the Optionee remains in
the continuous employment of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
behalf by its duly authorized officer and Optionee has also executed this
Agreement in duplicate, as of the day and year first above written.
OneDentist Resources, Inc.
By: ________________________________
Title:_______________________________
--------------------------------------
Optionee
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THIS AGREEMENT SHALL BE VOID IF IT HAS NOT BEEN EXECUTED AND RETURNED TO THE
COMPANY WITHIN 30 DAYS AFTER THE DATE OF GRANT.
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THIS OPTION AGREEMENT AND THE SECURITIES UNDERLYING
THIS OPTION AGREEMENT MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS SUCH SALE, PLEDGE, HYPOTHECATION, TRANSFER OR OTHER
DISPOSITION SHALL HAVE BEEN REGISTERED UNDER SAID ACT AND IN COMPLIANCE WITH ANY
APPLICABLE STATE SECURITIES LAWS OR UNTIL THE COMPANY SHALL HAVE RECEIVED A
LEGAL OPINION SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY, THAT SUCH
SECURITIES MAY BE LEGALLY SOLD OR OTHERWISE TRANSFERRED WITHOUT SUCH
REGISTRATION AND COMPLIANCE.
OPTIONEE HEREBY AGREES THAT ALL OPTIONED SHARES ACQUIRED UPON THE EXERCISE OF
THIS OPTION SHALL BE SUBJECT TO CERTAIN REPURCHASE RIGHTS AND RIGHTS OF FIRST
REFUSAL EXERCISABLE BY THE COMPANY AND ITS ASSIGNS. THE TERMS OF SUCH RIGHTS ARE
SPECIFIED IN THIS NONQUALIFIED STOCK OPTION AGREEMENT.
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INCENTIVE STOCK OPTION AGREEMENT
--------------------------------
This AGREEMENT (the "Agreement") is made as of the date of grant on the cover
page hereof (the "Date of Grant") by and between OneDentist Resources, Inc., a
Colorado corporation (the "Company"), and the individual named on the cover page
hereto (the "Optionee").
1. Grant of Stock Option. Subject to and upon the terms, conditions, and
restrictions set forth in this Agreement and in the Company's 2000 Stock Option
Plan (the "Plan"), the Company hereby grants to the Optionee as of the Date of
Grant a stock option (the "Option") to purchase the number of shares of the
Company's Common Stock, no par value per share, shown on the cover page hereof
(the "Optioned Shares"). The Option may be exercised from time to time in
accordance with the terms of this Agreement. The price at which the Optioned
Shares may be purchased pursuant to this Option shall be as set forth on the
cover page hereof subject to adjustment as hereinafter provided (the "Option
Price"). The Option is intended not to be an "incentive stock option" within the
meaning of that term under Section 422 of the Code, or any successor provision
thereto; this Agreement shall be construed in a manner that will effectuate such
intent.
2. Term of Option. The term of the Option shall commence on the Date of
Grant and, unless earlier terminated in accordance with Section 6 hereof, shall
expire ___ (___) years from the Date of Grant.
3. Right to Exercise. Subject to the expiration or earlier termination of
this Option in accordance with its terms, this Option shall become exercisable
as set forth on the cover page hereof. To the extent the Option is exercisable,
it may be exercised in whole or in part. In no event shall the Optionee be
entitled to acquire a fraction of one Optioned Share pursuant to this Option.
The Optionee shall be entitled to the privileges of ownership with respect to
Optioned Shares purchased and delivered to him upon the exercise of all or part
of this Option.
The Company may require, as a condition to the exercise of this Option,
that the Optionee agree to be bound by any shareholders agreement among all or
certain shareholders of the Company that may then be in effect, or certain
provisions of any such agreement that may be specified by the Company, either in
addition to or in lieu of the provisions of Sections 8 and 9 hereof (as
determined by the Company).
4. Option Nontransferable. The Option granted hereby shall be neither
transferable nor assignable by the Optionee except by will or by the laws of
descent and distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee, or in the event of his or her legal incapacity,
by his or her guardian or legal representative acting on behalf of the Optionee
in a fiduciary capacity under state law and court supervision.
5. Notice of Exercise; Payment. To the extent then exercisable, the Option
may be exercised by written notice to the Company stating the number of Optioned
Shares for which the Option is being exercised and the intended manner of
payment. The date of such notice shall be the exercise date. Payment equal to
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the aggregate Option Price of the Optioned Shares for which the Option is being
exercised shall be tendered in full with the notice of exercise to the Company
in cash in the form of currency or check or other cash equivalent acceptable to
the Company. The Optionee may also tender the Option Price by (a) the actual or
constructive transfer to the Company of nonforfeitable, nonrestricted Common
Shares that have been owned by the Optionee for more than six months prior to
the date of exercise, or (b) by any combination of the foregoing methods of
payment, including a partial tender in cash and a partial tender in
nonforfeitable, nonrestricted Common Shares. Nonforfeitable, nonrestricted
Common Shares that are transferred by the Optionee in payment of all or any part
of the Option Price shall be valued on the basis of their fair market value per
Common Share, as determined by the Board. As a further condition precedent to
the exercise of this Option, the Optionee shall comply with all regulations and
requirements of any regulatory authority having control of, or supervision over,
the issuance of Common Shares and in connection therewith shall execute any
documents which the Board or a Committee thereof shall in its sole discretion
deem necessary or advisable. The requirement of payment in cash shall be deemed
satisfied if the Optionee makes arrangements that are satisfactory to the
Company with a bank or broker that is a member of the National Association of
Securities Dealers, Inc. to sell on the exercise date a sufficient number of
Optioned Shares that are being purchased pursuant to the exercise, so that the
net proceeds of the sale transaction will at least equal the amount of the
aggregate Option Price plus payment of any applicable withholding taxes and
interest amount, and pursuant to which the bank or broker undertakes to deliver
to the Company the amount of the aggregate Option Price plus payment of any
applicable withholding taxes and interest at the "applicable Federal rate"
within the meaning of that term under Section 1274 of the Code, or any successor
provision thereto, for the period from the date of exercise to the date of
payment, on a date satisfactory to the Company, but not later than the date on
which the sale transaction will settle in the ordinary course of business.
6. Termination of Agreement. This Agreement and the Option granted hereby
shall terminate automatically and without further notice on the earliest of the
following dates:
(a) One year after the Optionee's death or permanent and total
disability, if the Optionee dies or becomes permanently and totally disabled
while in the employ of the Company
(b) ___________________ (______) __________ after the Optionee's
retirement under a retirement plan of the Company or one of its Subsidiaries at
or after the earliest voluntary retirement age provided for in such retirement
plan or retirement at any earlier age with the consent of the Board;
(c) Except as provided on a case-by-case basis, thirty (30) calendar
days after the Optionee ceases to be an employee, advisor or consultant of the
Company and its Subsidiaries for any reason other than as described in Section
6(a) or 6(b) hereof; or
(d) ____ years from the Date of Grant.
In the event that the Optionee's employment is terminated for cause, this
Agreement shall terminate at the time of such termination notwithstanding any
other provision of this Agreement. For purposes of this provision, "cause" shall
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mean the Optionee shall have committed prior to termination of employment any of
the following acts:
(i) an intentional act of fraud, embezzlement, theft, or any other
material violation of law in connection with the Optionee's duties or in
the course of the Optionee's employment;
(ii) intentional wrongful damage to material assets of the Company;
(iii) intentional wrongful disclosure of material confidential
information of the Company;
(iv) intentional wrongful engagement in any competitive activity that
would constitute a material breach of the duty of loyalty; or
(v) intentional breach of any stated material employment policy of the
Company.
This Agreement shall not be exercisable for any number of Optioned Shares in
excess of the number of Optioned Shares for which this Agreement is then
exercisable, pursuant to Section 3 or 7 hereof, on the date of termination of
employment. For the purposes of this Agreement, the continuous employment of the
Optionee with the Company shall not be deemed to have been interrupted, and the
Optionee shall not be deemed to have ceased to be an employee of the Company, by
reason of the transfer of his or her employment among the Company and its
Subsidiaries or a leave of absence of not more than thirty (30) days unless
otherwise approved by the Board.
7. Acceleration of Option and Effect of Certain Transactions.
(a) Notwithstanding anything herein to the contrary, as of the effective
date of any Sale Event (as defined below), any portion of this Option that is
not then exercisable shall become exercisable in full.
(b) In the case of (i) the dissolution or liquidation of the Company,
(ii) the sale of all or substantially all of the assets of the Company on a
consolidated basis to another person or entity, (iii) a merger, reorganization
or consolidation in which the holders of the Company's outstanding voting power
immediately prior to such transaction do not own a majority of the outstanding
voting power of the surviving or resulting entity immediately upon completion of
such transaction, (iv) the sale of all of the outstanding stock of the Company
to an unrelated person or entity or (v) any other transaction where the owners
of the Company's outstanding voting power prior to such transaction do not own
at least a majority of the outstanding voting power of the relevant entity after
the transaction (in each case, a "Sale Event"), this Option shall terminate on
the effective date of such transaction or event, unless provision is made in
such transaction in the sole discretion of the parties thereto for the
assumption of this Option or the substitution for this Option of a new stock
option of the successor person or entity or a parent or subsidiary thereof, with
appropriate adjustment as to the number and kind of shares and the per share
exercise price, as provided in Section 13 of this Agreement. In the event of any
transaction which will result in such termination, the Company shall give to the
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Optionee written notice thereof at least ten (10) days prior to the effective
date of such transaction. Until such effective date, the Optionee may exercise
any portion of this Option which is or becomes vested on or prior to such
effective date, but after such effective date the Optionee may not exercise this
Option unless it is assumed or substituted by the successor entity (or a parent
or subsidiary thereof) as provided above.
8. Company's Right of Repurchase.
(a) Exercise of Right. The Company shall have the right (the "Repurchase
Right") to repurchase some or all of the Option Shares which the Optionee has
elected to exercise from the Optionee, upon the occurrence of any of the events
specified in Section 8(b) below (the "Repurchase Event"). The Repurchase Right
may be exercised by the Company within 180 days following the date of such event
(the "Repurchase Period"). The Repurchase Right shall be exercised by the
Company by giving the holder written notice on or before the last day of the
Repurchase Period of its intention to exercise the Repurchase Right, and,
together with such notice, tendering to the holder an amount equal to the fair
market value of the shares, determined as provided in Section 8(c). The Company
may assign the Repurchase Right to one or more persons. Upon exercise of the
Repurchase Right in the manner provided in this Section 8(a), the Optionee shall
deliver to the Company the stock certificate or certificates representing the
Option Shares being repurchased, duly endorsed and free and clear of any and all
liens, charges and encumbrances.
If Option Shares are not purchased under the Repurchase Right, the
Optionee and his or her successor in interest, if any, will hold any such shares
in his or her possession subject to all of the provisions of this Section 8 and
Section 9 hereof.
(b) Company's Right to Exercise Repurchase Right. The Company shall have
the Repurchase Right in the event that any of the following events shall occur:
(i) The termination of the Optionee's employment with the Company and
its Subsidiaries for any reason whatsoever, regardless of the circumstances
thereof, and including without limitation upon death, disability,
retirement, discharge or resignation for any reason, whether voluntary or
involuntarily; or
(ii) The (x) filing of a voluntary petition under any bankruptcy or
insolvency law, or a petition for the appointment of a receiver or the
making of an assignment for the benefit of creditors, with respect to the
Optionee, or (y) the Optionee being subjected involuntarily to a petition
or assignment or to an attachment or other legal or equitable interest with
respect to his or her assets, which involuntary petition or assignment or
attachment is not discharged within 60 days after its date or (z) the
Optionee being subject to a transfer of Option Shares by operation of law,
except by reason of death.
(c) Determination of Fair Market Value. For purposes of this Section 8,
the Fair Market Value of the Option Shares shall be determined as of the date of
the Repurchase Event by the Board.
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(d) Expiration of Company's Repurchase Right. The Repurchase Right shall
remain in effect until the closing of an Initial Public Offering.
9. Company's Right of First Refusal.
(a) Exercise of Right. If at a time other than within the period
specified in Section 8(a) the Optionee desires to transfer all or any part of
the Option Shares to any person other than the Company (an "Offeror"), the
Optionee shall: (i) obtain in writing an irrevocable and unconditional bona fide
offer (the "Offer") for the purchase thereof from the Offeror; and (ii) give
written notice (the "Option Notice") to the Company setting forth the Optionee's
desire to transfer such shares, which Option Notice shall be accompanied by a
photocopy of the Offer and shall set forth the name and address of the Offeror
and the price and terms of the Offer. Upon receipt of the Option Notice, the
Company shall have an assignable option to purchase any or all of such Option
Shares (the "Company Option Shares") specified in the Option Notice, such option
to be exercisable by giving, within 10 days after receipt of the Option Notice,
a written counter notice to the Optionee. If the Company elects to purchase any
or all of such Company Option Shares, it shall be obligated to purchase, and the
Optionee shall be obligated to sell to the Company, such Company Option Shares
at the price and terms indicated in the Offer within 30 days from the date of
delivery by the Company of such counter notice.
(b) Sale of Option Shares to Offeror. The Optionee may, for 60 days
after the expiration of the 10-day option period as set forth in Section 9(a),
sell to the Offeror, pursuant to the terms of the Offer, any or all of such
Company Option Shares not purchased or agreed to be purchased by the Company or
its assignee. If any or all of such Company Option Shares are not sold pursuant
to an Offer within the time permitted above, the unsold Company Option Shares
shall remain subject to the terms of this Section 9.
(c) Adjustments for Changes in Capital Structure. If there shall be any
change in the Common Stock of the Company through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, combination or
exchange of shares, or the like, the restrictions contained in this Section 9
shall apply with equal force to additional and/or substitute securities, if any,
received by the Optionee in exchange for, or by virtue of his or her ownership
of, Option Shares.
(d) Failure to Deliver Option Shares. If the Optionee fails or refuses
to deliver on a timely basis duly endorsed certificates representing Company
Option Shares to be sold to the Company or its assignee pursuant to this Section
9, the Company shall have the right to deposit the purchase price for such
Company Option Shares in a special account with any bank or trust company,
giving notice of such deposit to the Optionee, whereupon such Company Option
Shares shall be deemed to have been purchased by the Company. All such monies
shall be held by the bank or trust company for the benefit of the Optionee. All
monies deposited with the bank or trust company but remaining unclaimed for two
years after the date of deposit shall be repaid by the bank or trust company to
the Company on demand, and the Optionee shall thereafter look only to the
Company for payment. The Company may place a legend on any certificate for
Option Shares delivered to the Optionee reflecting the restrictions on transfer
provided in this Section 9.
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(e) Expiration of Company's Right of First Refusal. The first refusal
rights of the Company set forth above shall remain in effect until the closing
of an Initial Public Offering.
10. No Employment Contract. Nothing contained in this Agreement shall
confer upon the Optionee any right with respect to continuance of employment by
the Company, nor limit or affect in any manner the right of the Company to
terminate the employment or adjust the compensation of the Optionee.
11. Taxes and Withholding. To the extent that the Company shall be required
to withhold any federal, state, local or foreign taxes in connection with the
exercise of the Option, and the amounts available to the Company for such
withholding are insufficient, it shall be a condition to the exercise of the
Option that the Optionee shall pay such taxes or make provisions that are
satisfactory to the Company for the payment thereof. The Company will pay any
and all issue and other taxes in the nature thereof which may be payable by the
Company in respect of any issue or delivery upon a purchase pursuant to this
Option.
12. Compliance with Law. Notwithstanding any other provision of this
Agreement, the Option shall not be exercisable if the exercise thereof would
result in a violation of any applicable federal or state securities law.
13. Adjustments. The Board may make or provide for such adjustments in the
Option Price and in the number or kind of shares or other securities covered by
outstanding Options as the Board in its sole discretion may in good faith
determine to be equitably required in order to prevent dilution or enlargement
of the rights of Optionees that would otherwise result from any (a) stock
dividend, stock split, combination of shares, recapitalization or other change
in the capital structure of the Company, (b) merger, consolidation, separation,
reorganization, partial or complete liquidation, issuance of rights or warrants
to purchase stock or (c) other corporate transaction or event having an effect
similar to any of the foregoing. Moreover, in the event of any such transaction
or event, the Board, in its discretion, may provide in substitution for any or
all outstanding Options under this Plan such alternative consideration as it, in
good faith, may determine to be equitable in the circumstances and may require
in connection therewith the surrender of all Options so replaced.
14. Availability of Common Shares. The Company shall at all times until the
expiration of the Option reserve and keep available, either in its treasury or
out of its authorized but unissued Common Shares, the full number of Optioned
Shares deliverable upon the exercise of this Option.
15. Lock-Up Agreement. The Optionee agrees that, if requested by the
Company in connection with an Initial Public Offering, the Optionee will not
sell, offer for sale or otherwise dispose of the Optioned Shares for such period
of time as is determined by the Board, provided that at least of the majority of
the Company's Directors and officers who hold Option Rights or Common Shares at
such time are similarly bound.
16. [Mandatory Notice of Disqualifying Disposition of Optioned Shares
Acquired Under An Incentive Stock Option. Without limiting any other provision
hereof, the Optionee hereby agrees that if the Optionee disposes (whether by
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sale, exchange, gift or otherwise) of any of the Optioned Shares within two (2)
years of the Date of Grant or within one (1) year after the transfer of such
share or shares to the Optionee, the Optionee shall notify the Company of such
disposition in writing within thirty (30) days from the date of such
disposition. Such written notice shall state the principal terms of such
disposition and the type and amount of the consideration received for such share
or shares by the Optionee in connection therewith.]
17. Amendments. Any amendment to the Plan shall be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable
hereto; provided, however, that no amendment shall adversely affect the rights
of the Optionee under this Agreement without the Optionee's consent.
18. Severability. In the event that one or more of the provisions of this
Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.
19. Relation to Plan. This Agreement is subject to the terms and conditions
of the Plan. In the event of any inconsistency between the provisions of this
Agreement and the Plan, the Plan shall govern. Capitalized terms used herein
without definition shall have the meanings assigned to them in the Plan. The
Board acting pursuant to the Plan, as constituted from time to time, shall,
except as expressly provided otherwise herein, have the right to determine any
questions which arise in connection with this Option or its exercise.
20. Successors and Assigns. Without limiting Section 4 hereof, the
provisions of this Agreement shall inure to the benefit of, and be binding upon,
the successors, administrators, heirs, legal representatives and assigns of the
Optionee, and the successors and assigns of the Company.
21. Governing Law. The interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Ohio.
22. Notices. Any notice to the Company provided for herein shall be in
writing to the Company, marked Attention: President, and any notice to the
Optionee shall be addressed to the Optionee at his or her address on file with
the Company. Any written notice required to be given to the Company shall be
deemed to be duly given only when actually received by the Company.
END OF AGREEMENT
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