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QUENTRA NETWORKS, INC. 2000 EQUITY INCENTIVE PLAN
NOTICE OF STOCK OPTION AWARD
Participant's Name and Address:
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You have been granted an award, subject to the terms and conditions of this
Notice of Stock Option Award (the "Notice"), the Quentra Networks, Inc. 2000
Equity Incentive Plan, as amended from time to time (the "Plan") and the Stock
Option Award Agreement (the "Award Agreement") attached hereto, as follows.
Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Notice.
Award Number:
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Date of Award:
Vesting Commencement Date:
Exercise Price per Share:
Total Number of Shares Subject to the Option:
Total Exercise Price:
Type of Option: |X| Nonstatutory Stock Option
|_| Incentive Stock Option
Expiration Date:
Post-Termination Exercise Period: Three (3) Months
Vesting Schedule:
Subject to Participant's employment or service and other limitations set
forth in this Notice, the Plan and the Award Agreement, the Option may be
exercised, in whole or in part, in accordance with the following schedule:
33% of the Shares subject to the Option shall vest twelve months after the
Vesting Commencement Date, and an additional 33% of the Shares subject to the
Option shall vest on each yearly anniversary of the Vesting Commencement Date
thereafter.
During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall cease after the leave of absence exceeds a
period of ninety (90) days. Vesting of the Option shall resume upon the
Participant's termination of the leave of absence and return to service to the
Company or a subsidiary.
In the event of the Participant's change in status from employee to
consultant or from an employee whose customary employment is 20 hours or more
per week to an employee
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whose customary employment is fewer than 20 hours per week, vesting of the
Option shall continue only to the extent determined by the Committee as of such
change in status.
In the event of termination of the Participant's employment or service for
cause, the Participant's right to exercise the Option shall terminate
concurrently with the termination of the Participant's employment or service.
IN WITNESS WHEREOF, the Company and the Participant have executed this
Notice and agree that the Option is to be governed by the terms and conditions
of this Notice, the Plan, and the Award Agreement.
Quentra Networks, Inc.,
a Delaware corporation
By:
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Title:
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THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION
SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE PARTICIPANT'S EMPLOYMENT OR
SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR
ACQUIRING SHARES HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS NOTICE, THE AWARD AGREEMENT, OR THE PLAN SHALL CONFER UPON
THE PARTICIPANT ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF
PARTICIPANT'S EMPLOYMENT OR SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE
PARTICIPANT'S RIGHT OR THE RIGHT OF THE PARTICIPANT'S EMPLOYER TO TERMINATE
PARTICIPANT'S EMPLOYMENT OR SERVICE, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT
NOTICE. THE PARTICIPANT ACKNOWLEDGES THAT UNLESS THE PARTICIPANT HAS A WRITTEN
EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, PARTICIPANT'S STATUS IS
AT WILL.
The Participant acknowledges receipt of a copy of the Plan and the Award
Agreement, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts the Option subject to all of the terms
and provisions hereof and thereof. The Participant has reviewed this Notice, the
Plan, and the Award Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Notice, and fully
understands all provisions of this Notice, the Plan and the Award Agreement. The
Participant hereby agrees that all disputes arising out of or relating to this
Notice, the Plan and the Award Agreement shall be resolved in accordance with
Section 13 of the Award Agreement. The Participant further agrees to notify the
Company upon any change in the residence address indicated in this Notice.
Dated: Signed:
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Participant
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Award Number:
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QUENTRA NETWORKS, INC. 2000 EQUITY INCENTIVE PLAN
STOCK OPTION AWARD AGREEMENT
1. Grant of Option. Quentra Networks, Inc., a Delaware corporation (the
"Company"), hereby grants to the Participant (the "Participant") named in the
Notice of Stock Option Award (the "Notice"), an option (the "Option") to
purchase the Total Number of Shares of Common Stock subject to the Option (the
"Shares") set forth in the Notice, at the Exercise Price per Share set forth in
the Notice (the "Exercise Price") subject to the terms and provisions of the
Notice, this Stock Option Award Agreement (the "Award Agreement") and the
Company's 2000 Equity Incentive Plan, as amended from time to time (the "Plan"),
which are incorporated herein by reference. Unless otherwise defined herein, the
terms defined in the Plan shall have the same defined meanings in this Award
Agreement.
If designated in the Notice as an Incentive Stock Option, the Option is
intended to qualify as an Incentive Stock Option as defined in Section 422 of
the Code. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to Options designated as Incentive
Stock Options which become exercisable for the first time by the Participant
during any calendar year (under all plans of the Company or any parent or
subsidiary) exceeds $100,000, such excess Options, to the extent of the Shares
covered thereby in excess of the foregoing limitation, shall be treated as
Nonstatutory Stock Options. For this purpose, Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the date the Option with respect
to such Shares is awarded.
2. Exercise of Option.
(a) Right to Exercise. The Option shall be exercisable during its term
in accordance with the Vesting Schedule set out in the Notice and with the
applicable provisions of the Plan and this Award Agreement. No partial
exercise of the Option may be for less than the lesser of five percent (5%)
of the total number of Shares subject to the Option or the remaining number
of Shares subject to the Option. In no event shall the Company issue
fractional Shares.
(b) Method of Exercise. The Option shall be exercisable only by
delivery of an Exercise Notice (attached as Exhibit A) which shall state
the election to exercise the Option, the whole number of Shares in respect
of which the Option is being exercised, such other representations and
agreements as to the holder's investment intent with respect to such Shares
and such other provisions as may be required by the Committee. The Exercise
Notice shall be signed by the Participant and shall be delivered in person,
by certified mail, or by such other method as determined from time to time
by the Committee to the Company accompanied by payment of the Exercise
Price. The Option shall be deemed to be exercised upon receipt by the
Company of such written notice accompanied by the Exercise Price, which, to
the extent selected, shall be deemed to be satisfied by use of the
broker-dealer sale and remittance procedure to pay the Exercise Price
provided in Section 3(d), below.
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(c) Acceleration. Notwithstanding Section 7(g) of the Plan, upon a
Change in Control, the right to exercise the Option shall not be
accelerated.
(d) Taxes. The Company and its subsidiaries are authorized to withhold
from any Option granted or to be settled, any payment relating to an Option
under the Plan, including from a distribution of Shares, or any payroll or
other payment to a Participant, amounts of withholding and other taxes due
or potentially payable in connection with any transaction involving an
Option, and to take such other action as the Committee may deem advisable
to enable the Company and Participants to satisfy obligations for the
payment of withholding taxes and other tax obligations relating to any
Option. This authority shall include authority to withhold or receive
Shares or other property and to make cash payments in respect thereof in
satisfaction of a Participant's tax obligations.
3. Method of Payment. Payment of the Exercise Price shall be by any of the
following, or a combination thereof, as determined by the Committee; provided,
however, that such exercise method does not then violate any applicable federal
and state laws, rules and regulations; and, provided further, that the portion
of the Exercise Price equal to the par value of the Shares must be paid in cash
or other legal consideration permitted by the Delaware General Corporation Law:
(a) cash;
(b) check;
(c) surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Committee may require (including
withholding of Shares otherwise deliverable upon exercise of the Option)
which have a Fair Market Value on the date of surrender or attestation
equal to the aggregate Exercise Price of the Shares as to which the Option
is being exercised (but only to the extent that such exercise of the Option
would not result in an accounting compensation charge with respect to the
Shares used to pay the exercise price); or
(d) payment through a broker-dealer sale and remittance procedure
pursuant to which the Participant (i) shall provide written instructions to
a Company designated brokerage firm to effect the immediate sale of some or
all of the purchased Shares and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased Shares and (ii) shall
provide written directives to the Company to deliver the certificates for
the purchased Shares directly to such brokerage firm in order to complete
the sale transaction.
4. Restrictions on Exercise. The Option may not be exercised if the
issuance of the Shares subject to the Option upon such exercise would constitute
a violation of any applicable federal and states laws, rules and regulations. In
addition, the Option, if an Incentive Stock Option, may not be exercised until
such time as the Plan has been approved by the stockholders of the Company.
5. Termination or Change of Employment or Service. In the event the
Participant's employment or service terminates, other than for cause, the
Participant may, to
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the extent otherwise so entitled at the date of such termination (the
"Termination Date"), exercise the Option during the Post-Termination Exercise
Period. In the event of termination of the Participant's employment or service
for cause, the Participant's right to exercise the Option shall, except as
otherwise determined by the Committee, terminate concurrently with the
termination of the Participant's employment or service. In no event shall the
Option be exercised later than the Expiration Date set forth in the Notice. In
the event of the Participant's change in status from employee, director or
consultant to any other status of employee, director or consultant, the Option
shall remain in effect and, except to the extent otherwise determined by the
Committee, continue to vest; provided, however, that with respect to any
Incentive Stock Option that shall remain in effect after a change in status from
employee to director or consultant, such Incentive Stock Option shall cease to
be treated as an Incentive Stock Option and shall be treated as a Nonstatutory
Stock Option on the day three (3) months and one (1) day following such change
in status. Except as provided in Sections 6 and 7 below, to the extent that the
Participant is not entitled to exercise the Option on the Termination Date, or
if the Participant does not exercise the Option within the Post-Termination
Exercise Period, the Option shall terminate.
6. Disability of Participant. In the event the Participant's employment or
service terminates as a result of his or her disability, the Participant may,
but only within twelve (12) months from the Termination Date (and in no event
later than the Expiration Date), exercise the Option to the extent he or she was
otherwise entitled to exercise it on the Termination Date; provided, however,
that if such disability is not a "disability" as such term is defined in Section
22(e)(3) of the Code and the Option is an Incentive Stock Option, such Incentive
Stock Option shall cease to be treated as an Incentive Stock Option and shall be
treated as a Nonstatutory Stock Option on the day three (3) months and one (1)
day following the Termination Date. To the extent that the Participant is not
entitled to exercise the Option on the Termination Date, or if the Participant
does not exercise the Option to the extent so entitled within the time specified
herein, the Option shall terminate.
7. Death of Participant. In the event of the termination of the
Participant's employment or service as a result of his or her death, or in the
event of the Participant's death during the Post-Termination Exercise Period or
during the twelve (12) month period following the Participant's termination of
employment or service as a result of his or her disability, the Participant's
estate, or a person who acquired the right to exercise the Option by bequest or
inheritance, may exercise the Option, but only to the extent the Participant
could exercise the Option at the date of termination, within twelve (12) months
from the date of death (but in no event later than the Expiration Date). To the
extent that the Participant is not entitled to exercise the Option on the date
of death, or if the Option is not exercised to the extent so entitled within the
time specified herein, the Option shall terminate.
8. Transferability of Option. Except as otherwise provided by the
Committee, Options and other rights of Participants under the Plan may not be
transferred to third parties, pledged, mortgaged, hypothecated, or otherwise
encumbered, and may note subject to claims of creditors, except as designated by
the Participant by will or by the laws of descent and distribution (or pursuant
to a Beneficiary designation).
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9. Term of Option. The Option may be exercised no later than the Expiration
Date set forth in the Notice or such earlier date as otherwise provided herein.
10. Tax Consequences. Set forth below is a brief summary as of the date of
this Award Agreement of some of the federal tax consequences of exercise of the
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE PARTICIPANT SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of Incentive Stock Option. If the Option qualifies as an
Incentive Stock Option, there will be no regular federal income tax
liability upon the exercise of the Option, although the excess, if any, of
the Fair Market Value of the Shares on the date of exercise over the
Exercise Price will be treated as income for purposes of the alternative
minimum tax for federal tax purposes and may subject the Participant to the
alternative minimum tax in the year of exercise.
(b) Exercise of Incentive Stock Option Following Disability. If the
Participant's employment or service terminates as a result of disability
that is not total and permanent disability as defined in Section 22(e)(3)
of the Code, to the extent permitted on the date of termination, the
Participant must exercise an Incentive Stock Option within three (3) months
of such termination for the Incentive Stock Option to be qualified as an
Incentive Stock Option.
(c) Exercise of Nonstatuory Stock Option. On exercise of a
Nonstatutory Stock Option , the Participant will be treated as having
received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price. If the Participant is an employee or a
former employee, the Company will be required to withhold from the
Participant's compensation or collect from the Participant and pay to the
applicable taxing authorities an amount in cash equal to a percentage of
this compensation income at the time of exercise, and may refuse to honor
the exercise and refuse to deliver Shares if such withholding amounts are
not delivered at the time of exercise.
(d) Disposition of Shares. In the case of a Nonstatutory Stock Option,
if Shares are held for more than one year, any gain realized on disposition
of the Shares will be treated as long-term capital gain for federal income
tax purposes and subject to tax at a maximum rate of 20%. In the case of an
Incentive Stock Option, if Shares transferred pursuant to the Option are
held for more than one year after receipt of the Shares and are disposed
more than two years after the Date of Award, any gain realized on
disposition of the Shares also will be treated as capital gain for federal
income tax purposes and subject to the same tax rates and holding periods
that apply to Shares acquired upon exercise of a Nonstatutory Stock Option
. If Shares purchased under an Incentive Stock Option are disposed of prior
to the expiration of such one-year or two-year periods, any gain realized
on such disposition will be treated as compensation income (taxable at
ordinary income rates) to the extent of the difference between the Exercise
Price and the lesser of (i) the Fair Market Value of the Shares on the date
of exercise, or (ii) the sale price of the Shares.
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11. Entire Agreement; Amendment; Governing Law. The Notice, the Plan and
this Award Agreement constitute the entire agreement of the parties with respect
to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and the Participant with respect to
the subject matter hereof, and may not be modified adversely to the
Participant's interest except by means of a writing signed by the Company and
the Participant. Notwithstanding the foregoing, the Board may make any such
amendment to cause the Plan or an Option to qualify for an exemption under Rule
16b-3 without the consent of a Participant. Nothing in the Notice, the Plan and
this Award Agreement (except as expressly provided therein) is intended to
confer any rights or remedies on any persons other than the parties. The Notice,
the Plan and this Award Agreement are to be construed in accordance with and
governed by the internal laws of the State of Delaware without giving effect to
any choice of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of Delaware to the rights
and duties of the parties. Should any provision of the Notice, the Plan or this
Award Agreement be determined by a court of law to be illegal or unenforceable,
such provision shall be enforced to the fullest extent allowed by law and the
other provisions shall nevertheless remain effective and shall remain
enforceable.
12. Headings. The captions used in the Notice and this Award Agreement are
inserted for convenience and shall not be deemed a part of the Option for
construction or interpretation.
13. Dispute Resolution The provisions of this Section 13 shall be the
exclusive means of resolving disputes arising out of or relating to the Notice,
the Plan and this Award Agreement. The Company, the Participant, and the
Participant's assignees pursuant to Section 8 (the "parties") shall attempt in
good faith to resolve any disputes arising out of or relating to the Notice, the
Plan and this Award Agreement by negotiation between individuals who have
authority to settle the controversy. Negotiations shall be commenced by either
party by notice of a written statement of the party's position and the name and
title of the individual who will represent the party. Within thirty (30) days of
the written notification, the parties shall meet at a mutually acceptable time
and place, and thereafter as often as they reasonably deem necessary, to resolve
the dispute. If the dispute has not been resolved by negotiation, the parties
agree that any suit, action, or proceeding arising out of or relating to the
Notice, the Plan or this Award Agreement shall be brought in the United States
District Court for the Central District of California (or should such court lack
jurisdiction to hear such action, suit or proceeding, in a California state
court in the county of Los Angeles, California) and that the parties shall
submit to the jurisdiction of such court. The parties irrevocably waive, to the
fullest extent permitted by law, any objection the party may have to the laying
of venue for any such suit, action or proceeding brought in such court. THE
PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF
ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this
Section 13 shall for any reason be held invalid or unenforceable, it is the
specific intent of the parties that such provisions shall be modified to the
minimum extent necessary to make it or its application valid and enforceable.
14. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United
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States mail by certified mail (if the parties are within the United States) or
upon deposit for delivery by an internationally recognized express mail courier
service (for international delivery of notice), with postage and fees prepaid,
addressed to the other party at its address as shown beneath its signature in
the Notice, or to such other address as such party may designate in writing from
time to time to the other party.
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EXHIBIT A
QUENTRA NETWORKS, INC. 2000 EQUITY INCENTIVE PLAN
EXERCISE NOTICE
Quentra Networks, Inc.
1640 S. Sepulveda Blvd., Suite 222
Los Angeles, California 90025
Attention: Corporate Secretary
1. Exercise of Option. Effective as of today, ______________, ___ the
undersigned (the "Participant") hereby elects to exercise the Participant's
option to purchase ___________ shares of the Common Stock (the "Shares") of
Quentra Networks, Inc. (the "Company") under and pursuant to the Company's 2000
Equity Incentive Plan, as amended from time to time (the "Plan") and the [ ]
Incentive [ ] Nonstatutory Stock Option Award Agreement (the "Award Agreement")
and Notice of Stock Option Award (the "Notice") dated ______________, ________.
Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Exercise Notice.
2. Representations of the Participant. The Participant acknowledges that
the Participant has received, read and understood the Notice, the Plan, and the
Award Agreement and agrees to abide by and be bound by their terms and
conditions.
3. Rights as Stockholder. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 4 of the Plan.
4. Delivery of Payment. The Participant herewith delivers to the Company
the full Exercise Price for the Shares, which, to the extent selected, shall be
deemed to be satisfied by use of the broker-dealer sale and remittance procedure
to pay the Exercise Price provided in Section 3(d) of the Award Agreement.
5. Tax Consultation. The Participant understands that the Participant may
suffer adverse tax consequences as a result of the Participant's purchase or
disposition of the Shares. The Participant represents that the Participant has
consulted with any tax consultants the Participant deems advisable in connection
with the purchase or disposition of the Shares and that the Participant is not
relying on the Company for any tax advice.
6. Taxes. The Participant agrees to satisfy all applicable federal, state
and local income and employment tax withholding obligations and herewith
delivers to the Company
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the full amount of such obligations or has made arrangements acceptable to the
Company to satisfy such obligations. In the case of an Incentive Stock Option,
the Participant also agrees, as partial consideration for the designation of the
Option as an Incentive Stock Option, to notify the Company in writing within
thirty (30) days of any disposition of any shares acquired by exercise of the
Option if such disposition occurs within two (2) years from the Date of Award or
within one (1) year from the date the Shares were transferred to the
Participant. If the Company is required to satisfy any federal, state or local
income or employment tax withholding obligations as a result of such an early
disposition, the Participant agrees to satisfy the amount of such withholding in
a manner that the Committee prescribes.
7. Successors and Assigns. The Company may assign any of its rights under
this Exercise Notice to single or multiple assignees, and this agreement shall
inure to the benefit of the successors and assigns of the Company. This Exercise
Notice shall be binding upon the Participant and his or her heirs, executors,
administrators, successors and assigns.
8. Headings. The captions used in this Exercise Notice are inserted for
convenience and shall not be deemed a part of this agreement for construction or
interpretation.
9. Dispute Resolution. The provisions of Section 13 of the Award Agreement
shall be the exclusive means of resolving disputes arising out of or relating to
this Exercise Notice.
10. Governing Law; Severability. This Exercise Notice is to be construed in
accordance with and governed by the internal laws of the State of Delaware
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
Delaware to the rights and duties of the parties. Should any provision of this
Exercise Notice be determined by a court of law to be illegal or unenforceable,
such provision shall be enforced to the fullest extent allowed by law and the
other provisions shall nevertheless remain effective and shall remain
enforceable.
11. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, (if the parties are within
the United States) or upon deposit for delivery by an internationally recognized
express mail courier service (for international delivery of notice) with postage
and fees prepaid, addressed to the other party at its address as shown below
beneath its signature, or to such other address as such party may designate in
writing from time to time to the other party.
12. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this agreement.
13. Entire Agreement. The Notice, the Plan, and the Award Agreement are
incorporated herein by reference, and together with this Exercise Notice
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Participant with respect to the subject matter
hereof, and may not be modified adversely to the Participant's interest except
by means of a writing signed by the Company and the Participant.
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Notwithstanding the foregoing, the Board may make any such amendment to cause
the Plan or an Option to qualify for an exemption under Rule 16b-3 without the
consent of a Participant. Nothing in the Notice, the Plan, the Award Agreement
and this Exercise Notice (except as expressly provided therein) is intended to
confer any rights or remedies on any persons other than the parties.
Submitted by: Accepted by:
PARTICIPANT: QUENTRA NETWORKS, INC.
By:
Title:
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(Signature)
Address: Address:
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