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Exhibit
10.3
FORM
NON-QUALIFIED STOCK OPTION
AGREEMENT
Pursuant To
The
AMENDED AND RESTATED
INTELLON CORPORATION
2000 EMPLOYEE INCENTIVE
PLAN
Name of Participant:
Date of Grant:
Number of Shares:
Exercise Price per Share:
This NON-QUALIFIED STOCK
OPTION AGREEMENT (the “Agreement”) is made as of
_______________, between Intellon Corporation, a Delaware
corporation (the “Company”), and the above-named
individual, an employee of the Company or one of its subsidiaries
(the “Employee”), to record the granting of a
non-qualified stock option pursuant to the Company’s 2000
Employee Incentive Plan (the “Plan”).
1. Grant of Option .
In accordance with the Plan, the Company hereby grants to the
Employee, subject to the terms and conditions of the Plan and this
Agreement, the option to purchase from the Company an aggregate of
_____________ shares of Common Stock ($.01 par value) of the
Company at the exercise price of $____________ per share, such
option to be exercised as hereinafter provided. The parties intend
this option to be treated as a non-qualified stock option
(“NQSO”) under the terms of the Internal Revenue Code
of 1986, as amended (the “Code”).
2. Expiration Date .
This option shall expire on ________________ (the “Expiration
Date”). This date shall not be more than 10 years from the
date of grant (5 years for a 10-percent shareholder).
3. Exercise of Option
. No shares may be purchased under this option and the option shall
not be exercisable until the option has vested pursuant to the
vesting schedule described in the succeeding paragraph:
Under the vesting schedule,
the Employee will vest in % of the
shares of Common Stock subject hereto on the
-year anniversary of the date of grant, provided that the Employee
is still employed by the Company or any subsidiary corporation of
the Company on such anniversary date. [ Spell out vesting
] In the event of a “Change in Control” as defined
in the Plan, this option shall become vested in accordance with the
terms of the Plan. This option shall also be subject to accelerated
vesting under the provisions of Section 5 of this
Agreement.
Notwithstanding the foregoing
or any other provisions of the Plan or this Agreement, this option
may not be exercised after the Expiration Date and is not
exercisable at any time by any person if the Employee at the time
of exercise or at any time following the date of grant has, in the
sole discretion of the Committee, (i) worked for or on behalf
of a competitor of the Company or any affiliated company or
otherwise engaged in competition against the Company or any
affiliated company or (ii) engaged in any other activity
harmful to the Company in any way.
Any exercise of this option
shall be made in a writing duly executed and delivered to the
Company specifying the number of shares as to which the option is
being exercised in the form of the Form for Exercise of Option
attached hereto and accompanied by the payment of the exercise
price and any applicable taxes as set forth in Section 4.
Schedule I of this Agreement shall be made available to the
Company at the time of exercise for notation of any partial
exercise.
4. Payment of Exercise
Price . On the date of any exercise of this option, the
exercise price of the shares as to which this option is being
exercised shall be due and payable in full. Payment shall be made
in cash or by certified check or by delivery of shares of the
Common Stock of the Company beneficially owned by the optionee,
duly assigned to the Company with the assignment guaranteed by a
bank, trust company or member firm of the New York Stock Exchange,
or by a combination of the foregoing. Any such shares so delivered
shall be deemed to have a value per share equal to the fair market
value of the shares on such date and must have been held by the
Employee for more than six months. For this purpose, fair market
value shall equal: (i) the closing price of the
Company’s Common Stock on the national stock exchange on
which such stock is traded on the date the option is exercised, or
as otherwise reported by The Nasdaq Stock Market, Inc.;
(ii) if there was no trading in such stock on the date of such
exercise, the closing price on the last preceding day on which
there was such trading; or (iii) if the Common Stock is not
traded on a national stock exchange, or otherwise in a medium
operated by The Nasdaq Stock Market, Inc., an amount determined by
the Committee to be the fair market value of such
shares.
The Employee shall also remit
to the Company the amount needed to satisfy any federal, state or
local withholding taxes that may arise or be applicable as the
result of an exercise under this option. No certificate will be
issued to the Employee with respect to the exercised shares until
such withholding obligations have been satisfied to the complete
satisfaction of the Company.
5. Exercise Upon Death or
Termination of Employment .
(a) If the employment of the
Employee with the Company or any subsidiary corporation of the
Company terminates for any reason other than death, permanent
physical disability (as determined by the Committee), or
“cause” (as defined under the Plan), this option to the
extent vested may be exercised at any time prior to the earlier of
the Expiration Date or the expiration of three months after the
date of termination, but only if, and to the extent that, the
Employee was entitled to exercise this option at the time of
termination. If after termination of employment, but before the
earlier of the expiration of the option or the expiration of the
three-month period referred to in this Section 5(1), the
Employee dies, this option shall continue to be exercisable only
for the remainder of either of such periods (whichever is shorter)
and the 12 months period referred to in Section 5(2) below
shall not be applicable.
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(b) If the Employee’s
employment with the Company or any subsidiary corporation of the
Company terminates by reason of permanent physical disability (as
determined by the Committee) or death, this option may be exercised
by the Employee or the Employee’s legal representative, heir
or devisee, as appropriate, at any time prior to the earlier of the
Expiration Date or the expiration of 12 months following the date
employment terminated due to such disability or death but only if,
and to the extent that, the Employee was entitled to exercise this
option at the time of termination. If the employment of the
Employee terminates by reason of death or permanent physical
disability hereunder at the time at which 40% or more of the
Employee’s option had vested, then all of such
Employee’s unvested options shall become immediately vested
and exercisable upon the Employee’s termination date. If the
employment of the Employee terminates by reason of death or
permanent physical disability hereunder at a time at which less
than 40% of the Employee’s award had vested, then only such
vested portion of the Option shall be vested and exercisable at the
Employee’s termination date.
(c) Notwithstanding the
foregoing provisions, an option may not be exercised after
termination of employment for “cause” (as defined under
the Plan).
6. Option
Nontransferable . This option is not transferable otherwise
than by will or the laws of descent or distribution, pursuant to a
domestic relations order or by gift to family members or family
entities as permitted in the Committee’s discretion pursuant
to the Plan’s terms.
7. Rights as a
Shareholder . The Employee shall have no rights as a
shareholder with respect to any of the shares covered by this
option until the date of issuance to the Employee of a stock
certificate for such shares, and no adjustment shall be made for
any dividends or other rights the record date of which is prior to
the date such stock certificate is issued.
8. Additional Stockholder
Restrictions .
(a) Until such time as the
Common Stock is traded in the “Public Markets” (as
hereinafter defined), if at any time the Employee wishes to sell,
assign, transfer or otherwise dispose of any or all of the shares
acquired upon option exercise that are owned or controlled by him
or her (for purposes of this Section 8, the “
Shares ”), other than as part of a “Permitted
Transfer” (as hereinafter defined), pursuant to the terms of
a bona fide offer received from a third party, the Employee
(for purposes of this Subsection 8(a) the “ Selling
Stockholder ”) shall submit a written offer (the “
Offer ”) to sell such Shares to the Company on terms
and conditions, including price, not less favorable to the Company
than those on which he or she proposes to sell such Shares to such
third party (the “ Right of First Refusal ”).
The Offer shall disclose the identity of the proposed purchaser(s)
or transferee(s) (collectively, the “ Offeree
”), the Shares proposed to be sold or transferred (the
“ Offered Shares ”), the agreed terms of the
sale or transfer, including price, and any other material facts
relating to the sale or transfer. Within fifteen (15) days
after receipt of the Offer, the Company shall give notice (the
“ Company Notice ”) to the Selling Stockholder
of its intent to purchase all or any portion of the Offered Shares
on the same terms and conditions as set forth in the Offer (or its
determination not to do so). If the Company
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exercises its Right of First
Refusal for any amount of the Offered Shares, the Company and the
Selling Stockholder shall consummate the sale of such Offered
Shares on the terms set forth in the Offer by the date thirty
(30) days after the initial delivery of the Offer to the
Company. For purposes of this Agreement, the Public Markets shall
mean: any “National Securities Exchange” (as defined
under the Securities Exchange Act of 1934, as amended, and in the
regulations promulgated by the Securities and Exchange Commission);
any other regional stock exchange or foreign stock exchange the
stock price quotations for which are published in the Wall Street
Journal or available subject to a commercially reasonable delay on
the World Wide Web, any automated interdealer quotation system
operated by the NASD, including but limited to the Nasdaq SmallCap
Market and the OTC Bulletin Board; or the “pink sheets”
(the stock prices for which are published by the National Quotation
Bureau, Inc.).
The Selling Stockholder may,
not later than sixty (60) days following delivery to the
Company of the Offer, complete the transfer of the Offered Shares
not subscribed for by the Company pursuant to Subsection 8(a)
hereof, subject to the terms and conditions described in the Offer.
Any proposed transfer on terms and conditions different from those
described in the Offer, as well as any subsequent proposed transfer
by the Selling Stockholder, shall again be subject to the Rights of
First Refusal set forth in this Subsection 8(a) and shall require
the Selling Stockholder to deliver a new Offer to the Company to
comply with the procedures described in this Subsection 8(a) with
respect to such different or new transfer.
(b) Anything herein to the
contrary notwithstanding, the provisions of Subsection 8(a) shall
not apply to:
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(i) |
any transfer of Shares by the Employee by gift or bequest or
through inheritance to, or for the benefit of, any member or
members of his or her immediate family (which shall include any
spouse, lineal ancestor or descendant or sibling) or to a trust,
partnership or limited liability company for the benefit of such
members; |
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(ii) |
any transfer of Shares by the Employee to a trust in respect of
which he or she serves as trustee, provided that the trust
instrument governing said trust shall provide that such Employee,
as trustee, shall retain sole and exclusive control over the voting
and disposition of said Shares; |
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(iii) |
any repurchase of Shares by the Company from the Employee which
are the subject of any restrictive stock purchase provisions of any
other agreements to which the Employee is a party and under which
the Company has the option to repurchase such shares upon the
occurrence of certain events, including termination of employment;
and |
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(iv) |
any sale assignment or other transfer made with the prior
written consent of at least a majority of the members of the
Company’s Board of Directors, which consent may be withheld
for any reason, in the sole discretion of such directors (any of
which transfers in (i) through (iv) above is hereinafter
defined as a “Permitted Transfer”); |
provided, however, that in each
case (other than subprovision (iii) above, the transferee of
the Shares shall hold the Shares so acquired with all the rights
conferred by, and subject to all the restrictions imposed by this
Agreement, including Subsection 8(a), and as a condition to such
transfer, each such transferee shall execute and deliver a Joinder
Agreement as required by the Company pursuant to which such
transferee shall agree to be bound by the provisions of this
Agreement; and provided further, however, that
notwithstanding the provisions of this Subsection 8(b), no Employee
shall be permitted to sell, assign or otherwise transfer any Shares
to a person that is a competitor of the Company (as determined by
the Company’s Board of Directors).
(c) In the event that the
holders of at least two-thirds (66 2/3%) of the outstanding shares
of the Company’s Series A Convertible Preferred Stock, $.0001
par value (the “ Series A Preferred Stock ”),
the Company’s Series B Convertible Preferred Stock, $.0001
par value (the “ Series B Preferred Stock ”, and
the Company’s Series C Convertible Preferred Stock, $.0001
par value (the “ Series C Preferred Stock ”, and
collectively with the Series A Preferred Stock and the Series B
Preferred Stock, the “Preferred Stock”), voting
together as a single class on an as converted basis (“
Selling Investors ”), approve a Company Sale
Transaction (as hereinafter defined), then the Employee hereby
agrees with respect to all restricted stock shares that he or she
holds and any other Company securities over which he or she
otherwise exercises dispositive power:
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(i) |
In the event such Company Sale Transaction requires the
approval of stockholders, (i) if the matter is to be brought
to a vote at a stockholder meeting, after receiving proper notice
of any meeting of stockholders of the Company to vote on the
approval of a Company Sale Transaction, (x) to be present, in
person or by proxy, as a holder of restricted stock shares, at all
such meetings and be counted for the purposes of determining the
presence of a quorum at such meetings, and (y) to vote (in
person, by proxy or by action by written consent, as applicable)
all Shares in favor of such Company Sale Transaction and in
opposition of any and all other proposals that could reasonably be
expected to delay or impair the ability of the Company to
consummate such Company Sale Transaction. |
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(ii) |
In the event that the Company Sale Transaction is to be
effected by the sale of Shares without the need for stockholder
approval, the Employee agrees to sell all shares of capital stock
of the Company beneficially held by him or her (or in the event
that the Selling Investors are selling fewer than all of their
shares of capital stock of the Company, shares in the same
proportion as the Selling Investors are selling) to the person to
whom the Selling Investors propose to sell their shares, for the
same per-share consideration (on an as-converted basis) and on the
same terms and conditions as the Selling Investors. |
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(iii) |
To refrain from exercising any dissenters’ rights or
rights of appraisal under applicable law at any time with respect
to such Company Sale Transaction. |
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(iv) |
To execute and deliver all related documentation and take such
other action in support of the Company Sale Transaction as shall
reasonably be requested by the Company. |
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(v) |
Not to deposit, and to cause their affiliates not to deposit,
except as provided in this Subsection 8(c), any voting securities
owned by such party or affiliate in a voting trust or subject any
such voting securities to any arrangement or agreement with respect
to the voting of such shares of capital stock, unless specifically
requested to do so by the acquiror in connection with a Company
Sale Transaction. |
(d) Notwithstanding the
provisions set forth in Subsection 8(c) above, the obligation of
the Employee to take, or refrain from taking, any action described
in Subsection 8(c), shall be subject to the satisfaction of each of
the following conditions:
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(i) |
The only representations, warranties or covenants that the
Employee shall be required to make in connection with a Company
Sale Transaction are representations and warranties with respect to
its own ownership of the Company’s securities to be sold by
it and its ability to convey title thereto free and clear of liens,
encumbrances or adverse claims and reasonable covenants regarding
confidentiality, publicity and similar matters; the liability of
the Employee with respect to any representation and warranty or
covenant made by the Company in connection with a Company Sale
Transaction shall be several and not joint with any other person;
and such liability shall be limited to a pro rata share of an
escrow covering not to exceed 10% in the aggregate of the
consideration payable to all stockholders of the Company for a
period not to exceed one (1) year from the closing date (as
that term is defined in the document for the transaction giving
rise to the escrow), other than with respect to the
representations, warranties and covenants made by the Employee in
connection with a Company Sale Transaction with respect to
ownership and ability to convey title. |
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(ii) |
The Employee shall not be required to amend, extend or
terminate any contractual or other relationship with the Company,
the acquiror or their respective affiliates. |
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(iii) |
The Employee shall not be required to agree to any covenant not
to compete or covenant not to solicit customers, employees or
suppliers of any party to the Company Sale Transaction. |
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(iv) |
Upon the consummation of a Company Sale Transaction, all of the
holders of the Company’s Preferred Stock or Common Stock will
receive the same form and amount of consideration per share of
Preferred Stock or Common Stock, respectively, taking into account
any liquidation preference to which the holders of Preferred Stock
are entitled in accordance with the Company’s certificate of
incorporation, as amended, as in effect immediately prior to the
Company Sale Transaction, or if any holders of Preferred Stock or
Common Stock are given an option as to the form and amount of
consideration to be received, all holders will be given the same
option. In addition, no holder shall be required to accept
consideration in a Company Sale Transaction other than cash,
freely-tradable equity securities registered under the Securities
Exchange Act of 1934, as amended, trading on any Public Market
and/or equity securities of a private company if the Company Sale
Transaction for which the equity securities are to be received as
consideration is an arms’ length transaction in which the
acquiring company does not control, is not controlled by, nor under
common control with any shareholder or board member of the
Company. |
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(v) |
The Employee shall not be obligated to make any out of pocket
expenditure prior to the consummation of the Company Sale
Transaction (excluding modest expenditures for postage, copies,
etc.), and shall not be obligated to pay any expenses incurred in
connection with a consummated Company Sale Transaction, except
indirectly to the extent such costs are incurred for the benefit of
all of the Company’s stockholders and are paid by the Company
or the acquiring party. Costs incurred by or on behalf of the
Employee for its sole benefit will not be considered costs of the
transaction hereunder. |
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(vi) |
A “Company Sale Transaction” is defined to mean
(i) an acquisition of the Company by another person by means
of any transaction or series of related transactions (including,
without limitation, any reorganization, merger or consolidation)
that would result in the transfer of fifty percent (50%) or
more of the outstanding voting power of the Company or in which the
stockholders of the Company immediately prior to such transaction
would own, as a result of such transaction, less than a majority of
the voting securities, in the same relative proportions, of the
successor or surviving corporation immediately thereafter, or
(ii) a sale of all or substantially all of the assets of the
Company. |
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(e) The Employee agrees that
he or she shall not transfer, whether in public or private
transactions, other than as part of a Permitted Transfer, any
equity securities of the Company, or other securities exercisable
for or convertible into any of the Company’s equity
securities, whether or not acquired upon exercise of this option,
within one hundred (180) days following the effective date of
the first registration statement declared effective by the
Securities and Exchange Commission with respect to the distribution
of any of the Company’s equity securities or other securities
exercisable for or convertible into any of the Company’s
equity securities.
(f) The Employee does hereby
agree that all securities issued by the Company which are held by
the Employee, whether acquired on, before or subsequent to the date
of this Agreement, and whether acquired upon the exercise of
options granted to the Employee by the Company, upon the direct
issuance to the Employee of such securities by the Company, or
otherwise, shall be subject to all of the provisions of this
Section 8.
(g) To the extent that the
provisions of this Section 8 of the Agreement conflict with,
or are inconsistent with, the provisions of the Amended and
Restated Stockholders Agreement, dated as of March 15, 2005,
as it may be subsequently amended, to which the Employee and the
Company are parties (the “Stockholders Agreement”), the
terms of the Stockholders Agreement shall control and shall
supercede the provisions of this Agreement.
9. General
Restrictions .
(a) The Company shall not be
required to deliver any certificate upon the exercise of this
option until it has been furnished with such opinion,
representation or other document as it may reasonably deem
necessary, to ensure compliance with any law or any regulation of
the Securities and Exchange Commission or any other governmental
authority having jurisdiction over the Company, the Employee, the
Plan, or the shares to be optioned under the Plan or any interests
granted thereunder. This option is also subject to the requirement
that if at any time the Board of Directors of the Company shall
determine, in its discretion, that the listing, registration or
qualification of the shares (or the interests evidenced hereby)
subject to this option upon any securities exchange or under any
state or federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of this option or
the issue or purchase of shares hereunder (or the interests
evidenced hereby), this option shall not be exercised in whole or
in part and the interests evidenced hereby shall have no validity
unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any
conditions not acceptable to the Committee in the exercise of its
reasonable judgment.
(b) Until the Company’s
shares of Common Stock are publicly traded and the shares subject
to the option are covered by a registration statement or other
materials filed with and declared effective by the Securities and
Exchange Commission, or any applicable foreign securities
regulator, the shares obtained by exercising this option shall not
be transferable, except as permitted by applicable securities laws,
and shall bear the following legend:
(c) THE SHARES REPRESENTED BY
THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND
HAVE NOT BEEN REGISTERED
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UNDER THE SECURITIES ACT OF
1933, ANY APPLICABLE FOREIGN SECURITIES LAWS OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED BY SAID ACT, FOREIGN
SECRUTIES LAWS OR STATE LAWS.
10. Adjustment of
Shares . In the event of any change in the Common Stock of the
Company by reason of any stock dividend, stock split,
recapitalization, reorganization, merger, consolidation, split-up,
combination, or exchange of shares, or of any similar change
affecting the Common Stock, the number and kind of shares subject
to this option and the purchase price per share shall be adjusted
automatically consistent with such change to prevent substantial
dilution or enlargement of the rights granted to, or available for,
the Employee hereunder. Any such adjustment shall be binding on the
Employee.
11. No Employment
Rights . Neither the Plan nor this option shall confer upon the
Employee any right with respect to continuance of employment (or
engagement as a consultant, as applicable) by the Company or any
affiliate nor shall they interfere in any way with the right of the
Company or any subsidiary by which the Employee is employed (or
engaged, as applicable) to terminate the employment or engagement
of the Employee at any time.
12. Coordination With
Plan . The Employee hereby acknowledges receipt of a copy of
the Plan and agrees to be bound by all of the terms and provisions
thereof including any which may conflict with those contained in
this Agreement. Capitalized terms used in this Agreement, or
otherwise identified as being so defined, shall have the meaning
given to such terms under the Plan.
13. Notices . All
notices to the Company shall be in writing and sent to the
Company’s President at the Company’s offices, 5100 West
Silver Springs Boulevard, Ocala, FL 34482, or to such other person
and/or addresses the Company may provide by notice to Employee.
Notices to the Employee shall be addressed to the Employee at the
Employee’s address as it appears on the Company’s
records. Notice shall be deemed given five (5) days after
being deposited in the applicable governmental mail, with
certification of delivery procedure requested, one day after being
delivered to an overnight courier for next day service delivery, or
upon hand delivery.
14. Acknowledgment .
By accepting this option, the Employee acknowledges the
following:
(a) No representations or
promises have been made concerning the marketability or value of
the options or the shares of the Company. The Employee understands
that neither this option nor the shares have been registered under
the Securities Act of 1933, as amended (the “Act”), or
under any foreign or state laws, on the ground that the issuance of
this option and the shares is exempt from registration under
federal, foreign or state securities laws, and that reliance on
such exemption is based, in part, upon the Employee’s
representations and warranties herein set forth. The Employee
agrees that such Employee will not dispose of any of the shares
other than in strict compliance with the Act, any applicable
foreign or state securities laws, and any agreements that may be
executed by the Employee, or the Employee’s
successors
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or assigns. Upon exercise of
this option, the Employee must, therefore, continue to bear the
economic risk of investment in the shares for an indefinite period
of time.
(b) The Employee understands
that the purchase of the shares from the Company upon exercise of
this option has not been reviewed by any federal, foreign or state
agency because, in part, of the representations and warranties set
forth herein and the non-public nature of the purchase of the
shares. The Employee understands that any offering literature used
in connection with the Employee’s purchase of the shares,
including any business plan, has not been reviewed by any federal
or state agency.
(c) The Employee understands
that neither the Company nor any of its affiliates makes any
representation or warranty of any kind concerning the
Employee’s ability to offer or sell any of the shares through
a public offering, or otherwise, or that any public market for any
of the shares will develop and, accordingly, the Employee may never
be able to offer to sell any of the shares. The shares cannot be
sold unless registered under the Act or any applicable foreign or
state securities laws, or an exemption from regist
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