VOLCAN HOLDINGS, INC.
2008 EQUITY INCENTIVE PLAN
FORM OF INCENTIVE STOCK OPTION
AGREEMENT
This INCENTIVE STOCK OPTION AGREEMENT (the “Option
Agreement”), dated as of the __ day of ___________ , 20__
(the “Grant Date”), is between Volcan Holdings, Inc., a
Delaware corporation (the “Company”), and _______ (the
“Optionee”), a key employee of the Company or of a
Subsidiary of the Company (a “Related Corporation”),
pursuant to the Volcan Holdings, Inc. 2008 Equity Incentive Plan
(the “Plan”).
WHEREAS, the Company desires to give the Optionee the opportunity
to purchase shares of common stock of the Company, par value $0.001
(“Common Shares”), in accordance with the provisions of
the Plan, a copy of which is attached hereto;
NOW THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the
parties hereto, intending to be legally bound hereby, agree as
follows:
1. Grant of Option . The
Company hereby grants to the Optionee the right and option (the
“Option”) to purchase all or any part of an aggregate
of [________] (______) Common Shares. The Option is in all
respects limited and conditioned as hereinafter provided, and is
subject in all respects to the terms and conditions of the Plan now
in effect and as it may be amended from time to time (but only to
the extent that such amendments apply to outstanding options). Such
terms and conditions are incorporated herein by reference, made a
part hereof, and shall control in the event of any conflict with
any other terms of this Option Agreement. The Option granted
hereunder is intended to be an incentive stock option
(“ISO”) meeting the requirements of the Plan and
section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”), and not a nonqualified stock option
(“NQSO”).
2. Exercise Price . The
exercise price of the Common Shares covered by this Option shall be
$_________ per share. It is the determination of the committee
administering the Plan (the “Committee”) that on the
Grant Date the exercise price was not less than the greater of (i)
100% (110% for an Optionee who owns more than 10% of the total
combined voting power of all shares of stock of the Company or of a
Related Corporation – a “More-Than-10% Owner”) of
the “Fair Market Value” (as defined in the Plan) of a
Common Share, or (ii) the par value of a Common Share.
3. Term . Unless earlier
terminated pursuant to any provision of the Plan or of this Option
Agreement, this Option shall expire on _________ __, 20__ (the
“Expiration Date”), which date is not more than 10
years (five years in the case of a More-Than-10% Owner) from the
Grant Date. This Option shall not be exercisable on or after the
Expiration Date.
4. Exercise of Option . The
Option shall vest according to the following schedule, provided
that Optionee remains continuously employed as a key employee of
the Company or a Related Corporation from the date hereof through
the applicable vesting date:
|
Date Installment Becomes
Exercisable
|
Number of Shares
|
|
|
________ Shares
|
|
|
an additional ________
Shares
|
|
|
an additional ________
Shares
|
|
|
an additional ________
Shares
|
The Committee may accelerate any
vesting date of the Option, in its discretion, if it deems such
acceleration to be desirable. Once the Option becomes exercisable,
it will remain exercisable until it is exercised or until it
terminates.
5. Method of Exercising Option
. Subject to the terms and conditions of this Option Agreement and
the Plan, the Option may be exercised by written notice to the
Company at its principal office. The form of such notice is
attached hereto and shall state the election to exercise the Option
and the number of whole shares with respect to which it is being
exercised; shall be signed by the person or persons so exercising
the Option; and shall be accompanied by payment of the full
exercise price of such shares. Only full shares will be
issued.
The exercise price shall be paid to the Company:
(a) in cash, or by certified check,
bank draft, or postal or express money order;
(b) through the delivery of Common
Shares previously acquired by the Optionee;
(c) by delivering a properly executed
notice of exercise of the Option to the Company and a broker, with
irrevocable instructions to the broker promptly to deliver to the
Company the amount necessary to pay the exercise price of the
Option;
(d) in Common Shares newly acquired
by the Optionee upon exercise of the Option (which shall constitute
a disqualifying disposition with respect to this ISO);
or
(e) in any combination of (a), (b),
(c) or (d) above.
In the event the exercise price
is paid, in whole or in part, with Common Shares, the portion of
the exercise price so paid shall be equal to the Fair Market Value
of the Common Shares surrendered on the date of
exercise.
Upon receipt of notice of exercise and payment, the Company shall
deliver a certificate or certificates representing the Common
Shares with respect to which the Option is so exercised. The
Optionee shall obtain the rights of a shareholder upon receipt of a
certificate(s) representing such Common Shares.
- 2-
Such certificate(s) shall be registered in the name of the person
so exercising the Option (or, if the Option is exercised by the
Optionee and if the Optionee so requests in the notice exercising
the Option, shall be registered in the name of the Optionee and the
Optionee’s spouse, jointly, with right of survivorship), and
shall be delivered as provided above to, or upon the written order
of, the person exercising the Option. In the event the Option is
exercised by any person after the death or disability (as
determined in accordance with Section 22(e)(3) of the Code) of the
Optionee, the notice shall be accompanied by appropriate proof of
the right of such person to exercise the Option. All Common Shares
that are purchased upon exercise of the Option as provided herein
shall be fully paid and non-assessable.
Upon exercise of the Option, Optionee shall be responsible for all
employment and income taxes then or thereafter due (whether
Federal, State or local), and if the Optionee does not remit to the
Company sufficient cash (or, with the consent of the Committee,
Common Shares) to satisfy all applicable withholding requirements,
the Company shall be entitled to satisfy any withholding
requirements for any such tax by disposing of Common Shares at
exercise, w
