Director Stock Option Agreement

Document Sample
Director Stock Option Agreement Powered By Docstoc
					This Director Stock Option Agreement is made between a company and one of its
directors granting the director an option to purchase the company's stock. This
document contains the material terms and conditions of the agreement including the
amount of shares offered, the price and vesting details. It also sets forth the term of the
option and restrictions on exercising the option. This document contains standard
provisions and it may be customized to fit the specific needs of the parties. This should
be used by a company when offering a director a stock option.
                              STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT (the “Agreement”) made as of ___________
[Instruction: Insert Date], by and between ___________ [Instruction: Insert Name of
Company], ___________ [Instruction: Insert Address] (“Company”), and ___________
[Instruction: Insert Name of Director], ___________ [Instruction: Insert Address]
(“Optionee”).

WHEREAS, Company has adopted Company’s Stock Incentive Plan (the “Plan”) and has
approved the granting to certain directors of Company nonqualified options to purchase common
stock of Company ("Common Stock"); and

WHEREAS, Optionee is a director of Company, and Company desires to secure or increase
Optionee's stock ownership of Company in order to increase Optionee's incentive and personal
interest in the welfare of Company.

NOW, THEREFORE, in consideration of the promises and other good and valuable
consideration set forth, the parties agree as follows:

1. Grant of Option. The Company hereby grants to Optionee the option (the “Option”) to
purchase all or any part of an aggregate amount of ___________ (_____) [Instruction: Insert
Amount] shares of the Common Stock of Company at a price of ___________ Dollars ($____)
[Instruction: Insert Amount] per share, on the terms and conditions set forth herein.

2. Vesting. The Option will become exercisable ("vest") as follows:

   A. ___________ percent (___%) [Instruction: Insert Percentage (i.e. 50%)] shall vest on
___________ [Instruction: Insert Date] (the “Initial Vest Date”);

    B. The remainder shall vest on that date which is ___________ (___) [Instruction: Insert
Amount (i.e. 6)] months following the Initial Vest Date, provided that Optionee serves
continually as a Director of Company for the entire period, and subject to any other restrictions
on exercise set forth in this Agreement

3. Term of Option. Except as otherwise provided in paragraph 5 hereof, the Option shall be
exercisable, in whole or in part, and at any time within ___________ (___) [Instruction: Insert
Amount (i.e. 10)] years following the Initial Vest Date thereof, at which time the Options shall
terminate and not be exercisable thereafter.

4. Exercise of Option. Each election to exercise the Option shall be in writing, on Company’s
standard form “Notice of Stock Option Exercise”, which can be obtained from Company’s
Human Resources Department, signed by Optionee, and received by Company at its principal
office, accompanied by payment in full in the manner provided in the Plan. Optionee may
purchase less than the number of shares covered hereby, provided that no partial exercise of this
option may be for a fraction of a share. No Shares will be issued pursuant to the exercise of this
option unless and until Participant pays to Company, or makes provision satisfactory to
Company for payment of, any federal, state or local withholding taxes required by law to be
withheld in respect of this option.

5. Termination as Director of Company. If Optionee ceases to be a Director of Company for
any reason, any outstanding Option held by the Director shall be exercisable according to the
following provisions:

   A. If Optionee ceases to be a Director for any reason other than resignation or removal for
cause, subject to the provisions regarding death of Optionee herein, any outstanding Option held
by Optionee at such time shall be exercisable until the earlier of: one (1) year after the date
Optionee ceases to be a Director; or the expiration date of the Option;

    B. If during Optionee’s term of office as a Director, Optionee resigns from the Board, any
outstanding Option held by Optionee which is not exercisable by him immediately prior to
resignation shall terminate as of the date of resignation, and any outstanding Option held by
Optionee which is exercisable immediately prior to resignation shall be exercisable until the
earlier of: six (6) months after the date Optionee ceases to be a Director; or the expiration date of
the Option;

    C. If during Optionee’s term of office as a Director, Optionee is removed from office for
cause, any outstanding Option held by Optionee which is not exercisable by him immediately
prior to removal, and any outstanding Option held by Optionee which is exercisable immediately
prior to removal, shall terminate as of the date of removal for cause and may not be exercised;

    D. Following the death of Optionee during service as a Director of Company, any
outstanding Option held by Optionee at the time of death, shall be exercisable by the person
entitled to do so under the will of Optionee, or, if Optionee shall fail to make testamentary
disposition of the Option or shall die intestate, by the legal representative of Optionee at any time
until the earlier of: one (1) year after the date the of Optionee death; or the expiration date of the
Option; and

    E. Following the death of Optionee after ceasing to be a Director and during a period when
an Option is otherwise exercisable, the Option shall be exercisable by such person entitled to do
so under the will of Optionee or by such legal representative at any time until the earlier of: one
(1) year after the date Optionee ceases to be a Director; or the expiration date of the Option.

6. Transfer Restriction. The Option may not be sold, assigned, transferred, pledged or
otherwise encumbered by Optionee, either voluntarily or by operation of law, except by will or
the laws of descent and distribution, and, during the lifetime of Participant, this option shall be
exercisable only by Participant.

7. Restriction on Option Exercise. Notwithstanding anything to the contrary contained herein,
the Option may not be exercised by Optionee unless the shares to be acquired by Optionee have
been registered under the Securities Act of 1933 (the "Act"), and any other applicable securities
laws of any other state, or Company receives an opinion of counsel reasonably acceptable to
Company stating that the exercise of the Options and the issuance of shares pursuant to the
exercise is registered or exempt from such registration requirements. Optionee shall represent
that unless and until the shares have been registered under the Act and applicable state securities
laws: (A) Optionee is acquiring the shares for investment purposes only and without the intent
of making any sale or disposition thereof; (B) Optionee has been advised and understands that
the shares have not been registered for sale pursuant to federal and state securities laws and are
"restricted securities" under such laws; and (C) Optionee acknowledges that the shares will be
subject to stop transfer instructions and bear the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER
STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED
IN THE ABSENCE OF REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION
FROM SUCH REGISTRATION. NO OFFER, SALE OR TRANSFER MAY TAKE PLACE
WITHOUT PRIOR WRITTEN APPROVAL OF THE COMPANY BEING AFFIXED
HERETO. IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT, SUCH
APPROVAL SHALL BE GRANTED ONLY IF THE COMPANY HAS RECEIVED AN
OPINION OF SHAREHOLDER'S COUNSEL AT SHAREHOLDER'S EXPENSE
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT THIS CERTIFICATE MAY
BE LAWFULLY TRANSFERRED PURSUANT TO AN EXEMPTION FROM
REGISTRATION.

8. Anti-dilution. The aggregate number of shares of Common Stock available for issuance
under the Option, and the price per share, shall all be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock subsequent to the date of this
Agreement resulting from a recapitalization, reorganization, merger, consolidation or similar
transaction as provided in the Plan. Upon dissolution or liquidation of Company, or upon a
merger or consolidation in which Company is not the surviving corporation, the Option shall
terminate.

9. No Rights as a Stockholder. Optionee shall have no rights as a stockholder with respect to
any shares covered by the Options until the date as of which stock is issued following exercise of
such Option. Except as provided in this Agreement, no adjustment shall be made for dividends
or any other distributions for which the record date is prior to the date as of which such stock is
issued.

10. Provisions of the Plan. This option is subject to the provisions of the Plan, including the
provisions relating to amendments to the Plan, a copy of which is furnished to Optionee with this
Agreement

11. Miscellaneous.

    A. This Agreement constitutes the entire agreement between the parties hereto with respect
to the specific subject matter hereof and supersedes all prior agreements or understandings of any
kind with respect to the specific subject matter hereof.
    B. In the event that any provision or part of this Agreement shall be deemed void or invalid
by a court of competent jurisdiction, the remaining provisions or parts shall be and remain in full
force and effect.

    C. Any modification to this Agreement must be in writing and signed by the parties or it
shall have no effect and shall be void.

   D. This Agreement is binding upon and shall inure to the benefit of the respective
successors, licensees and/or assigns of the parties hereto.

    E. The waiver by either party of a breach or violation of any provision of this Agreement
shall not constitute a waiver of any subsequent or other breach or violation.

    F. This Agreement shall be governed in accordance with the laws of the State of
_____________ [Instruction: Insert State], applicable to agreements to be wholly performed
therein, with jurisdiction exclusive to the Federal and State courts located in the County of
_____________ [Instruction: Insert County], State of ______________ [Instruction: Insert
State].

IN WITNESS WHEREOF the parties have duly executed this Agreement as of the date first
written above.


COMPANY:


________________________________ [Instruction: sign]
By: ___________________________ [Instruction: Insert Name of Signatory]
Title: ___________________________ [Instruction: Insert Title of Signatory]


OPTIONEE:


________________________________ [Instruction: sign]
By: ___________________________ [Instruction: Insert Name of Signatory]
Title: ___________________________ [Instruction: Insert Title of Signatory]
INFORMATION AND FORMS ARE PROVIDED "AS IS" WITHOUT ANY EXPRESS OR IMPLIED WARRANTY OF ANY KIND
INCLUDING WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT OF INTELLECTUAL PROPERTY, OR FITNESS
FOR ANY PARTICULAR PURPOSE. IN NO EVENT SHALL DOCSTOC, INC., OR ITS AGENTS, OFFICERS, ATTORNEYS,
ETC., BE LIABLE FOR ANY DAMAGES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF
PROFITS, BUSINESS INTERRUPTION, LOSS OF INFORMATION) ARISING OUT OF THE USE OF OR INABILITY TO USE
THE MATERIALS, EVEN IF DOCSTOC HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. They are for
guidance and should be modified by you or your attorney to meet your specific needs and the laws of your state or jurisdiction. Use at
your own risk. Docstoc® is NOT providing legal or any other kind of advice and is not creating or entering into an Attorney-Client
relationship. The 
				
DOCUMENT INFO
Shared By:
Tags:
Stats:
views:200
posted:1/20/2012
language:English
pages:6
Description: This Director Stock Option Agreement is made between a company and one of its directors granting the director an option to purchase the company's stock. This document contains the material terms and conditions of the agreement including the amount of shares offered, the price and vesting details. It also sets forth the term of the option and restrictions on exercising the option. This document contains standard provisions and it may be customized to fit the specific needs of the parties. This should be used by a company when offering a director a stock option.