Employee Stock Options Agreement


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									This form should be used by companies that desire to incentivize their employees
through stock ownership. Employee stock ownership ties the employee’s financial
interests to overall company performance. The agreement grants an employee an
option to purchase company stock at a set price and according to a specified vesting
schedule. This document contains standard clauses commonly used in these types of
agreements, including company restrictions on the transfer of shares, but can be
customized to ensure the specific terms of the parties’ agreement are addressed.
                               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 Employee], ___________ [Instruction: Insert Address]

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

WHEREAS, Participant is an employee of Company, and Company desires to secure or increase
Participant’s stock ownership of the Company in order to increase Participant’s incentive and
personal interest in the welfare of the 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. Company hereby grants to Participant an option to purchase, in whole or in
part, on the terms provided herein and in the Plan, a total of ___________ [Instruction: Insert
Amount] shares (the “Shares”) of common stock, with a par value of ___________ Dollars
($____) [Instruction: Insert Amount] per share, of Company (“Common Stock”) at
___________ Dollars ($____) [Instruction: Insert Amount] per Share. Unless earlier
terminated, this option shall expire at ___________ Instruction: Insert Time], on ___________
[Instruction: Insert Date] (the “Final Exercise Date”). It is intended that the option evidenced
by this Agreement shall not be an “incentive stock option” as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”), and any regulations promulgated

2. Vesting.

   A. This option will become exercisable (“vest”) as follows:

      i.   ___________ percent (___%) [Instruction: Insert Percentage (i.e. 25%)] of the
original number of Shares shall vest on the first anniversary of ___________ [Instruction:
Insert Date] “Vesting Commencement Date”

      ii. An additional ___________ percent (___%) [Instruction: Insert Percentage (i.e.
2%)] of the original number of Shares shall vest at the end of each successive month following
the first anniversary of the Vesting Commencement Date until the ___________ [Instruction:
Insert Number (i.e,. fourth] anniversary of the Vesting Commencement Date.

    B. The right of exercise shall be cumulative so that, to the extent the option is not exercised
in any period to the maximum extent permissible, it shall continue to be exercisable, in whole or
in part, with respect to all Shares for which it is vested until the earlier of the Final Exercise Date
or the termination of this option hereunder or pursuant to the Plan.

    C. In the event that all or substantially all of Company’s capital stock (other than the
issuance by Company of capital stock to one or more venture capitalists or other institutional
investors pursuant to an equity financing), assets or business of Company, by merger,
consolidation, sale of assets or otherwise (a “Change in Control”), the vesting schedule of the
Shares shall be accelerated so that:

     i.   ___________ percent (___%) [Instruction: Insert Percentage (i.e., 25%)] of the
Unvested Shares shall vest immediately; and

      ii.   The remaining Unvested Shares shall vest ratably on a monthly basis in accordance
with the original vesting schedule.

     iii. In addition, if within one year following the Change in Control, Participant is
terminated without cause by Company, then the vesting schedule of the Shares shall be
accelerated so that 25% of the Shares that have not yet vested as of the date of Participant's
termination shall vest immediately.

3. Exercise of Option.

    A. Each election to exercise this 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 Participant, and received by Company at its principal office, accompanied
by payment in full in the manner provided in the Plan. Participant 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.

    B. Except as otherwise provided herein, this option may not be exercised unless Participant,
at the time Participant exercises this option, is, and has been at all times since the Grant Date, an
employee, officer or director of, or consultant or advisor to, Company or any other entity the
employees, officers, directors, consultants, or advisors of which are eligible to receive option
grants under the Plan (an “Eligible Participant”).

    C. If Participant ceases to be an Eligible Participant for any reason, then, except as provided
herein, the right to exercise this option shall terminate three months after such cessation (but in
no event after the Final Exercise Date), provided that this option shall be exercisable only to the
extent that Participant was entitled to exercise this option on the date of such cessation.
Notwithstanding the foregoing, if Participant, prior to the Final Exercise Date, violates the non-
competition or confidentiality provisions of any employment contract, confidentiality and
nondisclosure agreement or other agreement between Participant and Company, the right to
exercise this option shall terminate immediately upon written notice to Participant from
Company describing such violation.
    D. If Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the
Code) prior to the Final Exercise Date while he or she is an Eligible Participant and Company
has not terminated such relationship for “cause”, this option shall be exercisable, within the
period of one year following the date of death or disability of Participant, provided that this
option shall be exercisable only to the extent that this option was exercisable by Participant on
the date of his or her death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.

   E. If, prior to the Final Exercise Date, Participant's employment or other relationship with
Company is terminated by Company for cause, the right to exercise this option shall terminate
immediately upon the effective date of such termination of employment or other relationship.

    F. 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.

4. Transfer Restrictions.

    A. This option may not be sold, assigned, transferred, pledged or otherwise encumbered by
Participant, 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

   B. The Participant agrees that he or she will not transfer any Shares issued pursuant to the
exercise of this option unless the transferee, as a condition to such transfer, delivers to Company
a written instrument confirming that such transferee shall be bound by all of the terms and
conditions of this Agreement.

5. 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 the Participant
with this Agreement

6. 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

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


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


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

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