EXHIBIT 99.2
Published on September 15, 2006
EXHIBIT 99.2
STEPUP COMMERCE, INC. 2004 STOCK INCENTIVE PLAN
NOTICE OF STOCK OPTION AWARD
Grantees Name and Address: | «Name» | |||
«Address» |
You (the Grantee) have been granted an option to purchase shares of Common Stock, subject to
the terms and conditions of this Notice of Stock Option Award (the Notice), the StepUp Commerce,
Inc. 2004 Stock Incentive Plan, as amended from time to time (the Plan) and the Stock Option
Award Agreement (the Option 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 | «GrantNO» | |||
Date of Award | «GrantDate» | |||
Vesting Commencement Date | «VCD» | |||
Exercise Price per Share | «ExercisePrice_» | |||
Total Number of Shares Subject to the Option (the Shares) |
«Shares_» | |||
Total Exercise Price | «Total_price» | |||
Type of Option: | «Type» | |||
Expiration Date: | «ExpirationDate» | |||
Post-Termination Exercise Period: | Thirty (30) Days |
Vesting Schedule:
Subject to the Grantees Continuous Service and other limitations set forth in this Notice,
the Plan and the Option Agreement, the Option may be exercised, in whole or in part, in accordance
with the following schedule:
«Vestingname»
During any authorized leave of absence, the vesting of the Option as provided in this schedule
shall be suspended after the leave of absence exceeds a period of ninety (90) days. Vesting of the
Option shall resume upon the Grantees termination of the leave of absence and return to service to
the Company or a Related Entity. The Vesting Schedule of the Options shall be extended by the
length of the suspension.
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In the event of termination of the Grantees Continuous Service for Cause, the Grantees right
to exercise the Option shall terminate concurrently with the termination of the Grantees
Continuous Service, except as otherwise determined by the Administrator. In the event of
termination of the Grantees Continuous Service for Cause, there will be no Post-Termination
Exercise Period.
In the event of the Grantees change in status from Employee to Consultant or from an Employee
whose customary employment is 20 hours or more per week to an Employee whose customary employment
is fewer than 20 hours per week, vesting of the Option shall continue only to the extent determined
by the Administrator as of such change in status consistent with any minimum vesting requirements
set forth in the Plan.
IN WITNESS WHEREOF, the Company and the Grantee 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 Option
Agreement.
StepUp Commerce, Inc., | ||||||
a California corporation | ||||||
By: | ||||||
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Title: | ||||||
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THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL VEST, IF AT ALL,
ONLY DURING THE PERIOD OF THE GRANTEES CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND
AGREES THAT NOTHING IN THIS NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE
ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEES CONTINUOUS SERVICE, NOR
SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEES RIGHT OR THE RIGHT OF THE COMPANY OR RELATED
ENTITY TO WHICH THE GRANTEE PROVIDES SERVICES TO TERMINATE THE GRANTEES CONTINUOUS SERVICE, WITH
OR WITHOUT CAUSE. THE GRANTEE ACKNOWLEDGES THAT THE GRANTEES STATUS IS AT WILL UNLESS THE GRANTEE
HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY OR THE COMMON LAW OF THE
GRANTEES COUNTRY OF RESIDENCE PROVIDES OTHERWISE.
The Grantee acknowledges receipt of a copy of the Plan and the Option 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 Grantee has reviewed
this Notice, the Plan, and the Option 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 Option Agreement including, but not limited to, the provisions of Section
11 providing a right of first refusal in favor of the Company upon certain changes in record
ownership, the provisions of Section 12 providing a repurchase option in favor of the
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Company upon certain repurchase events, and the provisions of Section 13 setting forth certain
restrictions necessary or useful in maintaining the Companys status as an S Corporation. The
Grantee hereby agrees that all questions of interpretation and administration relating to this
Notice, the Plan and the Option Agreement shall be resolved by the Administrator in accordance with
Section 20 of the Option Agreement. The Grantee further agrees to the venue selection and waiver
of a jury trial in accordance with Section 21 of the Option Agreement. The Grantee further agrees
to notify the Company upon any change in the residence address indicated in this Notice.
The Grantee acknowledges, understands and agrees that the grant of the Option is voluntary and
that the Grantee has not been induced to accept the Option by any promise of being hired by the
Company or a Related Entity or any promise of continuation of the Grantees Continuous Service.
Dated:
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Signed: | |||||||||
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Award
Number: «GrantNO»
STEPUP COMMERCE, INC. 2004 STOCK INCENTIVE PLAN
STOCK OPTION AWARD AGREEMENT
1. Grant of Option. StepUp Commerce, Inc., a California corporation (the Company),
hereby grants to the Grantee (the Grantee) 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 Option Agreement) and the Companys 2004 Stock 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 Option 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 Grantee
during any calendar year (under all plans of the Company or any Parent or Subsidiary of the
Company) exceeds $100,000, such excess Options, to the extent of the Shares covered thereby in
excess of the foregoing limitation, shall be treated as Non-Qualified 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. Except as provided in Section 13(a) below, 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 Option Agreement. The Option shall be subject to
the provisions of Section 11 of the Plan relating to the exercisability or termination of the
Option in the event of a Corporate Transaction. The Grantee shall be subject to reasonable
limitations on the number of requested exercises during any monthly or weekly period as determined
by the Administrator. In no event shall the Company issue fractional Shares.
(b) Method of Exercise.
(i) If Company Is an S Corporation. If, at the time of the Grantees written notice
of exercise of the Option, the Company is an S Corporation within the meaning of section 1361 of
the Code (an S Corporation), the Option may be exercised only in compliance with the requirements
of Section 13(a) below. The Grantee should contact the Chief Financial Officer (if any, or the
President if none) of the Company to ascertain whether the Company is an S Corporation.
(ii) If Company Is Not an S Corporation. If, at the time of the Grantees written
notice of exercise of the Option, the Company is not an S Corporation, the
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Option shall be exercisable only by delivery of an exercise notice (a form of which is
attached as Exhibit A) or by such other procedure as specified from time to time by the
Administrator which shall state the election to exercise the Option, the whole number of Shares in
respect of which the Option is being exercised, and such other provisions as may be required by the
Administrator. The exercise notice shall be delivered in person, by certified mail, or by such
other method (including electronic transmission) as determined from time to time by the
Administrator 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 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 4(d) below.
(c) Taxes. No Shares will be delivered to the Grantee or other person pursuant to the
exercise of the Option until the Grantee or other person has made arrangements acceptable to the
Administrator for the satisfaction of applicable income tax and employment tax withholding
obligations, including, without limitation, such other tax obligations of the Grantee incident to
the receipt of Shares or the disqualifying disposition of Shares received on exercise of an
Incentive Stock Option. Upon exercise of the Option, the Company or the Grantees employer may
offset or withhold (from any amount owed by the Company or the Grantees employer to the Grantee)
or collect from the Grantee or other person an amount sufficient to satisfy such tax withholding
obligations.
3. Grantees Representations. The Grantee understands that neither the Option nor the
Shares exercisable pursuant to the Option have been registered under the Securities Act of 1933, as
amended or any other United States securities law, nor have they been qualified for distribution
under the securities laws of any province of Canada. In the event the Shares purchasable pursuant
to the exercise of the Option have not been registered under the Securities Act of 1933, as
amended, at the time the Option is exercised, the Grantee shall, if requested by the Company,
concurrently with the exercise of all or any portion of the Option, deliver to the Company his or
her Investment Representation Statement in the form attached hereto as Exhibit B.
4. Method of Payment. Payment of the Exercise Price shall be made by any of the
following, or a combination thereof, at the election of the Grantee; provided, however, that such
exercise method does not then violate any Applicable Law:
(a) cash;
(b) check;
(c) if the exercise occurs on or after the Registration Date, surrender of Shares or delivery
of a properly executed form of attestation of ownership of Shares as the Administrator may require
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, provided, however, that
Shares acquired under the Plan or any other equity compensation plan or agreement of the Company
must have been held by the Grantee for a period of more than six (6) months (and not used for
another Award exercise by attestation during such period); or
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(d) if the exercise occurs on or after the Registration Date, payment through a broker-dealer
sale and remittance procedure pursuant to which the Grantee (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 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.
5. 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
Laws. In addition, the Option may not be exercised until such time as the Plan has been approved
by the shareholders of the Company. If the exercise of the Option within the applicable time
periods set forth in Section 6, 7 and 8 of this Option Agreement is prevented by the provisions of
this Section 5, the Award shall remain exercisable until one (1) month after the date the Grantee
is notified by the Company that the Option is exercisable, but in any event no later than the
Expiration Date set forth in the Notice.
6. Termination or Change of Continuous Service. In the event the Grantees Continuous
Service terminates, other than for Cause, the Grantee may, but only during the Post-Termination
Exercise Period, exercise the portion of the Option that was vested at the date of such termination
(the Termination Date). The Post-Termination Exercise Period shall commence on the Termination
Date. In the event of termination of the Grantees Continuous Service for Cause, the Grantees
right to exercise the Option shall, except as otherwise determined by the Administrator, terminate
concurrently with the termination of the Grantees Continuous Service (also the Termination
Date). In no event, however, shall the Option be exercised later than the Expiration Date set
forth in the Notice. In the event of the Grantees change in status from Employee, Director or
Consultant to any other status of Employee, Director or Consultant, the Option shall remain in
effect and vesting of the Option shall continue only to the extent determined by the Administrator
as of such change in status consistent with any minimum vesting requirements set forth in the Plan;
provided, however, 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 Non-Qualified Stock Option on
the day three (3) months and one (1) day following such change in status. Except as provided in
Sections 7 and 8, below, to the extent that the Option was unvested on the Termination Date, or if
the Grantee does not exercise the vested portion of the Option within the Post-Termination Exercise
Period, the Option shall terminate.
7. Disability of Grantee. In the event the Grantees Continuous Service terminates as
a result of his or her Disability, the Grantee may, but only within twelve (12) months commencing
on the Termination Date (but in no event later than the Expiration Date), exercise the portion of
the Option that was vested 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 Non-Qualified Stock Option on the day three (3) months and one (1)
day following the Termination Date. To the extent that the Option was unvested on the Termination
Date, or if the Grantee does not exercise the vested portion of
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the Option within the time specified herein, the Option shall terminate. Section 22(e)(3) of
the Code provides that an individual is permanently and totally disabled if he or she is unable to
engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve (12) months.
8. Death of Grantee. In the event of the termination of the Grantees Continuous
Service as a result of his or her death, or in the event of the Grantees death during the
Post-Termination Exercise Period or during the twelve (12) month period following the Grantees
termination of Continuous Service as a result of his or her Disability, the person who acquired the
right to exercise the Option pursuant to Section 9 may exercise the portion of the Option that was
vested at the date of termination within twelve (12) months commencing on the date of death (but in
no event later than the Expiration Date). To the extent that the Option was unvested on the date
of death, or if the vested portion of the Option is not exercised within the time specified herein,
the Option shall terminate.
9. Transferability.
(a) Transferability of Option. The Option may not be transferred in any manner other
than by will or by the laws of descent and distribution and may be exercised during the lifetime of
the Grantee only by the Grantee. Notwithstanding the foregoing, the Grantee may designate one or
more beneficiaries of the Grantees Incentive Stock Option or Non-Qualified Stock Option in the
event of the Grantees death on a beneficiary designation form provided by the Administrator.
Following the death of the Grantee, the Option, to the extent provided in Section 8, may be
exercised (a) by the person or persons designated under the deceased Grantees beneficiary
designation or (b) in the absence of an effectively designated beneficiary, by the Grantees legal
representative or by any person empowered to do so under the deceased Grantees will or under the
then applicable laws of descent and distribution. The terms of the Option shall be binding upon
the executors, administrators, heirs and successors of the Grantee.
(b) Non-Transferability of Shares. The Shares acquired pursuant to the Option shall
be non-transferable for a period of six (6) months after the date of acquisition of the Shares.
10. Term of Option. The Option must be exercised no later than the Expiration Date
set forth in the Notice or such earlier date as otherwise provided herein. After the Expiration
Date or such earlier date, the Option shall be of no further force or effect and may not be
exercised.
11. Companys Right of First Refusal. The right of first refusal in the Companys
Bylaws is not applicable to the Shares and is hereby replaced with the Right of First Refusal
described herein.
(a) Transfer Notice. Neither the Grantee nor a transferee (either being sometimes
referred to herein as the Holder) shall sell, hypothecate, encumber or otherwise transfer any
Shares or any right or interest therein without first complying with the provisions of this Section
11 or obtaining the prior written consent of the Company. In the event the Holder
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desires to accept a bona fide third-party offer for any or all of the Shares, the Holder shall
provide the Company with written notice (the Transfer Notice) of:
(i) The Holders intention to transfer;
(ii) The name of the proposed transferee;
(iii) The number of Shares to be transferred; and
(iv) The proposed transfer price or value and terms thereof.
If the Grantee proposes to transfer any Shares to more than one transferee, the Grantee shall
provide a separate Transfer Notice for the proposed transfer to each transferee. The Transfer
Notice shall be signed by both the Grantee and the proposed transferee and must constitute a
binding commitment of the Grantee and the proposed transferee for the transfer of the Shares to the
proposed transferee subject to the terms and conditions of this Option Agreement.
(b) Bona Fide Transfer. If the Company determines that the information provided by
the Grantee in the Transfer Notice is insufficient to establish the bona fide nature of a proposed
voluntary transfer, the Company shall give the Grantee written notice of the Grantees failure to
comply with the procedure described in this Section 11, and the Grantee shall have no right to
transfer the Shares without first complying with the procedure described in this Section 11. The
Grantee shall not be permitted to transfer the Shares if the proposed transfer is not bona fide.
(c) First Refusal Exercise Notice. The Company shall have the right to purchase (the
Right of First Refusal) all but not less than all, of the Shares which are described in the
Transfer Notice (the Offered Shares) at any time within forty-five (45) days after receipt of the
Transfer Notice (the Option Period). The Offered Shares shall be repurchased at (i) the per
share price or value and in accordance with the terms stated in the Transfer Notice (subject to
Section 11(d) below) or (ii) the Fair Market Value of the Shares on the date on which the purchase
is to be effected if no consideration is paid pursuant to the terms stated in the Transfer Notice,
which Right of First Refusal shall be exercised by written notice (the First Refusal Exercise
Notice) to the Holder. During the Option Period or the 90-day period specified in Section 11(f)
below, the Company may exercise its Repurchase Right (as set forth in Section 12 below) in lieu of
or in addition to its Right of First Refusal if the Repurchase Right is or becomes exercisable
during the Option Period or such 90-day period.
(d) Payment Terms. The Company shall consummate the purchase of the Offered Shares on
the terms set forth in the Transfer Notice within 30 days after delivery of the First Refusal
Exercise Notice; provided, however, that in the event the Transfer Notice provides for the payment
for the Offered Shares other than in cash, the Company and/or its assigns shall have the right to
pay for the Offered Shares by the discounted cash equivalent of the consideration described in the
Transfer Notice as reasonably determined by the Administrator. Upon payment for the Offered Shares
to the Holder or into escrow for the benefit of the Holder, the Company or its assigns shall become
the legal and beneficial owner of the Offered Shares and all rights and interest therein or related
thereto, and the Company shall have the right to
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transfer the Offered Shares to its own name or its assigns without the further action by the
Holder.
(e) Assignment. Whenever the Company shall have the right to purchase Shares under
this Right of First Refusal, the Company may designate and assign one or more employees, officers,
directors or shareholders of the Company or other persons or organizations, to exercise all or a
part of the Companys Right of First Refusal.
(f) Non-Exercise. If the Company and/or its assigns do not collectively elect to
exercise the Right of First Refusal within the Option Period or such earlier time if the Company
and/or its assigns notifies the Holder that it will not exercise the Right of First Refusal, then
the Holder may transfer the Shares upon the terms and conditions stated in the Transfer Notice,
provided that:
(i) The transfer is made within 90 days of the earlier of (A) the date the Company and/or its
assigns notify the Holder that the Right of First Refusal will not be exercised or (B) the
expiration of the Option Period; and
(ii) The transferee agrees in writing that such Shares shall be held subject to the provisions
of this Option Agreement.
The Company shall have the right to demand further assurances from the Grantee and the transferee
(in a form satisfactory to the Company) that the transfer of the Offered Shares was actually
carried out on the terms and conditions described in the Transfer Notice. No Offered Shares shall
be transferred on the books of the Company until the Company has received such assurances, if so
demanded, and has approved the proposed transfer as bona fide.
(g) Expiration of Transfer Period. Following such 90-day period, no transfer of the
Offered Shares and no change in the terms of the transfer as stated in the Transfer Notice
(including the name of the proposed transferee) shall be permitted without a new written Transfer
Notice prepared and submitted in accordance with the requirements of this Right of First Refusal.
(h) Termination of Right of First Refusal. The provisions of this Right of First
Refusal shall terminate as to all Shares upon the Registration Date.
(i) Additional Shares or Substituted Securities. In the event of any transaction
described in Section 10 or 11 of the Plan, any new, substituted or additional securities or other
property which is by reason of any such transaction distributed with respect to the Shares shall be
immediately subject to the Right of First Refusal, but only to the extent the Shares are at the
time covered by such right.
12. Companys Repurchase Right.
(a) Grant of Repurchase Right. The Company is hereby granted the right (the
Repurchase Right), exercisable at any time (i) during the ninety (90) day period following the
Termination Date, (ii) during the ninety (90) day period following an exercise of the Option that
occurs after the Termination Date or (iii) during the period the Company is an S Corporation if
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the Grantee takes any action or fails to take any action (or if the Company can reasonably
anticipate that the Grantee will take any action or fail to take any action) which results in the
Company being unable to maintain the Companys status as an S Corporation, to repurchase all or any
portion of the Shares (the Share Repurchase Period).
(b) Exercise of the Repurchase Right. The Repurchase Right shall be exercisable by
written notice delivered to each Holder of the Shares prior to the expiration of the Share
Repurchase Period. The notice shall indicate the number of Shares to be repurchased and the date
on which the repurchase is to be effected, such date to be not later than the last day of the Share
Repurchase Period. On the date on which the repurchase is to be effected, the Company and/or its
assigns shall pay to the Holder in cash or cash equivalents (including the cancellation of any
purchase-money indebtedness) an amount equal to (i) the Fair Market Value of the Shares which are
to be repurchased from the Holder as of the Termination Date or (ii) in the case of a repurchase
pursuant to Section 12(a)(iii), the Fair Market Value of the Shares which are to be repurchased
from the Holder as of the date on which the repurchase is to be effected. Upon such payment or
deposit into escrow for the benefit of the Holder, the Company and/or its assigns shall become the
legal and beneficial owner of the Shares being repurchased and all rights and interest thereon or
related thereto, and the Company shall have the right to transfer to its own name or its assigns
the number of Shares being repurchased, without further action by the Holder.
(c) Assignment. Whenever the Company shall have the right to purchase Shares under
this Repurchase Right, the Company may designate and assign one or more employees, officers,
directors or shareholders of the Company or other persons or organizations, to exercise all or a
part of the Companys Repurchase Right.
(d) Termination of the Repurchase Right. The Repurchase Right shall terminate with
respect to any Shares for which it is not timely exercised. In addition, the Repurchase Right
shall terminate and cease to be exercisable, with respect to all Shares upon the Registration Date.
(e) Additional Shares or Substituted Securities. In the event of any transaction
described in Section 10 or 11 of the Plan, any new, substituted or additional securities or other
property which is by reason of any such transaction distributed with respect to the Shares shall be
immediately subject to the Repurchase Right, but only to the extent the Shares are at the time
covered by such right.
13. S Corporation Status. The Grantee acknowledges that the Company has elected to be
classified as an S Corporation for federal and state income tax purposes and, following the
exercise of the Option with respect to all or any part of the shares of stock subject to the
Option, agrees to provide to the Company, immediately upon the Companys request, such properly
signed consents or other documents as, in the opinion of counsel for the Company, may be necessary
or useful to maintaining the Companys status as an S Corporation. Except with the written consent
of the Company specifically referring to this Section 13, the following provisions (the S
Corporation Provisions) shall apply to the exercise of the Option and the shares of stock acquired
upon the exercise of the Option until such time as the Company ceases to qualify as an S
Corporation.
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(a) Method of Exercise.
(i) Advance Notice of Intent to Exercise. The Grantee shall give written notice (the
Advance Notice) of the Grantees intent to exercise the Option (a form of which is attached as
Exhibit D), which must be received by the Company no later than thirty (30) days prior to the date
on which such exercise is proposed to be effective (the Proposed Exercise Date). The Advance
Notice shall be in a form approved by the Company and must state the election to exercise the
Option, the Proposed Exercise Date, the number of shares for which the Option is to be exercised,
such information as required by the Company to enable the Company to determine whether the proposed
exercise of the Option may cause the Company to cease to qualify as an S Corporation, and such
other representations and agreements as to the Grantees investment intent with respect to such
shares as may be required pursuant to the provisions of this Option Agreement. The Advance Notice
must be signed by the Grantee and must be delivered in person or by certified or overnight, return
receipt requested mail to the Chief Financial Officer (or President if there is none) of the
Company at least thirty (30) days prior to the earlier of the Expiration Date or the termination of
the Option as set forth in Sections 6, 7, or 8 above, as applicable (the Outside Exercise Date).
Except as otherwise permitted by the Company, the Grantees failure to comply with the requirements
of this Section 13(a)(i) shall extend the Proposed Exercise Date to a date at least thirty (30)
days following the Companys receipt of an Advance Notice which complies in full with such
requirements. If the Proposed Exercise Date, as extended pursuant to the preceding sentence, would
occur after the Outside Exercise Date, the Option shall terminate at the Outside Exercise Date and
the Company shall not be required to make any payment to the Grantee that would otherwise be
required pursuant to Section 13(a)(ii) below. The provisions of Section 13(a) shall cease to apply
as provided in Section 13(f) below, and thereafter the Option may be exercised pursuant to Section
2(b)(ii) above.
(ii) Companys Right to Redeem Option. If, following its receipt of the Grantees
Advance Notice, the Company determines, in its sole discretion, that the Grantees exercise of the
Option may cause the Company to cease to qualify as an S Corporation, the Company shall so notify
the Grantee (a Disqualification Notice) no later than five (5) days prior to the Proposed
Exercise Date. Following receipt of a Disqualification Notice, the Grantee may withdraw the
Grantees Advance Notice. If, following receipt of a Disqualification Notice, the Grantee does not
withdraw the Grantees Advance Notice, the Company shall have the right (the Option Redemption
Right) to cancel the Option for the number of shares set forth in the Grantees Advance Notice in
exchange for payment to the Grantee of the Option Redemption Amount. The Grantee hereby agrees
that the Company may withhold from the Option Redemption Amount, or the Grantee shall otherwise
make the adequate provision for, the foreign, federal and state tax withholding obligations of the
Company or Related Entity, as applicable, which arise in connection with the payment of the Option
Redemption Amount. The Option Redemption Amount shall be an amount equal to the excess, if any,
of (A) the Fair Market Value, determined as of the Proposed Exercise Date, of the number of shares
set forth in the Grantees Advance Notice over (B) the exercise price for such shares. If the
Company exercises its Option Redemption Right, the Company shall cancel the Option, effective as of
the Proposed Exercise Date, for the number of shares set forth in the Grantee Advance Notice and
shall pay the Option Redemption Amount (reduced by any applicable withholding tax) to the Grantee
in cash within ninety (90) days following the Proposed Exercise Date. For purposes of
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the foregoing, cancellation of any indebtedness of the Grantee to the Company shall be treated
as payment to the Grantee in cash to the extent of the unpaid principal and any accrued interest
canceled.
(iii) If Option Redemption Right Is Not Exercised. If, following receipt of the
Grantees Advance Notice, the Company does not give the Grantee a Disqualification Notice or
otherwise does not exercise the Option Redemption Right, the Grantee may exercise the Option
effective as of the Proposed Exercise Date by delivering to the Company on or before the Proposed
Exercise Date (but in any event no later than the Outside Exercise Date) full payment of the
exercise price for the number of shares being purchased, as set forth in the Grantees Advance
Notice. If the Grantee fails to deliver full payment of the exercise price for the number of
shares being purchased on or before the Proposed Exercise Date, the Grantee may only exercise the
Option by again complying with the requirements of Section 13(a)(i).
(b) Restriction on Transfer. No transfer of any shares of stock by the Grantee,
whether voluntary or involuntary, shall be effective unless all of the Grantees shares are
transferred to one transferee and such transferee is a permitted shareholder of an S Corporation (a
Permitted Transferee). Thus, for example, in the event of a divorce of the Grantee, the former
spouse of the Grantee may be awarded the Grantees shares of stock if and only if the former spouse
is a Permitted Transferee and the former spouse is awarded all of the shares held by the Grantee.
(c) Restriction on Other Action. The Grantee shall not take any action or fail to
take any action which shall result in the Company being unable to maintain the Companys status as
an S Corporation. This provision shall require, without limitation, that the Grantee notify the
Company prior to the Grantee ceasing to qualify as an eligible shareholder of an S Corporation and
permit the Company to repurchase all shares of stock owned by the Grantee pursuant to Section 12
hereof.
(d) Transfer by Trust. If any transfer by the Grantee is by operation of law or by
right of succession under a revocable trust, the transferees shall be obligated to make such
transfers as shall reasonably be necessary in the opinion of counsel for the Company, to avoid
termination of the Companys status as an S Corporation.
(e) Other Restrictions. The provisions of this Section 13 are in addition to the
provisions of Sections 11 and 12 hereof. By way of example and not limitation, a transfer by
divorce or otherwise to a Permitted Transferee pursuant to this Section 13 shall be subject to the
Right of First Refusal set forth in Section 11 hereof.
(f) Termination of Restrictions. The restrictions imposed by this Section 13 shall
terminate upon the occurrence of the first of any of the following events: (i) the written
agreement of the Company and the Grantee, (ii) the bankruptcy, receivership or complete dissolution
of the Company, (iii) a transfer or purchase of shares of stock of the Company which results in one
shareholder holding all of the issued and outstanding shares of stock of the Company, (iv)
revocation of the Companys election to be treated as an S Corporation or (v) the Registration
Date.
9
(g) Additional Shares or Substituted Securities. In the event of any transaction
described in Section 10 or 11 of the Plan, any new, substituted or additional securities or other
property which is by reason of any such transaction distributed with respect to the Shares shall be
immediately subject to the S Corporation Provisions, but only to the extent the Shares are at the
time covered by such Provisions.
(h) Condition on Exercise, Transfer or Disposition of Shares. The Grantee shall not
exercise the Option with respect to all or any part of the shares of stock subject to the Option,
unless the Grantee executes and becomes bound by an agreement with provisions which, in the opinion
of counsel for the Company, may be necessary or useful to maintaining the Companys status as an S
Corporation, including, without limitation, provisions similar to the S Corporation Provisions.
Furthermore, neither the Grantee nor any Permitted Transferee shall at any time, directly or
indirectly, voluntarily or involuntarily, intentionally or unintentionally, by law, by judicial or
other government process, order or proceeding, or otherwise, transfer or otherwise dispose of all
or part of his, her or its shares of the Companys stock unless the transferee executes and becomes
bound by an agreement with provisions which, in the opinion of counsel for the Company, may be
necessary or useful to maintaining the Companys status as an S Corporation, including, without
limitation, provisions similar to the S Corporation Provisions. The term transfer or otherwise
dispose as used above shall include the sale, assignment, transfer, conveyance, gift, encumbrance,
pledge, bequest, devise, hypothecation, or other disposition of Shares, including a levy or
attachment on the Shares. In the absence of such executed agreement, any such exercise, transfer
or disposition is null and void ab initio.
14. Stop-Transfer Notices. In order to ensure compliance with the restrictions on
transfer set forth in this Option Agreement, the Notice or the Plan, the Company may issue
appropriate stop transfer instructions to its transfer agent, if any, and, if the Company
transfers its own securities, it may make appropriate notations to the same effect in its own
records.
15. Refusal to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Option Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or
pay dividends to any purchaser or other transferee to whom such Shares shall have been so
transferred.
16. United States Tax Consequences. Set forth below is a brief summary as of the date
of this Option Agreement of some of the United States 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 GRANTEE 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 Grantee to the alternative minimum tax in the year of
exercise. However, the Internal Revenue Service issued proposed regulations
10
which would subject the Grantee to withholding at the time the Grantee exercises an Incentive
Stock Option for Social Security and Medicare based upon the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price. These proposed regulations
are subject to further modification by the Internal Revenue Service and, if adopted, would be
effective only for the exercise of an Incentive Stock Option that occurs two years after the
regulations are issued in final form.
(b) Exercise of Incentive Stock Option Following Disability. If the Grantees
Continuous Service terminates as a result of Disability that is not a permanent and total
disability as such term is defined in Section 22(e)(3) of the Code, to the extent permitted on the
date of termination, the Grantee 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.
Section 22(e)(3) of the Code provides that an individual is permanently and totally disabled if he
or she is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than twelve (12) months.
(c) Exercise of Non-Qualified Stock Option. On exercise of a Non-Qualified Stock
Option, the Grantee 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 Grantee is an Employee or a former Employee, the
Company will be required to withhold from the Grantees compensation or collect from the Grantee
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 Non-Qualified 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. 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 of 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
Non-Qualified 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.
17. Lock-Up Agreement. The Grantee, if requested by the Company and the lead
underwriter of any public offering of the Common Stock (the Lead Underwriter), hereby irrevocably
agrees not to sell, contract to sell, grant any option to purchase, transfer the economic risk of
ownership in, make any short sale of, pledge or otherwise transfer or dispose of any interest in
any Common Stock or any securities convertible into or exchangeable or exercisable for or any other
rights to purchase or acquire Common Stock (except Common Stock included in such public offering or
acquired on the public market after such offering) during the 180-day
11
period following the effective date of a registration statement of the Company filed under the
Securities Act of 1933, as amended, or such shorter or longer period of time as the Lead
Underwriter shall specify. The Grantee further agrees to sign such documents as may be requested
by the Lead Underwriter (with the express approval of the Company) to effect the foregoing and
agrees that the Company may impose stop-transfer instructions with respect to such Common Stock
subject to the lock-up period until the end of such period.
18. Entire Agreement: Governing Law. The Notice, the Plan and this Option 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 Grantee
with respect to the subject matter hereof, and may not be modified adversely to the Grantees
interest except by means of a writing signed by the Company and the Grantee. Nothing in the
Notice, the Plan and this Option 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
Option Agreement are to be construed in accordance with and governed by the internal laws of the
State of California 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 California
to the rights and duties of the parties. Should any provision of the Notice, the Plan or this
Option Agreement be determined 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.
19. Construction. The captions used in the Notice and this Option Agreement are
inserted for convenience and shall not be deemed a part of the Option for construction or
interpretation. Except when otherwise indicated by the context, the singular shall include the
plural and the plural shall include the singular. Use of the term or is not intended to be
exclusive, unless the context clearly requires otherwise.
20. Administration and Interpretation. Any question or dispute regarding the
administration or interpretation of the Notice, the Plan or this Option Agreement shall be
submitted by the Grantee or by the Company to the Administrator. The resolution of such question
or dispute by the Administrator shall be final and binding on all persons.
21. Venue and Waiver of Jury Trial. The Company, the Grantee, and the Grantees
assignees pursuant to Section 9 (the parties) agree that any suit, action, or proceeding arising
out of or relating to the Notice, the Plan or this Option Agreement shall be brought in the United
States District Court for the Northern 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
San Francisco) 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 21 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.
12
22. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the United States mail
by certified mail (if the parties are within the United States), with postage and fees prepaid,
addressed to the other party at its address as shown in these instruments, or to such other address
as such party may designate in writing from time to time to the other party.
23. Confidentiality. The Company shall provide to the Grantee, during the period the
Option is outstanding, copies of financial statements of the Company at least annually. The
Grantee understands and agrees that such financial statements are confidential and shall not be
disclosed by the Grantee, to any entity or person, for any reason, at any time, without the prior
written consent of the Company, unless required by law. If disclosure of such financial statements
is required by law, whether through subpoena, request for production, deposition, or otherwise, the
Grantee promptly shall provide written notice to Company, including copies of the subpoena, request
for production, deposition, or otherwise, within five (5) business days of their receipt by the
Grantee and prior to any disclosure so as to provide Company an opportunity to move to quash or
otherwise to oppose the disclosure. Notwithstanding the foregoing, the Grantee may disclose the
terms of such financial statements to his or her spouse or domestic partner, and for legitimate
business reasons, to legal, financial, and tax advisors.
END OF AGREEMENT
13
EXHIBIT A
STEPUP COMMERCE, INC. 2004 STOCK INCENTIVE PLAN
EXERCISE NOTICE
StepUp Commerce, Inc.
703 Market Street, Suite 350
San Francisco, CA 94103
703 Market Street, Suite 350
San Francisco, CA 94103
Attention: Secretary
1.
Effective as of today, the undersigned «Name» (the Grantee) hereby elects to
exercise the Grantees option to purchase
shares of the Common Stock (the Shares) of
StepUp Commerce, Inc. (the Company) under and pursuant to the Companys 2004 Stock Incentive
Plan, as amended from time to time (the Plan)
and the «Type» Stock Option Award Agreement (the Option
Agreement) and Notice of Stock Option Award (the
Notice) number «GrantNO» dated «GrantDate». Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined meanings in this Exercise
Notice.
2. Representations of the Grantee. The Grantee acknowledges that the Grantee has
received, read and understood the Notice, the Plan and the Option Agreement and agrees to abide by
and be bound by their terms and conditions.
3. Rights as Shareholder. 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
shareholder 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 10 of the Plan.
The Grantee shall enjoy rights as a shareholder until such time as the Grantee disposes of the
Shares or the Company and/or its assignee(s) exercises the Right of First Refusal or the Repurchase
Right. Upon such exercise, the Grantee shall have no further rights as a holder of the Shares so
purchased except the right to receive payment for the Shares so purchased in accordance with the
provisions of the Option Agreement, and the Grantee shall forthwith cause the certificate(s)
evidencing the Shares so purchased to be surrendered to the Company for transfer or cancellation.
4. Delivery of Payment. The Grantee 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
4(d) of the Option Agreement.
5. Tax Consultation. The Grantee understands that the Grantee may suffer adverse tax
consequences as a result of the Grantees purchase or disposition of the Shares. The Grantee
represents that the Grantee has consulted with any tax consultants the Grantee deems advisable
1
in connection with the purchase or disposition of the Shares and that the Grantee is not
relying on the Company for any tax advice. IF THE COMPANY IS AN S CORPORATION, THE GRANTEE MAY BE
ALLOCATED TAXABLE INCOME JUST BY VIRTUE OF HOLDING THE SHARES.
6. Taxes. The Grantee agrees to satisfy all applicable federal, state and local
income and employment tax withholding obligations and herewith delivers to the Company 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 Grantee 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 Award Date or within one (1) year
from the date the Shares were transferred to the Grantee. 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 Grantee agrees to satisfy the amount of such withholding in a manner that
the Administrator prescribes.
7. Restrictive Legends. The Grantee understands and agrees that the Company shall
cause the legends set forth below or legends substantially equivalent thereto, to be placed upon
any certificate(s) evidencing ownership of the Shares together with any other legends that may be
required by the Company, by United States federal or state securities laws, by Canadian provincial
securities laws or the S Corporation Provisions:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE ACT), ANY U.S. STATE
SECURITIES LAWS AND ANY CANADIAN SECURITIES LAWS AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER, A RIGHT OF FIRST REFUSAL AND A REPURCHASE
RIGHT HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE
OPTION AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE
SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF
THE ISSUER SUCH TRANSFER RESTRICTIONS, RIGHT OF FIRST REFUSAL AND
REPURCHASE RIGHT ARE BINDING ON TRANSFEREES OF THESE SHARES.
8. 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. Subject to the restrictions on transfer herein set
2
forth, this Exercise Notice shall be binding upon the Grantee and his or her heirs, executors,
administrators, successors and assigns.
9. Construction. 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.
Except when otherwise indicated by the context, the singular shall include the plural and the
plural shall include the singular. Use of the term or is not intended to be exclusive, unless
the context clearly requires otherwise.
10. Administration and Interpretation. The Grantee hereby agrees that any question or
dispute regarding the administration or interpretation of this Exercise Notice shall be submitted
by the Grantee or by the Company to the Administrator. The resolution of such question or dispute
by the Administrator shall be final and binding on all persons.
11. Governing Law; Severability. This Exercise Notice is to be construed in
accordance with and governed by the internal laws of the State of California 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 California 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.
12. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the United States mail
by certified mail (if the parties are within the United States), 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.
13. 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.
14. Entire Agreement. The Notice, the Plan and the Option 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 Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantees interest except by means of a writing
signed by the Company and the Grantee. Nothing in the Notice, the Plan, the Option 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.
3
Submitted by: | Accepted by: | |||||||
«NAME» | STEPUP COMMERCE, INC. | |||||||
By: | ||||||||
|
||||||||
Title: | ||||||||
|
||||||||
Address: | Address: | |||||||
703 Market Street, Suite 350 | ||||||||
San Francisco, CA 94103 | ||||||||
4
EXHIBIT B
STEPUP COMMERCE, INC. 2004 STOCK INCENTIVE PLAN
INVESTMENT REPRESENTATION STATEMENT
GRANTEE:
|
«NAME» | |||
COMPANY:
|
STEPUP COMMERCE, INC. | |||
SECURITY:
|
COMMON STOCK | |||
AMOUNT:
|
shares | |||
DATE:
|
|
|||
|
In connection with the purchase of the above-listed Securities, the undersigned Grantee
represents to the Company the following:
(a) Grantee is aware of the Companys business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and knowledgeable decision
to acquire the Securities. Grantee is acquiring these Securities for investment for Grantees own
account only and not with a view to, or for resale in connection with, any distribution thereof
within the meaning of the Securities Act of 1933, as amended (the Securities Act).
(b) Grantee acknowledges and understands that the Securities constitute restricted
securities under the Securities Act and have not been registered under the Securities Act in
reliance upon a specific exemption therefrom, which exemption depends upon among other things, the
bona fide nature of Grantees investment intent as expressed herein. Grantee further understands
that the Securities must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Grantee further acknowledges
and understands that the Company is under no obligation to register the Securities. Grantee
understands that the certificate evidencing the Securities will be imprinted with a legend which
prohibits the transfer of the Securities unless they are registered or such registration is not
required in the opinion of counsel satisfactory to the Company.
(c) Grantee is familiar with the provisions of Rule 701 and Rule 144, each promulgated under
the Securities Act, which, in substance, permit limited public resale of restricted securities
acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701
at the time of the grant of the Option to the Grantee, the exercise will be exempt from
registration under the Securities Act. In the event the Company becomes subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days
thereafter (or such longer period as any market stand-off agreement may require) the Securities
exempt under Rule 701 may be resold, subject to the satisfaction of certain of the conditions
specified by Rule 144, including: (1) the resale being made through a broker in an unsolicited
brokers transaction or in transactions directly with a market maker (as said term is defined
under the Securities Exchange Act of 1934); and, in the case of an affiliate, (2) the availability
of certain public information about the Company, (3) the amount of Securities being
1
sold during any three month period not exceeding the limitations specified in Rule 144(e), and
(4) the timely filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at the time of grant of the
Option, then the Securities may be resold in certain limited circumstances subject to the
provisions of Rule 144, which requires the resale to occur not less than one year after the later
of the date the Securities were sold by the Company or the date the Securities were sold by an
affiliate of the Company, within the meaning of Rule 144; and, in the case of acquisition of the
Securities by an affiliate, or by a non-affiliate who subsequently holds the Securities less than
two years, the satisfaction of the conditions set forth in sections (1), (2), (3) and (4) of the
paragraph immediately above.
(d) Grantee further understands that in the event all of the applicable requirements of Rule
701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A,
or some other registration exemption will be required; and that, notwithstanding the fact that
Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has
expressed its opinion that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rules 144 or 701 will have a substantial burden
of proof in establishing that an exemption from registration is available for such offers or sales,
and that such persons and their respective brokers who participate in such transactions do so at
their own risk. Grantee understands that no assurances can be given that any such other
registration exemption will be available in such event.
(e) Grantee represents that he is a resident of the State or Province of .
Signature of Grantee: | ||
«NAME» | ||
Date: |
2
EXHIBIT C
ADVANCE NOTICE OF INTENT TO EXERCISE
To be delivered in person or by certified mail return receipt requested or overnight mail
StepUp Commerce, Inc.
703 Market Street, Suite 350
San Francisco, CA 94103
703 Market Street, Suite 350
San Francisco, CA 94103
Attention: Chief Financial Officer
(a) Effective
as of today, , I, «Name» hereby advise StepUp Commerce, Inc., (the
Company) of my intent to exercise my option to purchase
shares of the Common Stock
(the Shares) of the Company under and pursuant to the Companys 2004 Stock Incentive Plan (the
Plan) and the «Type» Stock Option Agreement and
Notice of Stock Option Grant number «GrantNO» dated
«GrantDate» (the
Option Agreement).
(b) I plan to exercise the above Shares no later than , which date is no less
than thirty (30) days from the date of receipt by the Company of this Advance Notice of Intent to
Exercise.
(c) I am aware that pursuant to Section 13 of the Option Agreement the Company will determine
whether my intended exercise may cause the Company to cease to qualify as an S Corporation. If it
is determined that this proposed exercise will cause the Company to cease to qualify as an S
Corporation I will be bound by the provisions of Section 13 of the Option Agreement.
(d) To assist the Company in determining whether my intent to exercise would cause the Company
to cease to qualify as an S Corporation, please be advised that:
(please check all boxes that apply)
o I and my spouse are United States citizens.
o Neither I nor my spouse is a non-resident alien within the meaning of section
7701(b)(1)(B) of the Internal Revenue Service Code of 1986, as amended.
o Either I or my spouse is NOT United States citizens.
o Either I or my spouse IS a non-resident alien within the meaning of section
7701(b)(1)(B) of the Internal Revenue Service Code of 1986, as amended.
(e) Should my status or the status of my spouse as represented in part (d) above change at any
time in the future, I will immediately notify the Company of such change.
(f) Entire Agreement. The Notice of Stock Option Grant, the Plan and the Option
Agreement are incorporated herein by reference and together with this Advance Notice of Intent to
Exercise constitute the entire agreement of the parties with respect to the subject matter hereof
1
and supersede in their entirety all prior undertakings and agreements of the Company and the
Grantee with respect to the subject matter hereof, and may not be modified adversely to the
Grantees interest except by means of a writing signed by the Company and the Grantee.
Submitted by: |
||
«NAME» |
||
Address: |
||
2