Stock Option Agreement- Long Form

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This Stock Option Agreement is between a corporation and an employee for the purchase of stock under an existing stock option plan. This agreement sets out how many shares the employee may purchase and what will happen if the employee leaves the company. This form is for use in all states.

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This Stock Option Agreement is between a corporation and an option holder for the purchase of stock under an existing stock option plan. This agreement sets out the specifics of the arrangement including the maximum number of shares an optionee can purchase and the price per share of stock. It also includes the earliest date on which the option can be exercised and the expiration date of the option. It is important that this business transaction be memorialized in writing. A written Stock Option Agreement will prove crucial in the event of disagreements or misunderstandings between the parties.

This Stock Option Agreement includes the following provisions:
  • Name of Corporation: Sets out the name and address of the corporation issuing the shares and the date of the agreement;
  • Purchase Information: Sets forth the name of purchaser, total price and the number of shares purchased;
  • Grant of Options: Specifies the number of shares optioned and the purchase price per share;
  • Term: Sets forth the earliest purchase date and the expiration date of the option agreement;
  • Expiry Event: Sets out the optionee’s options regarding the stock if employee is terminated or voluntary leaves the corporation;
  • Class of Shares: Sets out the specific class of the optioned shares (common, preferred, Class A);
  • Non-Assignable: This option is not assignable except through a Will or laws of intestacy;
  • Signatures: This agreement must be signed by the corporation and the option holder.

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This attorney-prepared packet contains:
  1. General Instructions
  2. Stock Option Agreement – Long Form
State Law Compliance: This form complies with the laws of all states
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Stock Option Agreement
Long Form

 

THIS AGREEMENT dated as of [Date (ie. July 31, 2002)] between [Name of Corporation], a corporation organized and existing under the laws of the State of [State (ie. California)], with its principal place of business at [Address of Corporation] (the “Corporation”), and [Name of Option Holder], residing at [Address of Option Holder] (the "Optionee").
IN CONSIDERATION OF the mutual covenants and agreements hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1.   Grant of Options. The Corporation hereby grants to the Optionee an option (the “Option”) to subscribe for and purchase from the Corporations treasury, up to an aggregate of [Number and Class of Optioned Shares (ie. 5,000 Common)] Shares in the capital of the Corporation (the “Optioned Shares”), as fully paid and non-assessable shares of the Corporation, for a purchase price of [Purchase/Exercise Price Per Share (ie. $7.50)] per Optioned Share, subject, however, to the provisions and upon the terms and conditions hereinafter set forth.
2.   Exercise Term of Options. The rights represented by the Option may be exercised at any time after [Earliest Date on which Option can be exercised] (the “Vesting Date”) and before 5:00 p.m. [City of Principal Place of Business of Corporation (ie. Los Angeles)] time on the [Expiry Date of Option] (the “Expiry Date”), after which Expiry Date the unexercised portion of the Option, whether vested or unvested, will expire.
3.   Expiry Event. Notwithstanding the Exercise Term, the Option shall, to the extent not validly exercised, and whether vested or unvested, expire on the earliest to occur of the following dates and times (an “Expiry Event”):
(a)   ninety (90) days after the Optionee ceases to be an employee of the Corporation, for any reason (other than dismissal for cause or resignation), including but not limited to retirement, permanent disability or death. In the event of the Optionees death, the Option may be exercised during such 90 day period by the Optionees legal representative or the person or persons to whom the deceased Optionees rights under the Option shall pass by will or the applicable laws of descent and distribution, and only to the extent the Optionee would have been entitled to exercise the Option on the date of death;
(b)   ninety (90) days after termination of the Optionees employment by reason of permanent disability or retirement under any retirement plan of the Corporation, during which ninety (90) day period the Optionee may exercise the Option to the extent he or she was entitled to exercise it at the time of such termination, provided that if the Optionee shall die within such ninety (90) day period, then such right shall be extended to ninety (90) days following the date of death of the Optionee; and
(c)   Immediately upon the Optionee (i) resigning from employment with the Corporation; being terminated for cause by the Corporation, whether or not the Optionee received compensation in respect of dismissal or was entitled to a period of notice of termination which would otherwise have permitted a greater portion of the Option to vest with the Optionee; or (iii) becoming bankrupt under any applicable bankruptcy legislation.
4.   Exercise of Options. The rights represented by the Option may be exercised by the Optionee, in whole or in part (but not as to a fractional share of an Optioned Share), by the surrender of this Option Agreement, with the attached Notice of Exercise of Option duly executed, at the principal office of the Corporation at its principal place of business first noted above (or such other office or agency of the Corporation as it may designate by notice in writing to the Optionee at the address of the Optionee appearing on the books of the Corporation at any time during the Exercise Term of the respective Optioned Shares) and upon payment to it for the account of the Corporation, by cash or by certified or bank cashiers cheque, of the purchase price. The Corporation agrees that the Optioned Shares so purchased shall be and be deemed to be issued to the Optionee as the record owner of such shares as of the close of business on the date on which this Option Agreement shall have been surrendered and payment made for such shares as aforesaid.
5.   Covenants of the Corporation. The Corporation hereby agrees as follows:
(a)   all Optioned Shares which may be issued upon the exercise of the rights represented by this Option Agreement will, upon issuance, be validly issued, fully paid and non-assessable and free from any and all taxes, liens and charges with respect to the issue thereof;
(b)   during the Exercise Term, the Corporation will at all times have authorized and reserved a sufficient number of its shares in its capital stock to provide for the exercise of the rights represented by this Option Agreement; and
(c)   in the event the Corporation files a prospectus in order to issue its securities to the public, the Corporation shall include in such prospectus a full disclosure and qualification with respect to all of the shares which may be issued upon the exercise of the rights represented by this Option Agreement, such that all of the shares which may be issued upon the exercise of the rights represented by this Option Agreement will be qualified by the prospectus.
6.   Class of Optioned Shares. As used herein the term [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares” shall mean and include the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares of the Corporation authorized on the date of the original granting of this Option Agreement.
7.   Adjustments to Class of Optioned Shares.
(a)   Subdivisions and Redivisions. In the event of any subdivision or redivision or subdivisions or redivisions of the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares at any time while the Option is outstanding into a greater number of Shares, the Corporation shall thereafter deliver at the time of exercise of the Option, in lieu of the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares in respect of which the Option is then being exercised, such greater number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares as would result from said subdivision or redivision or subdivisions or redivisions had the Option been exercised before such subdivision or redivision or subdivisions or redivisions without the Optionee making any additional payment or giving any other consideration therefor.
(b)   Consolidations. In the event of any consolidation or consolidations of the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares at any time while the Option is outstanding into a lesser number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares, the Corporation shall thereafter deliver, and the Optionee shall accept, at the time of exercise of the Option, in lieu of the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares in respect of which the Option is then being exercised, such lesser number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares as would result from such consolidation or consolidations had such Option been exercised before such consolidation or consolidations.
(c)   Reclassifications/Changes. In the event of any reclassification or change or reclassifications or changes of the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares at any time while the Option is outstanding, the Corporation shall thereafter deliver at the time of exercise of the Option the number of securities of the Corporation of the appropriate class or classes resulting from said reclassification or change or reclassifications or changes as the Optionee would have been entitled to receive in respect of the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares in respect of which the Option is then being exercised had the Option been exercised before such reclassification or change or reclassifications or changes.
(d)   Other Capital Reorganizations. In the event of any capital reorganization of the Corporation at any time while the Option is outstanding, not otherwise covered in this paragraph 7 or a consolidation, amalgamation or merger with or into any other entity or the sale of the properties and assets as or substantially as an entirety to any other entity, the Optionee if he or she has not exercised his or her Option prior to the effective date of such reorganization, consolidation, amalgamation, merger or sale, upon the exercise of the Option thereafter, shall be entitled to receive and shall accept in lieu of the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares then subscribed for by him or her, but for the same aggregate consideration payable therefor, the number of other securities or property of the entity resulting from such merger, amalgamation or consolidation or to which such sale may be made, as the case may be, that the Optionee would have been entitled to receive on such capital reorganization, consolidation, amalgamation, merger or sale if, on the record date or the effective date thereof, he or she had been the registered holder of the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares so subscribed for.
(e)   Other Changes. In the event that the Corporation takes any action affecting the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares at any time, other than any action described above, which in the opinion of the Corporation would materially affect the rights of a Optionee, the exercise price or number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares issuable upon exercise of the Option will be adjusted in such manner, if any, and at such time, as the Corporation may determine, but subject in all cases to any necessary regulatory and, if required, shareholder approval. Failure to take such action by the Corporation so as to provide for an adjustment on or prior to the effective date of any action by the Corporation affecting the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares will be conclusive evidence that the Corporation has determined that it is equitable to make no adjustment in the circumstances.
(f)   No Fractional Shares. The Corporation shall not be obligated to issue fractional [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares in satisfaction of its obligations under the Option Agreement and the Optionee will not be entitled to receive any form of compensation in lieu thereof.
(g)   Additional Subscription Rights. If at any time the Corporation grants to its shareholders the right to subscribe for and purchase pro rata additional securities of any other corporation or entity, there shall be no adjustments made to the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares or other securities subject to the Option in consequence thereof and the Option shall remain unaffected.
(h)   Adjustments Cumulative. The adjustment in the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares issuable pursuant to the Option provided for in this paragraph 7 shall be cumulative.
8.   Mutilated or Missing Options. Upon receipt of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of this Option Agreement and, in the case of any such loss, theft or destruction, upon delivery of a bond or indemnity satisfactory to the Corporation, or, in the case of any such mutilation, upon surrender or cancellation of this Option, the Corporation will issue to the Optionee a new Option Agreement of like tenor, in lieu of this Option Agreement, representing the right to subscribe for and purchase the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares which may be subscribed for and purchased hereunder.
9.   Applicable Laws or Regulations. The exercise of Option and the Corporations obligation to sell and deliver Shares upon exercise of Options shall be subject to all applicable federal, State and foreign laws, rules and regulations, the rules and regulations of any stock exchange on which the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares are listed for trading and to such approvals by any regulatory or governmental agency as may, in the opinion of counsel to the Corporation, be required. The Corporation shall not be obligated by any provision of this Option Agreement to issue or sell Shares in violation of such laws, rules and regulations or any condition of such approvals. No [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares issued or sold hereunder where such grant, issue or sale would require registration of the Shares under the securities laws of any jurisdiction and any purported grant of any Option or issue or sale of Shares hereunder in violation of this provision shall be void. In addition, the Corporation shall have no obligation to issue any [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares pursuant to this Option Agreement unless such Shares shall have been duly listed, upon official notice of issuance, with all stock exchanges on which the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares are listed for trading. [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares issued and sold to the Optionee pursuant to the exercise of Options may be subject to limitations on sale or resale under applicable securities laws.
10.   Option Not Assignable. The Option shall be transferable only by will or by the laws of intestacy and shall be exercisable, during the lifetime of the Optionee to whom the Option is granted, only by the Optionee (or, during any period in which the Optionee lacks capacity, by the Optionees personal or legal representatives) and, upon the death of the Optionee, by the Optionees heirs, executors, administrators or personal or legal representatives. Except as specifically provided in the foregoing sentence, neither the Option nor any of the rights and privileges conferred upon the Optionee under this Option Agreement shall be transferred, assigned, pledged, hypothecated in any way or made the subject of any security interest of any kind whatever (whether by operation of law or otherwise), and neither the Option nor any of the rights and privileges conferred upon the Optionee under this Option Agreement shall be subject to execution, attachment or similar process. Upon any attempt by the Optionee to so transfer, assign, pledge, hypothecate, make subject to a security interest or otherwise dispose of the Option or any of the rights and privileges hereby conferred contrary to the provisions hereof, or upon the levy of any execution, attachment or similar process upon an Option or any of the rights and privileges thereby conferred, the Option and such rights and privileges shall immediately terminate and cease to be exercisable.
11.   No Obligation to go Public or List. Notwithstanding any provision of this Option Agreement, there is no obligation on the Corporation to make any public distribution of its securities, become listed on any stock exchange nor a “reporting issuer” or equivalent in any jurisdiction and no provision hereof shall be interpreted to impose any such obligations.
12.   Governing Law. This Option Agreement shall be governed by and construed in accordance with the laws of the State of [State (ie. California)].
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first above mentioned.
 
 
[NAME OF CORPORATION]
 
 
 
 
Per:
 
 
 
 
Name:   
Title:   
 
 
 
 
Witness
 
[NAME OF OPTION HOLDER]
 
 
Notice of Exercise of Option
[to be signed only upon exercise of this Option]
 
The undersigned hereby exercises the within Option for the purchase of ________________ Optioned Shares covered by such Option and in accordance with the terms and conditions thereof, and herewith makes payment of the exercise price in full.
The Corporation is instructed to issue such Shares in the name of the undersigned and to deliver the same at the address indicated below.
 
Date:                , 20___.
 
 
 
x
Witness
 
[Name of Option Holder]
 
 
 
[Signature must conform exactly with the name of the registered owner on the front of this Option]
 
 
 
 
 
 
 
Optionee Address
 
Number of Pages9
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#28548
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Stock Option Agreement
Long Form

 

THIS AGREEMENT dated as of [Date (ie. July 31, 2002)] between [Name of Corporation], a corporation organized and existing under the laws of the State of [State (ie. California)], with its principal place of business at [Address of Corporation] (the “Corporation”), and [Name of Option Holder], residing at [Address of Option Holder] (the "Optionee").
IN CONSIDERATION OF the mutual covenants and agreements hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1.   Grant of Options. The Corporation hereby grants to the Optionee an option (the “Option”) to subscribe for and purchase from the Corporations treasury, up to an aggregate of [Number and Class of Optioned Shares (ie. 5,000 Common)] Shares in the capital of the Corporation (the “Optioned Shares”), as fully paid and non-assessable shares of the Corporation, for a purchase price of [Purchase/Exercise Price Per Share (ie. $7.50)] per Optioned Share, subject, however, to the provisions and upon the terms and conditions hereinafter set forth.
2.   Exercise Term of Options. The rights represented by the Option may be exercised at any time after [Earliest Date on which Option can be exercised] (the “Vesting Date”) and before 5:00 p.m. [City of Principal Place of Business of Corporation (ie. Los Angeles)] time on the [Expiry Date of Option] (the “Expiry Date”), after which Expiry Date the unexercised portion of the Option, whether vested or unvested, will expire.
3.   Expiry Event. Notwithstanding the Exercise Term, the Option shall, to the extent not validly exercised, and whether vested or unvested, expire on the earliest to occur of the following dates and times (an “Expiry Event”):
(a)   ninety (90) days after the Optionee ceases to be an employee of the Corporation, for any reason (other than dismissal for cause or resignation), including but not limited to retirement, permanent disability or death. In the event of the Optionees death, the Option may be exercised during such 90 day period by the Optionees legal representative or the person or persons to whom the deceased Optionees rights under the Option shall pass by will or the applicable laws of descent and distribution, and only to the extent the Optionee would have been entitled to exercise the Option on the date of death;
(b)   ninety (90) days after termination of the Optionees employment by reason of permanent disability or retirement under any retirement plan of the Corporation, during which ninety (90) day period the Optionee may exercise the Option to the extent he or she was entitled to exercise it at the time of such termination, provided that if the Optionee shall die within such ninety (90) day period, then such right shall be extended to ninety (90) days following the date of death of the Optionee; and
(c)   Immediately upon the Optionee (i) resigning from employment with the Corporation; being terminated for cause by the Corporation, whether or not the Optionee received compensation in respect of dismissal or was entitled to a period of notice of termination which would otherwise have permitted a greater portion of the Option to vest with the Optionee; or (iii) becoming bankrupt under any applicable bankruptcy legislation.
4.   Exercise of Options. The rights represented by the Option may be exercised by the Optionee, in whole or in part (but not as to a fractional share of an Optioned Share), by the surrender of this Option Agreement, with the attached Notice of Exercise of Option duly executed, at the principal office of the Corporation at its principal place of business first noted above (or such other office or agency of the Corporation as it may designate by notice in writing to the Optionee at the address of the Optionee appearing on the books of the Corporation at any time during the Exercise Term of the respective Optioned Shares) and upon payment to it for the account of the Corporation, by cash or by certified or bank cashiers cheque, of the purchase price. The Corporation agrees that the Optioned Shares so purchased shall be and be deemed to be issued to the Optionee as the record owner of such shares as of the close of business on the date on which this Option Agreement shall have been surrendered and payment made for such shares as aforesaid.
5.   Covenants of the Corporation. The Corporation hereby agrees as follows:
(a)   all Optioned Shares which may be issued upon the exercise of the rights represented by this Option Agreement will, upon issuance, be validly issued, fully paid and non-assessable and free from any and all taxes, liens and charges with respect to the issue thereof;
(b)   during the Exercise Term, the Corporation will at all times have authorized and reserved a sufficient number of its shares in its capital stock to provide for the exercise of the rights represented by this Option Agreement; and
(c)   in the event the Corporation files a prospectus in order to issue its securities to the public, the Corporation shall include in such prospectus a full disclosure and qualification with respect to all of the shares which may be issued upon the exercise of the rights represented by this Option Agreement, such that all of the shares which may be issued upon the exercise of the rights represented by this Option Agreement will be qualified by the prospectus.
6.   Class of Optioned Shares. As used herein the term [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares” shall mean and include the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares of the Corporation authorized on the date of the original granting of this Option Agreement.
7.   Adjustments to Class of Optioned Shares.
(a)   Subdivisions and Redivisions. In the event of any subdivision or redivision or subdivisions or redivisions of the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares at any time while the Option is outstanding into a greater number of Shares, the Corporation shall thereafter deliver at the time of exercise of the Option, in lieu of the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares in respect of which the Option is then being exercised, such greater number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares as would result from said subdivision or redivision or subdivisions or redivisions had the Option been exercised before such subdivision or redivision or subdivisions or redivisions without the Optionee making any additional payment or giving any other consideration therefor.
(b)   Consolidations. In the event of any consolidation or consolidations of the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares at any time while the Option is outstanding into a lesser number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares, the Corporation shall thereafter deliver, and the Optionee shall accept, at the time of exercise of the Option, in lieu of the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares in respect of which the Option is then being exercised, such lesser number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares as would result from such consolidation or consolidations had such Option been exercised before such consolidation or consolidations.
(c)   Reclassifications/Changes. In the event of any reclassification or change or reclassifications or changes of the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares at any time while the Option is outstanding, the Corporation shall thereafter deliver at the time of exercise of the Option the number of securities of the Corporation of the appropriate class or classes resulting from said reclassification or change or reclassifications or changes as the Optionee would have been entitled to receive in respect of the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares in respect of which the Option is then being exercised had the Option been exercised before such reclassification or change or reclassifications or changes.
(d)   Other Capital Reorganizations. In the event of any capital reorganization of the Corporation at any time while the Option is outstanding, not otherwise covered in this paragraph 7 or a consolidation, amalgamation or merger with or into any other entity or the sale of the properties and assets as or substantially as an entirety to any other entity, the Optionee if he or she has not exercised his or her Option prior to the effective date of such reorganization, consolidation, amalgamation, merger or sale, upon the exercise of the Option thereafter, shall be entitled to receive and shall accept in lieu of the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares then subscribed for by him or her, but for the same aggregate consideration payable therefor, the number of other securities or property of the entity resulting from such merger, amalgamation or consolidation or to which such sale may be made, as the case may be, that the Optionee would have been entitled to receive on such capital reorganization, consolidation, amalgamation, merger or sale if, on the record date or the effective date thereof, he or she had been the registered holder of the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares so subscribed for.
(e)   Other Changes. In the event that the Corporation takes any action affecting the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares at any time, other than any action described above, which in the opinion of the Corporation would materially affect the rights of a Optionee, the exercise price or number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares issuable upon exercise of the Option will be adjusted in such manner, if any, and at such time, as the Corporation may determine, but subject in all cases to any necessary regulatory and, if required, shareholder approval. Failure to take such action by the Corporation so as to provide for an adjustment on or prior to the effective date of any action by the Corporation affecting the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares will be conclusive evidence that the Corporation has determined that it is equitable to make no adjustment in the circumstances.
(f)   No Fractional Shares. The Corporation shall not be obligated to issue fractional [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares in satisfaction of its obligations under the Option Agreement and the Optionee will not be entitled to receive any form of compensation in lieu thereof.
(g)   Additional Subscription Rights. If at any time the Corporation grants to its shareholders the right to subscribe for and purchase pro rata additional securities of any other corporation or entity, there shall be no adjustments made to the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares or other securities subject to the Option in consequence thereof and the Option shall remain unaffected.
(h)   Adjustments Cumulative. The adjustment in the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares issuable pursuant to the Option provided for in this paragraph 7 shall be cumulative.
8.   Mutilated or Missing Options. Upon receipt of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of this Option Agreement and, in the case of any such loss, theft or destruction, upon delivery of a bond or indemnity satisfactory to the Corporation, or, in the case of any such mutilation, upon surrender or cancellation of this Option, the Corporation will issue to the Optionee a new Option Agreement of like tenor, in lieu of this Option Agreement, representing the right to subscribe for and purchase the number of [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares which may be subscribed for and purchased hereunder.
9.   Applicable Laws or Regulations. The exercise of Option and the Corporations obligation to sell and deliver Shares upon exercise of Options shall be subject to all applicable federal, State and foreign laws, rules and regulations, the rules and regulations of any stock exchange on which the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares are listed for trading and to such approvals by any regulatory or governmental agency as may, in the opinion of counsel to the Corporation, be required. The Corporation shall not be obligated by any provision of this Option Agreement to issue or sell Shares in violation of such laws, rules and regulations or any condition of such approvals. No [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares issued or sold hereunder where such grant, issue or sale would require registration of the Shares under the securities laws of any jurisdiction and any purported grant of any Option or issue or sale of Shares hereunder in violation of this provision shall be void. In addition, the Corporation shall have no obligation to issue any [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares pursuant to this Option Agreement unless such Shares shall have been duly listed, upon official notice of issuance, with all stock exchanges on which the [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares are listed for trading. [Class of Optioned Shares (ie. Common, Preference, Class A, etc.)] Shares issued and sold to the Optionee pursuant to the exercise of Options may be subject to limitations on sale or resale under applicable securities laws.
10.   Option Not Assignable. The Option shall be transferable only by will or by the laws of intestacy and shall be exercisable, during the lifetime of the Optionee to whom the Option is granted, only by the Optionee (or, during any period in which the Optionee lacks capacity, by the Optionees personal or legal representatives) and, upon the death of the Optionee, by the Optionees heirs, executors, administrators or personal or legal representatives. Except as specifically provided in the foregoing sentence, neither the Option nor any of the rights and privileges conferred upon the Optionee under this Option Agreement shall be transferred, assigned, pledged, hypothecated in any way or made the subject of any security interest of any kind whatever (whether by operation of law or otherwise), and neither the Option nor any of the rights and privileges conferred upon the Optionee under this Option Agreement shall be subject to execution, attachment or similar process. Upon any attempt by the Optionee to so transfer, assign, pledge, hypothecate, make subject to a security interest or otherwise dispose of the Option or any of the rights and privileges hereby conferred contrary to the provisions hereof, or upon the levy of any execution, attachment or similar process upon an Option or any of the rights and privileges thereby conferred, the Option and such rights and privileges shall immediately terminate and cease to be exercisable.
11.   No Obligation to go Public or List. Notwithstanding any provision of this Option Agreement, there is no obligation on the Corporation to make any public distribution of its securities, become listed on any stock exchange nor a “reporting issuer” or equivalent in any jurisdiction and no provision hereof shall be interpreted to impose any such obligations.
12.   Governing Law. This Option Agreement shall be governed by and construed in accordance with the laws of the State of [State (ie. California)].
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first above mentioned.
 
 
[NAME OF CORPORATION]
 
 
 
 
Per:
 
 
 
 
Name:   
Title:   
 
 
 
 
Witness
 
[NAME OF OPTION HOLDER]
 
 
Notice of Exercise of Option
[to be signed only upon exercise of this Option]
 
The undersigned hereby exercises the within Option for the purchase of ________________ Optioned Shares covered by such Option and in accordance with the terms and conditions thereof, and herewith makes payment of the exercise price in full.
The Corporation is instructed to issue such Shares in the name of the undersigned and to deliver the same at the address indicated below.
 
Date:                , 20___.
 
 
 
x
Witness
 
[Name of Option Holder]
 
 
 
[Signature must conform exactly with the name of the registered owner on the front of this Option]
 
 
 
 
 
 
 
Optionee Address
 

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