This Non-Qualified Stock Option Agreement (the “Agreement”) is entered into as of between ACME Resources LLC, a TX LLC (the “Company”), and (the “Optionee”), under the Company’s (the “Plan”). This Option is a nonqualified stock option (“NSO”) and is not intended to qualify as an incentive stock option under Section 422 of the Internal Revenue Code (the “Code”).
The Company grants the Optionee an option to purchase shares of the Company’s common stock (the “Shares”) at an exercise price of per Share (the “Exercise Price”), which the Company has determined is not less than the fair market value of a Share on the Grant Date. The total exercise price for all Shares is .
The Option vests and becomes exercisable according to the following schedule, measured from the Vesting Commencement Date of , provided the Optionee remains in continuous service through each vesting date:
Unvested portions of the Option are forfeited upon termination of the Optionee’s service.
The Option expires at 5:00 p.m. on , which is no later than ten (10) years after the Grant Date, unless terminated earlier under this Agreement or the Plan.
The Optionee may exercise the vested portion of the Option by delivering to the Company a signed notice of exercise specifying the number of Shares to be purchased, together with payment of the aggregate Exercise Price and satisfaction of any applicable withholding obligations. Payment of the Exercise Price may be made in cash or check, by cashless exercise through a broker, by net exercise (if permitted by the Administrator), by tender of previously owned Shares, or by another method the Administrator approves. No fractional Shares will be issued.
The Optionee acknowledges that, upon exercise, the Company (or a related employer) is required to withhold federal, state, local, and employment taxes on the “spread” described in Section 7. As a condition to exercise and issuance of Shares, the Optionee must make arrangements satisfactory to the Company to satisfy all withholding obligations, which the Company may collect by cash payment, by withholding from the Optionee’s compensation, or by withholding Shares otherwise issuable on exercise. The Company may refuse to issue Shares until the Optionee satisfies these obligations.
If the Optionee’s service terminates for any reason other than death, disability, or cause, the vested portion of the Option remains exercisable for month(s) after termination (but not beyond the Expiration Date). Upon termination due to death or disability, the vested portion remains exercisable for twelve (12) months. Upon termination for cause, the entire Option terminates immediately. The unvested portion of the Option terminates on the date of termination of service.
The Optionee understands that, for an NSO, the Optionee generally recognizes ordinary income at the time of exercise equal to the excess of the fair market value of the Shares on the exercise date over the Exercise Price (the “spread”), and this amount is subject to income and employment tax withholding. Any later appreciation is generally taxed as capital gain when the Shares are sold. If the Shares are subject to vesting at exercise and the Optionee files a timely election under Section 83(b) of the Code, income is instead measured at the time of exercise on the then-current spread. The Company makes no representation regarding tax consequences, and the Optionee is advised to consult a personal tax advisor.
Except as the Administrator may otherwise permit consistent with applicable law, the Option is not transferable other than by will or the laws of descent and distribution and, during the Optionee’s lifetime, is exercisable only by the Optionee. The Shares are subject to the transfer restrictions of applicable securities laws, the Plan, and the Company’s governing documents.
This Agreement is subject to the Plan, which is incorporated by reference; in the event of conflict, the Plan controls. This Agreement is governed by the laws of the State of TX. It may be amended only in a writing signed by both parties and may be executed in counterparts, including electronically.
Name: Michael Yuan
Title: General Manager
Date:
Name: ______________________
Date: ______________________