STOCK OPTION AGREEMENT

[COMPANY NAME]

This Stock Option Agreement (“Agreement”) is entered into as of [DATE] (“Grant Date”) between [COMPANY NAME], a [STATE] corporation (“Company”), and [EMPLOYEE NAME] (“Optionee”).

RECITALS

WHEREAS, the Company desires to attract and retain the services of Optionee and to provide incentives for such services; and

WHEREAS, the Company has adopted the [YEAR] Stock Incentive Plan (“Plan”), which is incorporated herein by reference; and

WHEREAS, the Company desires to grant Optionee an option to purchase shares of the Company’s Common Stock subject to the terms and conditions set forth herein and in the Plan.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the parties agree as follows:

1. GRANT OF OPTION

1.1 Grant. Subject to the terms and conditions of this Agreement and the Plan, the Company hereby grants to Optionee an option (“Option”) to purchase up to [NUMBER] shares of the Company’s Common Stock, $[PAR VALUE] par value per share (“Common Stock”), at the exercise price of $[PRICE] per share (“Exercise Price”).

1.2 Type of Option. This Option is intended to be:

• An incentive stock option (“ISO”) under Section 422 of the Internal Revenue Code
• A non-qualified stock option (“NQSO”)

1.3 Maximum ISO Limit. To the extent that the aggregate Fair Market Value of shares with respect to which ISOs are exercisable for the first time by Optionee during any calendar year exceeds $100,000, such excess Options shall be treated as NQSOs.

2. VESTING SCHEDULE

2.1 Vesting Commencement. The Option shall vest and become exercisable according to the following schedule, provided that Optionee remains in continuous service with the Company:

• Standard Vesting: [PERCENTAGE]% of the shares subject to the Option shall vest on each anniversary of the Grant Date over [NUMBER] years
• Cliff Vesting: [PERCENTAGE]% of the shares shall vest on [DATE], with the remaining shares vesting monthly/quarterly thereafter
• Performance Vesting: Vesting based on achievement of performance milestones as set forth in Exhibit A

2.2 Acceleration Events.

• Change in Control: Upon a Change in Control (as defined in the Plan), [PERCENTAGE]% of unvested Options shall immediately vest
• Termination Without Cause/For Good Reason: If Optionee’s employment is terminated by the Company without Cause or by Optionee for Good Reason within [NUMBER] months following a Change in Control, [PERCENTAGE]% of unvested Options shall immediately vest
• Death or Disability: Upon termination due to death or Disability, [PERCENTAGE]% of unvested Options shall immediately vest

3. EXERCISE OF OPTION

3.1 Exercise Period. The Option may be exercised at any time after it becomes vested and before it expires as follows:

• While employed: Until termination of employment
• After termination for Cause: Immediately upon termination
• After termination without Cause: [NUMBER] days after termination
• After resignation: [NUMBER] days after resignation
• After death or Disability: [NUMBER] months after termination

3.2 Method of Exercise. The Option may be exercised by written notice to the Company specifying the number of shares to be purchased and accompanied by payment of the Exercise Price by:

• Cash or certified check
• Cashless exercise (broker-assisted sale)
• Net exercise (surrender of shares)
• Previously owned shares of Common Stock

3.3 Minimum Exercise. No partial exercise of less than [NUMBER] shares (or all remaining shares if fewer than [NUMBER] remain) shall be permitted.

4. TRANSFERABILITY

4.1 General Restriction. The Option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or the laws of descent and distribution.

4.2 Permitted Transfers. Notwithstanding the foregoing, ISOs may be transferred to:

• Optionee’s spouse, children, or grandchildren
• A trust for the benefit of such family members
• A partnership whose partners are limited to such family members

5. CORPORATE TRANSACTIONS

5.1 Merger or Consolidation. In the event of a merger, consolidation, or reorganization, the Option shall be subject to the agreement of merger or consolidation and may be:

• Converted into options to purchase shares of the surviving entity
• Cashed out for fair value
• Terminated with advance notice

5.2 Asset Sale. In the event of a sale of all or substantially all of the Company’s assets, the Option shall be subject to the terms of such sale agreement.

6. TAX OBLIGATIONS

6.1 Tax Withholding. The Company may withhold from any payment or require Optionee to pay the amount of any federal, state, local, or foreign taxes required to be withheld.

6.2 Section 409A Compliance. This Agreement is intended to comply with Section 409A of the Internal Revenue Code or qualify for an exemption therefrom.

6.3 ISO Requirements. If this Option is intended to be an ISO:

• Optionee must be an employee on the Grant Date
• The Option must be exercised within 10 years of the Grant Date
• The Exercise Price must not be less than Fair Market Value on the Grant Date
• For 10% stockholders, special rules apply

7. REPRESENTATIONS AND WARRANTIES

7.1 Optionee Representations. Optionee represents and warrants that:

• Optionee has full capacity to enter into this Agreement
• Optionee understands the risks associated with the Option
• Optionee has received and reviewed the Plan and this Agreement

7.2 Investment Representations. Optionee acknowledges that:

• The shares have not been registered under the Securities Act
• The shares are being acquired for investment purposes only
• Optionee is an “accredited investor” as defined in Rule 501 of Regulation D

8. DEFINITIONS

“Cause” means: (a) willful misconduct or gross negligence; (b) conviction of a felony; (c) material breach of employment agreement; (d) violation of Company policies; or (e) failure to perform duties after written notice and opportunity to cure.

“Change in Control” means: (a) acquisition of 50% or more of voting securities; (b) merger or consolidation resulting in change of control; (c) sale of all or substantially all assets; or (d) board composition change.

“Disability” means inability to perform essential job functions with or without reasonable accommodation for 180 consecutive days.

“Fair Market Value” means the closing price of Common Stock on the Grant Date, or if not publicly traded, the fair market value as determined by the Board.

“Good Reason” means: (a) material reduction in duties or responsibilities; (b) material reduction in compensation; (c) relocation of more than 50 miles; or (d) material breach of employment agreement by Company.

9. GENERAL PROVISIONS

9.1 Compliance with Law. The issuance and transfer of shares shall be subject to compliance with all applicable laws and regulations.

9.2 No Right to Continued Employment. This Agreement does not confer any right to continued employment or service.

9.3 Governing Law. This Agreement shall be governed by the laws of [STATE].

9.4 Entire Agreement. This Agreement and the Plan constitute the entire agreement between the parties.

9.5 Amendment. This Agreement may be amended only by written agreement signed by both parties.

9.6 Severability. If any provision is held invalid, the remainder shall continue in full force and effect.

9.7 Notices. All notices shall be in writing and delivered to the addresses set forth below or as subsequently designated.

9.8 Counterparts. This Agreement may be executed in counterparts, including electronic signatures.

10. CLAWBACK PROVISIONS

10.1 Compensation Recovery. This Option shall be subject to any clawback or recoupment policy adopted by the Company or required by law.

10.2 Forfeiture Events. The Option may be forfeited if Optionee engages in activities detrimental to the Company or violates restrictive covenants.

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

[COMPANY NAME]

By: _________________________
Name: [NAME]
Title: [TITLE]

OPTIONEE

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[EMPLOYEE NAME]

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EXHIBIT A

PERFORMANCE VESTING CRITERIA

[If applicable, detail specific performance milestones, metrics, and measurement periods]

EXHIBIT B

NOTICE OF EXERCISE FORM

[Include standard form for exercising options]

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IMPORTANT NOTICE: This is a template for informational purposes only. All stock option agreements should be reviewed by qualified legal counsel before execution. Tax implications may vary significantly based on individual circumstances. Consult with tax advisors regarding the tax consequences of stock option grants and exercises.