STOCK OPTIONS AWARD AGREEMENT

[COMPANY NAME]
EQUITY INCENTIVE PLAN

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AGREEMENT DETAILS

Employee Name: _________________________
Employee ID: _________________________
Grant Date: _________________________
Board/Committee Approval Date: _________________________

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1. GRANT OF OPTION

Subject to the terms and conditions set forth in this Stock Options Award Agreement (“Agreement”) and the [Company Name] Equity Incentive Plan (the “Plan”), [Company Name], a [State] corporation (the “Company”), hereby grants to the above-named employee (“Participant”) an option (the “Option”) to purchase the number of shares of the Company’s Common Stock set forth below at the Exercise Price per share specified below.

Type of Option: ☐ Incentive Stock Option (ISO) ☐ Nonqualified Stock Option (NQSO)
Total Number of Shares: _________________________
Exercise Price per Share: $_____________ (Fair Market Value on Grant Date)
Total Exercise Price: $_____________
Expiration Date: _________________________ (10 years from Grant Date)

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2. VESTING SCHEDULE

Standard Vesting (Select One):

☐ Four-Year Vest with One-Year Cliff: 25% of the shares subject to the Option shall vest on the first anniversary of the Vesting Commencement Date, and the remaining 75% shall vest in equal monthly installments over the following 36 months.

☐ Annual Vesting: 25% of the shares shall vest on each anniversary of the Vesting Commencement Date over four years.

☐ Custom Vesting Schedule: [Specify custom schedule]

Vesting Commencement Date: _________________________

Accelerated Vesting Provisions:

Single Trigger Acceleration (Involuntary Termination): In the event of Participant’s involuntary termination without Cause or resignation for Good Reason, [____]% of the then-unvested shares shall immediately vest.

Double Trigger Acceleration (Change in Control): In the event of a Change in Control followed within [12/18] months by Participant’s involuntary termination without Cause or resignation for Good Reason, [50%/100%] of the then-unvested shares shall immediately vest.

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3. EXERCISE CONDITIONS

3.1 Exercise During Employment

The Option may be exercised only while Participant is employed by or providing services to the Company or its subsidiaries, except as otherwise provided herein.

3.2 Post-Termination Exercise Periods

Termination for Cause: Option expires immediately upon termination.

Voluntary Resignation: Participant may exercise vested portions for 30 days following termination.

Involuntary Termination without Cause: Participant may exercise vested portions for 90 days following termination.

Death or Disability: Participant (or estate/beneficiary) may exercise vested portions for 12 months following termination.

Retirement: [If applicable] Participant may exercise vested portions for [specify period] following retirement.

3.3 Exercise Methods

The Option may be exercised by any of the following methods, subject to Company approval:

• Cash payment
• Cashless exercise through broker
• Net exercise (surrender shares to cover exercise price)
• Promissory note (if permitted by law and Company policy)

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4. TRANSFERABILITY RESTRICTIONS

4.1 General Restrictions

The Option is not transferable except by will or the laws of descent and distribution, and may be exercised during Participant’s lifetime only by Participant.

4.2 Right of First Refusal

The Company shall have a right of first refusal on any proposed transfer of shares acquired upon exercise of the Option, subject to the terms of the Plan and any applicable shareholders’ agreement.

4.3 Drag-Along and Tag-Along Rights

Shares acquired upon exercise shall be subject to any drag-along and tag-along rights set forth in the Company’s charter documents or shareholders’ agreements.

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5. TAX CONSIDERATIONS

5.1 Tax Withholding

Participant acknowledges that the Company has the right to deduct from payments of any kind otherwise due to Participant any federal, state, or local taxes of any kind required by law to be withheld.

5.2 ISO-Specific Provisions (If Applicable)

If this Option qualifies as an Incentive Stock Option:

• Maximum aggregate fair market value exercisable in any calendar year: $100,000
• Participant must hold shares acquired upon exercise for at least two years from Grant Date and one year from exercise date to qualify for favorable tax treatment
• Disqualifying disposition reporting requirements apply

5.3 Section 409A Compliance

This Option is intended to be exempt from Section 409A of the Internal Revenue Code and shall be construed accordingly.

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6. CHANGE IN CONTROL PROVISIONS

6.1 Definition of Change in Control

A “Change in Control” shall mean: (a) Acquisition by any person of 50% or more of the Company’s voting securities; (b) Consummation of a merger, consolidation, or similar transaction; (c) Sale of all or substantially all of the Company’s assets; (d) Complete liquidation or dissolution of the Company; or (e) Change in the majority of the Board of Directors within a 12-month period.

6.2 Treatment Upon Change in Control

Upon a Change in Control, the Committee may, in its discretion:

• Provide for accelerated vesting
• Require cash-out of the Option at fair value
• Provide for assumption or substitution by the acquiring entity
• Take such other action as deemed appropriate

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7. CLAWBACK AND RECOUPMENT

7.1 General Clawback

The Option and any shares acquired upon exercise are subject to recoupment under any clawback policy adopted by the Company, including policies required by applicable law or stock exchange listing standards.

7.2 Specific Recoupment Events

In the event of:

• Material financial restatement due to Participant’s misconduct
• Violation of non-compete, non-solicitation, or confidentiality agreements
• Breach of fiduciary duty or other serious misconduct

The Company may cancel unvested Options and recoup the value of vested Options exercised within [specify period] prior to the triggering event.

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8. RESTRICTIVE COVENANTS

8.1 Confidentiality

Participant acknowledges access to confidential information and agrees to maintain strict confidentiality during and after employment.

8.2 Non-Competition (If Enforceable)

During employment and for [specify period] thereafter, Participant agrees not to engage in competitive activities as defined in the Company’s employment agreement or policy.

8.3 Non-Solicitation

During employment and for [specify period] thereafter, Participant agrees not to solicit Company employees, customers, or vendors.

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9. ADMINISTRATION

9.1 Plan Administration

This Agreement is subject to all terms and conditions of the Plan, which is administered by the Board of Directors or designated Committee.

9.2 Interpretation

The Committee has full authority to interpret the Plan and this Agreement and make all determinations necessary for administration.

9.3 Amendment

This Agreement may be amended only by written consent of both parties, except for amendments required by law or to maintain the intended tax treatment.

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10. GENERAL PROVISIONS

10.1 Governing Law

This Agreement shall be governed by the laws of [State] without regard to conflict of law principles.

10.2 Entire Agreement

This Agreement, together with the Plan, constitutes the entire agreement between the parties regarding the subject matter herein.

10.3 Severability

If any provision is deemed invalid or unenforceable, the remainder shall remain in full force and effect.

10.4 Notices

All notices shall be in writing and delivered to the addresses on file with the Company.

10.5 Electronic Delivery

The Company may deliver documents electronically, and electronic signatures shall be valid and binding.

10.6 Data Privacy

Participant consents to the collection, processing, and transfer of personal data for plan administration purposes.

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11. DEFINITIONS

Cause: [Insert company-specific definition covering misconduct, breach of duties, etc.]

Good Reason: [Insert definition covering material reduction in duties, compensation, or other adverse changes]

Fair Market Value: [Insert methodology for determining FMV, especially important for private companies]

Disability: [Insert definition consistent with applicable disability laws]

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ACKNOWLEDGMENT AND ACCEPTANCE

By signing below, the parties acknowledge that they have read, understood, and agree to be bound by the terms of this Agreement and the Plan.

COMPANY:

[Company Name]

By: _________________________________
Name: [Name]
Title: [Title]
Date: _____________

PARTICIPANT:

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[Participant Name]
Date: _____________

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APPENDICES

Appendix A: Equity Incentive Plan
Appendix B: Exercise Notice Form
Appendix C: Tax Election Forms (83(b), etc.)
Appendix D: Beneficiary Designation Form

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This template is for informational purposes only and does not constitute legal advice. Companies should consult with qualified legal counsel to ensure compliance with applicable laws and regulations.