exv4w4



 





Exhibit 4.4




ENTONE TECHNOLOGIES, INC.

2003 STOCK PLAN

NOTICE OF STOCK OPTION GRANT




     You have been granted the following option to purchase shares of the Common Stock of Entone
Technologies, Inc. (the “Company”):



	 	 	 
	Name of Optionee:

	 	                                                            
	 
	 	 
	Total Number of Shares:

	 	                                        
	 
	 	 
	Type of Option:

	 	                                                            
	 
	 	 
	Exercise Price Per Share:

	 	$                                         
	 
	 	 
	Date of Grant:

	 	                                                            
	 
	 	 
	Date Exercisable:

	 	This option may be exercised at any time after
the Date of Grant for all or any part of the
shares subject to this option (the “Shares”).
	 
	 	 
	Vesting Commencement Date:

	 	                                                            
	 
	 	 
	Vesting Schedule:

	 	*Alt. 1 (use for 1st option granted
to any individual): None of the Shares shall
vest until the Optionee completes twelve (12)
months of continuous Service after the Vesting
Commencement Date, whereupon twenty five
percent (25%) of the Shares shall vest (and any
Repurchase Right relating to such Shares shall
terminate). Thereafter, an additional 2.08333%
of the Shares shall vest each time the Optionee
completes a month of continuous Service with
the Company. Upon a Change of Control, if the
Optionee has not completed twelve (12) months
of continuous Service, the Shares shall be
deemed vested for the completed months of
continuous Service after the Vesting
Commencement Date.
	 
	 	 
	 

	 	*Alt. 2 (use for subsequent option granted to
any individual) : 2.08333% of the Shares shall
vest each time the Optionee completes a month
of continuous Service with the Company after
the Vesting Commencement Date. [Also remove
the accelerated vesting clause from Section
7(b)]
	 
	 	 
	Expiration Date:

	 	                                        . This option expires
earlier if the Optionee’s Service terminates
earlier, as provided in Section 6 of the Stock
Option Agreement.





By your signature and the signature of the Company’s representative below, you and the Company
agree that this option is granted under and governed by the terms and conditions of the 2003 Stock
Plan and the Stock Option Agreement, both of which are attached to and made a part of this
document.




	 	 	 	 	 
	OPTIONEE:

	 	ENTONE TECHNOLOGIES, INC.	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 


	 	 

	 	 
	 
	 	 	 	 
	 


	 	 

	 	 


















 




THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE EXERCISE THEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN
OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.




ENTONE TECHNOLOGIES, INC.

2003 STOCK PLAN:

STOCK OPTION AGREEMENT




SECTION 1. GRANT OF OPTION.




          (a) Option. On the terms and conditions set forth in the Notice of Stock Option
Grant and this Agreement, the Company grants to the Optionee on the Date of Grant the option to
purchase at the Exercise Price the number of Shares set forth in the Notice of Stock Option Grant.
The Exercise Price is agreed to be at least 100% of the Fair Market Value per Share on the Date of
Grant (110% of Fair Market Value if Section 3(b) of the Plan applies). This option is intended to
be an ISO or an NSO, as provided in the Notice of Stock Option Grant.




          (b) $100,000 Limitation. Even if this option is designated as an ISO in the Notice
of Stock Option Grant, it shall be deemed to be an NSO to the extent (and only to the extent)
required by the $100,000 annual limitation under Section 422(d) of the Code.




          (c) Stock Plan and Defined Terms. This option is granted pursuant to the Plan, a
copy of which the Optionee acknowledges having received. The provisions of the Plan are
incorporated into this Agreement by this reference. Capitalized terms are defined in Section 14 of
this Agreement.




SECTION 2. RIGHT TO EXERCISE.




          (a) Exercisability. Subject to Subsection (b) below and the other conditions set
forth in this Agreement, all or part of this option may be exercised prior to its expiration at the
time or times set forth in the Notice of Stock Option Grant. Shares purchased by exercising this
option may be subject to the Right of Repurchase under Section 7.




          (b) Stockholder Approval. Any other provision of this Agreement notwithstanding, no
portion of this option shall be exercisable at any time prior to the approval of the Plan by the
Company’s stockholders.




SECTION 3. TRANSFER OR ASSIGNMENT OF OPTION.




          Except as otherwise provided in this Agreement, this option and the rights and privileges
conferred hereby shall not be sold, pledged or otherwise transferred (whether by operation of law
or otherwise) and shall not be subject to sale under execution, attachment, levy or similar
process.




     SECTION 4. EXERCISE PROCEDURES.



          (a) Notice of Exercise. The Optionee or the Optionee’s representative may exercise
this option by giving written notice to the Company pursuant to Section 13(c). The notice shall
specify the election to exercise this option, the number of Shares for which it is being exercised
and the form of payment. The person exercising this option shall sign the notice. In the event
that this option is being exercised by the representative of the Optionee, the notice shall be
accompanied by proof (satisfactory to the Company) of the representative’s right to




 









 







exercise this option. The Optionee or the Optionee’s representative shall deliver to the
Company, at the time of giving the notice, payment in a form permissible under Section 5 for the
full amount of the Purchase Price.




          (b) Issuance of Shares. After receiving a proper notice of exercise, the Company
shall cause to be issued one or more certificates evidencing the Shares for which this option has
been exercised and such certificates shall be deposited in escrow under Section 7(c). Such Shares
shall be registered (i) in the name of the person exercising this option, (ii) in the names of such
person and his or her spouse as community property or as joint tenants with the right of
survivorship or (iii) with the Company’s consent, in the name of a revocable trust.




          (c) Withholding Taxes. In the event that the Company determines that it is required
to withhold any tax as a result of the exercise of this option, the Optionee, as a condition to the
exercise of this option, shall make arrangements satisfactory to the Company to enable it to
satisfy all withholding requirements. The Optionee shall also make arrangements satisfactory to
the Company to enable it to satisfy any withholding requirements that may arise in connection with
the vesting or disposition of Shares purchased by exercising this option.




SECTION 5. PAYMENT FOR STOCK.




          (a) Cash. All or part of the Purchase Price may be paid in cash or cash
equivalents.




          (b) Surrender of Stock. All or any part of the Purchase Price may be paid by
surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee.
Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at
their Fair Market Value on the date when this option is exercised. The Optionee shall not
surrender, or attest to the ownership of, Shares in payment of the Purchase Price if such action
would cause the Company to recognize compensation expense (or additional compensation expense) with
respect to this option for financial reporting purposes.




          (c) Exercise/Sale. If Stock is publicly traded, all or part of the Purchase Price
and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver
all or part of the sales proceeds to the Company.




          (d) Exercise/Pledge. If Stock is publicly traded, all or part of the Purchase Price
and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as
security for a loan, and to deliver all or part of the loan proceeds to the Company.




SECTION 6. TERM AND EXPIRATION.




          (a) Basic Term. This option shall in any event expire on the expiration date set
forth in the Notice of Stock Option Grant, which date is ten (10) years after the Date of Grant
(five (5) years after the Date of Grant if this option is designated as an ISO in the Notice of
Stock Option Grant and Section 3(b) of the Plan applies).




          (b) Termination of Service (Except by Death). If the Optionee’s Service terminates
for any reason other than death, then this option shall expire on the earliest of the following
occasions:




               (i) The expiration date determined pursuant to Subsection (a) above;



               (ii) The date three (3) months after the termination of the Optionee’s Service for
any reason other than Disability; or



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               (iii) The date six (6) months after the termination of the Optionee’s Service by
reason of Disability.


The Optionee may exercise all or part of this option at any time before its expiration under the
preceding sentence, but only to the extent that this option is exercisable for vested Shares on or
before the date when the Optionee’s Service terminates. When the Optionee’s Service terminates,
this option shall expire immediately with respect to the number of Shares for which this option is
not yet exercisable and with respect to any Restricted Shares. In the event that the Optionee dies
after termination of Service but before the expiration of this option, all or part of this option
may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate
or by any person who has acquired this option directly from the Optionee by beneficiary
designation, bequest or inheritance, but only to the extent that this option was exercisable for
vested Shares on or before the date when the Optionee’s Service terminated.




          (c) Death of the Optionee. If the Optionee dies while in Service, then this option
shall expire on the earlier of the following dates:




               (i) The expiration date determined pursuant to Subsection (a) above; or



               (ii) The date twelve (12) months after the Optionee’s death.


All or part of this option may be exercised at any time before its expiration under the preceding
sentence by the executors or administrators of the Optionee’s estate or by any person who has
acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance,
but only to the extent that this option is exercisable for vested Shares on or before the
Optionee’s death. When the Optionee dies, this option shall expire immediately with respect to the
number of Shares for which this option is not yet exercisable and with respect to any Restricted
Shares.




          (d) Leaves of Absence. For any purpose under this Agreement, Service shall be
deemed to continue while the Optionee is on a bona fide leave of absence, if such leave was
approved by the Company in writing and if continued crediting of Service for such purpose is
expressly required by the terms of such leave or by applicable law (as determined by the Company).




          (e) Notice Concerning ISO Treatment. Even if this option is designated as an ISO in
the Notice of Stock Option Grant, it ceases to qualify for favorable tax treatment as an ISO to the
extent that it is exercised:




               (i) More than three (3) months after the date when the Optionee ceases to be an
Employee for any reason other than death or permanent and total disability (as defined in Section
22(e)(3) of the Code);



               (ii) More than twelve (12) months after the date when the Optionee ceases to be an
Employee by reason of permanent and total disability (as defined in Section 22(e)(3) of the Code);
or



               (iii) More than three months after the date when the Optionee has been on a leave of
absence for ninety (90) days, unless the Optionee’s reemployment rights following such leave were
guaranteed by statute or by contract.



SECTION 7. RIGHT OF REPURCHASE.




          (a) Scope of Repurchase Right. Until they vest in accordance with the Notice of
Stock Option Grant and Subsection (b) below, the Shares acquired under this Agreement shall be
“Restricted Shares” and shall be subject to repurchase (in whole or in part) by the Company through
payment of an amount equal to the Exercise Price for each of the Restricted Shares being
repurchased in the event the Optionee’s Service with the Company terminates for any reason (the
“Repurchase Right”). The Company may exercise the Repurchase Right




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only during a period of ninety (90) consecutive days commencing on the date when the
Optionee’s Service terminates (the “Repurchase Period”).




          (b) Lapse of Repurchase Right. The Right of Repurchase shall lapse with respect to
the Restricted Shares in accordance with the vesting schedule set forth in the Notice of Stock
Option Grant. Notwithstanding the foregoing, upon a Change of Control, if the Optionee has not
completed twelve (12) months of continuous Service, the Shares shall be deemed vested for the
completed months of continuous Service after the Vesting Commencement Date.




          (c) Escrow. Upon issuance, the certificate(s) for Shares shall be deposited in
escrow with the Company to be held in accordance with the provisions of this Agreement. Any
additional or exchanged securities or other property described in Subsection (f) below shall
immediately be delivered to the Company to be held in escrow. All ordinary cash dividends on
Shares (or on other securities held in escrow) shall be paid directly to the Optionee and shall not
be held in escrow. Shares, together with any other assets held in escrow under this Agreement,
shall be (i) surrendered to the Company for repurchase upon exercise of the Right of Repurchase or
the Right of First Refusal or (ii) released to the Optionee upon his or her request to the extent
that the Shares have ceased to be Restricted Shares and the Company’s Right of First Refusal has
lapsed (but not more frequently than once every six (6) months). In any event, all Shares that
have ceased to be Restricted Shares, together with any other vested assets held in escrow under
this Agreement, shall be released within ninety (90) days after the earlier of (i) the termination
of the Optionee’s Service or (ii) the lapse of the Right of First Refusal.




          (d) Exercise of Repurchase Right. The Company shall be deemed to have exercised its
Right of Repurchase automatically for all Restricted Shares as of the commencement of the
Repurchase Period, unless the Company during the Repurchase Period notifies the holder of the
Restricted Shares pursuant to Section 13(c) that it will not exercise its Right of Repurchase for
some or all of the Restricted Shares. During the Repurchase Period, the Company shall pay to the
holder of the Restricted Shares the purchase price determined under Subsection (a) above for the
Restricted Shares being repurchased. Payment shall be made in cash or cash equivalents and/or by
canceling indebtedness to the Company incurred by the Optionee in the purchase of the Restricted
Shares. The certificate(s) representing the Restricted Shares being repurchased shall be delivered
to the Company properly endorsed for transfer.




          (e) Termination of Rights as Stockholder. If the Right of Repurchase is exercised
in accordance with this Section 7 and the Company makes available the consideration for the
Restricted Shares being repurchased, then the person from whom the Restricted Shares are
repurchased shall no longer have any rights as a holder of the Restricted Shares (other than the
right to receive payment of such consideration). Such Restricted Shares shall be deemed to have
been repurchased pursuant to this Section 7, whether or not the certificate(s) for such Restricted
Shares have been delivered to the Company or the consideration for such Restricted Shares has been
accepted.




          (f) Additional or Exchanged Securities and Property. In the event of a merger or
consolidation of the Company with or into another entity, any other corporate reorganization, a
stock split, the declaration of a stock dividend, the declaration of an extraordinary dividend
payable in a form other than stock, a spin-off, an adjustment in conversion ratio, a
recapitalization or a similar transaction affecting the Company’s outstanding securities, any
securities or other property (including cash or cash equivalents) that are by reason of such
transaction exchanged for, or distributed with respect to, any Restricted Shares shall immediately
be subject to the Right of Repurchase. Appropriate adjustments to reflect the exchange or
distribution of such securities or property shall be made to the number and/or class of the
Restricted Shares. Appropriate adjustments shall also be made to the price per share to be paid
upon the exercise of the Right of Repurchase, provided that the aggregate purchase price payable
for the Restricted Shares shall remain the same. In the event of a merger or consolidation of the
Company with or into another entity or any other corporate reorganization, the Right of Repurchase
may be exercised by the Company’s successor.




          (g) Transfer of Restricted Shares. The Optionee shall not transfer, assign,
encumber or otherwise dispose of any Restricted Shares without the Company’s written consent,
except as provided in the following sentence. The Optionee may transfer Restricted Shares to one
or more members of the Optionee’s




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Immediate Family or to a trust established by the Optionee for the benefit of the Optionee
and/or one or more members of the Optionee’s Immediate Family, provided in either case that the
Transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of
this Agreement. If the Optionee transfers any Restricted Shares, then this Agreement shall apply
to the Transferee to the same extent as to the Optionee.




          (h) Assignment of Repurchase Right. The Company’s Right of Repurchase shall be
freely assignable, in whole or in part. Any person who accepts an assignment of the Right of
Repurchase from the Company shall assume all of the Company’s rights and obligations under this
Section 7.




SECTION 8. RIGHT OF FIRST REFUSAL.




          (a) Right of First Refusal. In the event that the Optionee proposes to sell, pledge
or otherwise transfer to a third party any Shares acquired under this Agreement, or any interest in
such Shares, the Company shall have the Right of First Refusal with respect to all (and not less
than all) of such Shares. If the Optionee desires to transfer Shares acquired under this
Agreement, the Optionee shall give a written Transfer Notice to the Company describing fully the
proposed transfer, including the number of Shares proposed to be transferred, the proposed transfer
price, the name and address of the proposed Transferee and proof satisfactory to the Company that
the proposed sale or transfer will not violate any applicable federal or state securities laws.
The Transfer Notice shall be signed both by the Optionee and by the proposed Transferee and must
constitute a binding commitment of both parties to the transfer of the Shares. The Company shall
have the right to purchase all, and not less than all, of the Shares on the terms of the proposal
described in the Transfer Notice (subject, however, to any change in such terms permitted under
Subsection (b) below) by delivery of a notice of exercise of the Right of First Refusal within
thirty (30) days after the date when the Transfer Notice was received by the Company.




          (b) Transfer of Shares. If the Company fails to exercise its Right of First Refusal
within thirty (30) days after the date when it received the Transfer Notice, the Optionee may, not
later than ninety (90) days following receipt of the Transfer Notice by the Company, conclude a
transfer of the Shares subject to the Transfer Notice on the terms and conditions described in the
Transfer Notice, provided that any such sale is made in compliance with applicable federal and
state securities laws and not in violation of any other contractual restrictions to which the
Optionee is bound. Any proposed transfer on terms and conditions different from those described in
the Transfer Notice, as well as any subsequent proposed transfer by the Optionee, shall again be
subject to the Right of First Refusal and shall require compliance with the procedure described in
Subsection (a) above. If the Company exercises its Right of First Refusal, the parties shall
consummate the sale of the Shares on the terms set forth in the Transfer Notice within sixty (60)
days after the date when the Company received the Transfer Notice (or within such longer period as
may have been specified in the Transfer Notice); provided, however, that in the event the Transfer
Notice provided that payment for the Shares was to be made in a form other than cash or cash
equivalents paid at the time of transfer, the Company shall have the option of paying for the
Shares with cash or cash equivalents equal to the present value of the consideration described in
the Transfer Notice.




          (c) Additional or Exchanged Securities and Property. In the event of a merger or
consolidation of the Company with or into another entity, any other corporate reorganization, a
stock split, the declaration of a stock dividend, the declaration of an extraordinary dividend
payable in a form other than stock, a spin-off, an adjustment in conversion ratio, a
recapitalization or a similar transaction affecting the Company’s outstanding securities, any
securities or other property (including cash or cash equivalents) that are by reason of such
transaction exchanged for, or distributed with respect to, any Shares subject to this Section 8
shall immediately be subject to the Right of First Refusal. Appropriate adjustments to reflect the
exchange or distribution of such securities or property shall be made to the number and/or class of
the Shares subject to this Section 8.




          (d) Termination of Right of First Refusal. Any other provision of this Section 8
notwithstanding, in the event that the Stock is readily tradable on an established securities
market when the Optionee desires to transfer Shares, the Company shall have no Right of First
Refusal, and the Optionee shall have no obligation to comply with the procedures prescribed by
Subsections (a) and (b) above.




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          (e) Permitted Transfers. This Section 8 shall not apply to (i) a transfer by
beneficiary designation, will or intestate succession or (ii) a transfer to one or more members of
the Optionee’s Immediate Family or to a trust established by the Optionee for the benefit of the
Optionee and/or one or more members of the Optionee’s Immediate Family, provided in either case
that the Transferee agrees in writing on a form prescribed by the Company to be bound by all
provisions of this Agreement. If the Optionee transfers any Shares acquired under this Agreement,
either under this Subsection (e) or after the Company has failed to exercise the Right of First
Refusal, then this Agreement shall apply to the Transferee to the same extent as to the Optionee.




          (f) Termination of Rights as Stockholder. If the Company makes available, at the
time and place and in the amount and form provided in this Agreement, the consideration for the
Shares to be purchased in accordance with this Section 8, then after such time the person from whom
such Shares are to be purchased shall no longer have any rights as a holder of such Shares (other
than the right to receive payment of such consideration in accordance with this Agreement). Such
Shares shall be deemed to have been purchased in accordance with the applicable provisions hereof,
whether or not the certificate(s) therefor have been delivered as required by this Agreement.




          (g) Assignment of Right of First Refusal. The Company’s Right of First Refusal
shall be freely assignable, in whole or in part. Any person who accepts an assignment of the Right
of First Refusal from the Company shall assume all of the Company’s rights and obligations under
this Section 8.




SECTION 9. LEGALITY OF INITIAL ISSUANCE.




          No Shares shall be issued upon the exercise of this option unless and until the Company has
determined that:




               (i) It and the Optionee have taken any actions required to register the Shares under
the Securities Act or to perfect an exemption from the registration requirements thereof;



               (ii) Any applicable listing requirement of any stock exchange or other securities
market on which Stock is listed has been satisfied; and



               (iii) Any other applicable provision of federal, state or foreign law has been
satisfied.



SECTION 10. NO REGISTRATION RIGHTS.




          The Company may, but shall not be obligated to, register or qualify the sale of Shares under
the Securities Act or any other applicable law. The Company shall not be obligated to take any
affirmative action in order to cause the sale of Shares under this Agreement to comply with any
law.




SECTION 11. RESTRICTIONS ON TRANSFER.




          (a) Securities Law Restrictions. Regardless of whether the offering and sale of
Shares under the Plan have been registered under the Securities Act or have been registered or
qualified under the securities laws of any state, the Company at its discretion may impose
restrictions upon the sale, pledge or other transfer of such Shares (including the placement of
appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in
the judgment of the Company, such restrictions are necessary or desirable in order to achieve
compliance with the Securities Act, the securities laws of any state or any other law.




          (b) Market Stand-Off. In connection with any underwritten public offering by the
Company of its equity securities pursuant to an effective registration statement filed under the
Securities Act, including the Company’s initial public offering, the Optionee or a Transferee shall
not directly or indirectly sell, make any short sale of, loan, hypothecate, pledge, offer, grant or
sell any option or other contract for the purchase of, purchase any option or other contract for
the sale of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing
transactions with respect to, any Shares acquired under this Agreement without the prior written




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consent of the Company or its underwriters. Such restriction (the “Market Stand-Off”) shall
be in effect for such period of time following the date of the final prospectus for the offering as
may be requested by the Company or such underwriters. In no event, however, shall such period
exceed one hundred eighty (180) days. The Market Stand-Off shall in any event terminate two years
after the date of the Company’s initial public offering. In the event of the declaration of a
stock dividend, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or
a similar transaction affecting the Company’s outstanding securities without receipt of
consideration, any new, substituted or additional securities which are by reason of such
transaction distributed with respect to any Shares subject to the Market Stand-Off, or into which
such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off. In
order to enforce the Market Stand-Off, the Company may impose stop-transfer instructions with
respect to the Shares acquired under this Agreement until the end of the applicable stand-off
period. The Company’s underwriters shall be beneficiaries of the agreement set forth in this
Subsection (b). This Subsection (b) shall not apply to Shares registered in the public offering
under the Securities Act, and the Optionee or a Transferee shall be subject to this Subsection (b)
only if the directors and officers of the Company are subject to similar arrangements.




          (c) Investment Intent at Grant. The Optionee represents and agrees that the Shares
to be acquired upon exercising this option will be acquired for investment, and not with a view to
the sale or distribution thereof.




          (d) Investment Intent at Exercise. In the event that the sale of Shares under the
Plan is not registered under the Securities Act but an exemption is available which requires an
investment representation or other representation, the Optionee shall represent and agree at the
time of exercise that the Shares being acquired upon exercising this option are being acquired for
investment, and not with a view to the sale or distribution thereof, and shall make such other
representations as are deemed necessary or appropriate by the Company and its counsel.




          (e) Legends. All certificates evidencing Shares purchased under this Agreement
shall bear the following legend:





“THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR
IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE
PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY
CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES AND CERTAIN
REPURCHASE RIGHTS UPON TERMINATION OF SERVICE WITH THE COMPANY. THE SECRETARY OF
THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER
HEREOF WITHOUT CHARGE.”


All certificates evidencing Shares purchased under this Agreement in an unregistered transaction
shall bear the following legend (and such other restrictive legends as are required or deemed
advisable under the provisions of any applicable law):





“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY
TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”



          (f) Removal of Legends. If, in the opinion of the Company and its counsel, any
legend placed on a stock certificate representing Shares sold under this Agreement is no longer
required, the holder of such certificate shall be entitled to exchange such certificate for a
certificate representing the same number of Shares but without such legend.




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          (g) Administration. Any determination by the Company and its counsel in connection
with any of the matters set forth in this Section 11 shall be conclusive and binding on the
Optionee and all other persons.




SECTION 12. ADJUSTMENT OF SHARES.




          In the event of any transaction described in Section 8(a) of the Plan, the terms of this
option (including, without limitation, the number and kind of Shares subject to this option and the
Exercise Price) shall be adjusted as set forth in Section 8(a) of the Plan. In the event that the
Company is a party to a merger or consolidation, this option shall be subject to the agreement of
merger or consolidation, as provided in Section 8(b) of the Plan.




SECTION 13. MISCELLANEOUS PROVISIONS.




          (a) Rights as a Stockholder. Neither the Optionee nor the Optionee’s representative
shall have any rights as a stockholder with respect to any Shares subject to this option until the
Optionee or the Optionee’s representative becomes entitled to receive such Shares by filing a
notice of exercise and paying the Purchase Price pursuant to Sections 4 and 5.




          (b) No Retention Rights. Nothing in this option or in the Plan shall confer upon
the Optionee any right to continue in Service for any period of specific duration or interfere with
or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing
or retaining the Optionee) or of the Optionee, which rights are hereby expressly reserved by each,
to terminate his or her Service at any time and for any reason, with or without cause.




          (c) Notice. Any notice required by the terms of this Agreement shall be given in
writing. It shall be deemed effective upon (i) personal delivery, (ii) deposit with the United
States Postal Service, by registered or certified mail, with postage and fees prepaid or (iii)
deposit with Federal Express Corporation, with shipping charges prepaid. Notice shall be addressed
to the Company at its principal executive office and to the Optionee at the address that he or she
most recently provided to the Company in accordance with this Subsection (c).




          (d) Entire Agreement. The Notice of Stock Option Grant, this Agreement and the Plan
constitute the entire contract between the parties hereto with regard to the subject matter hereof.
They supersede any other agreements, representations or understandings (whether oral or written
and whether express or implied) which relate to the subject matter hereof.




          (e) Choice of Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of California, as such laws are applied to contracts entered into and
performed in such State.




SECTION 14. DEFINITIONS.




          (a) “Agreement” shall mean this Stock Option Agreement.




          (b) “Board of Directors” shall mean the Board of Directors of the Company, as
constituted from time to time or, if a Committee has been appointed, such Committee.




          (c) “Code” shall mean the Internal Revenue Code of 1986, as amended.




          (d) “Committee” shall mean a committee of the Board of Directors, as described in
Section 2 of the Plan.




          (e) “Company” shall mean Entone Technologies, Inc., a Delaware corporation.




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          (f) “Consultant” shall mean a person who performs bona fide services for the
Company, a Parent or a Subsidiary as a consultant or advisor, excluding Employees and Outside
Directors.




          (g) “Date of Grant” shall mean the date specified in the Notice of Stock Option
Grant, which date shall be the later of (i) the date on which the Board of Directors resolved to
grant this option or (ii) the first day of the Optionee’s Service.




          (h) “Disability” shall mean that the Optionee is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment.




          (i) “Employee” shall mean any individual who is a common-law employee of the
Company, a Parent or a Subsidiary.




          (j) “Exercise Price” shall mean the amount for which one Share may be purchased upon
exercise of this option, as specified in the Notice of Stock Option Grant.




          (k) “Fair Market Value” shall mean the fair market value of a Share, as determined
by the Board of Directors in good faith. Such determination shall be conclusive and binding on all
persons.




          (l) “Immediate Family” shall mean any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law and shall include adoptive relationships.




          (m) “IRS” means the United States Internal Revenue Service.




          (n) “ISO” shall mean an employee incentive stock option described in Section 422(b)
of the Code.




          (o) “Notice of Stock Option Grant” shall mean the document so entitled to which this
Agreement is attached.




          (p) “NSO” shall mean a stock option not described in Sections 422(b) or 423(b) of
the Code.




          (q) “Optionee” shall mean the person named in the Notice of Stock Option Grant.




          (r) “Outside Director” shall mean a member of the Board of Directors who is not an
Employee.




          (s) “Parent” shall mean any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if each of the corporations other than the Company
owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.




          (t) “Plan” shall mean the Entone Technologies, Inc. 2003 Stock Plan, as in effect on
the Date of Grant.




          (u) “Purchase Price” shall mean the Exercise Price multiplied by the number of
Shares with respect to which this option is being exercised.




          (v) “Repurchase Period” shall have the meaning given to such term in Section 7.




          (w) “Restricted Share” shall mean a Share that is subject to the Right of
Repurchase.




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          (x) “Right of First Refusal” shall mean the Company’s right of first refusal
described in Section 8.




          (y) “Right of Repurchase” shall mean the Company’s right of repurchase described in
Section 7.




          (z) “Securities Act” shall mean the Securities Act of 1933, as amended.




          (aa) “Service” shall mean service as an Employee, Outside Director or Consultant.




          (bb) “Share” shall mean one share of Stock, as adjusted in accordance with Section 8
of the Plan (if applicable).




          (cc) “Stock” shall mean the Common Stock of the Company, with a par value of $0.001
per Share.




          (dd) “Subsidiary” shall mean any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations in such chain.




          (ee) “Transferee” shall mean any person to whom the Optionee has directly or
indirectly transferred any Share acquired under this Agreement.




          (ff) “Transfer Notice” shall mean the notice of a proposed transfer of Shares
described in Section 8.





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