Document:

utmd8k20110323spafilshie.htm

Exhibit 10.17

 

 

	  	
Short form agreement

	 
	 	 	 
	  	
Relating to the sale and purchase of part of the issued share capital of Femcare Group Limited

	 
	 	 	 	 
	  	
(1)

	
Gilbert Marcus Filshie

	 
	 	 	 	 
	  	
(2)

	
Utah Medical Products, Inc.

	 
	  	  	  	 
	  	  	  	 
	  	  	  	 
	  	  	  	 
	  	  	  	 
	  	  	  	 
	  	
Dated

	
             18 March 2011

	 
	  	  	  	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	  	
Osborne Clarke

	  	 
	  	  	  	 
	  	
Apex Plaza

	  	 
	  	
Forbury Road

	  	 
	  	
Reading

	  	 
	  	
RG1 1AX

	  	 

 

  

  

  

Contents

	
1.

	
Definitions and interpretation

	
1

	
2.

	
Sale and purchase

	
3

	
3.

	
Consideration

	
4

	
4.

	
Leakage

	
4

	
5.

	
Completion

	
5

	
6.

	
Limitation

	
5

	
7.

	
Announcements

	
5

	
8.

	
Post Completion matters

	
6

	
9.

	
Protection of goodwill

	
7

	
10.

	
Costs

	
8

	
11.

	
General

	
8

	
12.

	
Governing law and jurisdiction

	
9

  

  

  

This Agreement is made on 18 March 2011

 

Between:

 

	
(1)

	
Gilbert Marcus Filshie of The End House, Pembroke Drive, Mapperley Park, Nottingham NG35 BG (the "Legacy Vendor"); and

 

	
(2)

	
Utah Medical Products, Inc. whose registered office is at 7043 South 300 West, Midvale, Utah 84047 USA (the "Purchaser").

 

Background:

 

This agreement is supplemental to a further sale and purchase agreement between (1) the Vendors (as defined therein), and (2) Utah Medical Products Inc., dated on or around the date of this agreement (the "Main SPA"). Capitalised terms used but not defined in this Agreement shall have the meanings as set out in the Main SPA.

 

The Legacy Vendor has agreed to sell and the Purchaser has agreed to purchase the Shares (as defined below) on the terms of this Agreement.

 

It is agreed as follows:

 

	
1.

	
Definitions and interpretation

 

	
1.1

	
In this Agreement, unless the context otherwise requires, the following definitions shall apply:

 

"Agreement" means this Agreement (including any schedule or annexure to it and any document in agreed form);

 

"Authorised Leakage" means any of the following:

 

	
  

	
(a)

	
all accrued interest due and payable on the fixed rate unsecured loans notes held by the Legacy Vendor; or

 

	
  

	
(b)

	
all royalty payments due to the Legacy Vendor under the terms of a royalty agreement entered into between the Legacy Vendor and Femcare-Nikomed Limited on 21 May 2004 as amended on 27 August 2004;

 

"Client" means any person to whom or which the Group shall at any time during the 12 month period prior to Completion have provided Restricted Business;

 

"Company" means Femcare Group Limited (no. 05147637) of Stuart Court, Spursholt Place Salisbury Road, Romsey, Hampshire SO51 6DJ;

 

"Completion" means the completion of the sale and purchase under this Agreement;

 

"Consideration" means the consideration payable by the Purchaser to the Legacy Vendor for the Shares under clause 3;

 

"Group Companies" or "Group" means the Company and any subsidiary and any subsidiary undertaking of the Company or such companies and "Group Company" means any one of them;

 

"Initial Cash Consideration" has same the meaning as in the Main SPA;

 

"Leakage" means any of the following to the extent they occur during the period from 11.59pm on the Locked Box Date to Completion:

 

  

1

  

	 	
(a) 

	
any dividend or distribution, in each case declared, paid or made by any Group Company other than to another Group Company;

 

	
  

	
(b)

	
any other payment in respect of any share capital or other securities of any Group Company other than to another Group Company;

 

	
  

	
(c)

	
any fees and expenses incurred or to be incurred by any Group Company in connection with the transactions contemplated by this Agreement;

 

	
  

	
(d)

	
any payments made or future benefits granted by any Group Company to the Legacy Vendor or any Vendor Associate (including any related tax or national insurance contributions for which any Group Company is liable to account);

 

	
  

	
(e)

	
any assets transferred to, or liabilities assumed, indemnified or incurred for the benefit of, the Legacy Vendor or any Vendor Associate;

 

	
  

	
(f)

	
any waiver of all or any part of any debt or liability amount owed to any Group Company by the Legacy Vendor or any Vendor Associate;

 

	
  

	
(g)

	
any gratuitous or discretionary payment (including but not limited to any sale bonuses) in connection with the sale of the Shares) to the Legacy Vendor or any Vendor Associate by any Group Company;

 

	
  

	
(h)

	
any transaction or agreement entered into by any Group Company with or for the benefit of the Legacy Vendor;

 

	
  

	
(i)

	
any liabilities incurred for (including any guarantees given in relation to the liabilities of) the Legacy Vendor; or

 

	
  

	
(j)

	
any agreement to do any of the matters referred to in any of (a) to (i) above,

 

other than Authorised Leakage.

 

“Legacy Vendor’s Loan Notes” means the Loan Notes of the Company held by the Legacy Vendor

 

"Prospective Client" means any person who or which was at any time during the 12 month period prior to Completion negotiating with or has been subject to any presentation or pitch by any Group Company for the provision of any Restricted Business.

 

"Purchaser's Solicitors" means Osborne Clarke of Apex Plaza, Forbury Road, Reading, Berkshire RG1 1AX;

 

"Restricted Business" means the provision of female surgical incisional sterilisation or any fallopian tubal ligation which is in either case with a device which is same in form and function as a filshie clip as carried on by the Group in the Territory during the 12 month period prior to Completion;

 

"Restricted Period" means the period commencing on Completion and ending 5 years from Completion;

 

"Senior Employee" means any person who is or was during the 12 month period prior to Completion employed by any Group Company in a senior managerial, sales, marketing, senior customer advisory or senior customer facing capacity or who was a consultant to or a director of any Group Company or any person who was so employed or retained by any Group Company in each case whose fees and/or emoluments exceed £30,000 per annum at Completion.

 

  

2

  

 

"Shares" means the 25,000 C Ordinary shares in the capital of the Company held by the Legacy Vendor;

 

"Taxation" has the meaning given to it in the Tax Schedule (as defined within the Main SPA);

 

"Territory" means the United Kingdom and any other jurisdiction where the Group carries on its business at Completion (which expression shall include, for the avoidance of doubt, any jurisdiction into which any Group Company makes sales whether directly or through a distributor);

 

"Vendor Agreement" means an agreement between a Group Company and the Legacy Vendor or Vendor Associate; and

 

"Vendor Associate" means any other person with whom the Legacy Vendor and/or any Group Company is either associated (within the meaning of section 448, CTA 2010 (previously section 417, ICTA)) or connected (within the meaning of section 1122, CTA 2010 (previously section 839, ICTA) or, as the case may be, section 993, ITA).

 

	
1.2

	
In this Agreement, unless the context otherwise requires:

 

	
  

	
(a)

	
words in the singular include the plural and vice versa and words in one gender include any other gender;

 

	
  

	
(b)

	
references to clauses and schedules are to clauses and schedules of this Agreement and references to sub-clauses and paragraphs are references to sub-clauses and paragraphs of the clause or schedule in which they appear;

 

	
  

	
(c)

	
"sterling" and the sign "£" means pounds sterling in the currency of the United Kingdom; and

 

	
  

	
(d)

	
headings are for convenience only and shall not affect the construction of this Agreement.

 

	
2.

	
Sale and purchase

 

	
2.1

	
Subject to the terms of this Agreement, the Legacy Vendor shall sell and the Purchaser shall purchase, with effect from the date of this Agreement, the Shares.

 

	
2.2

	
The Legacy Vendor waives all rights of pre-emption over any of the Shares or any other shares in the capital of the Company conferred on him by the Articles of Association of the Company or in any other way and undertakes to take all steps necessary to waive all rights of pre-emption over any of the Shares or any other shares in the capital of the Company.

 

	
2.3

	
Subject to clause 2.5, the Legacy Vendor irrevocably and unconditionally waives all and any claims he has against the Company as at Completion other than in respect of his claim for royalties for the period from 1st January 2011 to Completion (and whether due before, at or after Completion) pursuant to a royalty agreement ("Royalty Agreement") entered into between the Legacy Vendor and Femcare-Nikomed Limited on 21 May 2004 as amended on 27 August 2004 ("Royalties") and shall indemnify and keep indemnified the Company in respect of all and any other claims that he may have against the Company as at Completion.

 

	
2.4

	
Notwithstanding the generality of clause 2.3, but subject to clause 2.5, the Legacy Vendor confirms that the performance of any Vendor Agreement by a Group Company at any time prior to the date of the agreement is or was in accordance with its terms and no act or omission of a Group Company has caused it to be in default of any Vendor Agreement.

 

  

3

  

	
2.5

	
Notwithstanding clauses 2.3 and 2.4 for the avoidance of any doubt, the Legacy Vendor does not waive any claims he may have against the Company in respect of royalties for the period from Completion and which are due to him pursuant to the Royalty Agreement.

 

	
2.6

	
The Legacy Vendor covenants to the Purchaser that:

 

	
  

	
(a)

	
the Shares are fully paid up (or credited as fully paid);

 

	
  

	
(b)

	
he is the sole legal and beneficial owner of the Shares and that he has and shall have pursuant to this Agreement the right to transfer the legal and beneficial title to the Shares on the terms of this Agreement and without the consent of any third party and that they are transferred free from any Encumbrance;

 

	
  

	
(c)

	
he has the full power and authority to enter into and perform this Agreement and each of the documents to be executed by it and delivered pursuant to this Agreement, each of which shall constitute valid and binding obligations on it; and

 

	
  

	
(d)

	
he is not bankrupt, has not proposed a voluntary arrangement nor has made or proposed any arrangement or composition with his creditors or any class of his creditors.

 

	
2.7

	
The Purchaser shall not be obliged to complete the purchase of any of the Shares unless the sale and purchase of all the shares in the capital of the Company (including the Shares) is completed simultaneously.

 

	
3.

	
Consideration

 

	
3.1

	
The Consideration is the payment by the Purchaser to the Legacy Vendor of the sum of £57,212.41, of which £50,000 will be paid into the Escrow Account and the remainder shall be payable in cash at Completion in accordance with clause 5.

 

	
3.2

	
The £50,000 paid into the Escrow Account pursuant to clause 3.1 above shall be form part of the Escrow Amount and be dealt with in the manner set out in the Main SPA including, without limitation, the provisions of clause 6 of the Main SPA.

 

	
3.3

	
Save in the case of fraud on the part of the Legacy Shareholder, the Legacy Shareholder's entitlement to sums released from the Escrow Account for the benefit of the Shareholders pursuant to the provisions of clause 6 of the Main SPA is 2.5% of the total amount released.

 

	
3.4

	
The gross amount payable by the Company to repay or redeem (as the case may be) the Legacy Vendor’s Loan Notes is £458,066.96 and the net amount payable by the Company to the Legacy Vendor to repay or redeem (as the case may be) after deduction of the withholding tax is £432,453.57.

 

	
4.

	
Leakage

 

	
4.1

	
The Legacy Vendor undertakes to the Purchaser to pay to the relevant Group Company immediately on demand an amount equal to the Value of any Leakage received by him or any of his Vendor Associates where such payment is made for his benefit.

 

	
4.2

	
The Legacy Vendor undertakes to pay to the Purchaser on demand a sum equal to all reasonable costs (including all reasonably and properly incurred legal costs), reasonable expenses or other reasonable liabilities which the Purchaser may reasonably and properly incur either before or after the commencement of any action in connection with:

 

	
  

	
(a)

	
any Leakage received by him or any of his Vendor Associates where such payment is made for his benefit;

 

  

4

  

	
  

	
(b)

	
any legal proceedings (including, but not limited to, litigation and arbitration) including any application, in respect of any claim made against him pursuant to clause 4.1 above in which a judgment, decision or order is made in favour of the Purchaser; or

 

	
  

	
(c)

	
the enforcement of any such settlement or judgment.

 

	
4.3

	
If, in respect of or in connection with any claim made against the Legacy Vendor pursuant to clause 4.1, any amount payable to the Purchaser by a Vendor is subject to Taxation, the amount to be paid to the Purchaser by the Legacy Vendor shall be such as to ensure that the net amount retained by the Purchaser after such Taxation has been taken into account is equal to the full amount which would be payable to the Purchaser had the amount not been subject to Taxation.

 

	
4.4

	
Any payment pursuant to this clause shall (to the extent possible) be treated as a reduction of the Consideration.

 

	
5.

	
Completion

 

	
5.1

	
Completion shall take place at the offices of the Purchaser's Solicitors immediately following the signing of this Agreement.

 

	
5.2

	
On Completion, the Legacy Vendor shall deliver to the Purchaser stock transfer forms, duly completed and executed by the registered holders, in favour of the Purchaser or as it may direct, in respect of the Shares, together with the relevant share certificates (or indemnities in relation to the same if such certificates have been lost or destroyed).

 

	
5.3

	
As soon as the Legacy Vendor has complied with the provisions of sub-clause 5.2 the Purchaser shall pay the Consideration to the Legacy Vendor at the same time and in the manner as the Initial Cash Consideration is paid to the Vendors pursuant to the terms of the Main SPA and the Purchaser shall procure  that at the same time as the Consideration is paid to the Legacy Vendor in accordance with this clause 5.3 the Company shall repay or redeem (as applicable) in full the Legacy Vendor’s Loan Notes and pay the net amount stated  in clause 3.4 to the Legacy Vendor for the repayment or redemption of the Legacy Vendor’s Loan Notes.

 

	
5.4

	
The Purchaser shall procure that the Company shall pay all the withholding tax in respect of the repayment or redemption (as the case may be) of the Legacy Vendor’s Loan Notes to HM Revenue and Customs as soon as that sum is due and payable to it and the Purchaser shall indemnify the Legacy Vendor against any and all liabilities for the withholding tax and any and all liabilities in respect of costs, expense, interest, fines, and all other payments that may become due and payable by reason of the non payment of the full amount of the withholding tax to HM Revenue and Customs by the due date for payment.

 

	
5.4

	
Each party to this Agreement undertakes to indemnify and keep indemnified the others in respect of any document which such indemnifying party is obliged to deliver under this Agreement being unauthorised, invalid or for any other reason ineffective.

 

	
6.

	
Limitation

 

Save in the case of fraud on the part of the Legacy Vendor, the individual liability of the Legacy Vendor for any claims under this Agreement shall not exceed the Consideration.

 

	
7.

	
Announcements

 

	
7.1

	
Except as provided for in clauses 7.2 and clause 7.3, no announcement concerning the terms of this Agreement shall be made by or on behalf of either party without the prior written consent of the other party.

 

	
7.2

	
Any announcement, circular or other communication made or issued by or on behalf of any party which is required by law or the rules of any regulatory or governmental body to which such party is subject, including, without limitation, any stock exchange on which any securities of such party are listed, may be made or issued by or on behalf of that party without the consent of the other party.

  

5

  

 

	
7.3

	
Nothing in this clause 7 (Announcements) shall restrict the Purchaser or any other Purchaser Group Company from:

 

	
  

	
(a)

	
disclosing any and all required details of:

 

	
  

	
(i)

	
the transactions contemplated by this Agreement or any Agreed Form document;

 

	
  

	
(ii)

	
the Company or any Group Company; and/or

 

	
  

	
(iii)

	
the terms of this Agreement (including making a public filing of this Agreement),

 

to or at the request of the Securities Exchange Commission or any other regulatory or governmental body to which the Purchaser or any member of the Purchaser's Group is subject, including, without limitation, any stock exchange on which any securities of such Purchaser or member of the Purchaser's Group are listed,

 

	
  

	
(b)

	
providing information regarding the acquisition of the Group to its shareholders, provided that any such information does not contain any statement of fact, opinion, belief or otherwise which is intended to adversely affect the reputation or prospects of the Legacy Vendor; or

 

	
  

	
(c)

	
informing customers or suppliers of the acquisition of the Company by the Purchaser after Completion, provided that any such information does not contain any statement of fact, opinion, belief or otherwise which is intended to adversely affect the reputation or prospects of the Legacy Vendor; or

 

	
  

	
(d)

	
otherwise making any announcement that has been approved in accordance with the terms of the Main SPA,

 

	
8.

	
Post Completion matters

 

	
8.1

	
The Legacy Vendor irrevocably undertakes to the Purchaser that, for as long as he remains the registered holder of the Shares after Completion, he shall:

 

	
  

	
(a)

	
hold the Shares and any dividends and other moneys or assets paid or distributed in respect of them and all rights arising out of or in connection with them from Completion in trust for the Purchaser; and

 

	
  

	
(b)

	
deal with the Shares and all such dividends, distributions and rights as the Purchaser may direct from Completion until the date on which the Purchaser or its nominee is entered in the register of members of the Company as the holder of the Shares.

 

	
8.2

	
The Legacy Vendor irrevocably and unconditionally appoints the Purchaser as his attorney to do and perform any acts and things which the Purchaser in its absolute discretion considers necessary or desirable in connection with the Shares from Completion until the date on which the Purchaser or its nominee is entered in the register of members of the Company as the holder of the Shares, including (without prejudice to the generality of the foregoing):

 

	 	
(a)

	
exercising any rights, privileges or duties attaching to the Shares including, without limitation, receiving notices of, and attending and voting at, all meetings of the shareholders of the Company and meetings of the members of any particular class of the Shares and all or any adjournment of such meetings; and

 

  

6

  

 

	
  

	
(b)

	
completing and delivering any consents, proxies or resolution and any other documents required to be signed by a Vendor as a member of the Company from Completion until the date on which the Purchaser or its nominee is entered in the register of members of the Company as the holder of the Shares,

 

provided that the Purchaser shall not be entitled to create any liabilities whatsoever for the Legacy Vendor.

 

	
8.3

	
For the purpose of sub clause 8.2 (Post Completion matters), the Legacy Vendor irrevocably and unconditionally authorises the Company from Completion to send any notices in respect of its shareholding to the Purchaser and the Company shall not be required also to send such notices the relevant Legacy Vendor.

 

	
8.4

	
The Purchaser undertakes to procure that the stock transfer form effecting the sale of the Shares to the Purchaser is duly stamped and that the transfer to which it relates is duly registered in the statutory books of the Company showing the Purchaser as the legal owner of the Shares as soon as practicable following Completion.

 

	
9.

	
Protection of goodwill

 

	
9.1

	
In order to assure to the Purchaser the full benefit of the business and goodwill of the Group, the Legacy Vendor undertakes that he shall not directly or indirectly (whether as principal, shareholder, partner, employee, agent or otherwise), whether on his own account or in conjunction with or on behalf of any other person, do any of the following things:

 

	
  

	
(a)

	
during the Restricted Period carry on or be engaged, concerned or interested in (except as the holder of shares in a company whose shares are listed on a recognised investment exchange or overseas investment exchange (as such terms are defined in Sections 285 and 313, Financial Services and Markets Act 2000) which confer not more than 1% of the votes which could normally be cast at a general meeting of that company) any business which is involved with the Restricted Business within the Territory; or

 

	
  

	
(b)

	
during the Restricted Period canvass or solicit or seek to entice away the custom of any Client or Prospective Client for the purposes of providing Restricted Business within the Territory; or

 

	
  

	
(c)

	
during the Restricted Period accept orders for the provision of Restricted Business within the Territory in respect of any Client or Prospective Client; or

 

	
  

	
(d)

	
during the Restricted Period endeavour to entice away from any Group Company or encourage to terminate his employment with any Group Company (whether or not such termination would be a breach of his contract of employment) any Senior Employee; or

 

	
  

	
(e)

	
during the Restricted Period employ or otherwise engage any Senior Employee; or

 

	
  

	
(f)

	
save as required by law, during the Restricted Period do or say anything calculated to lead any person to withdraw from or cease to continue offering to any Group Company any rights (whether of purchase, sale, import, distribution, agency or otherwise) then enjoyed by it or in any other way to cease to do business or reduce the amount of business it transacts with any Group Company; or

 

	
  

	
(g)

	
save in the circumstances referred to in sub clause 15.10 of the Main SPA (Confidentiality), disclose to any other person any information which is secret or confidential to the business or affairs of the Group or any Purchaser Group Company or use any such information to the detriment of the business of the Group or any Purchaser Group Company for so long as that information remains secret or confidential; or

 

  

7

  

 

	
  

	
(h)

	
in relation to a business which is competitive or reasonably likely to be competitive with the Restricted Business, use any trade or business name or distinctive mark, style or logo used by or in the business of any Group Company at Completion or anything intended or likely to be confused with it.

 

	
9.2

	
Each undertaking contained in this clause 9 (Protection of goodwill) shall be construed as a separate and independent undertaking and, while the restrictions set out in this clause are considered by the parties to be reasonable in all the circumstances, it is agreed that if any one or more of such restrictions shall, either taken by itself or themselves together, be adjudged to go beyond what is reasonable in all the circumstances for the protection of the Purchaser's legitimate interests but would be adjudged reasonable if any particular restriction or restrictions were deleted or any part or parts of the wording thereof were deleted, restricted or limited in any particular manner (including without limitation any reduction in their duration or geographical scope) then the said restrictions shall apply with such deletions, restrictions or limitation as the case may be.

 

	
9.3

	
The Legacy Vendor agrees that, having regard to the facts and matters set out above and having taken professional advice, the restrictions contained in this clause 9 (Protection of goodwill) are reasonable and necessary for the protection of the legitimate business interests of the Purchaser.

 

	
9.4

	
Nothing in this Clause 9 shall prevent the Legacy Vendor from carrying on or being engaged, concerned or interested (whether directly or indirectly) in any business which is involved in Transostial Occlusive Permanent Sterilisation devices (including, without limitation, the sale and marketing of such devices) or seeking the custom of any Client or Prospective Client in respect of any such devices or accepting orders for any such devices (whether directly or indirectly) in respect of any Client or Prospective Client.

 

	
10.

	
Costs

 

	
10.1

	
Except as set out in clause 10.2, each party shall bear its own costs and expenses incurred in the preparation, execution and implementation of this Agreement.

 

	
10.2

	
The Purchaser shall pay all stamp and other transfer duties and registration fees applicable to any document to which it is a party and which arise as a result of or in consequence of this Agreement.

 

	
11.

	
General

 

	
11.1

	
Entire agreement

 

	
  

	
(a)

	
This Agreement and the provisions of the Main SPA incorporated into this Agreement set out the entire agreement and understanding between the parties in respect of the subject matter of this Agreement.

 

	
  

	
(b)

	
The Purchaser acknowledges that it has entered into this Agreement in reliance only upon the representations, warranties and promises specifically contained or incorporated in this Agreement and, save as expressly set out in this Agreement, the Vendor shall have no liability in respect of any other representation, warranty or promise made prior to the date of this Agreement unless it was made fraudulently.

 

	
11.2

	
Variation

 

No purported variation of this Agreement shall be effective unless it is in writing and signed by or on behalf of each of the parties.

  

8

  

 

	
11.3

	
Counterparts

 

	
  

	
(a)

	
This Agreement may be executed in any number of counterparts and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart; and

 

	
  

	
(b)

	
Each counterpart, when executed, shall be an original of this Agreement and all counterparts shall together constitute one instrument.

 

	
11.4

	
Further assurance

 

After Completion, the Legacy Vendor shall execute such documents and take such steps as the Purchaser may reasonably require to vest the full title to the Shares in the Purchaser and to give the Purchaser the full benefit of this Agreement.

 

	
11.5

	
Contracts (Rights of Third Parties) Act 1999

 

Unless expressly provided in this Agreement, no term of this Agreement is enforceable pursuant to the Contracts (Rights of Third Parties) Act 1999 by any person who is not a party to it.

 

	
12.

	
Governing law and jurisdiction

 

	
12.1

	
This Agreement and any dispute, claim or obligation (whether contractual or non-contractual) arising out of or in connection with it, its subject matter or formation shall be governed by English law.

 

	
12.2

	
The parties irrevocably agree that the English courts shall have exclusive jurisdiction to settle any dispute or claim (whether contractual or non-contractual) arising out of or in connection with this Agreement, its subject matter or formation.

 

This Agreement has been executed as a deed on the date appearing at the head of page 1.

 

  

9

  

 

	
SIGNED as a Deed

 

(but not delivered until dated) by

 

GILBERT MARCUS FILSHIE

 

in the presence of:-

 

Signature of witness:

 

 

Name of witness:

 

 

Address:

 

 

 

 

Occupation:

	
)

 

)

 

)

 

)

	  

 

	
EXECUTED as a Deed

 

(but not delivered until dated) by

 

UTAH MEDICAL PRODUCTS, INC.

 

acting by a duly authorised representative

 

in the presence of:-

 

Signature of witness:

 

 

Name of witness: Tin Lee

 

 

Address: 7043 South 300 West

 

Midvale, Utah 84047 USA

 

 

 

Occupation: Supervisor

	
)

 

)

 

)

 

)

 

)

 

)

	
/s/ Kevin L. Cornwell

 

Chairman & CEO

 

 

 

 

 

 

 

/s/ Tin Lee

 

 

10Exhibit 4.1

 

HAUTELOOK, INC.

 

2009 STOCK PLAN

 

ADOPTED ON APRIL 20, 2009

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
SECTION 1.
    	
Establishment And Purpose
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 2.
    	
Administration
    	
 
    	
1
    
	
(a)
    	
Committees   of the Board of Directors
    	
 
    	
1
    
	
(b)
    	
Authority   of the Board of Directors
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 3.
    	
Eligibility
    	
 
    	
1
    
	
(a)
    	
General   Rule
    	
 
    	
1
    
	
(b)
    	
Ten-Percent   Stockholders
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 4.
    	
Stock Subject To Plan
    	
 
    	
2
    
	
(a)
    	
Basic   Limitation
    	
 
    	
2
    
	
(b)
    	
Additional   Shares
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 5.
    	
Terms And Conditions Of Awards Or Sales
    	
 
    	
2
    
	
(a)
    	
Stock   Purchase Agreement
    	
 
    	
2
    
	
(b)
    	
Duration   of Offers and Nontransferability of Rights
    	
 
    	
2
    
	
(c)
    	
Purchase   Price
    	
 
    	
2
    
	
(d)
    	
Withholding   Taxes
    	
 
    	
2
    
	
(e)
    	
Restrictions   on Transfer of Shares
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 6.
    	
Terms And Conditions Of Options
    	
 
    	
3
    
	
(a)
    	
Stock   Option Agreement
    	
 
    	
3
    
	
(b)
    	
Number   of Shares
    	
 
    	
3
    
	
(c)
    	
Exercise   Price
    	
 
    	
3
    
	
(d)
    	
Exercisability
    	
 
    	
3
    
	
(e)
    	
Basic   Term
    	
 
    	
3
    
	
(f)
    	
Termination   of Service (Except by Death)
    	
 
    	
3
    
	
(g)
    	
Leaves   of Absence
    	
 
    	
4
    
	
(h)
    	
Death   of Optionee
    	
 
    	
4
    
	
(i)
    	
Restrictions   on Transfer of Shares
    	
 
    	
4
    
	
(j)
    	
Transferability   of Options
    	
 
    	
5
    
	
(k)
    	
Withholding   Taxes
    	
 
    	
5
    
	
(l)
    	
No   Rights as a Stockholder
    	
 
    	
5
    
	
(m)
    	
Modification,   Extension and Assumption of Options
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 7.
    	
Payment For Shares
    	
 
    	
5
    
	
(a)
    	
General   Rule
    	
 
    	
5
    
	
(b)
    	
Services   Rendered
    	
 
    	
5
    
	
(c)
    	
Promissory   Note
    	
 
    	
5
    
	
(d)
    	
Surrender   of Stock
    	
 
    	
6
    
	
(e)
    	
Exercise/Sale
    	
 
    	
6
    
	
(f)
    	
Other   Forms of Payment
    	
 
    	
6
    
						

 

i

 

	
SECTION 8. 
    	
Adjustment Of Shares
    	
 
    	
6
    
	
(a)
    	
General
    	
 
    	
6
    
	
(b)
    	
Assumption   or Replacement of Options by Successor or Acquiring Company
    	
 
    	
6
    
	
(c)
    	
Other   Treatment of Options
    	
 
    	
7
    
	
(d)
    	
Reservation   of Rights
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 9. 
    	
Securities Law Requirements
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 10. 
    	
No Retention Rights
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 11. 
    	
Duration and Amendments
    	
 
    	
8
    
	
(a)
    	
Term   of the Plan
    	
 
    	
8
    
	
(b)
    	
Right   to Amend or Terminate the Plan
    	
 
    	
8
    
	
(c)
    	
Effect   of Amendment or Termination
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 12. 
    	
Definitions
    	
 
    	
8
    
					

 

ii

 

HAUTELOOK, INC. 2009 STOCK PLAN

 

SECTION 1.                       ESTABLISHMENT AND PURPOSE.

 

The purpose of the Plan is to offer selected persons an opportunity to acquire a proprietary interest in the success of the Company, or to increase such interest, by purchasing Shares of the Company’s Stock. The Plan provides both for the direct award or sale of Shares and for the grant of Options to purchase Shares.  Options granted under the Plan may include Nonstatutory Options as well as ISOs intended to qualify under Section 422 of the Code.

 

Capitalized terms are defined in Section 12.

 

SECTION 2.                       ADMINISTRATION.

 

(a)                                  Committees of the Board of Directors. The Plan may be administered by one or more Committees.  Each Committee shall consist of one or more members of the Board of Directors who have been appointed by the Board of Directors. Each Committee shall have such authority and be responsible for such functions as the Board of Directors has assigned to it.  If no Committee has been appointed, the entire Board of Directors shall administer the Plan. Any reference to the Board of Directors in the Plan shall be construed as a reference to the Committee (if any) to whom the Board of Directors has assigned a particular function.

 

(b)                                  Authority of the Board of Directors.  Subject to the provisions of the Plan, the Board of Directors shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the Plan. All decisions, interpretations and other actions of the Board of Directors shall be final and binding on all Purchasers, all Optionees and all persons deriving their rights from a Purchaser or Optionee.

 

SECTION 3.                       ELIGIBILITY.

 

(a)                                  General Rule. Only Employees, Outside Directors and Consultants shall be eligible for the grant of Nonstatutory Options or the direct award or sale of Shares.  Only Employees shall be eligible for the grant of ISOs.

 

(b)                                  Ten-Percent Stockholders.  A person who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries shall not be eligible for the grant of an ISO unless (i) the Exercise Price is at least 110% of the Fair Market Value of a Share on the date of grant and (ii) such ISO by its terms is not exercisable after the expiration of five years from the date of grant. For purposes of this Subsection (b), in determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied.

 

 

SECTION 4.                       STOCK SUBJECT TO PLAN.

 

(a)                                  Basic Limitation. Not more than 8,687,043 Shares may be issued under the Plan (subject to Subsection (b) below and Section 8(a)).(1) All of these Shares may be issued upon the exercise of ISOs.  The number of Shares that are subject to Options or other rights outstanding at any time under the Plan shall not exceed the number of Shares that then remain available for issuance under the Plan.  The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. Shares offered under the Plan may be authorized but unissued Shares or treasury Shares.

 

(b)                                  Additional Shares. In the event that Shares previously issued under the Plan have not vested and  are reacquired by the Company, such Shares shall be added to the number of Shares then available for issuance under the Plan.  In the event that an outstanding Option or other right for any reason expires or is canceled, the Shares allocable to the unexercised portion of such Option or other right shall be added to the number of Shares then available for issuance under the Plan.

 

SECTION 5.                       TERMS AND CONDITIONS OF AWARDS OR SALES.

 

(a)                                  Stock Purchase Agreement. Each award or sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser and the Company. Such award or sale shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Stock Purchase Agreement.  The provisions of the various Stock Purchase Agreements entered into under the Plan need not be identical.

 

(b)                                  Duration of Offers and Nontransferability of Rights.  Any right to acquire Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Purchaser within 30 days after the grant of such right was communicated to the Purchaser by the Company.  Such right shall not be transferable and shall be exercisable only by the Purchaser to whom such right was granted.

 

(c)                                  Purchase Price.  The Board of Directors shall determine the Purchase Price of Shares to be offered under the Plan at its sole discretion. The Purchase Price shall be payable in a form described in Section 7.

 

(d)                                  Withholding Taxes.  As a condition to the purchase of Shares, the Purchaser shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such purchase.

 

(e)                                  Restrictions on Transfer of Shares. Any Shares awarded or sold under the Plan shall be subject to such special forfeiture conditions, rights of repurchase, rights of first

 

(1) Please refer to Exhibit A for a schedule of the initial share reserve and any subsequent increases in the reserve.

 

2

 

refusal and other transfer restrictions as the Board of Directors may determine. Such restrictions shall be set forth in the applicable Stock Purchase Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally.

 

SECTION 6.                       TERMS AND CONDITIONS OF OPTIONS.

 

(a)                                  Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company.  The Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.

 

(b)                                  Number of Shares.  Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 8. The Stock Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option.

 

(c)                                  Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of any Option shall not be less than 100% of the Fair Market Value of a Share on the date of grant, and in the case of an ISO a higher percentage may be required by Section 3(b). Subject to the preceding sentence, the Exercise Price shall be determined by the Board of Directors at its sole discretion. The Exercise Price shall be payable in a form described in Section 7.

 

(d)                                  Exercisability. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable.  No Option shall be exercisable unless the Optionee (i) has delivered an executed copy of the Stock Option Agreement to the Company or (ii) otherwise agrees to be bound by the terms of the Stock Option Agreement. The Board of Directors shall determine the exercisability provisions of the Stock Option Agreement at its sole discretion.

 

(e)                                  Basic Term. The Stock Option Agreement shall specify the term of the Option. The term shall not exceed 10 years from the date of grant, and in the case of an ISO a shorter term may be required by Section 3(b). Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine when an Option is to expire.

 

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

 

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

 

(ii)               The date three months after the termination of the Optionee’s Service for any reason other than Disability, or such later date as the Board of Directors may determine; or

 

3

 

(iii)            The date six months after the termination of the Optionee’s Service by reason of Disability, or such later date as the Board of Directors may determine.

 

The Optionee may exercise all or part of the Optionee’s Options at any time before the expiration of such Options under the preceding sentence, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination).  The balance of such Options shall lapse when the Optionee’s Service terminates. In the event that the Optionee dies after the termination of the Optionee’s Service but before the expiration of the Optionee’s Options, all or part of such Options may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination).

 

(g)                                 Leaves of Absence. For purposes of Subsection (f) above, 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 this purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company).

 

(h)                                 Death of Optionee. If an Optionee dies while the Optionee is in Service, then the Optionee’s Options shall expire on the earlier of the following dates:

 

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

 

(ii)               The date 12 months after the Optionee’s death, or such later date as the Board of Directors may determine.

 

All or part of the Optionee’s Options may be exercised at any time before the expiration of such Options under the preceding sentence by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionee’s death (or became exercisable as a result of the death) and the underlying Shares had vested before the Optionee’s death (or vested as a result of the Optionee’s death). The balance of such Options shall lapse when the Optionee dies.

 

(i)                                    Restrictions on Transfer of Shares. Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine.  Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally.

 

4

 

(j)                                    Transferability of Options.  An Option shall be transferable by the Optionee only by (i) a beneficiary designation, (ii) a will or (iii) the laws of descent and distribution, except as provided in the next sentence. If the applicable Stock Option Agreement so provides, a Nonstatutory Option shall also be transferable by gift or domestic relations order to a Family Member of the Optionee.  An ISO may be exercised during the lifetime of the Optionee only by the Optionee or by the Optionee’s guardian or legal representative.

 

(k)                                Withholding Taxes.  As a condition to the exercise of an Option, the Optionee shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise. The Optionee shall also make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option.

 

(l)                                    No Rights as a Stockholder.  An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by the Optionee’s Option until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of such Option.

 

(m)                              Modification, Extension and Assumption of Options.  Within the limitations of the Plan, the Board of Directors may modify, extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or another issuer) in return for the grant of new Options for the same or a different number of Shares and at the same or a different Exercise Price.  The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair the Optionee’s rights or increase the Optionee’s obligations under such Option.

 

SECTION 7.                       PAYMENT FOR SHARES.

 

(a)                                  General Rule.  The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as otherwise provided in this Section 7.

 

(b)                                  Services Rendered.  At the discretion of the Board of Directors, Shares may be awarded under the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to the award.

 

(c)                                  Promissory Note.  At the discretion of the Board of Directors, all or a portion of the Purchase Price or Exercise Price (as the case may be) of Shares issued under the Plan may be paid with a full-recourse promissory note. The Shares shall be pledged as security for payment of the principal amount of the promissory note and interest thereon.  The interest rate payable under the terms of the promissory note shall not be less than the minimum rate (if any) required to avoid the imputation of additional interest under the Code.  Subject to the foregoing, the Board of Directors (at its sole discretion) shall specify the term, interest rate, amortization requirements (if any) and other provisions of such note.

 

5

 

(d)                                  Surrender of Stock.  At the discretion of the Board of Directors, all or any part of the Exercise 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 as of the date when the Option is exercised.

 

(e)                                  Exercise/Sale. To the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, all or part of the Exercise 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.

 

(f)                                    Other Forms of Payment.  To the extent that a Stock Purchase Agreement or Stock Option Agreement so provides, the Purchase Price or Exercise Price of Shares issued under the Plan may be paid in any other form permitted by the Delaware General Corporation Law, as amended.

 

SECTION 8.                       ADJUSTMENT OF SHARES.

 

(a)                                  General.  In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a reclassification, or any other increase or decrease in the number of issued shares of Stock effected without receipt of consideration by the Company, proportionate adjustments shall automatically be made in each of (i) the number of Shares available for future grants under Section 4, (ii) the number of Shares covered by each outstanding Option and (iii) the Exercise Price under each outstanding Option. In the event of a declaration of an extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Stock, a recapitalization, a spin-off, or a similar occurrence, the Board of Directors at its sole discretion may make appropriate adjustments in one or more of (i) the number of Shares available for future grants under Section 4, (ii) the number of Shares covered by each outstanding Option or (iii) the Exercise Price under each outstanding Option; provided, however, that the Board of Directors shall in any event make such adjustments as may be required by Section 25102(o) of the California Corporations Code.

 

(b)                                  Assumption or Replacement of Options by Successor or Acquiring Company.  In the event of (i) a dissolution or liquidation of the Company, (ii) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in which there is no substantial change in the stockholders of the Company or their relative stock holdings and the Options granted under this Plan are assumed, converted or replaced by the successor or acquiring corporation, which assumption, conversion or replacement will be binding on all Optionees), (iii) a merger in which the Company is the surviving corporation but after which the stockholders of the Company immediately prior to such merger (other than any stockholder which merges with the Company in such merger, or which owns or controls another corporation which merges with the Company in such merger) cease to own their shares or other equity interests in the Company, or (iv) the sale of all or substantially

 

6

 

all of the assets of the Company, any or all outstanding Options may be assumed, converted or replaced by the successor or acquiring corporation (if any), which assumption, conversion or replacement will be binding on all Optionees.  In the alternative, the successor or acquiring corporation may substitute equivalent Options or provide substantially similar consideration to Optionees as was provided to stockholders (after taking into account the existing provisions of the Options). The successor or acquiring corporation may also substitute by issuing, in place of outstanding Shares held by the Optionee, substantially similar shares or other property subject to repurchase restrictions and other provisions no less favorable to the Optionee than those which applied to such outstanding Shares immediately prior to such transaction described in this Section 8(b).  In the event such successor or acquiring corporation (if any) does not assume, convert, replace or substitute Options, as provided above, pursuant to a transaction described in this Section 8(b), then notwithstanding any other provision in this Plan to the contrary, the vesting of such Options will accelerate and the Options will become exercisable in full prior to the consummation of such event at such times and on such conditions as the Board of Directors determines, and if such Options are not exercised prior to the consummation of such transaction, they shall terminate upon consummation of such transaction.

 

(c)                                  Other Treatment of Options.  Subject to any greater rights granted to Optionees under Section 8(b), in the event of the occurrence of any transaction described in Section 8(b), any outstanding Options will be treated as provided in the applicable agreement or plan of merger, consolidation, dissolution, liquidation or sale of assets.

 

(d)                                  Reservation of Rights. Except as provided in this Section 8, an Optionee or Purchaser shall have no rights by reason of (i) any subdivision or consolidation of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class. Any issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets.

 

SECTION 9.                       SECURITIES LAW REQUIREMENTS.

 

Shares shall not be issued under the Plan unless the issuance and delivery of such Shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded.

 

SECTION 10.                NO RETENTION RIGHTS.

 

Nothing in the Plan or in any right or Option granted under the Plan shall confer upon the Purchaser or 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

 

7

 

Parent or Subsidiary employing or retaining the Purchaser or Optionee) or of the Purchaser or 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.

 

SECTION 11.                DURATION AND AMENDMENTS.

 

(a)                                  Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its adoption by the Board of Directors, subject to the approval of the Company’s stockholders. If the stockholders fail to approve the Plan within 12 months after its adoption by the Board of Directors, then any grants, exercises or sales that have already occurred under the Plan shall be rescinded and no additional grants, exercises or sales shall thereafter be made under the Plan. The Plan shall terminate automatically 10 years after the later of (i) the date when the Board of Directors adopted the Plan or (ii) the date when the Board of Directors approved the most recent increase in the number of Shares reserved under Section 4 that was also approved by the Company’s stockholders.  The Plan may be terminated on any earlier date pursuant to Subsection (b) below.

 

(b)                                  Right to Amend or Terminate the Plan.  The Board of Directors may amend, suspend or terminate the Plan at any time and for any reason; provided, however, that any amendment of the Plan shall be subject to the approval of the Company’s stockholders if it (i) increases the number of Shares available for issuance under the Plan (except as provided in Section 8) or (ii) materially changes the class of persons who are eligible for the grant of ISOs. Stockholder approval shall not be required for any other amendment of the Plan.  If the stockholders fail to approve an increase in the number of Shares reserved under Section 4 within 12 months after its adoption by the Board of Directors, then any grants, exercises or sales that have already occurred in reliance on such increase shall be rescinded and no additional grants, exercises or sales shall thereafter be made in reliance on such increase.

 

(c)                                  Effect of Amendment or Termination. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option granted prior to such termination. The termination of the Plan, or any amendment thereof, shall not affect any Share previously issued or any Option previously granted under the Plan.

 

SECTION 12.                DEFINITIONS.

 

(a)                                  “Board of Directors” shall mean the Board of Directors of the Company, as constituted from time to time.

 

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

 

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

 

(d)                                 “Company” shall mean HauteLook, Inc., a Delaware corporation.

 

8

 

(e)                                  “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.

 

(f)                                    “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.

 

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

 

(h)                                 “Exercise Price” shall mean the amount for which one Share may be purchased upon exercise of an Option, as specified by the Board of Directors in the applicable Stock Option Agreement.

 

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

 

(j)                                     “Family Member” shall mean (i) any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, (ii) any person sharing the Optionee’s household (other than a tenant or employee), (iii) a trust in which persons described in Clause (i) or (ii) have more than 50% of the beneficial interest, (iv) a foundation in which persons described in Clause (i) or (ii) or the Optionee control the management of assets and (v) any other entity in which persons described in Clause (i) or (ii) or the Optionee own more than 50% of the voting interests.

 

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

 

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

 

(m)                               “Option” shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares.

 

(n)                                 “Optionee” shall mean a person who holds an Option.

 

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

 

(p)                                 “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 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.  A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

 

9

 

(q)                                 “Plan” shall mean this HauteLook, Inc. 2009 Stock Plan.

 

(r)                                    “Purchase Price” shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Board of Directors.

 

(s)                                  “Purchaser” shall mean a person to whom the Board of Directors has offered the right to acquire Shares under the Plan (other than upon exercise of an Option).

 

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

 

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

 

(v)                                 “Stock” shall mean the Common Stock of the Company.

 

(w)                               “Stock Option Agreement” shall mean the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to the Optionee’s Option.

 

(x)                                   “Stock Purchase Agreement” shall mean the agreement between the Company and a Purchaser who acquires Shares under the Plan that contains the terms, conditions and restrictions pertaining to the acquisition of such Shares.

 

(y)                                 “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 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered Subsidiary as of such date.

 

10

 

EXHIBIT A

 

SCHEDULE OF SHARES RESERVED FOR ISSUANCE UNDER THE PLAN

 

	
Date of Board
    	
 
    	
Date of Stockholder
    	
 
    	
Number of
    	
 
    	
Cumulative Number
    
	
Approval
    	
 
    	
Approval
    	
 
    	
Shares Added
    	
 
    	
of Shares
    
	
April 20, 2009
    	
 
    	
April 27, 2009
    	
 
    	
Not Applicable
    	
 
    	
6,014,809
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
May 25, 2010
    	
 
    	
May 25, 2010
    	
 
    	
1,777,761
    	
 
    	
7,792,570
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
September 1, 2010
    	
 
    	
September 1, 2010
    	
 
    	
763,348
    	
 
    	
8,555,918
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
November 1, 2010
    	
 
    	
November 1, 2010
    	
 
    	
131,125
    	
 
    	
8,687,043
    

 

11

 

HAUTELOOK, INC. 2009 STOCK PLAN

 

NOTICE OF STOCK OPTION GRANT (FULLY VESTED)

 

The Optionee has been granted the following option to purchase shares of the Common Stock of HauteLook, Inc.:

 

	
Name   of Optionee:
    	
 
    	
<<Name>>
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Total   Number of Shares:
    	
 
    	
<<TotalShares>>
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Type   of Option:
    	
 
    	
<<ISO>>
    	
Incentive   Stock Option (ISO)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
<<NSO>>
    	
Nonstatutory   Stock Option (NSO)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Exercise   Price per Share:
    	
 
    	
$<<PricePerShare>>
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date   of Grant:
    	
 
    	
<<DateGrant>>
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
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.
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Vesting   Schedule:
    	
 
    	
The   Shares subject to this option shall be fully vested at all times.
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Expiration   Date:
    	
 
    	
<<ExpDate>>.    This   option expires earlier if the Optionee’s Service terminates earlier, as   provided in Section 6 of the Stock Option Agreement.
    	
 
    

 

By signing below, the Optionee and the Company agree that this option is granted under, and governed by the terms and conditions of, the 2009 Stock Plan and the Stock Option Agreement. Both of these documents are attached to, and made a part of, this Notice of Stock Option Grant. Section 13 of the Stock Option Agreement includes important acknowledgements of the Optionee.

 

	
OPTIONEE:
    	
 
    	
HAUTELOOK, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

 

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.

 

HAUTELOOK, INC. 2009 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 at any time prior to its expiration, as set forth in the Notice of Stock Option Grant.

 

(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.                       NO 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 12(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)                                 Execution of Agreements.  If, as a result of the exercise of this option, the Optionee will hold Shares that represent two percent (2%) or more of the Company’s then-outstanding capital stock, the Optionee shall upon the exercise of this option, if such person has not already done so, become a party to the Right of First Refusal Agreement, by signing a counterpart signature page thereto, and the Voting Agreement, by executing an Adoption Agreement.

 

(c)                                  Issuance of Shares.  After receiving a proper notice of exercise and, if applicable, the executed Right of First Refusal Agreement and Adoption Agreement, the Company shall cause to be issued one or more certificates evidencing the Shares for which this option has been exercised.  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. The Company shall cause such certificates to be delivered to or upon the order of the person exercising this option.

 

(d)                                 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 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.  At the discretion of the Board of Directors, 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 as of the date when this option is exercised.

 

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(c)                                  Exercise/Sale.  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. However, payment pursuant to this Subsection (c) shall be permitted only if (i) Stock then is publicly traded and (ii) such payment does not violate applicable law.

 

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 10 years after the Date of Grant (five 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 months after the termination of the Optionee’s Service for any reason other than Disability; or

 

(iii)                               The date six 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. 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.

 

(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 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.

 

(d)                                 Leaves of Absence. Service shall be deemed to continue for any purpose under this Agreement while the Optionee is on a bona fide leave of absence, if (i) such leave was

 

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approved by the Company in writing and (ii) 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).  Service shall be deemed to terminate when such leave ends, unless the Optionee immediately returns to active work.

 

(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 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 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 90 days, unless the Optionee’s reemployment rights following such leave were guaranteed by statute or by contract.

 

SECTION 7.                       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, State or foreign 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 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 30 days after the date when it received the Transfer Notice, the Optionee may, not later than 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, State and foreign 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,

 

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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 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 7 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 7.

 

(d)                                 Termination of Right of First Refusal.  Any other provision of this Section 7 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.

 

(e)                                  Permitted Transfers.  This Section 7 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 7, 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.

 

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(g)                                 Assignment of Right of First Refusal.  The Board of Directors may freely assign the Company’s Right of First Refusal, 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 7.

 

SECTION 8.                       LEGALITY OF INITIAL ISSUANCE.

 

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

 

(a)                                  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;

 

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

 

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

 

SECTION 9.                       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 10.                RESTRICTIONS ON TRANSFER OF SHARES.

 

(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 consent of the Company or its managing underwriter. 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 underwriter. In no event, however, shall such period exceed 180 days plus such additional period as may reasonably be requested by

 

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the Company or such underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research reports or (ii) analyst recommendations and opinions, including (without limitation) the restrictions set forth in Rule 2711(f)(4) of the National Association of Securities Dealers and Rule 472(f)(4) of the New York Stock Exchange, as amended, or any similar successor rules.  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.

 

(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 that 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.  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):

 

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“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.

 

(g)                                 Administration.  Any determination by the Company and its counsel in connection with any of the matters set forth in this Section 10 shall be conclusive and binding on the Optionee and all other persons.

 

SECTION 11.                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 12.                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

 

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matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) that 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 Delaware, as such laws are applied to contracts entered into and performed in such State.

 

SECTION 13.                ACKNOWLEDGEMENTS OF THE OPTIONEE.

 

(a)                                  Tax Consequences.  The Optionee agrees that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes the Optionee’s tax liabilities.  The Optionee shall not make any claim against the Company or its Board of Directors, officers or employees related to tax liabilities arising from this option or the Optionee’s other compensation. In particular, the Optionee acknowledges that this option is exempt from Section 409A of the Code only if the Exercise Price is at least equal to the Fair Market Value per Share on the Date of Grant.  Since Shares are not traded on an established securities market, the determination of their Fair Market Value is made by the Board of Directors or by an independent valuation firm retained by the Company.  The Optionee acknowledges that there is no guarantee in either case that the Internal Revenue Service will agree with the valuation, and the Optionee shall not make any claim against the Company or its Board of Directors, officers or employees in the event that the Internal Revenue Service asserts that the valuation was too low.

 

(b)                                 Electronic Delivery of Documents.  The Optionee agrees that the Company may deliver by email all documents relating to the Plan or this option (including, without limitation, a copy of the Plan) and all other documents that the Company is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission).  The Optionee also agrees that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a website, it shall notify the Optionee by email.

 

SECTION 14.                DEFINITIONS.

 

(a)                                  “Adoption Agreement” shall mean an adoption agreement to the Voting Agreement, substantially in the form attached hereto as Exhibit A.

 

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

 

(c)                                  “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.

 

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

 

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

 

(f)                                    “Company” shall mean HauteLook, Inc., a Delaware corporation.

 

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(g)                                 “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.

 

(h)                                 “Date of Grant” shall mean the date of grant 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.

 

(i)                                     “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.

 

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

 

(k)                                  “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.

 

(l)                                     “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.

 

(m)                               “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.

 

(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 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 HauteLook, Inc. 2009 Stock Plan, as in effect on the Date of Grant.

 

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

 

(v)                                 “Right of First Refusal” shall mean the Company’s right of first refusal described in Section 7.

 

(w)                               “Right of First Refusal Agreement” shall mean that certain Right of First Refusal and Co-Sale Agreement by and among the Company and certain stockholders of the Company, dated as of May 1, 2009, as may be amended from time to time.

 

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

 

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

 

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

 

(aa)                            “Stock” shall mean the Common Stock of the Company.

 

(bb)                          “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 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

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

 

(dd)                          “Transfer Notice” shall mean the notice of a proposed transfer of Shares described in Section 7.

 

(ee)                            “Voting Agreement” shall mean that certain Voting Agreement by and among the Company and certain stockholders of the Company, dated as of May 1 2009, as may be amended from time to time.

 

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EXHIBIT A

 

ADOPTION AGREEMENT

 

This Adoption Agreement (“Adoption Agreement”) is executed on                    , 20    , by the undersigned (the “Holder”) pursuant to the terms of that certain Voting Agreement dated as of April     , 2009, as may be amended from time to time (the “Agreement”), by and among the Company and certain of its stockholders.  Capitalized terms used but not defined in this Adoption Agreement shall have the respective meanings ascribed to such terms in the Agreement.  By the execution of this Adoption Agreement, the Holder agrees as follows.

 

1.1                                 Acknowledgment.  Holder acknowledges that Holder is acquiring certain shares of the capital stock of the Company (the “Stock”) or options, warrants or other rights to purchase such Stock (the “Options”), for one of the following reasons (Check the correct box):

 

o                                   as a transferee of Shares from a party in such party’s capacity as an “Investor” bound by the Agreement, and after such transfer, Holder shall be considered an “Investor” and a “Stockholder” for all purposes of the Agreement.

 

o                                   as a transferee of Shares from a party in such party’s capacity as a “Key Holder” bound by the Agreement, and after such transfer, Holder shall be considered a “Key Holder” and a “Stockholder” for all purposes of the Agreement.

 

o                                   as a new Investor in accordance with Section 6.1(a) of the Agreement, in which case Holder will be an “Investor” and a “Stockholder” for all purposes of the Agreement.

 

o                                   in accordance with Section 6.1(b) of the Agreement, as a new party who is not a new Investor, in which case Holder will be a “Stockholder” for all purposes of the Agreement.

 

1.2                                 Agreement.  Holder hereby (a) agrees that the Stock, Options, and any other shares of capital stock or securities required by the Agreement to be bound thereby, shall be bound by and subject to the terms of the Agreement and (b) adopts the Agreement with the same force and effect as if Holder were originally a party thereto.

 

1.3                                 Notice. Any notice required or permitted by the Agreement shall be given to Holder at the address or facsimile number listed below Holder’s signature hereto.

 

	
HOLDER:
    	
 
    	
 
    	
ACCEPTED   AND AGREED:
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
HAUTELOOK, INC.
    
	
Name   and Title of Signatory
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Facsimile   Number:
    	
 
    	
 
    	
 
    
									

 

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HAUTELOOK, INC. 2009 STOCK PLAN

 

NOTICE OF STOCK OPTION GRANT (EARLY EXERCISE)

 

The Optionee has been granted the following option to purchase shares of the Common Stock of HauteLook, Inc.:

 

	
Name   of Optionee:
    	
 
    	
<<Name>>
    
	
 
    	
 
    	
 
    
	
Total   Number of Shares:
    	
 
    	
<<TotalShares>>
    
	
 
    	
 
    	
 
    
	
Type   of Option:
    	
 
    	
<<ISO>>
    	
Incentive   Stock Option (ISO)
    
	
 
    	
 
    	
<<NSO>>
    	
Nonstatutory   Stock Option (NSO)
    
	
 
    	
 
    	
 
    	
 
    
	
Exercise   Price per Share:
    	
 
    	
$<<PricePerShare>>
    
	
 
    	
 
    	
 
    
	
Date   of Grant:
    	
 
    	
<<DateGrant>>
    
	
 
    	
 
    	
 
    
	
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.
    
	
 
    	
 
    	
 
    
	
Vesting   Commencement Date:
    	
 
    	
<<VestComDate>>
    
	
 
    	
 
    	
 
    
	
Vesting   Schedule:
    	
 
    	
The   Right of Repurchase shall lapse with respect to the first 25% of the Shares   subject to this option when the Optionee completes 12 months of continuous   Service after the Vesting Commencement Date set forth above. The Right of   Repurchase shall lapse with respect to 1/12th of the remaining 75% of the   Shares subject to this option when the Optionee completes each 3-month period   of continuous Service thereafter. In addition, the Right of Repurchase shall   lapse with respect to all of the Shares upon a Change in Control.
    
	
 
    	
 
    	
 
    
	
Expiration   Date:
    	
 
    	
<<ExpDate>>.    This   option expires earlier if the Optionee’s Service terminates earlier, as   provided in Section 6 of the Stock Option Agreement.
    

 

By signing below, the Optionee and the Company agree that this option is granted under, and governed by the terms and conditions of, the 2009 Stock Plan and the Stock Option Agreement.  Both of these documents are attached to, and made a part of, this Notice of Stock Option Grant.  Section 14 of the Stock Option Agreement includes important acknowledgements of the Optionee.

 

	
OPTIONEE:
    	
 
    	
HAUTELOOK, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
						

 

 

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.

 

HAUTELOOK, INC. 2009 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 15 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.                       NO 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. In the event of a partial exercise of this option, Shares shall be deemed to have been purchased in the order in which they vest in accordance with the Notice of Stock Option Grant.

 

(b)                                 Execution of Agreements.  If, as a result of the exercise of this option, the Optionee will hold Shares that represent two percent (2%) or more of the Company’s then-outstanding capital stock, the Optionee shall upon the exercise of this option, if such person has not already done so, become a party to the Right of First Refusal Agreement, by signing a counterpart signature page thereto, and the Voting Agreement, by executing an Adoption Agreement.

 

(c)                                  Issuance of Shares.  After receiving a proper notice of exercise and, if applicable, the executed Right of First Refusal Agreement and Adoption Agreement, the Company shall cause to be issued one or more certificates evidencing the Shares for which this option has been exercised.  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. In the case of Restricted Shares, the Company shall cause such certificates to be deposited in escrow under Section 7(c).  In the case of other Shares, the Company shall cause such certificates to be delivered to or upon the order of the person exercising this option.

 

(d)                                 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.

 

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(b)                                 Surrender of Stock.  At the discretion of the Board of Directors, 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 as of the date when this option is exercised.

 

(c)                                  Exercise/Sale.  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. However, payment pursuant to this Subsection (c) shall be permitted only if (i) Stock then is publicly traded and (ii) such payment does not violate applicable law.

 

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 10 years after the Date of Grant (five 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 months after the termination of the Optionee’s Service for any reason other than Disability; or

 

(iii)                               The date six 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:

 

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

 

(ii)                                  The date 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)                                 Part-Time Employment and Leaves of Absence.  If the Optionee commences working on a part-time basis, then the Company may adjust the vesting schedule set forth in the Notice of Stock Option Grant in accordance with the Company’s part-time work policy or the terms of an agreement between the Optionee and the Company pertaining to his or her part-time schedule.  If the Optionee goes on a leave of absence, then the Company may adjust the vesting schedule set forth in the Notice of Stock Option Grant in accordance with the Company’s leave of absence policy or the terms of such leave.  Except as provided in the preceding sentence, Service shall be deemed to continue for any purpose under this Agreement while the Optionee is on a bona fide leave of absence, if (i) such leave was approved by the Company in writing and (ii) 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). Service shall be deemed to terminate when such leave ends, unless the Optionee immediately returns to active work.

 

(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 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 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 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 the Company’s Right of

 

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Repurchase. The Company, however, may decline to exercise its Right of Repurchase or may exercise its Right of Repurchase only with respect to a portion of the Restricted Shares.  The Company may exercise its Right of Repurchase only during the Repurchase Period following the termination of the Optionee’s Service. The Right of Repurchase may be exercised automatically under Subsection (d) below. If the Right of Repurchase is exercised, the Company shall pay the Optionee an amount equal to the Exercise Price for each of the Restricted Shares being repurchased.

 

(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.

 

(c)                                  Escrow.  Upon issuance, the certificate(s) for Restricted 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 Restricted Shares (or on other securities held in escrow) shall be paid directly to the Optionee and shall not be held in escrow. Restricted 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 (but not more frequently than once every six 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 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.

 

(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.

 

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(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 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 Board of Directors may freely assign the Company’s Right of Repurchase, 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, State or foreign 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 30 days after the date when the Transfer Notice was received by the Company.

 

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(b)                                 Transfer of Shares.  If the Company fails to exercise its Right of First Refusal within 30 days after the date when it received the Transfer Notice, the Optionee may, not later than 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, State and foreign 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 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.

 

(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

 

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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 Board of Directors may freely assign the Company’s Right of First Refusal, 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:

 

(a)                                  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;

 

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

 

(c)                                  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 OF SHARES.

 

(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

 

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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 consent of the Company or its managing underwriter. 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 underwriter. In no event, however, shall such period exceed 180 days plus such additional period as may reasonably be requested by the Company or such underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research reports or (ii) analyst recommendations and opinions, including (without limitation) the restrictions set forth in Rule 2711(f)(4) of the National Association of Securities Dealers and Rule 472(f)(4) of the New York Stock Exchange, as amended, or any similar successor rules. 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.

 

(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 that 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

 

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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.

 

(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

 

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(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) that 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 Delaware, as such laws are applied to contracts entered into and performed in such State.

 

SECTION 14.                ACKNOWLEDGEMENTS OF THE OPTIONEE.

 

(a)                                  Tax Consequences.  The Optionee agrees that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes the Optionee’s tax liabilities.  The Optionee shall not make any claim against the Company or its Board of Directors, officers or employees related to tax liabilities arising from this option or the Optionee’s other compensation. In particular, the Optionee acknowledges that this option is exempt from Section 409A of the Code only if the Exercise Price is at least equal to the Fair Market Value per Share on the Date of Grant.  Since Shares are not traded on an established securities market, the determination of their Fair Market Value is made by the Board of Directors or by an independent valuation firm retained by the Company.  The Optionee acknowledges that there is no guarantee in either case that the Internal Revenue Service will agree with the valuation, and the Optionee shall not make any claim against the Company or its Board of Directors, officers or employees in the event that the Internal Revenue Service asserts that the valuation was too low.

 

(b)                                 Electronic Delivery of Documents.  The Optionee agrees that the Company may deliver by email all documents relating to the Plan or this option (including, without limitation, a copy of the Plan) and all other documents that the Company is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission).  The Optionee also agrees that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a website, it shall notify the Optionee by email.

 

SECTION 15.                DEFINITIONS.

 

(a)                                  “Adoption Agreement” shall mean an adoption agreement to the Voting Agreement, substantially in the form attached hereto as Exhibit A.

 

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

 

(c)                                  “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.

 

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(d)                                 “Change in Control” shall mean (i) the consummation of a merger or consolidation of the Company with or into another entity or (ii) the dissolution, liquidation or winding up of the Company. The foregoing notwithstanding, a merger or consolidation of the Company shall not constitute a “Change in Control” if immediately after such merger or consolidation a majority of the voting power of the capital stock of the continuing or surviving entity, or any direct or indirect parent corporation of such continuing or surviving entity, will be owned by the persons who were the Company’s stockholders immediately prior to such merger or consolidation in substantially the same proportions as their ownership of the voting power of the Company’s capital stock immediately prior to such merger or consolidation.

 

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

 

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

 

(g)                                 “Company” shall mean HauteLook, Inc., a Delaware corporation.

 

(h)                                 “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.

 

(i)                                     “Date of Grant” shall mean the date of grant 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.

 

(j)                                     “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.

 

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

 

(l)                                     “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.

 

(m)                               “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.

 

(n)                                 “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.

 

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

 

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

 

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

 

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

 

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

 

(t)            “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 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

(u)           “Plan” shall mean the HauteLook, Inc. 2009 Stock Plan, as in effect on the Date of Grant.

 

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

 

(w)          “Repurchase Period” shall mean a period of 90 consecutive days commencing on the date when the Optionee’s Service terminates for any reason, including (without limitation) death or disability.

 

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

 

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

 

(z)            “Right of First Refusal Agreement” shall mean that certain Right of First Refusal and Co-Sale Agreement by and among the Company and certain stockholders of the Company, dated as of April     , 2009, as may be amended from time to time.

 

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

 

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

 

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

 

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

 

(ee)         “Stock” shall mean the Common Stock of the Company.

 

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(ff)           “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 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

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

 

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

 

(ii)           “Voting Agreement” shall mean that certain Voting Agreement by and among the Company and certain stockholders of the Company, dated as of April     , 2009, as may be amended from time to time.

 

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EXHIBIT A

 

ADOPTION AGREEMENT

 

This Adoption Agreement (“Adoption Agreement”) is executed on                    , 20    , by the undersigned (the “Holder”) pursuant to the terms of that certain Voting Agreement dated as of April     , 2009, as may be amended from time to time (the “Agreement”), by and among the Company and certain of its stockholders.  Capitalized terms used but not defined in this Adoption Agreement shall have the respective meanings ascribed to such terms in the Agreement.  By the execution of this Adoption Agreement, the Holder agrees as follows.

 

1.1           Acknowledgment.  Holder acknowledges that Holder is acquiring certain shares of the capital stock of the Company (the “Stock”) or options, warrants or other rights to purchase such Stock (the “Options”), for one of the following reasons (Check the correct box):

 

o                                    as a transferee of Shares from a party in such party’s capacity as an “Investor” bound by the Agreement, and after such transfer, Holder shall be considered an “Investor” and a “Stockholder” for all purposes of the Agreement.

 

o                                    as a transferee of Shares from a party in such party’s capacity as a “Key Holder” bound by the Agreement, and after such transfer, Holder shall be considered a “Key Holder” and a “Stockholder” for all purposes of the Agreement.

 

o                                    as a new Investor in accordance with Section 6.1(a)   of the Agreement, in which case Holder will be an “Investor” and a “Stockholder” for all purposes of the Agreement.

 

o                                    in accordance with Section 6.1(b)   of the Agreement, as a new party who is not a new Investor, in which case Holder will be a “Stockholder” for all purposes of the Agreement.

 

1.2           Agreement.  Holder hereby (a) agrees that the Stock, Options, and any other shares of capital stock or securities required by the Agreement to be bound thereby, shall be bound by and subject to the terms of the Agreement and (b) adopts the Agreement with the same force and effect as if Holder were originally a party thereto.

 

1.3           Notice. Any notice required or permitted by the Agreement shall be given to Holder at the address or facsimile number listed below Holder’s signature hereto.

 

	
HOLDER:
    	
 
    	
 
    	
ACCEPTED   AND AGREED:
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
HAUTELOOK, INC.
    
	
Name   and Title of Signatory
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Facsimile   Number:
    	
 
    	
 
    	
 
    
								

 

15

 

HAUTELOOK, INC. 2009 STOCK PLAN

 

NOTICE OF STOCK OPTION GRANT

 

The Optionee has been granted the following option to purchase shares of the Common Stock of HauteLook, Inc.:

 

	
Name   of Optionee:
    	
 
    	
<<Name>>
    
	
 
    	
 
    	
 
    
	
Total   Number of Shares:
    	
 
    	
<<TotalShares>>
    
	
 
    	
 
    	
 
    
	
Type   of Option:
    	
 
    	
<<ISO>>
    	
Incentive   Stock Option (ISO)
    
	
 
    	
 
    	
<<NSO>>
    	
Nonstatutory   Stock Option (NSO)
    
	
 
    	
 
    	
 
    	
 
    
	
Exercise   Price per Share:
    	
 
    	
$<<PricePerShare>>
    
	
 
    	
 
    	
 
    
	
Date   of Grant:
    	
 
    	
<<DateGrant>>
    
	
 
    	
 
    	
 
    
	
Date   Exercisable:
    	
 
    	
This   option may be exercised with respect to the first 25% of the Shares subject   to this option when the Optionee completes 12 months of continuous Service   after the Vesting Commencement Date set forth below. This option may be   exercised with respect to 1/12th of the remaining 75% of   the Shares subject to this option when the Optionee completes each 3-month   period of continuous Service thereafter. In addition, the Right of Repurchase   shall lapse with respect to all of the Shares upon a Change in Control.
    
	
 
    	
 
    	
 
    
	
Vesting   Commencement Date:
    	
 
    	
     VestComDate>>
    
	
 
    	
 
    	
 
    
	
Expiration   Date:
    	
 
    	
<<ExpDate>>.    This   option expires earlier if the Optionee’s Service terminates earlier, as   provided in Section 6 of the Stock Option Agreement.
    

 

By signing below, the Optionee and the Company agree that this option is granted under, and governed by the terms and conditions of, the 2009 Stock Plan and the Stock Option Agreement. Both of these documents are attached to, and made a part of, this Notice of Stock Option Grant.  Section 13 of the Stock Option Agreement includes important acknowledgements of the Optionee.

 

	
OPTIONEE:
    	
 
    	
HAUTELOOK, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

 

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.

 

HAUTELOOK, INC. 2009 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. In addition, this option shall become exercisable in full if Section 8(b)(iv) of the Plan applies.

 

(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.       NO 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 12(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)           Execution of Agreements.  If, as a result of the exercise of this option, the Optionee will hold Shares that represent two percent (2%) or more of the Company’s then-outstanding capital stock, the Optionee shall upon the exercise of this option, if such person has not already done so, become a party to the Right of First Refusal Agreement, by signing a counterpart signature page thereto, and the Voting Agreement, by executing an Adoption Agreement.

 

(c)           Issuance of Shares.  After receiving a proper notice of exercise and, if applicable, the executed Right of First Refusal Agreement and Adoption Agreement, the Company shall cause to be issued one or more certificates evidencing the Shares for which this option has been exercised.  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. The Company shall cause such certificates to be delivered to or upon the order of the person exercising this option.

 

(d)           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 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.  At the discretion of the Board of Directors, 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 as of the date when this option is exercised.

 

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(c)           Exercise/Sale.  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. However, payment pursuant to this Subsection (c) shall be permitted only if (i) Stock then is publicly traded and (ii) such payment does not violate applicable law.

 

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 10 years after the Date of Grant (five 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 months after the termination of the Optionee’s Service for any reason other than Disability; or

 

(iii)          The date six 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 had become exercisable before the Optionee’s Service terminated. 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. 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 had become exercisable before 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 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

 

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inheritance, but only to the extent that this option had become exercisable 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.

 

(d)           Part-Time Employment and Leaves of Absence.  If the Optionee commences working on a part-time basis, then the Company may adjust the vesting schedule set forth in the Notice of Stock Option Grant in accordance with the Company’s part-time work policy or the terms of an agreement between the Optionee and the Company pertaining to his or her part-time schedule.  If the Optionee goes on a leave of absence, then the Company may adjust the vesting schedule set forth in the Notice of Stock Option Grant in accordance with the Company’s leave of absence policy or the terms of such leave.  Except as provided in the preceding sentence, Service shall be deemed to continue for any purpose under this Agreement while the Optionee is on a bona fide leave of absence, if (i) such leave was approved by the Company in writing and (ii) 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). Service shall be deemed to terminate when such leave ends, unless the Optionee immediately returns to active work.

 

(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 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 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 90 days, unless the Optionee’s reemployment rights following such leave were guaranteed by statute or by contract.

 

SECTION 7.       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, State or foreign 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

 

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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 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 30 days after the date when it received the Transfer Notice, the Optionee may, not later than 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, State and foreign 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 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 7 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 7.

 

(d)           Termination of Right of First Refusal.  Any other provision of this Section 7 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.

 

(e)           Permitted Transfers.  This Section 7 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

 

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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 7, 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 Board of Directors may freely assign the Company’s Right of First Refusal, 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 7.

 

SECTION 8.       LEGALITY OF INITIAL ISSUANCE.

 

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

 

(a)           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;

 

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

 

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

 

SECTION 9.       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 10.     RESTRICTIONS ON TRANSFER OF SHARES.

 

(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.

 

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(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 consent of the Company or its managing underwriter. 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 underwriter. In no event, however, shall such period exceed 180 days plus such additional period as may reasonably be requested by the Company or such underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research reports or (ii) analyst recommendations and opinions, including (without limitation) the restrictions set forth in Rule 2711(f)(4) of the National Association of Securities Dealers and Rule 472(f)(4) of the New York Stock Exchange, as amended, or any similar successor rules. 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.

 

(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 that 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

 

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CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES.  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.

 

(g)                                 Administration.  Any determination by the Company and its counsel in connection with any of the matters set forth in this Section 10 shall be conclusive and binding on the Optionee and all other persons.

 

SECTION 11.                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 12.                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.

 

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(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) that 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 Delaware, as such laws are applied to contracts entered into and performed in such State.

 

SECTION 13.                ACKNOWLEDGEMENTS OF THE OPTIONEE.

 

(a)                                  Tax Consequences.  The Optionee agrees that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes the Optionee’s tax liabilities.  The Optionee shall not make any claim against the Company or its Board of Directors, officers or employees related to tax liabilities arising from this option or the Optionee’s other compensation. In particular, the Optionee acknowledges that this option is exempt from Section 409A of the Code only if the Exercise Price is at least equal to the Fair Market Value per Share on the Date of Grant.  Since Shares are not traded on an established securities market, the determination of their Fair Market Value is made by the Board of Directors or by an independent valuation firm retained by the Company.  The Optionee acknowledges that there is no guarantee in either case that the Internal Revenue Service will agree with the valuation, and the Optionee shall not make any claim against the Company or its Board of Directors, officers or employees in the event that the Internal Revenue Service asserts that the valuation was too low.

 

(b)                                 Electronic Delivery of Documents.  The Optionee agrees that the Company may deliver by email all documents relating to the Plan or this option (including, without limitation, a copy of the Plan) and all other documents that the Company is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission).  The Optionee also agrees that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a website, it shall notify the Optionee by email.

 

SECTION 14.                DEFINITIONS.

 

(a)                                  “Adoption Agreement” shall mean an adoption agreement to the Voting Agreement, substantially in the form attached hereto as Exhibit A.

 

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

 

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(c)                                  “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.

 

(d)                                 “Change in Control” shall mean (i) the consummation of a merger or consolidation of the Company with or into another entity or (ii) the dissolution, liquidation or winding up of the Company. The foregoing notwithstanding, a merger or consolidation of the Company shall not constitute a “Change in Control” if immediately after such merger or consolidation a majority of the voting power of the capital stock of the continuing or surviving entity, or any direct or indirect parent corporation of such continuing or surviving entity, will be owned by the persons who were the Company’s stockholders immediately prior to such merger or consolidation in substantially the same proportions as their ownership of the voting power of the Company’s capital stock immediately prior to such merger or consolidation.

 

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

 

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

 

(g)                                 “Company” shall mean HauteLook, Inc., a Delaware corporation.

 

(h)                                 “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.

 

(i)                                     “Date of Grant” shall mean the date of grant 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.

 

(j)                                     “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.

 

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

 

(l)                                     “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.

 

(m)                               “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.

 

(n)                                 “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.

 

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

 

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

 

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

 

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

 

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

 

(t)                                    “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 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

(u)                                 “Plan” shall mean the HauteLook, Inc. 2009 Stock Plan, as in effect on the Date of Grant.

 

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

 

(w)                               “Right of First Refusal” shall mean the Company’s right of first refusal described in Section 7.

 

(x)                                   “Right of First Refusal Agreement” shall mean that certain Right of First Refusal and Co-Sale Agreement by and among the Company and certain stockholders of the Company, dated as of May 1, 2009, as may be amended from time to time.

 

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

 

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

 

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

 

(bb)                          “Stock” shall mean the Common Stock of the Company.

 

(cc)                            “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 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

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

 

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(ee)                            “Transfer Notice” shall mean the notice of a proposed transfer of Shares described in Section 7.

 

(ff)                                “Voting Agreement” shall mean that certain Voting Agreement by and among the Company and certain stockholders of the Company, dated as of May 1, 2009, as may be amended from time to time.

 

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EXHIBIT A

 

ADOPTION AGREEMENT

 

This Adoption Agreement (“Adoption Agreement”) is executed on                   , 20    , by the undersigned (the “Holder”) pursuant to the terms of that certain Voting Agreement dated as of May 1, 2009, as may be amended from time to time (the “Agreement”), by and among the Company and certain of its stockholders.  Capitalized terms used but not defined in this Adoption Agreement shall have the respective meanings ascribed to such terms in the Agreement.  By the execution of this Adoption Agreement, the Holder agrees as follows.

 

1.1                                 Acknowledgment.  Holder acknowledges that Holder is acquiring certain shares of the capital stock of the Company (the “Stock”) or options, warrants or other rights to purchase such Stock (the “Options”), for one of the following reasons (Check the correct box):

 

o                                   as a transferee of Shares from a party in such party’s capacity as an “Investor” bound by the Agreement, and after such transfer, Holder shall be considered an “Investor” and a “Stockholder” for all purposes of the Agreement.

 

o                                   as a transferee of Shares from a party in such party’s capacity as a “Key Holder” bound by the Agreement, and after such transfer, Holder shall be considered a “Key Holder” and a “Stockholder” for all purposes of the Agreement.

 

o                                   as a new Investor in accordance with Section 6.1(a) of the Agreement, in which case Holder will be an “Investor” and a “Stockholder” for all purposes of the Agreement.

 

o                                   in accordance with Section 6.1(b) of the Agreement, as a new party who is not a new Investor, in which case Holder will be a “Stockholder” for all purposes of the Agreement.

 

1.2                                 Agreement.  Holder hereby (a) agrees that the Stock, Options, and any other shares of capital stock or securities required by the Agreement to be bound thereby, shall be bound by and subject to the terms of the Agreement and (b) adopts the Agreement with the same force and effect as if Holder were originally a party thereto.

 

1.3                                 Notice. Any notice required or permitted by the Agreement shall be given to Holder at the address or facsimile number listed below Holder’s signature hereto.

 

 

	
HOLDER:
    	
 
    	
 
    	
ACCEPTED   AND AGREED:
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
HAUTELOOK, INC.
    
	
Name   and Title of Signatory
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Facsimile   Number:

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