SENIOR EXECUTIVE INCENTIVE STOCK OPTION PLAN
PURPOSES OF AND BENEFITS UNDER THE INCENTIVE PLAN. This Senior
Executive Stock Option Plan (the "Incentive Plan") is intended to encourage
stock ownership by senior executives of MetroGolf Incorporated (the
"Corporation"), so that they may acquire or increase their proprietary
interest in the Corporation, and is intended to facilitate the Corporation's
efforts to (i) induce qualified persons to become executives of the
Corporation and (ii) encourage such persons to remain in the employ of or
associated with the Corporation and to put forth maximum efforts for the
success of the Corporation.
1. DEFINITIONS. As used in this Incentive Plan, the following words
and phrases shall have the meanings indicated:
(a) "Board" shall mean the Board of Directors of the Corporation.
(b) "Committee" shall mean the Compensation Committee appointed by
the Board, if one has been appointed. If no Committee has been appointed, the
term "Committee" shall mean the Board. Following the Registration Date, the
Committee shall consist of at least two persons (or such other number as may
be required under Rule 16b-3, each of whom is a Disinterested Director,
appointed by and holding office at the pleasure of the Board).
(c) "Common Stock" shall mean the Corporation's $.01 par value
(d) "Disability" shall mean a Recipient's inability to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or that
has lasted or can be expected to last for a continuous period of no less than
12 months. If the Recipient has a disability insurance policy, the term
"Disability" shall be defined therein.
(e) "Disinterested Director" means a member of the Board who is
not, during the one year prior to service as a member of the Committee, or
during such service, granted or awarded equity securities pursuant to the
Incentive or any other plan of the Corporation, except for formula grants or
awards made pursuant to exceptions provided under Rule 16b-3.
(f) "Fair Market Value" per share as of a particular date shall
mean: (i) the last sale price of the Corporation's Common Stock as reported
on a national securities exchange or on the NASDAQ National Market System or
by NASDAQ; or (ii) if the quotation for the last sale reported is not
available for the Corporation's Common Stock as so reported; or (iii) if such
quotations are unavailable, the value determined by the Committee in its
discretion in a bona fide, good faith determination of fair market value.
Fair Market Value shall be determined without
regard to any restriction other than a restriction which, by its terms, will
never lapse. In the case of Options granted at a time when the Corporation
does not have a registration statement in effect relating to the shares
issuable hereunder, the value at which the Option shares are issued may be
determined by the Committee at a reasonable discount from Fair Market Value
to reflect the restricted nature of the shares to be issued and the inability
of the Recipient to sell those shares promptly.
(g) "Recipient" means any person granted an Option hereunder.
(h) "Rule 16b-3" means Rule 16b-3 which has been adopted by the
Securities and Exchange Commission under the Securities and Exchange Act of
1934, if and as such rule is then in effect.
(a) The Incentive Plan shall be administered by the Committee. The
Committee shall have the authority in its discretion, subject to and not
inconsistent with the express provisions of the Incentive Plan, to administer
the Incentive Plan and to exercise all the powers and authorities either
specifically conferred under the Incentive Plan or necessary or advisable in
the administration of the Incentive Plan, including the authority: to grant
Options; to determine the vesting schedule and other restrictions, if any,
relating to Options; to determine the purchase price of the shares of Common
Stock covered by each Option (the "Option Price"); to determine the persons
to whom, and the time or times at which, Options shall be granted; to
determine the number of shares to be covered by each Option; to determine
Fair Market Value per share; to interpret the Incentive Plan; to prescribe,
amend and rescind rules and regulations relating to the Incentive Plan; to
determine the terms and provisions of the Option agreements (which need not
be identical) entered into in connection with Options granted under the
Incentive Plan; and to make all other determinations deemed necessary or
advisable for the administration of the Incentive Plan. The Committee may
delegate to one or more of its members or to one or more agents such
administrative duties as it may deem advisable, and the Committee or any
person to whom it has delegated duties as aforesaid may employ one or more
persons to render advice with respect to any responsibility the Committee or
such person may have under the Incentive Plan.
(b) Options granted under the Incentive Plan shall be evidenced by
duly adopted resolutions of the Committee included in the minutes of the
meeting at which they are adopted or in a unanimous written consent.
(c) The Committee shall endeavor to administer the Incentive Plan
and grant Options hereunder in a manner that is compatible with the
obligations of persons subject to Section 16 of the Securities Exchange Act
of 1934 (the "1934 Act"), although compliance with Section 16 is the
obligation of the Recipient, not the Corporation. Neither the Committee, the
Board nor the Corporation can assume any legal responsibility for a
Recipient's compliance with his
obligations under Section 16 of the 1934 Act.
(d) No member of the Committee or the Board shall be liable for any
action taken or determination made in good faith with respect to the
Incentive Plan or any Option or Bonus granted hereunder.
(a) Subject to certain limitations hereinafter set forth, Options
may be granted to senior executives of the Corporation. In determining the
persons to whom Options shall be granted and the number of shares to be
covered by each Option, the Committee shall take into account the duties of
the respective persons, their present and potential contributions to the
success of the Corporation, and such other factors as the Committee shall
deem relevant to accomplish the purposes of the Incentive Plan.
(b) A Recipient shall be eligible to receive more than one grant of
an Option during the term of the Incentive Plan, on the terms and subject to
the restrictions herein set forth.
4. STOCK RESERVED.
(a) The stock subject to Options hereunder shall be shares of
Common stock, Such shares, in whole or in part, may be authorized but
unissued shares or shares that shall have been or that may be reacquired by
the Corporation. The aggregate number of shares of Common Stock as to which
Options may be granted from time to time under the Incentive Plan shall not
exceed 250,000 subject to adjustment as provided in Section 5(h) hereof.
(b) If any Option outstanding under the Incentive Plan for any
reason expires or is terminated without having been exercised in full, or if
any Option granted is forfeited because of vesting or other restrictions
imposes at the time of grant, the shares of Common Stock allocable to the
unexercised portion of such Option shall become available for subsequent
grants of Options under the Incentive Plan.
5. TERMS AND CONDITIONS OF OPTIONS: OPTION AGREEMENTS. Each Option
granted pursuant to the Incentive Plan shall be evidenced by a written Option
agreement between the Corporation and the Recipient, which agreement shall be
substantially in the form of Exhibit A hereto as modified from time to time
by the Committee in its discretion. Each Option Agreement shall comply with
and be subject to the following terms and conditions:
(a) NUMBER OF SHARES. Each Option agreement shall state the
number of shares of Common Stock covered by the Option.
(b) OPTION PRICE. Each Option agreement shall state the Option
shall be determined by the Committee subject only to the following
(1) The Option Price shall be subject to adjustment as provided
in Section 5(h) hereof.
(2) The date on which the Committee adopts a resolution
expressly granting an Option shall be considered the day on which such
option is granted, unless a future date is specified in the resolution, and
the Fair Market Value of The Common Stock to which such Option relates shall
be determined at the close of the day on which the resolution is adopted,
unless another value and/or another date is specified in the resolution.
(c) TERM AND VESTING OF OPTION. Each Option agreement shall state
the period during and time at which the Option shall vest and be exercisable,
in accordance with the following limitations:
(1) Unless otherwise stated in the granting resolution, the
date on which the Committee adopts a resolution expressly granting an Option
shall be considered the day on which such Option is granted, although such
grant shall not be effective until the Recipient has executed an Option
Agreement with respect to such Option.
(2) The exercise period of any Option shall not exceed ten
years from the date of grant of the Option.
(3) The Committee shall not have the authority to accelerate or
extend the exercisability of any outstanding Option at such time and under
such circumstances as it, in its sole discretion, deems appropriate. No
exercise period may be so extended to increase the term of the Option beyond
ten years from the date of the grant.
(4) The exercise period shall be subject to earlier termination
as provided in Sections 5(e) and 5(f) hereof, and furthermore, shall be
terminated under surrender of the Option by the holder thereof if such
surrender has been authorized in advance by the Committee.
(d) METHOD OF EXERCISE AND MEDIUM AND TIME OF PAYMENT.
(1) An Option may be exercised as to any or all whole shares of
Common Stock as to which it then is exercisable; provided, however, that no
Option may be exercised as to less than 100 shares (or such number of shares
as to which the Option is then exercisable if such number of shares is less
(2) Each exercise of an Option granted hereunder, whether in
whole or in part, shall be effected by written notice to the Secretary of the
Corporation designating the number of shares as to which the Option is being
exercised, and shall be accompanied by payment in full
of the Option Price for the number of shares so designated, together with any
written statements required by, or deemed by the Corporation's counsel to be
advisable pursuant to, any applicable securities laws.
(3) The Option Price shall be paid in cash, or in shares of
Common Stock having a Fair Market Value equal to such Option Price, or in
property or in a combination of cash, shares and property and, subject to
approval of the Committee, may be effected in whole or in part with funds
received from the Corporation at the time of exercise as a compensatory cash
(4) The Committee shall have the sole and absolute discretion to
determine whether or not property other than cash or Common Stock may be used
to purchase the shares of Common Stock hereunder, and, if so, to determine
the value of the property received.
(5) The Recipient shall make provision for the withholding of
taxes as required by Paragraph 6 hereof.
(e) TERMINATION. Except as provided herein or in the Option
Agreement by and between the Corporation and the Recipient, an Option may not
vest unless the Recipient has been continuously employed by the Corporation
(or a corporation or a Parent or Subsidiary Corporation of such corporation
issuing or assuming the option in a transaction to which Section 424(a) of
the Internal Revenue Code applies) through the corresponding vesting date.
(1) Unless otherwise provided in the Option Agreement by and
between the Corporation and the Recipient, if the Recipient ceases to be an
employee or officer of the Corporation (other than by reason of death,
Disability or retirement) all Options theretofore granted and vested to such
Recipient that are exercisable at the time of such cessation may, unless
earlier terminated in accordance with their terms, be exercised within three
months after such cessation; provided, however, that if the executive shall
be removed, for cause, all Options theretofore granted to such Recipient
shall, to the extent not theretofore exercised, terminate forthwith.
(2) Nothing in the Incentive Plan or in any Option granted
hereunder shall confer upon an individual any right to continue in the employ
of or maintain any other relationship with the Corporation or interfere in
any way with the right of the Corporation to terminate such employment or
other relationship between the individual and the Corporation.
(f) DEATH, DISABILITY OR RETIREMENT OF RECIPIENT. Unless otherwise
provided in the Option Agreement by and between the Corporation and the
Recipient, if a Recipient shall die while an executive of the Corporation, or
if the Recipient's executive status shall terminate by reason of Disability
or retirement, all Options theretofore granted to such Recipient, whether or
not otherwise exercisable, unless terminated in accordance with their terms,
may be exercised
by the Recipient or by the Recipient's estate or by a person who acquired the
right to exercise such Options by bequest or inheritance or otherwise by
reason of the death or Disability of the Recipient, at any time within one
year after the date of death, Disability or retirement of the Recipient.
(g) TRANSFERABILITY RESTRICTION.
(1) Options granted under the Incentive Plan shall not be
transferable other than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Internal
Revenue Code of Title I of the Employee Retirement Income Security Act of
1974, or the rules thereunder. Options may be exercised, during the lifetime
of the Recipient, only by the Recipient and thereafter only by his legal
(2) Any attempted sale, pledge, assignment, hypothecation or other
transfer of an Option contrary to the provisions hereof and/or the levy of
any execution, attachment or similar process upon an Option, shall be null and
void and without force or effect and shall result in a termination of the
(3)(A) As a condition to the transfer of any shares of Common Stock
issued upon exercise of an Option granted under this Incentive Plan, the
Corporation may require an opinion of counsel, satisfactory to the
Corporation, to the effect that such transfer will not be in violation of the
Securities Act of 1933, as amended (the "1933 Act") or any other applicable
securities laws or that such transfer has been registered under federal and
all applicable state securities laws. (B) Further, the Corporation shall be
authorized to refrain from delivering or transferring shares of Common Stock
issued under this Incentive Plan until the Committee determines that such
delivery or transfer will not violate applicable securities laws and the
Recipient has tendered to the Corporation any federal, state or local tax
owed by the Recipient as a result of exercising the Option or disposing of
any Common Stock when the Corporation has a legal liability to satisfy such
tax. (C) The Corporation shall not be liable for damages due to delay in the
delivery or issuance of any stock certificate for any reason whatsoever,
including, but not limited to, a delay caused by listing requirements of any
securities exchange or any registration requirements under the 1933 Act, the
1934 Act, or under any other state, federal or provincial law, rule or
regulation. (D) The Corporation is under no obligation to take any action
or incur any expense in order to register or qualify the delivery or transfer
of shares of Common Stock under applicable securities laws or to perfect any
exemption from such registration or qualification. (E) Furthermore, the
Corporation will not be liable to any Recipient for failure to deliver or
transfer shares of Common Stock if such failure is based upon the provisions
of this paragraph.
(h) EFFECT OF CERTAIN CHANGES.
(1) If there is any change in the number of shares of outstanding
Common Stock through the declaration of stock dividends, or through a
recapitalization resulting in stock splits or combinations or exchanges of
such shares, the number of shares of Common Stock available for Options and
the number of such shares covered by outstanding Options, and the exercise
price per share of the outstanding Options, shall be proportionately adjusted
by the Committee to reflect any increase or decrease in the number of issued
shares of Common Stock; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated.
(2) In the event of the proposed dissolution or liquidation of the
Corporation, or any corporate separation or division, including, but not
limited to, split-up, split-off or spin-off, or a merger or consolidation of
the Corporation with another corporation, the Committee may provide that the
holder of each Option then exercisable shall have the right to exercise such
Option (at its then current Option Price) solely for the kind and amount of
shares of stock and other securities, property, cash or any combination
thereof receivable upon such dissolution, liquidation, corporate separation or
division, or merger or consolidation by a holder of the number of shares of
Common Stock for which such Option might have been exercised immediately
prior to such dissolution, liquidation, corporate separation or division, or
merger or consolidation; or, in the alternative the Committee may provide
that each Option granted under the Incentive Plan shall terminate as of a
date fixed by the Committee; provided, however, that not less than 30 days'
written notice of the date so fixed shall be given to each Recipient, who
shall have the right, during the period of 30 days preceding such
termination, to exercise the Option as to all or any part of the shares of
Common Stock covered thereby, including shares as to which such Option would
not otherwise be exercisable.
(3) Paragraph (2) of this Section 5(h) shall not apply to a merger
or consolidation in which the Corporation is the surviving corporation and
shares of Common Stock are not converted into or exchanged for stock,
securities of any other corporation, cash or any other thing of value.
Notwithstanding the preceding sentence, in case of any consolidation or
merger of another corporation and in which there is a reclassification or
change (including a change to the right to receive cash or other property) of
the shares of Common Stock (excluding a change in par value, or from no par
value to par value, or any change as a result of a subdivision or
combination, but including any change in such shares into two or more classes
or series of shares), the Committee may provide that the holder of each
Option then exercisable shall have the right to exercise such Option solely
for the kind and amount of shares of stock and other securities (including
those of any new direct or indirect parent of the Corporation), property,
cash, or any combination thereof receivable upon such reclassification,
change, consolidation or merger by the holder of the number of shares of
Common Stock for which such Option might have been exercised.
(4) To the extent that the foregoing adjustments relate to stock
or securities of the Corporation, such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding and
(5) Except as expressly provided in this Section 5(h) the
Recipient shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class, or the payment of any stock dividend or any
other increase or decrease in the number of shares of stock of any class, or
by reason of any dissolution, liquidation, merger, or consolidation or
spinoff of assets or stock of another corporation; and any issue by the
Corporation 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 price of shares of
Common Stock subject to an Option. The grant of an Option pursuant to the
Incentive Plan shall not affect in any way the right or power of the
Corporation to make adjustments, reclassifications, reorganizations or
changes of its capital or business structures, or to merge or consolidate, or
to dissolve, liquidate, or sell or transfer all or any part of its business
(6) To the extent that the foregoing adjustments relate to
stock or securities of the Corporation, such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding and
(i) NO RIGHTS AS SHAREHOLDER -- NON-DISTRIBUTIVE INTENT.
(1) Neither a Recipient of an Option nor such Recipient's
legal representative, heir, legatee or distributee, shall be deemed to be the
holder of, or to have any rights of a holder with respect to, any shares
subject to such Option until after the Option is exercised and the shares are
(2) No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distribution
or other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 5(h) hereof.
(3) Upon exercise of an Option at a time when there is no
registration statement in effect under the 1933 Act relating to the shares
issuable upon exercise, shares may be issued to the Recipient only if the
Recipient represents and warrants in writing to the Corporation that the
shares purchased are being acquired for investment and not with a view to the
distribution thereof and provides the Corporation with sufficient information
to establish an exemption from the registration requirements of the 1933 Act.
A form of subscription agreement containing representations and warranties
deemed sufficient as of the date of adoption of this Incentive Plan is
attached hereto as Exhibit B.
(4) No shares shall be issued upon the exercise of an Option
unless and until there shall have been compliance with any then applicable
requirements of the Securities and Exchange Commission or any other
regulatory agencies having jurisdiction over the Corporation.
(j) OTHER PROVISIONS. Option Agreements authorized under the
Incentive Plan may contain such other provisions as the Committee shall deem
advisable, including, without
limitation, the imposition of restrictions upon the vesting and exercise of
6. AGREEMENT BY RECIPIENT REGARDING WITHHOLDING TAXES. Each Recipient
agrees that the Corporation, to the extent permitted or required by law,
shall be permitted to deduct a sufficient number of shares due to the
Recipient upon exercise of the Option to allow the Corporation to pay
federal, provincial, state and local taxes of any kind required by law to be
withheld upon the exercise of such Option. The Corporation shall not be
obligated to advise any Recipient of the existence of any tax or the amount
which the Corporation will be so required to withhold.
7. TERM OF INCENTIVE PLAN. Options may be granted under this Incentive
Plan from time to time within a period of ten years from the date the
Incentive Plan is adopted by the Board.
8. AMENDMENT AND TERMINATION OF THE INCENTIVE PLAN. The Committee at
any time and from time to time may suspend, terminate, modify or amend the
Incentive Plan. Except as provided in Section 6 hereof, no suspension,
termination, modification or amendment of the Incentive Plan may adversely
affect any Option previously granted, unless the written consent of the
Recipient is obtained.
9. ASSUMPTION. The terms and conditions of any outstanding Options
granted pursuant to this Incentive Plan shall be assumed by, be binding upon
and shall inure to the benefit of any successor corporation to the
Corporation and shall, to the extent applicable, continue to be governed by
the terms and conditions of this Incentive Plan. Such successor corporation
may, but shall not be obligated to, assume this Incentive Plan.
10. TERMINATION OF RIGHT OF ACTION. Every right of action arising out
of or in connection with the Incentive Plan by or on behalf of the
Corporation, or by any shareholder of the Corporation against any past,
present or future member of the Board or the Committee, or against any
employee, or by an employee (past, present or future) against the
Corporation, irrespective of the place where an action may be brought and of
the place of residence of any such shareholder, director or employee, will
cease and be barred by the expiration of three years from the date of the act
or omission in respect of which such right of action is alleged to have
arisen or such shorter period as may be provided by law.
11. TAX LITIGATION. The Corporation shall have the right, but not the
obligation, to contest, at its expense, any tax ruling or decision,
administrative or judicial, on any issue which is related to the Incentive
Plan and which the Board believes to be important to holders of Options
granted under the Incentive Plan and to conduct any such contest or any
litigation arising therefrom to a final decision.
12. LOANS. The Committee may, in its discretion, authorize the
Corporation to extend one or more loans to holders of Options in connection
with the exercise or receipt of Options.
The terms and conditions of any such loan shall be set by the Committee and
may include, in the Committee's discretion, loans that are secured,
unsecured, recourse or nonrecourse.
13. ADOPTION BY BOARD; APPROVAL OF SHAREHOLDERS. This Incentive Plan
was approved by the Board of Directors and the Shareholders of the
Corporation effective September 16, 1996.
FORM OF STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT made as of this __ day of _________, 199_, by and
between MetroGolf Incorporated, a Colorado corporation (the "Corporation"),
and ___________________ (the "Recipient").
In accordance with the Corporation's Senior Executive Incentive Stock
Option Plan (the "Incentive Plan"), a copy of which is attached hereto and is
incorporated herein by reference, the Corporation desires, in connection with
the services of the Recipient, to provide the Recipient with an opportunity
to acquire shares of the Corporation's no par value common stock ("Common
Stock") on favorable terms and thereby increase the Recipient's proprietary
interest in the Corporation and incentive put forth maximum efforts for the
success of the business of the Corporation. Capitalized terms used but not
defined herein are used as defined in the Incentive Plan.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein set forth and other good and valuable consideration, the Corporation
and the Recipient agree as follows:
1. CONFIRMATION OF GRANT OF OPTION. Pursuant to a determination of the
Committee made on ______________, 19__ (the "Date of Grant"), the Corporation,
subject to the terms of the Incentive Plan and of this Agreement, confirms that
the Recipient has been irrevocably granted on the Date of Grant, as a matter of
separate inducement and agreement, and in addition to and not in lieu of salary
or other compensation for services, a Stock Option (the "Option") exercisable
to purchase an aggregate of ____ shares of Common Stock on the terms and
conditions herein set forth, subject to adjustment as provided in Paragraph 8
2. OPTION PRICE. The Option Price of shares of Common Stock covered by
the Option will be $____ per share (the "Option Price") subject to adjustment
as provided in Paragraph 8 hereof.
3. EXERCISE OF OPTION. Except as otherwise provided herein or in
Section 5 of the Incentive Plan, the Option shall vest and thereafter be
exercisable as follows:
(i) The first 20% of the shares covered by the Option shall vest and
become exercisable upon ___________________________.
(ii) The second 20% of the shares covered by the Option shall vest and
exercisable upon __________________________.
(iii) The third 20% of the shares covered by the Option shall vest and
become exercisable upon __________________________.
(iv) The fourth 20% of the shares covered by the Option shall vest and
become exercisable upon __________________________.
(v) The fifth 20% of the shares covered by the Option shall vest and
become exercisable upon __________________________.
The Option may not be exercised at any one time as to fewer than 100 shares
(or such number of shares as to which the Option is then exercisable if such
number of shares is less than 100). The Option may be exercised by written
notice to the Secretary of the Corporation accompanied by payment in full of
the Option Price as provided in Section 5(d) of the Incentive Plan.
4. TERM OF OPTION. The term of the Option will through _________,
____, subject to earlier termination or cancellation as provided in this
Agreement. The holder of the Option will not have any rights to dividends or
any other rights of a shareholder with respect to any shares of Common Stock
subject to the Option until such shares shall have been issued (as evidenced
by the appropriate transfer agent of the Corporation) upon purchase of such
shares through exercise of the Option.
5. TRANSFERABILITY RESTRICTION. The Option may not be assigned,
transferred or otherwise disposed of, or pledged or hypothecated in any way
(whether by operation of law or otherwise) except in strict compliance with
Section 5 of the Incentive Plan. Any assignment, transfer, pledge,
hypothecation or other disposition of the Option or any attempt to make any
levy of execution, attachment or other process will cause the Option to
terminate immediately upon the happening of any such event; provided,
however, that any such termination of the Option under the provisions of this
Paragraph 5 will not prejudice any rights or remedies which the Corporation
may have under this Agreement or otherwise.
6. EXERCISE UPON TERMINATION. The Recipient's rights to exercise this
Option upon termination of employment or cessation of service as an officer
or consultant shall be as set forth in Section 5(e) of the Incentive Plan.
7. DEATH, DISABILITY OR RETIREMENT OF RECIPIENT. The exercisability
of this Option upon the death, Disability or retirement of the Recipient
shall be as set forth in Section 5(f) of the Incentive Plan.
8. ADJUSTMENTS. The Option shall be subject to adjustment upon the
occurrence of certain events as set forth in Section 5(h) of the Incentive
9. NO REGISTRATION OBLIGATION. The Recipient understands that the
Option is not registered under the 1933 Act and, unless by separate written
agreement, the Corporation has no obligation to so register the Option or any
of the shares of Common Stock subject to and issuable upon the exercise of
the Option, although it may from time to time register under the 1933 Act the
shares issuable upon exercise of Options granted pursuant to the Incentive
Plan. The Recipient represents that the Option is being acquired for the
Recipient's own account and that unless registered by the Corporation, the
shares of Common Stock issued on exercise of the Option will be acquired by
the Recipient for investment. The recipient understands that the Option is,
and the underlying securities may be, issued to the Recipient in reliance
upon exemptions from the 1933 Act, and acknowledges and agrees that all
certificates for the shares issued upon exercise of the Option will bear the
following legends unless such shares are registered under the 1933 Act prior
to their issuance:
The shares represented by this Certificate have not been registered
under the Securities Act of 1933 (the "1933 Act"), and are "restricted
securities" as that term is defined in Rule 144 under the 1933 Act. The
shares may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the 1933 Act or
pursuant to an exemption from registration under the 1933 Act, the
availability of which is to established to the satisfaction of the Company.
The Recipient further understands and agrees that the Option may be
exercised only if at the time of such exercise the underlying shares are
registered and/or the Recipient and the Corporation are able to establish the
existence of an exemption from registration under the 1933 Act and applicable
state or other laws.
10. NOTICES. (INSERT APPROPRIATE LANGUAGE HERE)
11. APPROVAL OF COUNSEL. The exercise of the Option and the issuance
and delivery of shares of Common Stock pursuant thereto shall be subject to
approval by the Corporation's counsel of all legal matters in connection
therewith, including compliance with the requirements of the 1933 Act, the
1934 Act, applicable state and other securities laws, the rules and
regulations thereunder, and the requirements of any national securities
exchange(s) upon which the Common Stock then may be listed.
12. CONTINUOUS EMPLOYMENT. The holder of the Option must have been
continuously employed by the Corporation (or an affiliate of the Corporation)
through a vesting date in order for the related shares to vest.
13. LOCK-UP PROVISION. The holder of the Common Stock issued upon
exercise of an option hereby will be subject to a lock-up to refrain from
making any public sale or distribution of the Common Stock issued upon
exercise of an Option granted hereunder (pursuant to Rule 144 or otherwise)
without the prior written consent of Laidlaw Equities, Inc. and Prime Charter
Ltd. for 13 months after the Effective Date of the Registration Statement for
the Corporation's Initial Public Offering of Common Stock.
14. BENEFITS OF AGREEMENT. This Agreement will inure to the benefit of
and be binding upon each successor and assignee of the Corporation. All
obligations imposed upon the Recipient and all rights granted to the
Corporation under this Agreement will be binding upon the Recipient's heirs,
legal representatives and successors.
15. EFFECT OF GOVERNMENTAL AND OTHER REGULATIONS. The exercise of the
Option and the Corporation's obligation to sell and deliver shares upon the
exercise of the Option are subject to all applicable federal and state laws,
rules and regulations, and to such approvals by any regulatory or
governmental agency which may, in the opinion of counsel for the Corporation,
16. INCORPORATION OF THE INCENTIVE PLAN. The Incentive Plan is
attached hereto and incorporated herein by reference. In the event that any
provision in this Agreement conflict with a provision in the Incentive Plan,
the provisions of the Incentive Plan shall govern.
17. ADMINISTRATION. The Committee shall have the power to interpret
the Incentive Plan and this Agreement consistent with Section 2 of the
Executed in the name and on behalf of the Corporation by one of its duly
authorized officers and by the Recipient all as of the date first above
Date , 19 By
------------ -- ----------------------------------
The undersigned Recipient has read and understands the terms of this
Option Agreement and the attached Incentive Plan and hereby agrees to comply
Date , 19
------------ -- ------------------------------------
Signature of Recipient
Tax ID Number:
THE SECURITIES BEING ACQUIRED BY THE UNDERSIGNED HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR ANY OTHER LAWS AND ARE OFFERED UNDER
EXEMPTIONS FROM THE REGISTRATION PROVISIONS OF SUCH LAWS. THESE SECURITIES
CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER CONTAINED IN THIS STOCK
SUBSCRIPTION AGREEMENT AND APPLICABLE SECURITIES LAWS.
This Subscription agreement is entered for the purpose of the
undersigned acquiring _________ shares of the no par value common stock (the
"Securities") of MetroGolf Incorporated, a Colorado corporation (the
"Corporation") from the Corporation pursuant to exercise of an Option granted
pursuant to the Corporation's Senior Executive Incentive Stock Option Plan
(the "Incentive Plan"). All capitalized terms not otherwise defined herein
shall be as defined in the Incentive Plan.
It is understood that no exercise of any Option at a time when no
registration statement relating thereto is effective under the 1933 Act can
be completed until the undersigned executes this Subscription Agreement and
delivers it to the Corporation, and that such grant or exercise is effective
only in accordance with the terms of the Incentive Plan and this
In connection with the undersigned's acquisition of the Securities, the
undersigned represents and warrants to the Corporation as follows:
1. The undersigned has been provided with, and has reviewed the
following reports, if any, filed by the Corporation pursuant to the
Securities Exchange Act of 1934, including (without limitation) the
Corporation's most recent annual report on Form 10-K, all Forms 8-K filed
subsequent to the date of such Form 10-K, and all other reports filed by the
Corporation pursuant to such Act subsequent to the date of the most recent
Form 10-K. The undersigned has also reviewed the Incentive Plan, and such
other information as the undersigned may have requested of the Corporation
regarding its business, operations, management, and financial condition (all
of which is referred to herein as the "Available Information").
2. The Corporation has given the undersigned the opportunity to ask
questions of and to receive answers from persons acting on the Corporation's
behalf concerning the terms and conditions of this transaction and the
opportunity to obtain any additional information regarding
the Corporation, its business and financial condition or to verify the
accuracy of the Available Information which the Corporation possesses or can
acquire without unreasonable effort or expense.
3. The Securities are being acquired by the undersigned for the
undersigned's own account and not on behalf of any other person or entity.
4. The undersigned understands that the Securities being acquired
hereby have not been registered under the 1933 Act or any state or foreign
securities laws, and are, and unless registered will continue to be,
restricted securities within the meaning of Rule 144 of the General Rules and
Regulations under the 1933 Act and other statutes, and the undersigned
consents to the placement of appropriate restrictive legends on any
certificates evidencing the Securities and any certificates issued in
replacement or exchange therefor and acknowledges that the Corporation will
cause its stock transfer records to note such restrictions.
5. By the undersigned's execution below, it is acknowledged and
understood that the Corporation is relying upon the accuracy and completeness
hereof in complying with certain obligations under applicable securities law.
6. This Agreement binds and inures to the benefit of the
representatives, successors and permitted assigns of the respective parties
7. The undersigned acknowledges that the grant of any Option and the
issuance and delivery of shares of Common Stock pursuant thereto shall be
subject to prior approval by the Corporation's counsel of all legal matters
in connection therewith, including compliance with the requirements of the
1933 Act, the 1934 Act, other applicable securities laws, the rules and
regulations thereunder, and the requirements of any national securities
exchange(s) upon which the Common Stock then may be listed.
8. The undersigned acknowledges and agrees that the Corporation has
withheld __________ shares for the payment of taxes as a result of the
exercise of an Option.
9. The Incentive Plan is attached hereto and incorporated herein by
reference. In the event that any provision in this Agreement conflicts with
ANY provision in the Incentive Plan, the provisions of the Incentive shall
Date: _____________, 19__. ---------------------------------
Signature of Recipient
Tax ID Number:________________