Stock Option Agreement Template

STOCK OPTION AGREEMENT

Date: Date

Company: Company Name

Optionee: Employee Name

Address: Optionee Address

1. GRANT OF OPTION

Company grants Optionee the right to purchase shares of Company's Common Stock under the following terms:

Grant Details:

• Number of Shares: Number
• Exercise Price: \$Amount per share (Fair Market Value on Grant Date)
• Grant Date: Date
• Option Type: Incentive Stock Option (ISO) Non-Qualified Stock Option (NSO)

2. VESTING SCHEDULE

Vesting Commencement Date: Date

Vesting Schedule:

• Cliff: % vests on Date (number months from Grant Date)
• Thereafter: % vests monthly/quarterly over period
• Fully Vested: Date (time period from Grant Date)

Vesting Table:

| Date | Cumulative % Vested | |------|-------------------| | Date | % (Cliff) | | Date | % | | Date | % | | Date | 100% |

Acceleration:

Single-trigger: Full acceleration upon Change of Control Double-trigger: Full acceleration if terminated without Cause within number months of Change of Control No acceleration provisions

3. EXERCISE OF OPTION

Exercise Period:

• May exercise vested portion only
• While employed/providing services
• Options expire: number years from Grant Date

Post-Termination Exercise:

• Termination for Cause: All options (vested and unvested) immediately forfeited
• Voluntary Resignation: 30/90 days to exercise vested options
• Termination without Cause: 90 days to exercise vested options
• Death or Disability: 12 months to exercise vested options
• Unvested options forfeited immediately upon termination

Exercise Procedure:

1. Provide written Exercise Notice to Company 2. Pay Exercise Price by: Cash/Check/Cashless exercise/Stock swap/Other 3. Pay applicable tax withholding 4. Company issues shares within number days

4. PAYMENT OF EXERCISE PRICE

Permitted Payment Methods:

Cash or check Wire transfer Cashless exercise (sell-to-cover) Stock swap (tender already-owned shares) Net exercise (if NSO)

5. TAX CONSEQUENCES

Tax Treatment:

For ISOs:

• No regular tax at grant or exercise (subject to AMT)
• Holding period: Must hold 2 years from grant AND 1 year from exercise for favorable tax treatment
• If holding requirements met: Long-term capital gains on sale
• If disqualifying disposition: Ordinary income on spread at exercise

For NSOs:

• No tax at grant
• Ordinary income at exercise on spread between FMV and exercise price
• Company withholds taxes
• Capital gains treatment on subsequent appreciation

Optionee Responsibility: Optionee solely responsible for tax consequences and should consult tax advisor.

Withholding: Company may withhold taxes through cash payment, share withholding, or sale of shares.

6. RESTRICTIONS ON TRANSFER

Non-Transferable: Options may not be sold, assigned, transferred, pledged, or hypothecated except:

• By will or laws of descent and distribution
• To family members or trusts (if permitted by plan)

Exercisable Only by Optionee: During lifetime, only Optionee may exercise.

7. SECURITIES LAW COMPLIANCE

Investment Representation: Optionee represents that shares acquired upon exercise are for investment and not for resale or distribution.

Legends: Stock certificates bear appropriate legends restricting transfer.

Lock-Up: Optionee agrees to lock-up restrictions for 180 days following IPO if requested by underwriters.

Section 409A: Option intended to be exempt from Section 409A as stock right with exercise price equal to FMV.

8. COMPANY'S RIGHTS

Right of First Refusal: Company may have right to repurchase shares at FMV if Optionee leaves Company.

Right of Repurchase: If Optionee terminates within time period, Company may repurchase unvested shares at exercise price.

Change of Control: Upon Change of Control:

Acceleration provisions apply (see Section 2) Options assumed by successor Options cashed out at fair value

9. ADJUSTMENTS

Upon stock split, stock dividend, recapitalization, or similar event, number of shares and exercise price shall be proportionately adjusted.

10. PLAN GOVERNS

This Option granted under Plan Name dated Date. Terms of Plan incorporated by reference. If conflict, Plan controls.

11. NO EMPLOYMENT RIGHTS

This Option does not confer any right to continued employment or service. Company retains right to terminate employment at any time.

12. DEFINITIONS

Cause: Definition of termination for cause

Change of Control: Definition - merger, sale of assets, change in board control, etc.

Disability: Unable to perform duties for number consecutive days due to physical or mental condition.

Fair Market Value: Method of determining FMV

13. MISCELLANEOUS

Governing Law: State

Entire Agreement: This Agreement and Plan constitute entire agreement

Amendments: Only by written amendment signed by Company and Optionee

Notices: To addresses above or as updated in writing

SIGNATURES:

COMPANY:

By: _______________________

Name: Name

Title: Title

Date: _______________________

OPTIONEE:

Signature: _______________________

Name: Employee Name

Date: _______________________

OPTIONEE ACKNOWLEDGES:

I have read this Agreement and the Plan. I understand the tax consequences and have consulted with my tax advisor. I agree to all terms.

Initials: ______

EXHIBIT A: VESTING SCHEDULE

EXHIBIT B: EXERCISE NOTICE FORM

EXHIBIT C: INVESTMENT REPRESENTATION STATEMENT