EXHIBIT 4.2
STOCK OPTION AGREEMENT UNDER
2002 EQUITY INCENTIVE PLANOF XXXXX GOLF, INC.
STOCK OPTION AGREEMENT (this "Agreement") entered into as of
_______ between XXXXX GOLF, INC., a Delaware corporation (the
"Corporation"), and ___________________, an employee (as that
term is defined by the Corporation's 2002 Equity Incentive Plan
(the "Plan")) (the "Optionee," which term as used herein shall be
deemed to include any successor to the Optionee by will or by the
laws of descent and distribution, unless the context shall
otherwise require, as provided in the Plan).
Pursuant to the Plan, the Compensation Committee approved
the issuance to the Optionee, effective as of the date set forth
above, of a Non-qualified Stock Option to purchase up to an
aggregate of _____ shares of common stock, par value $.001, of
the Corporation (the "Common Stock"), at the exercise strike
price of $__ per share (the "Option Price") upon the terms and
conditions hereinafter set forth. (Capitalized terms used herein
but not defined herein shall have the meaning ascribed to them in
the Plan).
NOW, THEREFORE, in consideration of the mutual premises and
undertakings hereinafter set forth, the parties hereto agree as
follows:
1. OPTION; OPTION PRICE. On behalf of the Corporation,
the Administering Body hereby grants as of the date of this
Agreement to the Optionee the option (the "Option") to purchase,
subject to the terms and conditions of this Agreement and the
provisions of the Plan (which is incorporated by reference herein
and which in all cases shall control in the event of any conflict
with the terms, definitions and provisions of this Agreement),
_____ shares of Common Stock of the Corporation at an exercise
strike price of $____ per share. A copy of the Plan has been
supplied to the Optionee, and the Optionee by executing this
Agreement hereby acknowledges receipt thereof.
2. TEN-YEAR TERM. The term (the "Option Term") of the
Option shall commence on the date of this Agreement and shall
terminate on the tenth (10th) anniversary of the date of this
Agreement, unless such Option shall theretofore have been
terminated in accordance with the terms hereof or the provisions
of the Plan.
3. VESTING; RESTRICTIONS ON EXERCISE.
(a) Subject to the provisions of Sections 5 and 8
hereof, and unless accelerated, as set forth in the Plan or
as provided herein, the Option granted hereunder shall vest
and become exercisable for the number of shares set forth
opposite the dates noted below (the "Option Vesting
Schedule").
Cumulative Number
Dates of Vested Shares
------------ -------------------
(b) If the Corporation shall consummate any merger,
consolidation or other reorganization involving a Change in
Control (a "Reorganization") in which holders of shares of
Common Stock are entitled to receive in respect of such
shares any securities, cash or other consideration
(including, without limitation, a different number of shares
of Common Stock), the Option shall vest in its entirety and
be exercisable, in accordance with the Plan and this
Agreement, for the kind and amount of securities, cash
and/or other consideration receivable upon such
Reorganization by a holder of the same number of shares of
Common Stock as are subject to the Option immediately prior
to such Reorganization. Any adjustments will be made to the
terms of the Option in the sole discretion of the
Administering Body as it may deem appropriate to give effect
to the Reorganization.
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(c) Subject to the provisions of Sections 5 and 8
hereof, shares as to which the Option becomes exercisable
pursuant to the foregoing provisions may be purchased at any
time thereafter prior to the expiration or termination of
the Option.
4. TERMINATION OF OPTION. If not terminated earlier under
some other provision of the plan or this Agreement, any
unexercised portion of the Option shall automatically and without
notice terminate and become null and void 30 days after the
Optionees last official date of employment as determined by the
company or board membership, as applicable.
5. PROCEDURE FOR EXERCISE.
(a) Subject to the requirements of Section 8, the
Option may be exercised, from time to time, in whole or in
part (but for the purchase of a whole number of shares
only), by delivery of a written notice, a form of which has
been attached as Annex A hereto (the "Notice"), from the
Optionee to the Secretary of the Corporation, which Notice
shall:
(i) state that the Optionee elects to exercise
the Option;
(ii) state the number of vested shares with
respect to which the Option is being exercised (the
"Optioned Shares");
(iii) state the date upon which the Optionee
desires to consummate the purchase of the Optioned
Shares (which date must be prior to the termination of
such Option and no later than thirty (30) days after
the date of receipt of such Notice);
(iv) include any representations of the Optionee
required under Section 8(c); and
(v) if the Option shall be exercised pursuant to
Section 9 by any person other than the Optionee,
include evidence to the satisfaction of the
Administering Body of the right of such person to
exercise the Option.
(b) Payment of the Option Price for the Optioned
Shares shall be made in U.S. dollars by personal check, bank
draft or money order payable to the order of the Corporation
or by wire transfer.
(c) The Corporation shall issue a stock certificate in
the name of the Optionee (or such other person exercising
the Option in accordance with the provisions of Section 9)
for the Optioned Shares as soon as practicable after receipt
of the Notice and payment of the aggregate Option Price for
such shares.
6. NO RIGHTS AS A STOCKHOLDER. The Optionee shall have no
rights as a stockholder of the Corporation with respect to any
Optioned Shares until the date the Optionee or his nominee
(which, for purposes of this Agreement, shall include any third
party agent selected by the Administering Body to hold such
Option Shares on behalf of the Optionee), guardian or legal
representative is the holder of record of such Optioned Shares.
7. ADJUSTMENTS.
(a) If at any time while the Option is outstanding,
(1) there shall be any increase or decrease in the number of
issued and outstanding shares of Common Stock through the
declaration of a stock split, spin-off, combination or
exchange of shares of Common Stock or (2) the value of the
outstanding shares of common stock is reduced by reason of
an extraordinary cash dividend, then and in each such event
appropriate adjustments shall be made in the number of
shares and the exercise price per share covered by the
Option, so that the same proportion of the Corporation's
issued and outstanding shares of Common Stock shall remain
subject to purchase at the same aggregate exercise price.
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(b) Except as otherwise expressly provided herein, the
issuance by the Corporation of shares of its capital stock
of any class, or securities convertible into shares of
capital stock of any class, either in connection with a
direct sale or upon the exercise of rights or warrants to
subscribe therefore, or upon conversion of shares or
obligations of the Corporation convertible into such shares
or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number of
or exercise price of shares of Common Stock covered by the
Option.
(c) Without limiting the generality of the foregoing,
the existence of the Option shall not affect in any manner
the right or power of the Corporation to make, authorize or
consummate (i) any or all adjustments, recapitalizations,
reorganizations or other changes in the Corporation's
capital structure or its business; (ii) any merger or
consolidation of the Corporation; (iii) any issue by the
Corporation of debt securities, or preferred or preference
stock that would rank above the shares of Common Stock
covered by the Option; (iv) the dissolution or liquidation
of the Corporation; (v) any sale, transfer or assignment of
all or any part of the assets or business of the
Corporation; or (vi) any other corporate act or proceeding,
whether of a similar character or otherwise.
8. ADDITIONAL PROVISIONS RELATED TO EXERCISE.
(a) The Option shall be exercisable only in accordance
with this Agreement and the terms of the Plan, including the
provisions regarding the period when the Option may be
exercised and the number of shares of Common Stock that may
be acquired upon exercise.
(b) The Option may not be exercised as to less than
one hundred (100) shares of Common Stock at any one time
unless less than one hundred (100) shares of Common Stock
remain to be purchased upon the exercise of the Option.
(c) To exercise the Option, the Optionee shall follow
the provisions of Section 5 hereof. Upon the exercise of
the Option at a time when there is not in effect a
registration statement under the Securities Act of 1933, as
amended (the "Securities Act") relating to the shares of
Common Stock issuable upon exercise of the Option, the
Administering Body in its discretion may, as a condition to
the exercise of the Option, require the Optionee (i) to
represent in writing that the shares of Common Stock
received upon exercise of the Option are being acquired for
investment and not with a view to distribution and (ii) to
make such other representations and warranties as are deemed
appropriate by counsel to the Corporation. No Option may be
exercised and no shares of Common Stock shall be issued and
delivered upon the exercise of the Option unless and until
the Corporation and/or the Optionee shall have complied with
all applicable federal or state registration, listing and/or
qualification requirements and all other requirements of law
or of any regulatory agencies having jurisdiction.
(d) Stock certificates representing shares of Common
Stock acquired upon the exercise of the Option that have not
been registered under the Securities Act shall, if required
by the Administering Body, bear an appropriate legend which
may, at the discretion of the Administering Body, take the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE SECURITIES UNDER THE ACT OR PURSUANT TO
AN EXEMPTION FROM REGISTRATION OR AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED."
(e) The exercise of each Option and the issuance of
shares in connection with the exercise of an Option shall,
in all cases, be subject to each of the following
conditions: (i) compliance with the terms of the Plan and
this Agreement, (ii) the satisfaction of withholding tax or
other withholding liabilities, (iii) as necessary, the
listing, registration or qualification of any to-be-issued
shares upon any securities exchange,
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The Nasdaq Stock Market or other trading or quotation system
or under any federal or state law and (iv) the consent or
approval of any regulatory body. The Administering Body
shall in its sole discretion determine whether one or more
of these conditions are necessary or desirable to be
satisfied in connection with the exercise of an Option and
prior to the delivery or purchase of shares pursuant to the
exercise of an Option. The exercise of an Option shall not
be effective unless and until such condition(s) shall have
been satisfied or the Administering Body shall have waived
such conditions, in its sole discretion.
9. RESTRICTION ON TRANSFER. The Option may not be
assigned or transferred except by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations
order as defined in the IRC, and may be exercised during the
lifetime of the Optionee only by the Optionee or the Optionee's
guardian or legal representative or assignee pursuant to a
qualified domestic relations order. If the Optionee dies, the
Option shall thereafter be exercisable, during the period
specified in Section 4(a)(i), by his executors or administrators
or by a person who acquired the right to exercise such Option by
bequest or inheritance to the full extent to which the Option was
exercisable by the Optionee at the time of his death. If the
Optionee becomes inflicted with a Permanent Disability, the
Option shall thereafter be exercisable, during the period
specified in Section 4(a) (i), by his legal representatives to
the full extent to which the Option was exercisable by the
Optionee at the time of his Permanent Disability. The Option
shall not be subject to execution, attachment or similar process.
Any attempted assignment or transfer of the Option contrary to
the provisions hereof, and the levy of any execution, attachment
or similar process upon the Option, shall be null and void and
without effect.
10. NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and
sufficient if (i) personally delivered, (ii) sent by nationally-
recognized overnight courier or (iii) sent by registered or
certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Optionee, to the address set forth on the
signature page hereto; and
if to the Corporation, to:
Xxxxx Golf, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Secretary
with a copy to:
Xxxxx Golf, Ltd.
c/x Xxxxx Golf GP Corp.
0000 X. Xxxxx Xxxxxxx
Xxxxx, Xxxxx 00000
Attention: President
or to such other address as the party to who notice is to be
given may have furnished to each other party in writing in
accordance herewith. Any such communication shall be deemed to
have been given (i) when delivered, if personally delivered,
(ii) on the first Business Day (as hereinafter defined) after
dispatch, if sent by nationally-recognized overnight courier and
(iii) on the third Business Day following the date on which the
piece of mail containing such communication is posted, if sent by
mail. As used herein, "Business Day" means a day that is not a
Saturday, Sunday or a day on which banking institutions in the
city to which the notice or communication is to be sent are not
required to be open.
11. NO WAIVER. No waiver of any breach or condition of
this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different
nature.
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12. OPTIONEE UNDERTAKING. The Optionee hereby agrees to
take whatever additional actions and execute whatever additional
documents the Corporation or its counsel may in their reasonable
judgment deem necessary or advisable in order to carry out one or
more of the obligations or restrictions imposed on the Optionee
pursuant to the express provisions of this Agreement.
13. MODIFICATION OF RIGHTS. The rights of the Optionee are
subject to modification and termination in certain events as
provided in this Agreement and the Plan.
14. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of
Delaware applicable to contracts made and to be wholly performed
therein.
15. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
16. ENTIRE AGREEMENT. This Agreement and the Plan
constitute the entire agreement between the parties with respect
to the subject matter hereof, and supersede all previously
written or oral negotiations, commitments, representations and
agreements with respect thereto.
XXXXX GOLF, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
OPTIONEE:
__________________________________
NAME
Address:___________________________
___________________________
___________________________
Annexes
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Annex A - Form of Exercise Notice
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ANNEX A
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EXERCISE NOTICE
Ladies/Gentlemen:
I hereby exercise my Stock Option to purchase _______ shares of
Common Stock of XXXXX GOLF, INC. at the option price of $______
per share as provided in the Stock Option Agreement dated the
_____ day of __________________.
I acknowledge that I previously received a copy of the 2002
Equity Incentive Plan of Xxxxx Golf, Inc. and executed a Stock
Option Agreement, and I have carefully reviewed both documents.
I have considered the tax implications of my option and the
exercise thereof. I hereby tender my personal check, bank draft
or money order payable to XXXXX GOLF, INC. in the amount of
$______ or, I have wire transferred $_______ to XXXXX GOLF, INC.,
which transfer shall be subject to the confirmation of receipt of
funds by the Corporation. [If payment is to be made by wire
transfer, the Optionee should contact the Corporation's Chief
Financial Officer or Controller in advance to obtain wiring
instructions.]
________________________
Optionee
________________________
Date
