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EXHIBIT 4.2
FORM OF
FARO TECHNOLOGIES, INC. 1993 STOCK OPTION PLAN
AMENDED AND RESTATED
STOCK OPTION AGREEMENT
Pursuant to this Amended and Restated Stock Option Agreement,
Non-statutory and/or Statutory Stock Options (the "Stock Options") as
specifically set forth in paragraph 2 below are hereby granted by FARO
Technologies, Inc. (the "Company") to the individual named below ("Grantee")
for and with respect to the $0.001 par value common stock of the Company (the
"Common Stock") and subject to the following terms and conditions:
1. PRIOR STOCK OPTION AGREEMENTS. This Amended and Restated
Stock Option Agreement (the "Agreement") supersedes and replaces in full any
Stock Option Agreement by and between the Grantee and the Company ("Prior
Agreement"). Any and all such Prior Agreements shall be null and void and
shall have no further force or effect.
2. GRANT OF OPTIONS. Subject to the provisions set forth herein
and the terms and conditions of the FARO Technologies, Inc. 1993 Stock Option
Plan previously adopted and as amended by the shareholders and Board of
Directors of the Company, a copy of which is attached as Exhibit A (the
"Plan"), the terms of which are hereby incorporated by reference, and in
consideration of the representations, warranties, covenants and agreements of
Grantee herein provided, the Company hereby grants to the Grantee Stock Options
to purchase from the Company the number of shares of Common Stock at the
purchase price per share and on the schedule as set forth herein below. At the
time of exercise of the Stock Options, payment of the purchase price must be
made in cash or, if the Committee (as defined in the Plan), in its discretion,
agrees to so accept, then by delivery to the Company of other Common Stock
owned by the Grantee, valued at its fair market value on the date of exercise,
or in some combination of cash and such common stock so valued, or such other
methods of payment authorized under the Plan. Upon the exercise of Stock
Options, the Committee shall have the right to have the Grantee remit to the
Company, in any such manner or combination of manners permitted under the terms
of the Plan, an amount sufficient to satisfy all federal, state and local
withholding tax requirements prior to the delivery by the Company of any
certificate for shares of Common Stock.
Name of Grantee: ___________________________________________
Character of Options and
Number of Shares Subject to Options: ISOs ________ NSOs _______
Exercise Price Per Share: $ _______________
Effective Date of Grant: __________________________________________
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3. VESTING. The Stock Options granted hereunder shall vest in
equal ____________ portions per year for _________ successive years, beginning
on the first anniversary of the Effective Date of Grant.
4. EXERCISE RESTRICTIONS. The Stock Options granted and vested
hereunder shall be exercisable at such time as the Company registers the Common
Stock with the United States Securities and Exchange Commission (the "SEC") and
conducts a public offering of such shares ("Early Exercise"), and the exercise
of the Stock Options prior to the Outside Exercise Data, as such term is
defined in paragraph 5 of this Agreement, is expressly contingent upon such
registration and completion of such offering. The Early Exercise period for
the Stock Options shall commence upon the later of (i) the date upon which such
options vest or (ii) the effective date of the registration statement filed
with the SEC in connection with the public offering, and shall expire five
years from the date thereof, or ten years from the Date of Grant, whichever is
earlier.
5. CONSISTENCY WITH PLAN. In accordance with Section 3.4(a) of
the Plan, the latest date upon which the Stock Options shall be exercisable is
ten years from the Effective Date of Grant (the "Outside Exercise Date").
Thus, if not subject to Early Exercise pursuant to Section 4 hereof, all vested
Stock Options shall be exercisable on such date and shall expire on the
following day.
6. CHANGE-IN-CONTROL. In the event there occurs any
Change-In-Control (as defined below), the Board of Directors (or, if
applicable, Committee) may, in its discretion, revise, alter, amend or modify
this Agreement and the related Stock Options granted in connection herewith, in
any manner that it deems appropriate, including, without limitation, the
following:
a. the Stock Option may be deemed to pertain to and
apply to the securities to which a holder of the number of shares of
Common Stock subject to the unexercised Stock Options would be
entitled if he actually owned such shares immediately prior to the
record date or other time any such event became effective; and
b. the date(s) upon which any outstanding and
unexercised Stock Options may be exercised may be accelerated without
regard to any limitations otherwise set forth in this Agreement or the
Plan.
If the Board of Directors (or, if applicable, the Committee) believes that a
Change-In-Control is reasonably likely to occur, the Board (or Committee) may
so revise, alter, amend or modify this Agreement as set forth above at any time
before and contingent upon the consummation of such event.
For purposes of this Agreement, "Change-In-Control" means (i) except
as shall exist as of the effective date of this Agreement, when any person (as
such term is used in Section 13 of the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder and including any Affiliate or
Associate of such person, as defined in Rule 12b-2 of such Act, and
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any person acting in concert with such person) directly or indirectly acquires
or otherwise becomes entitled to vote more than 50% of the voting securities
entitled to be cast at the elections for directors of the Company, or (ii) if
there occurs any merger, consolidation, share exchange or similar transaction,
or the sale, lease or exchange of all or a substantial part of the consolidated
assets of the Company and its subsidiaries to any person and (A) in the case of
a merger, share exchange, consolidation or the like, the holders of outstanding
securities of the Company entitled to vote in elections of directors
immediately before such merger, share exchange or other transaction hold less
than 50 percent of the voting securities of the surviving entity of such merger
or other transaction, or its parent; or (B) in the case of any such sale, lease
or exchange, the Company does not own more than 50 percent of the voting
securities of the other person.
7. OTHER CONDITIONS TO EXERCISE. The exercise of the Stock
Options is conditioned upon the acceptance by Grantee of the terms hereof as
evidenced by Xxxxxxx's execution of this Agreement and the return of an
executed copy to the Secretary of the Company no later than September 15,
1997. Exercise shall also be subject to Xxxxxxx's execution and delivery to
the Company of a stock purchase agreement between the Grantee and the Company,
which agreement shall contain certain reasonable substantive provisions and
customary representations, warranties and covenants by the parties and, in the
sole discretion of the Committee, the current buy/sell agreement then in place
between the Company and its stockholders.
8. DEATH OR OTHER TERMINATION. With regard to all Stock Options,
whether incentive stock options (defined in the Plan and for purposes hereof as
"ISOs") or nonqualified stock options (defined in the Plan and for purposes
hereof as "NSOs"), in the event of Grantee's death or disability, or if Grantee
for any other reason shall cease to be employed by the Company or subsidiary,
the Stock Options shall terminate pursuant to the terms of Section 2.7(a) or
(b) of the Plan, as applicable. Any such terminations shall be effective
immediately as of the occurrence of such event and without notice or any
further action on the part of the Company.
9. NOTICE OF EXERCISE. Written notice of an election to exercise
any of the Stock Options (such notice to be substantially in the form of
Exhibit B hereto) shall be given by Xxxxxxx, or Xxxxxxx's personal
representative in the event of Xxxxxxx's death, (i) by delivering such notice
at the principal executive offices of the Company no later than the exercise
date, or (ii) by mailing such notice, postage prepaid, addressed to the
Secretary of the Company at the principal executive offices of the Company at
least three business days prior to the exercise date. Such notice shall only
be effective if accompanied by payment in full (in form provided for in
paragraph 1 above) for the shares of Common Stock being purchased as set forth
in the notice.
10. TRANSFERABILITY. During the lifetime of Grantee, the Stock
Options may be exercised only by Grantee and may not be transferred in any
manner other than by will or the applicable laws of descent or distribution.
The Stock Options shall not otherwise be transferred, assigned, pledged or
hypothecated for any purpose whatsoever and are not subject, in whole or in
part, to execution, attachment, or similar process. Any attempted assignment,
transfer, pledge or hypothecation or other disposition of the Stock Options,
other than in accordance with
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the terms set forth herein, shall be void and of no effect. Notwithstanding
the foregoing, the Stock Options may be transferred to the spouse or lineal
descendent of Xxxxxxx, to the trustee of a trust for the primary benefit of a
spouse or lineal descendent or to a partnership in which the spouse and lineal
descendants are the only partners. Such assignee shall be subject to all of
the terms and provisions of the Plan and of this Agreement.
11. SHAREHOLDER RIGHTS. Neither Grantee nor any other person
entitled to exercise the Stock Options under the terms hereof shall be, or have
any of the rights or privileges of, a shareholder of the Company in respect of
any of the shares of Common Stock issuable on exercise of the Stock Options,
unless and until the purchase price for such shares shall have been paid in
full.
12. DELIVERY AND CANCELLATION OF AGREEMENT. In the event the
Stock Options shall be exercised in whole, this Agreement shall be surrendered
to the Company for cancellation. In the event the Stock Options shall be
exercised in part, or a change in the number or designation of the Common
Stock shall be made, this Agreement shall be delivered by Grantee to the
Company for the purpose of making appropriate notation thereon, or of otherwise
reflecting, in such manner as the Company shall determine, the partial exercise
or the change in the number or designation of the Common Stock.
13. GOVERNING LAW. The Stock Options and this Agreement shall be
construed, administered and governed in all respects under and by the laws of
the State of Florida.
14. LEGENDED SHARES. Xxxxxxx understands and acknowledges that
the certificates representing any shares purchased by Grantee regarding the
Stock Options being granted hereunder, may have a legend placed on such
certificates indicating that the shares represented by such certificates are
subject to certain restrictions imposed under Federal and state securities
laws, as well as by the Company and its shareholders pursuant to formal
agreement.
15. GRANTEE REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS. The
Grantee covenants and agrees that he/she is acquiring the Stock Options upon
and subject to the express condition that Xxxxxxx's subsequent purchase of any
shares of Common Stock upon exercise thereof will be made for investment
purposes only and not with a view to the resale or distribution of such shares
unless the same, at the time of their issuance and delivery, shall be
registered under the Securities Act of 1933, as amended (the "1933 Act"), or
alternatively, at some time following such acquisition, their resale is
determined by counsel for the Company, in their sole discretion, to be exempt
from registration requirements of the 1933 Act and of any applicable securities
law, regulation or filing. The Grantee is aware that (i) the Company has not
registered any class of its securities under Federal or state securities laws,
(ii) the Common Stock of the Company is subject to certain restrictions
pursuant to a formal agreement among the Company and its shareholders, (iii)
accordingly, no market exists for the resale of such shares to the public, and
(iv) the fair market value of the shares may not be readily ascertainable.
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16. ENTIRE AGREEMENT. This Agreement, including all exhibits and
schedules referenced herein and attached hereto, specifically, but without
limitation, the Plan attached hereto as Exhibit A, constitutes the entire
agreement between the parties hereto pertaining to the subject matters hereof,
and supersedes all negotiations, preliminary agreements, and all prior and
contemporaneous discussions and understandings of the parties in connection
with the subject matters hereof. To the extent of any direct contrary
provisions existing between the text of this Agreement and the Plan, the terms
of the Plan shall control; provided, however, that to the extent any
inconsistencies, additions, omissions or other differences exist between the
terms of the text of the Agreement and the Plan, such matters shall be
considered and interpreted where possible so as to realize the language and of
the text of this Agreement.
17. AMENDMENTS. No change, modification or termination of any of
the terms, provisions, or conditions of this Agreement shall be effective
unless made in writing and signed or initialed by all parties hereto, their
successors and assigns.
18. SEPARABILITY. If any paragraph, subparagraph or other
provision of this Agreement, or the application of such paragraph, subparagraph
or provision, is held invalid, then the remainder of the Agreement, and the
application of such paragraph, subparagraph or provision to person or
circumstances other than those with respect to which it is held invalid, shall
not be affected thereby.
19. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors, personal representatives, heirs and assigns.
20. SURVIVABILITY. The rights, responsibilities, duties,
representations and warranties of the parties hereto, and the covenants and
agreements herein contained, shall survive any closing and the execution
hereof, and shall continue to bind the parties hereto, and shall continue in
full force and effect until each and every obligation of the parties hereto
pursuant to this Agreement and any document or agreement incorporated herein by
reference shall have been fully performed.
FARO TECHNOLOGIES, INC.
By: __________________________________
Its: __________________________________
"Company"
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The undersigned hereby accepts the foregoing Stock Options and the
terms and conditions hereof. Xxxxxxx also acknowledges receipt of a copy of
the Plan (Exhibit A hereto), and represents that he is familiar with the terms
and provisions thereof. Grantee hereby accepts these Stock Options subject to
all the terms and provisions of the Plan and hereby agrees to accept as
binding, conclusive, and final all decisions and interpretations of the Board
of Directors (or, where applicable, the Committee) upon any questions arising
under the Plan.
___________________________________________________
"Grantee"
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EXHIBIT A
FARO TECHNOLOGIES, INC. 1993 STOCK OPTION PLAN
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EXHIBIT B
FORM OF NOTICE OF EXERCISE
