PARTICIPANT
Exhibit
10.2
XXXXXXX
ELECTRONICS, INC.
2008
EQUITY INCENTIVE PLAN
THIS
AGREEMENT, made effective as of this
day of ,
20 ,
by and between Xxxxxxx Electronics, Inc., a Minnesota corporation (the
“Company”), and
(“Participant”).
W
I T N E S S E T H:
WHEREAS,
Participant on the date hereof is a key employee or officer of the Company or
one of its Subsidiaries; and
WHEREAS,
the Company wishes to grant an incentive stock option to Participant to purchase
shares of the Company’s Common Stock pursuant to the Company’s 2008 Equity
Incentive Plan (the “Plan”); and
WHEREAS,
the Administrator of the Plan has authorized the grant of an incentive stock
option to Participant and has determined that, as of the effective date of this
Agreement, the fair market value of the Company’s Common Stock is $
per share;
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Grant
of Option. The Company hereby grants to Participant on the date set forth
above (the “Date of Grant”) the right and option (the “Option”) to purchase all
or any portion of an aggregate of
( )
shares of Common Stock at a per share price of $
on the terms and conditions set forth herein and subject to adjustment pursuant
to Section 15 of the Plan. This Option is intended to be an incentive stock
option within the meaning of Section 422, or any successor provision, of
the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations
thereunder, to the extent permitted under Code Section 422(d).
2. Duration
and Exercisability.
a.
General.
The term during which this Option may be exercised shall terminate on ,
,
except as otherwise provided in Paragraphs 2(b) through 2(d) below. This Option
shall become exercisable according to the following schedule:
|
Vesting
Date
|
Number
of Shares
|
Once
the Option becomes exercisable to the extent of one hundred percent (100%) of
the aggregate number of shares specified in Paragraph 1, Participant may
continue to exercise this Option under the terms and conditions of this
Agreement until the termination of the Option as provided herein. If Participant
does not purchase upon an exercise of this Option the full number of shares
which Participant is then entitled to purchase, Participant may purchase upon
any subsequent exercise prior to this Option’s termination such previously
unpurchased shares in addition to those Participant is otherwise entitled to
purchase.
b.
Termination
of Employment (other than Disability or Death). If Participant’s
employment with the Company or any Subsidiary is terminated for any reason other
than disability or death, this Option shall completely terminate on the earlier
of (i) the close of business on the three-month anniversary date of such
termination of employment, and (ii) the expiration date of this Option
stated in Paragraph 2(a) above. In such period following the termination of
Participant’s employment, this Option shall be exercisable only to the extent
the Option was exercisable on the vesting date immediately preceding such
termination of employment, but had not previously been exercised. To the extent
this Option was not exercisable upon such termination of employment, or if
Participant does not exercise the Option within the time specified in this
Paragraph 2(b), all rights of Participant under this Option shall be
forfeited.
c.
Disability.
If Participant’s employment terminates because of disability (as defined in Code
Section 22(e), or any successor provision), this Option shall terminate on
the earlier of (i) the close of business on the twelve-month anniversary
date of such termination of employment, and (ii) the expiration date of
this Option stated in Paragraph 2(a) above. In such period following the
termination of Participant’s employment, this Option shall be exercisable only
to the extent the Option was exercisable on the vesting date immediately
preceding such termination of employment, but had not previously been exercised.
To the extent this Option was not exercisable upon such termination of
employment, or if Participant does not exercise the Option within the time
specified in this Paragraph 2(c), all rights of Participant under this
Option shall be forfeited.
d.
Death.
In the event of Participant’s death, this Option shall terminate on the earlier
of (i) the close of business on the twelve-month anniversary date of the
date of Participant’s death, and (ii) the expiration date of this Option
stated in Paragraph 2(a) above. In such period following Participant’s death,
this Option shall be exercisable by the person or persons to whom Participant’s
rights under this Option shall have passed by Participant’s will or by the laws
of descent and distribution only to the extent the Option was exercisable on the
vesting date immediately preceding the date of Participant’s death, but had not
previously been exercised. To the extent this Option was not exercisable upon
the date of Participant’s death, or if such person or persons do not exercise
this Option within the time specified in this Paragraph 2(d), all rights under
this Option shall be forfeited.
3. Manner
of Exercise.
a.
General.
The Option may be exercised only by Participant (or other proper party in the
event of death or incapacity), subject to the conditions of the Plan and subject
to such other administrative rules as the Administrator may deem advisable, by
delivering within the Option Period written notice of exercise to the Company at
its principal office. The notice shall state 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 all shares designated in the notice. The exercise of the Option
shall be deemed effective upon receipt of such notice by the Company and upon
payment that complies with the terms of the Plan and this Agreement. The Option
may be exercised with respect to any number or all of the shares as to which it
can then be exercised and, if partially exercised, may be so exercised as to the
unexercised shares any number of times during the Option period as provided
herein.
b.
Form
of Payment. Payment of the option price by Participant shall be in the
form of cash, personal check, certified check or, if not prohibited by the
Administrator, previously acquired shares of Common Stock of the Company, or any
combination thereof. Any stock so tendered as part of such payment shall be
valued at its Fair Market Value as provided in the Plan. For purposes of this
Agreement, “previously acquired shares of Common Stock” shall include shares of
Common Stock that are already owned by Participant at the time of
exercise.
c.
Stock
Transfer Records. As soon as practicable after the effective exercise of
all or any part of the Option, Participant shall be recorded on the stock
transfer books of the Company as the owner of the shares purchased, and the
Company shall deliver to Participant one or more duly issued stock certificates
evidencing such ownership. All requisite original issue or transfer documentary
stamp taxes shall be paid by the Company.
4. Miscellaneous.
a.
Employment;
Rights as Shareholder. This Agreement shall not confer on Participant any
right with respect to continuance of employment by the Company or any of its
Subsidiaries, nor will it interfere in any way with the right of the Company to
terminate such employment. Participant shall have no rights as a shareholder
with respect to shares subject to this Option until such shares have been issued
to Participant upon exercise of this Option. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property), distributions or other rights for which the record date is prior to
the date such shares are issued, except as provided in Section 15 of the
Plan.
b.
Securities
Law Compliance. The exercise of all or any parts of this Option shall
only be effective at such time as counsel to the Company shall have determined
that the issuance and delivery of Common Stock pursuant to such exercise will
not violate any state or federal securities or other laws. Participant may be
required by the Company, as a condition of the effectiveness of any exercise of
this Option, to agree in writing that all Common Stock to be acquired pursuant
to such exercise shall be held, until such time that such Common Stock is
registered and freely tradable under applicable state and federal securities
laws, for Participant’s own account without a view to any further distribution
thereof, that the certificates for such shares shall bear an appropriate legend
to that effect and that such shares will be not transferred or disposed of
except in compliance with applicable state and federal securities
laws.
c.
Mergers,
Recapitalizations, Stock Splits, Etc. Pursuant and subject to
Section 15 of the Plan, certain changes in the number or character of the
Common Stock of the Company (through sale, merger, consolidation, exchange,
reorganization, divestiture (including a spin-off), liquidation,
recapitalization, stock split, stock dividend or otherwise) shall result in an
adjustment, reduction or enlargement, as appropriate, in Participant’s rights
with respect to any unexercised portion of the Option (i.e.,
Participant shall have such “anti-dilution” rights under the Option with respect
to such events, but shall not have “preemptive” rights).
d.
Shares
Reserved. The Company shall at all times during the option period reserve
and keep available such number of shares as will be sufficient to satisfy the
requirements of this Agreement.
e.
Withholding
Taxes on Disqualifying Disposition. In the event of a disqualifying
disposition of the shares acquired through the exercise of this Option,
Participant hereby agrees to inform the Company of such disposition. Upon notice
of a disqualifying disposition, the Company may take such action as it deems
appropriate to insure that, if necessary to comply with all applicable federal
or state income tax laws or regulations, all applicable federal and state
payroll, income or other taxes are withheld from any amounts payable by the
Company to Participant. If the Company is unable to withhold such federal and
state taxes, for whatever reason, Participant hereby agrees to pay to the
Company an amount equal to the amount the Company would otherwise be required to
withhold under federal or state law. Participant may, subject to the approval
and discretion of the Administrator or such administrative rules it may deem
advisable, elect to have all or a portion of such tax withholding obligations
satisfied by delivering shares of the Company’s Common Stock having a fair
market value equal to such obligations. Such election shall be approved by the
Administrator and otherwise comply with such rules as the Administrator may
adopt to assure compliance with Rule 16b-3, or any successor provision, as
then in effect, of the General Rules and Regulations under the Securities
Exchange Act of 1934, if applicable.
f.
Nontransferability.
During the lifetime of Participant, the accrued Option shall be exercisable only
by Participant or by the Participant’s guardian or other legal representative,
and shall not be assignable or transferable by Participant, in whole or in part,
other than by will or by the laws of descent and distribution.
g.
2008
Equity Incentive Plan. The Option evidenced by this Agreement is granted
pursuant to the Plan, a copy of which Plan has been made available to
Participant and is hereby incorporated into this Agreement. This Agreement is
subject to and in all respects limited and conditioned as provided in the Plan.
All defined terms of the Plan shall have the same meaning when used in this
Agreement. The Plan governs this Option and, in the event of any questions as to
the construction of this Agreement or in the event of a conflict between the
Plan and this Agreement, the Plan shall govern, except as the Plan otherwise
provides.
h.
Lockup
Period Limitation. Participant agrees that in the event the Company
advises Participant that it plans an underwritten public offering of its Common
Stock in compliance with the Securities Act of 1933, as amended, and that the
underwriter(s) seeks to impose restrictions under which certain shareholders may
not sell or contract to sell or grant any option to buy or otherwise dispose of
part or all of their stock purchase rights of the underlying Common Stock,
Participant hereby agrees that for a period not to exceed 180 days from the
prospectus, Participant will not sell or contract to sell or grant an option to
buy or otherwise dispose of this option or any of the underlying shares of
Common Stock without the prior written consent of the underwriter(s) or its
representative(s).
i.
Blue
Sky Limitation. Notwithstanding anything in this Agreement to the
contrary, in the event the Company makes any public offering of its securities
and determines in its sole discretion that it is necessary to reduce the number
of issued but unexercised stock purchase rights so as to comply with any state
securities or Blue Sky law limitations with respect thereto, the Board of
Directors of the Company shall have the right (i) to accelerate the
exercisability of this Option and the date on which this Option must be
exercised, provided that the Company gives Participant 15 days’ prior
written notice of such acceleration, and (ii) to cancel any portion of this
Option or any other option granted to Participant pursuant to the Plan which is
not exercised prior to or contemporaneously with such public offering. Notice
shall be deemed given when delivered personally or when deposited in the United
States mail, first class postage prepaid and addressed to Participant at the
address of Participant on file with the Company.
j.
Stock
Legend. The Administrator may require that the certificates for any
shares of Common Stock purchased by Participant (or, in the case of death,
Participant’s successors) shall bear an appropriate legend to reflect the
restrictions of Paragraphs 4(b), 4(h) and 4(i) of this Agreement.
k.
Scope
of Agreement. This Agreement shall bind and inure to the benefit of the
Company and its successors and assigns and Participant and any successor or
successors of Participant permitted by Paragraph 2 or Paragraph 4(f)
above.
l.
Arbitration.
Any dispute arising out of or relating to this Agreement or the alleged breach
of it, or the making of this Agreement, including claims of fraud in the
inducement, shall be discussed between the disputing parties in a good faith
effort to arrive at a mutual settlement of any such controversy. If,
notwithstanding, such dispute cannot be resolved, such dispute shall be settled
by binding arbitration. Judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. The arbitrator shall be a
retired state or federal judge or an attorney who has practiced securities or
business litigation for at least 10 years. If the parties cannot agree on
an arbitrator within 20 days, any party may request that the chief judge of
the District Court for Hennepin County, Minnesota, select an arbitrator.
Arbitration will be conducted pursuant to the provisions of this Agreement, and
the commercial arbitration rules of the American Arbitration Association, unless
such rules are inconsistent with the provisions of this Agreement. Limited civil
discovery shall be permitted for the production of documents and taking of
depositions. Unresolved discovery disputes may be brought to the attention of
the arbitrator who may dispose of such dispute. The arbitrator shall have the
authority to award any remedy or relief that a court of this state could order
or grant; provided, however, that punitive or exemplary damages shall not be
awarded. The arbitrator may award to the prevailing party, if any, as determined
by the arbitrator, all of its costs and fees, including the arbitrator’s fees,
administrative fees, travel expenses, out-of-pocket expenses and reasonable
attorneys’ fees. Unless otherwise agreed by the parties, the place of any
arbitration proceedings shall be Hennepin County, Minnesota.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on
the day and year first above written.
XXXXXXX
ELECTRONICS, INC.
By:
Its:
PARTICIPANT
