EXHIBIT 99.2
FORM OF NON-STATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT is entered into and effective as of this ____ day of
__________, ____ (the "Date of Grant"), by and between MOCON, Inc. (the
"Company") and ______________ (the "Optionee").
A. The Company has adopted the MOCON, Inc. 1998 Stock Option Plan (the
"Plan") authorizing the Board of Directors of the Company, or a committee as
provided for in the Plan (the Board or such a committee to be referred to as the
"Committee"), to grant non-statutory stock options to non-employees directors of
the Company and its Subsidiaries (as defined in the Plan).
B. The Company desires to give the Optionee an inducement to acquire a
proprietary interest in the Company and an added incentive to advance the
interests of the Company by granting to the Optionee an option to purchase
shares of common stock of the Company pursuant to the Plan.
Accordingly, the parties agree as follows:
1. Grant of Option.
The Company hereby grants to the Optionee the right, privilege, and
option (the "Option") to purchase ___________ (_______) shares (the "Option
Shares") of the Company's common stock, $0.10 par value (the "Common Stock"),
according to the terms and subject to the conditions hereinafter set forth and
as set forth in the Plan. The Option is not intended to be an "incentive stock
option," as that term is used in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
2. Option Exercise Price.
The per share price to be paid by Optionee in the event of an exercise
of the Option will be $____.
3. Duration of Option and Time of Exercise.
3.1 Initial Period of Exercisability. The Option will become
exercisable with respect to the Option Shares in ______ installment(s). The
following table sets forth the initial date of exercisability of such
installment(s) and the number of Option Shares as to which this Option will
become exercisable on such date:
Date of Number of Option Shares
Exercisability Available for Exercise
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The foregoing rights to exercise this Option will be cumulative with respect to
the Option Shares becoming exercisable on each such date, but in no event will
this Option be exercisable after, and this Option will become void and expire as
to all unexercised Option Shares at 5:00 p.m. Minneapolis, Minnesota time on
_________________, _____ (the "Time of Termination").
3.2 Termination of Service.
In the event that the Optionee ceases to serve as a director of the
company for any reason, then from and after the date of such cessation of
service this Option will not further vest but will remain exercisable until the
Time of Termination with respect to any Option Shares as to which this Option is
exercisable as of the date of cessation of service.
3.3 Change in Control.
(a) Impact of Change in Control. If a Change in Control (as
defined in the Plan) of the Company occurs, this Option will become
immediately exercisable in full and will remain exercisable until the
Time of Termination, regardless of whether the Optionee remains in the
employ or service of the Company or any Subsidiary. In addition, if a
Change in Control of the Company occurs, the Committee, in its sole
discretion and without the consent of the Optionee, may determine that
the Optionee will receive, with respect to some or all of the Option
Shares, as of the effective date of any such Change in Control of the
Company, cash in an amount equal to the excess of the Fair Market Value
(as defined in the Plan) of such Option Shares immediately prior to the
effective date of such Change in Control of the Company over the option
exercise price per share of this Option.
(b) Limitation on Change in Control Payments. Notwithstanding
anything in this Section 3.3 to the contrary, if, with respect to the
Optionee, acceleration of the vesting of this Option or the payment of
cash in exchange for all or part of the Option Shares as provided above
(which acceleration or payment could be deemed a "payment" within the
meaning of Section 280G(b)(2) of the Code), together with any other
payments which the Optionee has the right to receive from the Company
or any corporation which is a member of an "affiliated group" (as
defined in Section 1504(a) of the Code without regard to Section
1504(b) of the Code) of which the Company is a member, would constitute
a "parachute payment" (as defined in Section 280G(b)(2) of the Code),
the payments to the Optionee as set forth herein will be reduced to the
largest amount as will result in no portion of such payments being
subject to the excise tax imposed by Section 4999 of the Code;
provided, however, that if the Optionee is subject to a separate
agreement with the Company or a Subsidiary that expressly addresses the
potential application of Sections 280G or 4999 of the Code (including,
without limitation, that "payments" under such agreement or otherwise
will be reduced, that the Optionee will have the discretion to
determine which "payments" will be reduced, that such "payments" will
not be reduced or that such "payments" will be "grossed up" for tax
purposes), then this Section 3.3(b) will not apply, and any "payments"
to the Optionee pursuant to Section 3.3(a) of this Agreement will be
treated as "payments" arising under such separate agreement.
4. Manner of Option Exercise.
4.1 Notice. This Option may be exercised by the Optionee in whole or in
part from time to time, subject to the conditions contained in the Plan and in
this Agreement, by delivery, in person, by facsimile or electronic transmission
or through the mail, to the Company at its principal executive office in
Minneapolis, Minnesota (Attention: Chief Financial Officer), of a written notice
of exercise. Such notice must be in a form satisfactory to the Committee, must
identify the Option, must specify the number of Option Shares with respect to
which the Option is being exercised, and must be signed by the person or persons
so exercising the Option. Such notice must be accompanied by payment in full of
the total purchase price of the Option Shares purchased. In the event that the
Option is being exercised, as provided by the Plan and Section 3.2 above, by any
person or persons other than the Optionee, the notice must be accompanied by
appropriate proof of right of such person or persons to exercise the Option. As
soon as practicable after the effective exercise of the Option, the Optionee
will be recorded on the stock transfer books of the Company as the owner of the
Option Shares purchased, and the Company will deliver to the Optionee one or
more duly issued stock certificates evidencing such ownership.
4.2 Payment. At the time of exercise of this Option, the Optionee must
pay the total purchase price of the Option Shares to be purchased entirely in
cash (including a check, bank draft or money order, payable to the order of the
Company); provided, however, that the Committee, in its sole discretion, may
allow such payment to be made, in whole or in part, by tender of a promissory
note (on terms acceptable to the Committee in its sole discretion) or a Broker
Exercise Notice or Previously Acquired Shares (as such terms are defined in the
Plan), or by a combination of such methods. In the event the Optionee is
permitted to pay the total purchase price of this Option in whole or in part
with Previously Acquired Shares, the value of such shares will be equal to their
Fair Market Value on the date of exercise of this Option.
5. Rights of Optionee.
5.1 Service. Nothing in this Agreement will interfere with or limit in
any way the right of the Company or any Subsidiary to terminate the services of
the Optionee at any time.
5.2 Rights as a Shareholder. The Optionee will have no rights as a
shareholder unless and until all conditions to the effective exercise of this
Option (including, without limitation, the conditions set forth in Sections 4
and 6 of this Agreement) have been satisfied and the Optionee has become the
holder of record of such shares. No adjustment will be made for dividends or
distributions with respect to this Option as to which there is a record date
preceding the date the Optionee becomes the holder of record of such shares,
except as may otherwise be provided in the Plan or determined by the Committee
in its sole discretion.
5.3 Restrictions on Transfer. Except pursuant to testamentary will or
the laws of descent and distribution or as otherwise expressly permitted by the
Plan, no right or interest of the Optionee in this Option prior to exercise may
be assigned or transferred, or subjected to any lien, during the lifetime of the
Optionee, either voluntarily or involuntarily, directly or indirectly, by
operation of law or otherwise. Any attempt to transfer or encumber this Option
or the Option Shares other than in accordance with this Agreement and the Plan
will be null and void and will void this Option.
5.4 Breach of Confidentiality or Non-Compete Agreements.
Notwithstanding anything in this Agreement or the Plan to the contrary, in the
event that the Optionee materially breaches the terms of any confidentiality or
non-compete agreement entered into with the Company or any Subsidiary, whether
such breach occurs before or after termination of the Optionee's employment with
the Company or any Subsidiary, the Committee in its sole discretion may
immediately terminate all rights of the Optionee under the Plan and this
Agreement without notice of any kind.
6. Withholding Taxes.
The Company is entitled to (a) withhold and deduct from future wages of
the Optionee (or from other amounts that may be due and owing to the Optionee
from the Company), or make other arrangements for the collection of, all legally
required amounts necessary to satisfy any federal, state or local withholding
and employment-related tax requirements attributable to the Option, including,
without limitation, the grant or exercise of this Option or a disqualifying
disposition of any Option Shares, or (b) require the Optionee promptly to remit
the amount of such withholding to the Company before acting on the Optionee's
notice of exercise of this Option. In the event that the Company is unable to
withhold
such amounts, for whatever reason, the Optionee agrees to pay to the Company an
amount equal to the amount the Company would otherwise be required to withhold
under federal, state or local law.
7. Adjustments.
In the event of any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering, divestiture or extraordinary dividend
(including a spin-off), or any other change in the corporate structure or shares
of the Company, the Committee (or, if the Company is not the surviving
corporation in any such transaction, the board of directors of the surviving
corporation), in order to prevent dilution or enlargement of the rights of the
Optionee, will make appropriate adjustment (which determination will be
conclusive) as to the number and kind of securities or other property (including
cash) subject to, and the exercise price of, this Option.
8. Subject to Plan.
The Option and the Option Shares granted and issued pursuant to this
Agreement have been granted and issued under, and are subject to the terms of,
the Plan. The terms of the Plan are incorporated by reference in this Agreement
in their entirety, and the Optionee, by execution of this Agreement,
acknowledges having received a copy of the Plan. The provisions of this
Agreement will be interpreted as to be consistent with the Plan, and any
ambiguities in this Agreement will be interpreted by reference to the Plan. In
the event that any provision of this Agreement is inconsistent with the terms of
the Plan, the terms of the Plan will prevail.
9. Miscellaneous.
9.1 Binding Effect. This Agreement will be binding upon the heirs,
executors, administrators and successors of the parties to this Agreement.
9.2 Governing Law. This Agreement and all rights and obligations under
this Agreement will be construed in accordance with the Plan and governed by the
laws of the State of Minnesota, without regard to conflicts of laws provisions.
Any legal proceeding related to this Agreement will be brought in an appropriate
Minnesota court, and the parties to this Agreement consent to the exclusive
jurisdiction of the court for this purpose.
9.3 Entire Agreement. This Agreement and the Plan set forth the entire
agreement and understanding of the parties to this Agreement with respect to the
grant and exercise of this Option and the administration of the Plan and
supersede all prior agreements, arrangements, plans and understandings relating
to the grant and exercise of this Option and the administration of the Plan.
9.4 Amendment and Waiver. Other than as provided in the Plan, this
Agreement may be amended, waived, modified or canceled only by a written
instrument executed by the parties to this Agreement or, in the case of a
waiver, by the party waiving compliance.
The parties to this Agreement have executed this Agreement effective
the day and year first above written.
MOCON, INC.
By
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Its
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By execution of this Agreement, OPTIONEE
the Optionee acknowledges having
received a copy of the Plan.
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(Signature)
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(Name and Address)
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