MDWERKS, INC. NON-QUALIFIED STOCK OPTION AGREEMENT FOR Agreement
Exhibit
4.2 - Form of Non-Qualified Stock Option Agreement
FOR
__________________________
Agreement
Grant
of Option.
MDwerks, Inc. (the “Company”) hereby grants, as of ________, 200_ (“Date of
Grant”), to _____________ (the “Optionee”) an option (the “Option”) to purchase
up to ______ shares of the Company’s Common Stock, par value $.001 per share
(the “Shares”), at an exercise price per share equal to $______ (the “Exercise
Price”). The Option shall be subject to the terms and conditions set forth
herein. The Option was issued pursuant to the Company’s 2005 Incentive
Compensation Plan (the “Plan”), which is incorporated herein for all purposes.
The Option is a Non-Qualified Stock Option, and not an Incentive Stock Option.
The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to
be
bound by all of the terms and conditions hereof and thereof and all applicable
laws and regulations.
Definitions.
Unless
otherwise provided herein, terms used herein that are defined in the Plan and
not defined herein shall have the meanings attributed thereto in the
Plan.
| Percentage of Shares | Vesting Date |
Except
as
otherwise specifically provided herein, there shall be no proportionate or
partial vesting in the periods prior to each Vesting Date, and all vesting
shall
occur only on the appropriate Vesting Date. Upon the termination of the
Optionee’s Continuous Service with the Company and its Related Entities, any
unvested portion of the Option shall terminate and be null and
void.
Method
of Exercise.
The
vested portion of this Option shall be exercisable in whole or in part in
accordance with the exercise schedule set forth in Section 3 hereof by written
notice which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder’s investment intent with respect
to such Shares as may be required by the Company pursuant to the provisions
of
the Plan. Such written notice shall be signed by the Optionee and shall be
delivered in person or by certified mail to the Secretary of the Company. The
written notice shall be accompanied by payment of the Exercise Price. This
Option shall be deemed to be exercised after both (a) receipt by the Company
of
such written notice accompanied by the Exercise Price and (b) arrangements
that
are satisfactory to the Committee in its sole discretion have been made for
Optionee’s payment to the Company of the amount, if any, that is necessary to be
withheld in accordance with applicable Federal or state withholding
requirements. No Shares will be issued pursuant to the Option unless and until
such issuance and such exercise shall comply with all relevant provisions of
applicable law, including the requirements of any stock exchange upon which
the
Shares then may be traded.
Method
of Payment.
Payment
of the Exercise Price shall be by any of the following, or a combination
thereof, at the election of the Optionee: (a) cash; (b) check; (c) with Shares
that have been held by the Optionee for at least 6 months (or such other Shares
as the Company determines will not cause the Company to recognize for financial
accounting purposes a charge for compensation expense); (d) pursuant to a
“cashless exercise” procedure, by delivery of a properly executed exercise
notice together with such other documentation, and subject to such guidelines,
as the Committee shall require to effect an exercise of the Option and delivery
to the Company by a licensed broker acceptable to the Company of proceeds from
the sale of Shares or a margin loan sufficient to pay the Exercise Price and
any
applicable income or employment taxes; or (e) such other consideration or in
such other manner as may be determined by the Committee in its absolute
discretion.
(a) Any
unexercised portion of the Option shall automatically and without notice
terminate and become null and void at the time of the earliest to occur of
the
following:
(i) unless
the Committee otherwise determines in writing in its sole discretion, three
months after the date on which the Optionee’s Continuous Service with the
Company and its Related Entities is terminated for any reason other than by
reason of (A) termination of the Optionee’s Continuous Service by the Company or
a Related Entity for Cause, (B) a Disability of the Optionee as determined
by a
medical doctor satisfactory to the Committee, or (C) the Optionee's
death;
(ii) immediately
upon the termination of the Optionee’s Continuous Service with the Company and
its Related Entities for Cause;
(iii) twelve
months after the date on which the Optionee’s Continuous Service with the
Company and its Related Entities is terminated by reason of a Disability as
determined by a medical doctor satisfactory to the Committee;
(iv) twelve
months after the date of termination of the Optionee’s Continuous Service with
the Company and its Related Entities by reason of the death of the Optionee
(or,
if later, three months after the date on which the Optionee shall die if such
death shall occur during the one year period specified in paragraph (iii) of
this Section 0);
(v) the
tenth
anniversary of the date as of which the Option is granted; or
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(vi) immediately
in the event that the Optionee, if he or she had been an outside Director,
shall
file any lawsuit or arbitration claim against the Company or any Subsidiary,
or
any of their respective officers, directors or shareholders.
(b) To
the
extent not previously exercised, (i) the Option shall terminate immediately
in
the event of (1) the liquidation or dissolution of the Company, or (2) any
reorganization, merger, consolidation or other form of corporate transaction
in
which the Company does not survive or the Shares are converted into or exchanged
for securities issued by another entity, or an affiliate of such successor
or
acquiring entity, unless the successor or acquiring entity, or an affiliate
of
such successor or acquiring entity, assumes the Option or substitutes an
equivalent option or right pursuant to Section 10(c) of the Plan, and (ii)
the
Committee in its sole discretion may by written notice (“cancellation notice”)
cancel, effective upon the consummation of any corporate transaction described
in Subsection 9(b)(i) of the Plan in which the Company does survive, the Option
(or portion thereof) that remains unexercised on such date. The Committee shall
give written notice of any proposed transaction referred to in this Section
6(b)
a reasonable period of time prior to the closing date for such transaction
(which notice may be given either before or after approval of such transaction),
in order that the Optionee may have a reasonable period of time prior to the
closing date of such transaction within which to exercise the Option if and
to
the extent that it then is exercisable (including any portion of the Option
that
may become exercisable upon the closing date of such transaction). The Optionee
may condition his exercise of the Option upon the consummation of a transaction
referred to in this Section 6(b).
Transferability.
Unless
otherwise determined by the Committee, the Option granted hereby is not
transferable otherwise than by will or under the applicable laws of descent
and
distribution, and during the lifetime of the Optionee the Option shall be
exercisable only by the Optionee, or the Optionee’s guardian or legal
representative. In addition, the Option shall not be assigned, negotiated,
pledged or hypothecated in any way (whether by operation of law or otherwise),
and the Option shall not be subject to execution, attachment or similar process.
Upon any attempt to transfer, assign, negotiate, pledge or hypothecate the
Option, or in the event of any levy upon the Option by reason of any execution,
attachment or similar process contrary to the provisions hereof, the Option
shall immediately become null and void. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors and assigns of
the
Optionee.
No
Rights of Stockholders.
Neither
the Optionee nor any personal representative (or beneficiary) shall be, or
shall
have any of the rights and privileges of, a stockholder of the Company with
respect to any shares of Stock purchasable or issuable upon the exercise of
the
Option, in whole or in part, prior to the date of exercise of the
Option.
Acceleration
of Exercisability of Option.
(a) This
Option shall become immediately fully exercisable in the event that, prior
to
the termination of the Option pursuant to Section 6 hereof, (i) the Company
exercises its discretion to provide a cancellation notice with respect to the
Option pursuant to Section 6(b)(ii) hereof, or (ii) the Option is terminated
pursuant to Section 6(b)(i) hereof.
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(b) This
Option shall become immediately fully exercisable in the event that, prior
to
the termination of the Option pursuant to Section 6 hereof, and during the
Optionee's Continuous Service, there is a “Change in Control,” as defined in
Section 9(b) of the Plan.
(c) Notwithstanding
the foregoing, if in the event of a Change in Control the successor company
assumes or substitutes for the Option, the vesting of the Option shall not
be
accelerated as described in Section 9(b). For the purposes of this paragraph,
the Option shall be considered assumed or substituted for it following the
Change in Control the Option or substituted option confers the right to
purchase, for each Share subject to the Option immediately prior to the Change
in Control, the consideration (whether stock, cash or other securities or
property) received in the transaction constituting a Change in Control by
holders of Shares for each Share held on the effective date of such transaction
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares);
provided, however, that if such consideration received in the transaction
constituting a Change in Control is not solely common stock of the successor
company or its parent or subsidiary, the Committee may, with the consent of
the
successor company, or its parent or subsidiary, provide that the consideration
to be received upon the exercise or vesting of the Option will be solely common
stock of the successor company or its parent or subsidiary substantially equal
in fair market value to the per share consideration received by holders of
Shares in the transaction constituting a Change in Control. The determination
of
such substantial equality of value of consideration shall be made by the
Committee in its sole discretion and its determination shall be conclusive
and
binding. Notwithstanding the foregoing, on such terms and conditions as may
be
set forth in an Award Agreement, in the event of a termination of the Optionee’s
employment in such successor company (other than for Cause) within 24 months
following such Change in Control, the option held by the Optionee at the time
of
the Change in Control shall be accelerated as described in paragraph (b) of
this
Section 9.
No
Right to Continued Employment.
Neither
the Option nor this Agreement shall confer upon the Optionee any right to
continued employment or service with the Company.
Law
Governing.
This
Agreement shall be construed in accordance with and governed by the internal
laws of the State of Florida.
Interpretation
/ Provisions of Plan Control.
This
Agreement is subject to all the terms, conditions and provisions of the Plan,
including, without limitation, the amendment provisions thereof, and to such
rules, regulations and interpretations relating to the Plan adopted by the
Committee as may be in effect from time to time. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to
be
modified accordingly. The Optionee accepts the Option subject to all of the
terms and provisions of the Plan and this Agreement. The undersigned Optionee
hereby accepts as binding, conclusive and final all decisions or interpretations
of the Committee upon any questions arising under the Plan and this Agreement,
unless shown to have been made in an arbitrary and capricious
manner.
Notices.
Any
notice under this Agreement shall be in writing and shall be deemed to have
been
duly given when delivered personally or when deposited in the United States
mail, registered, postage prepaid, and addressed, in the case of the Company,
to
the Company’s Chief Financial Officer at 0000 X.X. 0xx
Xxxxxx,
Xxxxx X, Xxxxxxxxx Xxxxx, Xxxxxxx 00000, or if the Company should move its
principal office, to such principal office, and, in the case of the Optionee,
to
the Optionee’s last permanent address as shown on the Company’s records, subject
to the right of either party to designate some other address at any time
hereafter in a notice satisfying the requirements of this Section.
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Tax
Consequences.
Set
forth below is a brief summary as of the date of this Option Agreement of some
of the federal tax consequences of exercise of this Option and disposition
of
the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) The
Optionee will not recognize any income on receipt of the Option.
(b) The
Optionee will recognize ordinary income at the time he exercises the Option
equal to the amount by which the Fair Market Value of the Shares on the date
of
exercise exceeds the Exercise Price paid for the Shares. The amount so
recognized is subject to income tax withholding and employment taxes if the
Optionee is an employee of the Company or a Related Entity.
(c) The
Optionee’s tax basis for the Shares received as a result of the exercise of the
Option will be equal to the Fair Market Value of those Shares on the date the
Option is exercised.
(d) Upon
the
sale of the Shares, the Optionee will recognize a capital gain or loss on the
difference between the amount realized from the sale of the Shares and the
Fair
Market Value on the date the Option is exercised. The gain or loss would be
short- or long-term depending upon whether the Shares were held for at least
one
year after the date of exercise of the Option.
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the _____
day of __________, 200_.
| COMPANY: | ||
| MDWERKS, INC. | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
The
Optionee acknowledges receipt of a copy of the Plan and represents that he
or
she has reviewed the provisions of the Plan and this Option Agreement in their
entirety, is familiar with and understands their terms and provisions, and
hereby accepts this Option subject to all of the terms and provisions of the
Plan and the Option Agreement. The Optionee further represents that he or she
has had an opportunity to obtain the advice of counsel prior to executing this
Option Agreement.
| Dated:_____________, 200_ | OPTIONEE: | ||
| By: | |||
|
Name: |
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