Exhibit 4.2
XXX XXXXXXXXXXX
STOCK OPTION AGREEMENT
NON-QUALIFIED STOCK OPTION
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AGREEMENT entered into as of the ______ day of _________, 1999 by and
between XXX Xxxxxxxxxxx, a Massachusetts corporation (the "Company"), and the
undersigned individual (the "Optionee").
WHEREAS, the Company desires to grant the Optionee a non-qualified stock
option to acquire shares of the Company's common stock, $.01 par value per share
(the "Common Stock"); and
WHEREAS, the Optionee desires to accept such option subject to the terms
and conditions of this Agreement.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee, intending to be
legally bound, hereby agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee a non-
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qualified stock option (the "Option") to purchase all (or any part) of _________
shares of Common Stock (the "Shares") on the terms and conditions hereinafter
set forth. This option shall not be treated as an incentive stock option under
Section 422A of the Internal Revenue Code of 1986, as amended (the "Code").
2. Purchase Price. The purchase price ("Purchase Price") for the Shares
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covered by the Option shall be the closing price of a share of Common Stock on
______________, or $________ per share.
3. Vesting and Exercisability. On or after the first anniversary of the
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date hereof, twenty percent (20%) of the Shares subject to the Option shall vest
and be exercisable, and on or after each of the next four successive
anniversaries of the date hereof, an additional twenty percent (20%) of the
Shares shall vest and be exercisable.
4. Term of Option.
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(a) This Option shall expire not later than ten (10) years from the
date hereof; provided, however, that if the Optionee ceases to serve as _______
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of the Company for any reason, whether voluntary or involuntary (including
death), this Option shall terminate on the date such service terminates with
respect to any Shares subject to options which are vested or unvested on such
date.
5. Manner of Exercise of Option.
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(a) To the extent that the right to purchase shares under the Option
has vested and is in effect in accordance with the terms hereof, the number of
available Shares may be purchased in full (or in part) by giving written notice
to the Company stating the number of Shares purchased and accompanied by payment
in full for such Shares. Payment shall be either in cash or by a certified or
cashier's check or money order payable to the Company.
(b) The Company shall at all times during the term of the Option
reserve and keep available such number of shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
(c) Notwithstanding the provision of Section 5(a) of this Agreement,
the Company may delay the issuance of Shares covered by the vesting of this
Option and the delivery of a certificate for such Shares until one of the
following conditions shall be satisfied:
(i) The Shares purchased pursuant to a vested Option are at
the time of the issuance of such Shares effectively registered or qualified
under applicable federal and state securities laws now in effect or as hereafter
amended; or
(ii) Counsel for the Company shall have given an opinion that
such Shares are exempt from registration and qualification under applicable
federal and state securities laws now in effect or as hereafter amended.
(iii) The Company shall use its best efforts to promptly meet
the conditions under items (i) and (ii) above.
6. Changes in Stock.
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In the event of a stock dividend, stock split or other change in corporate
structure or capitalization affecting the Common Stock, the Board of Directors
or the Compensation Committee (the "Committee") shall make appropriate
adjustments in the number and kind of shares of stock remaining subject to this
Option outstanding at the time of such change and the Purchase Price. Subject
to any required action by the stockholders, if the Company shall be the
surviving corporation in any merger or consolidation (other than a merger or
consolidation in which the Company survives but in which a majority of its
outstanding shares are converted into securities of another corporation or are
exchanged for other consideration), this Option shall pertain and apply to the
securities which a holder of the number of shares of stock of the Company then
subject to this Option would have been entitled to receive, but a dissolution or
liquidation of the Company or a merger or consolidation in which the Company is
not the surviving corporation or in which a majority of its outstanding shares
are so converted or exchanged shall cause this Option to terminate; provided
that if any such dissolution, liquidation, merger or consolidation is
contemplated, the Company shall either arrange for any corporation succeeding to
the business and assets of the Company to issue to the Optionee replacement
options on such corporation's stock which will to the extent possible preserve
the value of the outstanding Option or shall make the outstanding Option fully
exercisable at least 20 days before the effective date of any such dissolution,
liquidation, merger or consolidation. The existence of this Agreement shall not
prevent any such change or other transaction and the Optionee shall not have any
right except as herein expressly set forth.
7. No Special Rights. Nothing contained in this Agreement shall be
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construed or deemed by any person under any circumstances to bind the Company or
any of its subsidiaries to continue the service of the Optionee as ________ of
the Company for the period during which this Option may vest.
8. Rights as a Shareholder. The Optionee shall not have any of the
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rights of a shareholder of the Company in respect of the Shares until one or
more certificates for such Shares shall be delivered to the Optionee upon the
purchase of Shares pursuant to a vested Option in accordance with this
Agreement. Except as otherwise expressly provided herein, no adjustment shall
be made for dividends or other rights for which the record date is prior to the
date such stock certificate is issued.
9. Notice of Disposition. Participant shall notify the Company when he
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makes any disposition of the Shares acquired upon exercise of this Option,
whether by sale, gift or otherwise.
10. Application of Stock Transfer Agreement. If at the time when this
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Option is exercised, the Company is a party to any agreement restricting the
transfer of any outstanding shares of its Common Stock, this Option may be
exercised only if the Shares so acquired are made subject to the transfer
restrictions set forth in that agreement (or if more than one such agreement is
then in effect), the agreement specified by the Board of Directors or the
Committee.
11. Tax Effects of Exercise of Option. At the time of exercise of any
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part of this Option, Optionee or his legal representative will be liable for
federal and state taxes for the gain between the exercise price of the Shares
and the then current fair market value of such shares. The Company has no
liability or responsibility to withhold any amounts to cover this federal or
state tax liability.
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12. Non-transferability of Option. This Option is not transferable by the
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Optionee otherwise than by will or the laws of descent and distribution, and is
exercisable during the Participant's lifetime only by the Participant.
13. Cancellation and Rescission of Option. The Committee or the Board of
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Directors may cancel, rescind, suspend or otherwise limit or restrict this
Option at any time if the Optionee engages in "Detrimental Activity" (as defined
below). Furthermore, in the event Optionee engages in Detrimental Activity at
any time prior to or during the six months after any exercise of this Option (or
portion hereof), such exercise may be rescinded until the later of (i) two years
after such exercise or (ii) two years after such Detrimental Activity. Upon
such rescission, the Company at its sole option may require the Optionee to (i)
deliver and transfer to the Company the shares of Common Stock received by the
Optionee upon such exercise, (ii) pay to the Company an amount equal to any
realized gain received by the Optionee from such exercise, or (iii) pay to the
Company an amount equal to the market price (as of the exercise date) of the
Common Stock acquired upon such exercise minus the respective exercise price.
The Company shall be entitled to set-off any such amount owed to the Company
against any amount owed to the Optionee by the Company. As used in this
Section 13, "Detrimental Activity" shall include: (i) the failure to comply with
the terms of this Agreement; (ii) the failure to comply with any term set forth
in the Key Employee Agreement (irrespective of whether the Optionee is a party
to the Key Employee Agreement); (iii) any activity that results in removal of
the Optionee for cause; (iv) a violation of any rule, policy, procedure or
guideline of the Company; (v) the Optionee being convicted of, or entering a
guilty plea with respect to a crime whether or not connected with the Company;
or (vi) any other conduct or act determined to be injurious, detrimental or
prejudicial to any interest of the Company.
[Remainder of Page Intentionally Left Blank]
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XXX XXXXXXXXXXX
STOCK OPTION AGREEMENT
Counterpart Signature Page
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its corporate seal to be hereto affixed by its officer thereunto duly
authorized, and the Optionee has hereunto set his hand and seal, all as of the
day and year first above written.
XXX XXXXXXXXXXX OPTIONEE
By:_________________ ___________________________
(signature)
___________________________
(print name)
___________________________
(print address)
___________________________
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