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EXHIBIT 4(B)
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT, dated as of ____________________, between
VERSUS TECHNOLOGY, INC., a Delaware Corporation (the "Corporation"), and XXXX
X. XXXXXXX, an employee of the Corporation or its subsidiary (herein
"Employee").
W I T N E S S E T H:
The Corporation desires, by affording the Employee an opportunity to purchase
shares of its Common Stock, $.01 par value, to provide the Employee with an
added incentive to join or to continue in the employment of the Corporation and
to continue and increase his or her efforts in that connection. This Stock
Option Agreement (this "Agreement") is being entered into pursuant to the
Versus Technology, Inc. 1996 Incentive Stock Option Plan and is subject to the
provisions thereof, including the determinations to be made by the Compensation
Committee (the "Committee") of the Board of Directors of the Corporation (the
"Board").
In consideration of the mutual covenants hereinafter set forth and for
other good and valuable consideration, the parties hereto hereby agree as
follows:
1. Grant. The Corporation with the approval and direction of the
Committee irrevocably grants the employee the right and option (the "Option")
to purchase all or any part of an aggregate of 1,000,000 shares of Common Stock
on the terms and conditions herein set forth. This Option shall be an
Incentive Stock Option.
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2. Price. The purchase price of the shares of Common Stock covered by
the Option shall be $0.375 per share, being in excess of the fair market value
of the Common Stock on the date hereof.
3. Time of Exercise. The term of the Option shall be for a period of ten
(10) years from the date hereof, subject to earlier termination as provided in
this Agreement. Except as provided in Paragraphs 5 and 6 hereof, the Option
may not be exercised unless the Employee shall at the time of exercise be an
employee of the Corporation. Neither the Option nor any rights related to the
Option shall be exercisable for a period of six months from the date hereof
when twenty-five percent (25%) of the Option shall become first exercisable,
and an additional twenty-five percent (25%) of the Option shall become
exercisable each of the three successive anniversaries of that date until the
Option shall become fully exercisable.
4. No Transfer. The Option shall not be transferable by the Employee
otherwise than by Will or the laws of descent and distribution, and the Option
may be exercised during his lifetime only by the Employee. The Option may not
be assigned, transferred (except as aforesaid), pledged or hypothecated in any
way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the Option contrary to the
provisions hereof and the levy of any attachment or similar process upon the
Option shall be null and void and without effect.
5. Termination. In the event the employment of the Employee shall be
terminated for any reason, (i) the Option may be exercised by the Employee at
any time
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within thirty (30) days after such date (or one year after such date if the
Employee is disabled within the meaning of Internal Revenue Code Section
22(e)(3), but in no event after the expiration of ten years from the date
hereof, and only if and to the extent that he was entitled to exercise the
Option at the date of termination, and (ii) so long as the stock of the
Corporation is not listed on a national securities exchange or traded on the
over-the-counter market, the Corporation may elect in its sole discretion to
repurchase the stock at a price equal to the fair market value of the stock at
the date of termination. The Option shall not be affected (i) by any change of
duties or position so long as the Employee continues to be an employee of the
Corporation or a Subsidiary or (ii) by any temporary leave of absence that does
not sever the employment relationship, which leave of absence is approved, if
for a period of not more than three months, by an officer of the Corporation,
or if for a period of more than three months, by the Board.
6. Death of Employee. If the Employee shall die while entitled to
exercise the Option, the Option may be exercised by the legatee or legatees of
the Option under the Employee's Will, the personal representative or
distributees of the Employee to the extent that the Option would otherwise have
been exercisable by the Employee at any time within a period of one year after
the date of the Employee's death, but this provision shall not otherwise extend
the ten (10) year duration of the Option.
7. Anti-Dilution Adjustments. In the event of any change in the
outstanding Common Stock of the Corporation by reason of stock dividends, stock
splits, recapitalizations, mergers, consolidations, combinations or exchanges
of shares, split-ups, split-offs, liquidations or other similar changes in
capitalization, or any distributions
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to common stockholders other than cash dividends, the numbers, class and prices
of shares covered by this Option shall be appropriately adjusted by the
Committee, whose determination shall be conclusive; provided, however, that no
such adjustment shall give the Employee any additional benefits under the
Option.
8. Corporate Transactions. Notwithstanding the provisions of Paragraph
7, if any "corporate transaction" as defined in Section 1.425-1 of the Treasury
Regulations promulgated under the Internal Revenue Code of 1986 occurs after
the date of this Agreement, and in connection with such corporate transaction,
the Corporation and another corporation enter into an agreement providing for
the issuance of substitute stock options in exchange for the Option or the
assumption of the Option, in either case giving the Employee the right to
purchase the largest whole number of shares of Common Stock of the Corporation
or of any other corporation at the lowest option price permitted by said
Section 1.425-1, the Option shall be deemed to provide for the purchase of such
number of shares of Common Stock at such option price as shall be agreed upon
by the Corporation and such other corporation, and the term "Corporation"
herein shall mean the issuer of the stock then covered by the Option and the
term "Common Stock" shall mean such stock.
9. No Employment Agreement. This Agreement does not confer upon the
Employee any right to continue in the employ of the Corporation nor does it
interfere in any way with the right of the Corporation or the right of the
Employee to terminate the employment of the Employee at any time.
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10. Restrictions. The obligation of the Corporation to sell and deliver
shares of Common Stock with respect to the Option shall be subject to (i) all
applicable laws, rules, regulations and such approvals by any governmental
agencies as may be required, including the effectiveness of a registration
statement under the Securities Act of 1933, as amended and (ii) the condition
that the shares of Common Stock to be received upon exercise of the Option
shall have been duly listed, upon official notice of issuance, on a stock
exchange (to the extent that the Common Stock of the Corporation is then listed
on any such stock exchange). In the event that the shares shall be delivered
otherwise than in accordance with an applicable registration statement, the
Corporation's obligation to deliver the shares is subject to the further
condition that the Employee will execute and deliver to the Corporation an
undertaking in form and substance satisfactory to the Corporation that (i) it
is the Employee's intention to acquire and hold such shares for investment and
not for resale or distribution, (ii) the shares will not be sold without
registration or exemption from the requirement of registration under the
Securities Act and (iii) the Employee will indemnify the Corporation for any
costs, liabilities and expenses which it may sustain by reason of any violation
of the Securities Act or any other law regulating the sale or purchase of
securities occasioned by any act on his part with respect to such shares.
The Corporation may require that any certificate or certificates evidencing
shares issued pursuant to the Plan bear a restrictive legend intended to effect
compliance with the Securities Act or any other applicable regulatory measures,
and stop transfer
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instructions with respect to the certificates representing the shares may be
given to the transfer agent.
11. Exercise. Subject to the terms and conditions of this Agreement, the
Option may be exercised only by written notice delivered to the Corporation at
its principal executive offices, attention of the Chief Financial Officer, of
intention to exercise such Option and by making payment of the purchase price
of such shares against delivery of a certificate or certificates therefor as
hereinafter provided. Such written notice shall:
(a) state the election to exercise the Option and the number of shares
in respect of which it is being exercised;
(b) fix a date not less than seven (7) business days from the date such
notice is received by the Corporation for delivery of the certificate or
certificates for said shares and the payment of the purchase price
therefor, and (c) be signed by the person or persons so exercising the
Option and in the event the Option is being exercised by any person or
persons other than the Employee, be accompanied by appropriate proof of
the right of such person or persons to exercise the Option.
On the date fixed in said written notice, a certificate or certificates
for the shares as to which the Option shall have been so exercised, registered
in the name of the person or persons so exercising the Option shall be issued
by the Corporation and delivered to or upon the order of such person or persons
against payment in full at the above-mentioned address of the purchase price of
said shares in cash, by check or by
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surrender or delivery to the Corporation of shares of the Corporation's Common
Stock with a fair market value equal to or less than the Option price, plus
cash equal to any difference. All shares issued as provided herein will be
fully paid and nonassessable. The Employee shall not have any of the rights of
the stockholder with respect to the shares of Common Stock subject to the
Option until the certificate evidencing such shares shall be issued to him upon
the due exercise of the Option.
12. Availability of Shares. The Corporation shall at all times during
the term of the Option reserve and keep available such number of shares of
Common Stock as will be sufficient to satisfy the requirements of this
Agreement, shall pay all original issue taxes with respect to the issue of
shares pursuant hereto and all other fees and expenses necessarily incurred by
the Corporation in connection therewith and will from time to time use its best
efforts to comply with all laws and regulations which in the opinion of counsel
for the Corporation shall be applicable thereto.
13. Fair Market Value. As used herein, the "fair market value" of a
share of Common Stock shall be:
(a) if the Common Stock is listed on a national securities exchange, the
closing price of the Common Stock on the Composite Tape on the trading day
immediately preceding such given date;
(b) if the Common Stock is traded on the over-the-counter market, the
average of the bid and the asked price for the Common Stock as reported by the
Wall Street Journal at the close of trading on the trading day immediately
preceding such given date, and
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(c) if the Common Stock is neither listed on a national securities
exchange or traded on the over-the-counter market, such value as the Board in
good faith shall determine.
14. The Plan. The Option is granted pursuant to the terms of the Plan,
which terms are incorporated herein by reference, and the Option shall in all
respects be interpreted in accordance with the Plan. The Committee shall
interpret and construe the Plan and this Agreement, and the Committee's
interpretations and determinations shall be conclusive and binding on the
parties hereto and any other person claiming an interest hereunder with respect
to any issue arising hereunder or thereunder.
15. Governing Law. This Agreement has been entered into and shall be
construed in accordance with the laws of the State of New Jersey.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be duly
executed and sealed by its duly authorized officers and the Employee has
hereunder set his hand, all as of the day and year first above written.
ATTEST: VERSUS TECHNOLOGY, INC.
By:
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Name:
Title:
WITNESS:
By:
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Name:
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