EXHIBIT 4.3
INTERNATIONAL SPORTS WAGERING INC.
INCENTIVE STOCK OPTION AGREEMENT
PURSUANT TO INTERNATIONAL SPORTS WAGERING INC.
1996 STOCK OPTION PLAN
AGREEMENT made as of ____________ ___, 19__, by and between
INTERNATIONAL SPORTS WAGERING INC., a Delaware corporation with its principal
place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ (the "Company"), and the undersigned employee of the Company or any of its
subsidiaries (the "Optionee").
W I T N E S S E T H:
WHEREAS, the Company considers it desirable and in its best interests
that the Optionee be encouraged to acquire an ownership interest in the Company,
and thereby have an added incentive to advance the interests of the Company, by
the grant of an option to purchase shares of the Company's common stock, par
value $.001 per share (the "Common Stock"), in accordance with the Company's
1996 Stock Option Plan (the "Plan") on the terms and conditions hereinafter set
forth; and
WHEREAS, the Plan provides that each option granted thereunder is to be
evidenced by an option agreement, setting forth the terms and conditions of the
option.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the Company and the Optionee hereby
agree as follows:
1. Grant of Option.
The Company hereby grants to the Optionee the right, privilege and
option (the "Option") to purchase ______ shares of the Company's Common Stock
(the "Shares") at the purchase price of $______________ per Share (the "Purchase
Price"), in the manner and subject to the conditions hereinafter provided and
contained in the Plan. In the event of any inconsistencies between the Plan and
this Agreement, the Plan shall govern. Such number of Shares issuable upon
exercise of the Option shall be subject to adjustment as provided in Section 7
below. The Option is intended to be an incentive stock option meeting the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"). If for
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any reason the Option or any part hereof is not deemed to be an incentive stock
option, to the extent it is not an incentive stock option, it shall be treated
as a non-qualified stock option.
[NOTE: THERE ARE ALTERNATE SECTIONS 2 DEPENDING UPON WHETHER THIS
IS AN INITIAL GRANT AT THE TIME OF EMPLOYMENT, OR A SUBSEQUENT
GRANT.]
[INITIAL GRANT AT TIME OF EMPLOYMENT]
2. Time of Exercise of Option.
The Option shall not be exercisable during the first 12 months after
the date that the Optionee's employment with the Company commenced (which
employment commencement date was _________, __, 19__). On the first anniversary
of the date on which Optionee's employment commenced, provided the Optionee is
then employed by the Company or any of its subsidiaries, the Option shall be
exercisable as to 25% of the Shares covered by the Option. On each of the
second, third and fourth anniversaries of the date on which Optionee's
employment commenced, provided the Optionee is then employed by the Company or
any of its subsidiaries, an additional 25% percent of the Shares covered hereby
shall be exercisable such that on the fourth anniversary of the date on which
Optionee's employment commenced, all of the Shares covered by the Option shall
be exercisable; provided, however, that upon a Change in Control (as defined in
the Plan) of the Company, the Option shall be immediately exercisable. To the
extent the Option is not exercised by the Optionee when it becomes exercisable,
it shall continue in full force and effect until the Expiration Date (as
hereinafter defined).
[SUBSEQUENT GRANT]
2. Time of Exercise of Option.
The Option shall not be exercisable during the first 12 months after
the date of grant. On the first anniversary of the date of grant, provided the
Optionee is then employed by the Company or any of its subsidiaries, the Option
shall be exercisable as to 25% of the Shares covered by the Option. On each of
the second, third and fourth anniversaries of the date of grant, provided the
Optionee is then employed by the Company or any of its subsidiaries, an
additional 25% percent of the Shares covered hereby shall be exercisable such
that on the fourth anniversary of the date of grant all of the Shares covered by
the Option shall be exercisable; provided, however, that upon a Change in
Control (as defined in the Plan) of the Company, the Option shall be immediately
exercisable.
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To the extent the Option is not exercised by the Optionee when it becomes
exercisable, it shall continue in full force and effect until the Expiration
Date (as hereinafter defined).
3. Method of Exercise.
The Option shall be exercised by written notice in the form of Exhibit
A hereto, directed to the Company at the Company's address set forth above, duly
executed by the Optionee, specifying the number of shares being purchased and
accompanied by either (i) cash or check payable to the order of the Company in
full payment of the Purchase Price for the number of Shares being purchased, or
(ii) certificate(s), duly endorsed for transfer to the Company with signature
guaranteed, for that number of previously acquired Shares having an aggregate
fair market value as determined in accordance with the Plan ("Fair Market
Value"), on the date of exercise equal to the full Purchase Price for the number
of Shares being purchased, or (iii) a combination of (i) and (ii).
The Option shall not be exercisable at any time in an amount less than
100 Shares (or the remaining Shares then covered by and purchasable under the
Option if less than 100 Share).
4. Term of Options; Exercisability.
A. Term.
1. This Option shall expire on the tenth anniversary
of the date of this agreement (the "Expiration Date"), subject to earlier
termination as herein provided.
2. Except as otherwise provided in this Section 4, if
the Optionee's employment by the Company and its subsidiaries is terminated for
any reason, the Option shall terminate on the earlier of (i) three months after
the date the Optionee's employment by the Company and its subsidiaries is
terminated, or (ii) the date on which the Option expires by its terms.
3. If the Optionee's employment is terminated by the
Company and its subsidiaries for cause (as such term is defined in any
employment agreement or similar agreement between the Optionee and the Company
or, if there is no such employment agreement, or the employment agreement does
not have provisions relating to termination for cause, as such term is defined
by the law of the State of New York), the Option will to the extent not
terminated be deemed to have terminated on the date immediately preceding the
date the Optionee's employment is terminated by the Company and its
subsidiaries.
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4. If the Optionee's employment is terminated by the
Company and its subsidiaries because the Optionee has become disabled (as
defined in any employment agreement or similar agreement between the Optionee
and the Company or within the meaning of Section 22(e)(3) of the Code), the
Option shall termi nate on the earlier of (i) one year after the date the
Optionee's employment by the Company and its subsidiaries is terminated, or (ii)
the date on which the Option expires by its terms.
5. In the event of the death of the Optionee, the
Option shall terminate on the earlier of (i) one year after the date of death,
or (ii) the date on which the Option expires by its terms.
B. Exercisability.
1. Except as provided in this Section 4.B., if the
Optionee's employment by the Company and its subsidiaries is terminated, the
Option shall be exercisable only to the extent that the right to purchase Shares
under the Option is exercisable on the date the Optionee's employment by the
Company and its subsidiaries is terminated.
2. If the Optionee's employment is terminated by the
Company and its subsidiaries because the Optionee has become disabled (as such
term is defined in any employment agreement between the Optionee and the Company
or, if there is no such employment agreement, or the employment agreement does
not contain provisions relating to termination for disability, as determined by
the Board of Directors of the Company), the Option shall be immediately
exercisable as to the full number of Shares covered by the Option, whether or
not under the provisions of Section 2 hereof the Option was otherwise
exercisable as of the date of disability.
3. In the event of the death of the Optionee, the
Option granted to the Optionee shall be immediately exercisable as to the full
number of Shares covered thereby, whether or not under the provisions of Section
2 hereof the Optionee was entitled to do so at the date of his death, by the
executor, administrator or personal representative of the Optionee, or by any
person or persons who acquired the right to exercise such Option by bequest or
inheritance or by reason of the death of the Optionee.
5. Non-Transferability.
The right of the Optionee to exercise the Option shall not be
assignable or transferable by the Optionee otherwise than by will or the laws of
descent and distribution, and the Option may be exercised during the lifetime of
the Optionee only by the Optionee.
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The Option shall be null and void and without effect upon the bankruptcy of the
Optionee or upon any attempted assignment or transfer, except as hereinabove
provided, including without limitation, any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
6. Representation Letter and Investment Legend.
A. Notwithstanding the provisions of Sections 3 and 4 hereof,
the Option cannot be exercised, and the Company may delay the issuance of the
Shares covered by the exercise of the Option and the delivery of a certificate
for the Shares, until one of the following conditions shall be satisfied:
1. The Shares with respect to which the Option has
been exercised are at the time of the issuance of the Shares effectively
registered or qualified under applicable federal and state securities acts now
in force or as hereafter amended; or
2. Counsel for the Company shall have given an
opinion, which opinion shall not be unreasonably conditioned or withheld, that
the issuance of the Shares is exempt from registration and qualification under
applicable federal and state securities acts now in force or as hereafter
amended.
B. In the event that for any reason the Shares to be issued
upon exercise of the Option shall not be effectively registered under the
Securities Act of 1933, as amended (the "1933 Act"), upon any date on which the
Option is exercised in whole or in part, the Optionee shall give a written
representation to the Company in the form attached hereto as Exhibit A and the
Company shall place an "investment legend," so-called, as described in Exhibit
A, upon any certificate for the Shares issued by reason of such exercise. In the
event that the Company shall, nevertheless, deem it necessary or desirable to
register under the 1933 Act or other applicable statutes the Shares with respect
to which the Option shall have been exercised, or to qualify the Shares for
exemption from the 1933 Act or other applicable statutes, then the Company may
take such action and may require from the Optionee such information in writing
for use in any registration statement, supplementary registration statement,
prospectus, preliminary prospectus, offering circular or any other document that
is reasonably necessary for such purpose and may require reasonable indemnity to
the Company and its officers and directors from the Optionee against all losses,
claims, damages and liabilities arising from such use of the information so
furnished and caused by
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any untrue statement of any material fact therein or caused by the omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made.
C. The Company shall be under no obligation to qualify the
Shares or to cause a registration statement or a post-effective amendment to any
registration statement to be prepared for the purposes of covering the issue of
the Shares or to cause the issuance of the Shares to be exempt from registration
and qualification under applicable federal and state securities acts now in
force or as hereinafter amended, except as otherwise agreed to by the Company in
writing in its sole discretion and, accordingly, the Company may delay the
issuance of the Shares covered by the exercise of the Option and the delivery of
a certificate for the Shares until the Company shall have determined that all
conditions to the issuance of the Shares shall have been satisfied.
7. Adjustment in and Changes in Common Stock.
Subject to the Plan, if the outstanding shares of the Common Stock are
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of any reorganization, recapitalization,
reclassification, stock split, combination of shares, or dividends payable in
capital stock, appropriate and equitable adjustment shall be made by the Board
of Directors of the Company, in its sole discretion, in the number and kind of
shares as to which the Option or portion thereof then unexercised shall be
exercisable. Such adjustment in the Option shall be made without change in the
total price applicable to the unexercised portion of such the Option and with a
corresponding adjustment in the Option price per share.
8. Effect on Other Rights.
This Agreement shall in no way affect the Optionee's participation in
or benefits under any other plan or benefit program maintained or provided by
the Company. Nothing in this Agreement shall be construed to give the Optionee
any right to any additional options other than in the sole discretion of the
Board of Directors of the Company or to confer on the Optionee any right to
continue in the employ of the Company or any subsidiary thereof or to be
evidence of any agreement or understanding, express or implied, that the Company
will employ the Optionee in any particular position or at any particular rate of
remuneration, or for any particular period of time or to interfere in any way
with the right of the Company or a subsidiary thereof (or the right of the
Optionee) to terminate the employment of the Optionee at any
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time, with or without cause, notwithstanding the possibility that the Option may
thereby be terminated entirely.
9. Rights as a Shareholder.
The Optionee shall have no rights as a shareholder with re spect to any
Shares which may be purchased by exercise of the Option until (x) the Option
shall have been exercised with respect thereto (including payment to the Company
of the Purchase Price), and (y) the earlier to occur of (i) delivery by the
Company to the optionee of a certificate therefor or (ii) the date on which the
Company is required to deliver a certificate pursuant to the Plan and this
Agreement. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such certificate is issued or required to be issued in accordance
with the Plan.
10. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY THEREIN WITHOUT
REFERENCE TO CONFLICT OF LAWS PRINCIPLES.
11. Withholding Taxes.
Whenever Shares are to be issued upon exercise of the Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all federal, state and local withholding tax
requirements, if any, prior to the delivery of any certificate or certificates
for such Shares. The Company may agree to permit the Optionee to withhold Shares
purchased upon exercise of this Option to satisfy the above-mentioned
withholding requirement.
12. Headings.
The headings contained in this Agreement are for convenience of
reference only and in no way define, limit or describe the scope or intent of
this Agreement or in any way affect this Agreement.
13. Binding Effect.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and assigns.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed, and the Optionee has hereunto set his or her hand and seal, all as of
the day and year first above written.
INTERNATIONAL SPORTS WAGERING INC.
By:___________________________
Title:
OPTIONEE:
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Name:
Rev. 2/14/97
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EXHIBIT A
TO STOCK OPTION AGREEMENT
Date:______________________
International Sports Wagering Inc.
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▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I hereby elect to purchase ____ shares of the Common Stock, no par
value per share, of International Sports Wagering Inc. (the "Company") under the
option granted to me pursuant to the Incentive Stock Option Agreement, dated as
of _______________, 199_, under the Company's 1996 Stock Option Plan.
Enclosed is [cash] [a check] in the amount of $______.___ [______
shares of the Company's Common Stock] in full payment of the shares being
purchased ($_______________ per share x ____ shares).
Please deliver certificates representing the shares being purchased to
me at:
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I hereby acknowledge that I have been informed as follows:
1. The shares of common stock of the Company to be issued to me
pursuant to the exercise of said option have not been registered under the
Securities Act of 1933, as amended (the "1933 Act"), and accordingly, must be
held indefinitely unless such shares are subsequently registered under the 1933
Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144, if
applicable, under the 1933 Act can be made only after the
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holding period and in limited amounts in accordance with the terms and
conditions provided by that Rule, and in any sale to which that Rule is not
applicable, registration or compliance with some other exemption under the 1933
Act will be required.
3. The Company is under no obligation to me to register the shares or
to comply with any such exemptions under the 1933 Act.
4. The availability of Rule 144, if applicable, is dependent upon
adequate current public information with respect to the Company being available
and, at the time that I may desire to make a sale pursuant to the Rule, the
Company may neither wish nor be able to comply with such requirement.
In consideration of the issuance of certificates for the shares to me,
I hereby represent and warrant that I am acquiring such shares for my own
account for investment, and that I will not sell, pledge, transfer or otherwise
dispose of such shares in the absence of an effective registration statement
covering the same, except as permitted by the provisions of Rule 144, if
applicable, or some other applicable exemption under the 1933 Act. In view of
this representation and warranty, I agree that there may be affixed to the
certificates for the shares to be issued to me, and to all certificates issued
hereafter representing such shares (until in the opinion of counsel, which
opinion must be reasonably satisfactory in form and substance to counsel for the
Company, it is no longer necessary or required) a legend as follows:
"The shares of common stock represented by this certifi cate have not
been registered under the Securities Act of 1933, as amended (the
"Act"), and were acquired by the registered holder, pursuant to a
representation and warranty that such holder was acquiring such shares
for his or her own account and for investment, with no intention to
transfer or dispose of the same, in ▇▇▇▇▇ tion of the registration
requirements of the Act. These shares may not be sold, pledged,
transferred or otherwise disposed of in the absence of an effective
registration statement under the Act, or an opinion of counsel, which
opinion is reasonably satisfactory to counsel to the Company, to the
effect that registration is not required under the Act."
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I further agree that the Company may place a stop order with its
Transfer Agent, prohibiting the transfer of such shares, so long as the legend
remains on the certificates representing the shares.
Very truly yours,
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Optionee:
Rev. 2/14/97
