Exhibit 10.39
ASPECT MEDICAL SYSTEMS, INC.
Stock Option Agreement
Granted Under 2001 Stock Incentive Plan
1. Grant of Option.
This agreement evidences the grant on the Grant Date (as defined on
Schedule A attached hereto) by Aspect Medical Systems, Inc., a Delaware
corporation (the "Company"), to an employee of the Company (the "Participant"),
of an option to purchase, in whole or in part, on the terms provided (i) herein;
(ii) on Schedule A attached hereto; and (iii) in the Company's 2001 Stock
Incentive Plan (the "Plan"), shares (the "Shares") of common stock, $0.01 par
value per share, of the Company ("Common Stock"). Unless earlier terminated,
this option shall expire on the Final Exercise Date (as defined on Schedule A
attached hereto).
It is intended that the option evidenced by this agreement shall be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended, and any regulations promulgated thereunder (the "Code").
Except as otherwise indicated by the context, the term "Participant," as used in
this option, shall be deemed to include any person who acquires the right to
exercise this option validly under its terms.
2. Vesting Schedule.
This option will become exercisable according to the vesting schedule set
forth on Schedule A attached hereto. The number of shares exercisable determined
in accordance with Schedule A shall be rounded to the next highest whole share,
but in no event shall such rounding increase the total number of shares for
which this Option is exercisable. The right of exercise shall be cumulative so
that to the extent the option is not exercised in any period to the maximum
extent permissible it shall continue to be exercisable, in whole or in part,
with respect to all shares for which it is vested until the earlier of the Final
Exercise Date or the termination of this option under Section 3 hereof or the
Plan.
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this option shall be in
writing, signed by the Participant, and received by the Company at its principal
office, accompanied by this agreement, and payment in full in the manner
provided in the Plan. The Participant may purchase less than the number of
shares covered hereby, provided that no partial exercise of this option may be
for any fractional share or for fewer than ten whole shares.
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(b) Continuous Relationship with the Company Required. Except as otherwise
provided in this Section 3, this option may not be exercised unless the
Participant, at the time he or she exercises this option, is, and has been at
all times since the Grant Date, an employee, officer or director of, or
consultant or advisor to, the Company or any parent or subsidiary of the Company
as defined in Section 424(e) or (f) of the Code (an "Eligible Participant").
(c) Termination of Relationship with the Company. If the Participant
ceases to be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
three months after such cessation (but in no event after the Final Exercise
Date), provided that this option shall be exercisable only to the extent that
the Participant was entitled to exercise this option on the date of such
cessation. Notwithstanding the foregoing, if the Participant, prior to the Final
Exercise Date, violates the non-competition or confidentiality provisions of any
employment contract, confidentiality and nondisclosure agreement or other
agreement between the Participant and the Company, the right to exercise this
option shall terminate immediately upon such violation.
(d) Exercise Period Upon Death or Disability. If the Participant dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
the Final Exercise Date while he or she is an Eligible Participant and the
Company has not terminated such relationship for "cause" as specified in
paragraph (e) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant by the
Participant (or in the case of death by an authorized transferee), provided that
this option shall be exercisable only to the extent that this option was
exercisable by the Participant on the date of his or her death or disability,
and further provided that this option shall not be exercisable after the Final
Exercise Date.
(e) Discharge for Cause. If the Participant, prior to the Final Exercise
Date, is discharged by the Company for "cause" (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of such
discharge. "Cause" shall mean willful misconduct by the Participant or willful
failure by the Participant to perform his or her responsibilities to the Company
(including, without limitation, breach by the Participant of any provision of
any employment, consulting, advisory, nondisclosure, non-competition or other
similar agreement between the Participant and the Company), as determined by the
Company, which determination shall be conclusive. The Participant shall be
considered to have been discharged for "Cause" if the Company determines, within
30 days after the Participant's resignation, that discharge for cause was
warranted.
4. Withholding.
No Shares will be issued pursuant to the exercise of this option unless
and until the Participant pays to the Company, or makes provision satisfactory
to the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option.
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5. Nontransferability of Option.
This option may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the Participant.
6. Disqualifying Disposition.
If the Participant disposes of Shares acquired upon exercise of this
option within two years from the Grant Date or one year after such Shares were
acquired pursuant to exercise of this option, the Participant shall notify the
Company in writing of such disposition.
7. Provisions of the Plan.
This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with, or prior to, this option.
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Schedule A to Incentive Stock Option Agreement
Participant:
Grant Date:
Vesting Start Date:
Final Exercise Date:
Shares:
Exercise Price:
Capitalized terms used in this Schedule A and not otherwise defined shall have
the respective meanings ascribed to them in the Incentive Stock Option Agreement
of which this Schedule A is a part (the "Agreement").
Vesting Schedule
This option shall not be exercisable for any Shares prior to the date six months
after the vesting start date. See the vesting schedule below.
Except as otherwise provided in the Agreement, this option may be exercised
prior to the Final Exercise Date in installments as to not more than the number
of shares and during the respective installment periods as follows:
Portion of
Exercise Period Shares Exercisable
--------------- ------------------
Prior to [six months after vesting start date] 0
[six months after vesting start date] 6/48
The Last Day of Each Month
For the Next 42 Months 1/48
By your signature and the Company's signature below, you and the Company agree
that this option is granted under and governed by the terms and conditions of
the Company's 2001 Stock Incentive Plan and the Agreement.
IN WITNESS WHEREOF, the Company has caused this option to be executed under its
corporate seal by its duly authorized officer. This option shall take effect as
a sealed instrument.
ASPECT MEDICAL SYSTEMS, INC.
Dated: By:
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Xxxxxxx Xxxxxx
Chief Financial Officer
The undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof. The undersigned hereby acknowledges receipt of a copy of the
Company's 2001 Stock Incentive Plan.
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Social Security Number
Address:
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