EXHIBIT 4.2
CYBEROPTICS CORPORATION
STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of the 12th day of January, 1998 by
and between CyberOptics Corporation, a Minnesota corporation ("the Company"),
and Xxxxxx X. Xxxxx ("Employee").
WITNESSETH, THAT:
WHEREAS, the Company wishes to grant this stock option to
Employee.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto hereby agree as follows:
1. Definitions
For all purposes of this Option, the following terms shall
have the meanings ascribed to them below:
(a) An "Adverse Change" in Employee's employment shall mean
the occurrence of any of the following events:
(i) the assignment to Employee of employment
responsibilities which are not of comparable responsibility
and status as the employment responsibilities held by
Executive immediately prior to a Change in Control;
(ii) a reduction by the Company in Employee's
compensation (including targeted bonus compensation) as in
effect immediately prior to a Change in Control;
(iii) the Company's requiring Employee to be based
anywhere after a Change of Control other than within fifty
(50) miles of Employee's office location immediately prior to
a Change in Control, except for requirements of temporary
travel on the Company's business to an extent substantially
consistent with Employee's business travel obligations
immediately prior to a Change in Control; or
(d) except to the extent otherwise required by
applicable law, the failure by the Company to continue in
effect after a Change in Control any benefit or compensation
plan, stock ownership plan, stock purchase plan, bonus plan,
life insurance plan, health-and-accident plan or disability
plan in which Employee is participating immediately prior to a
Change in Control (or plans providing Employee with
substantially similar benefits), the taking of any action by
the Company which would adversely affect Employee's
participation in, or materially reduce Employee's benefits
under, any of such plans or deprive Employee of any material
fringe benefit enjoyed by Employee immediately prior to such
Change in Control, or the failure by the Company to provide
Employee with the number of paid vacation days to which
Employee is entitled immediately prior to such Change in
Control in accordance with the Company's vacation policy as
then in effect.
(b) "Change in Control" shall mean:
(i) a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), whether
or not the Company is then subject to such reporting
requirement;
(ii) the public announcement (which, for purposes of
this definition, shall
include, without limitation, a report filed pursuant to
Section 13(d) of the Exchange Act) by the Company or any
"person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) that such person has become the "beneficial
owner" (as defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of the
Company representing 40% or more of the combined voting power
of the Company's then outstanding securities;
(ii) the Continuing Directors cease to constitute a
majority of the Company's Board of Directors;
(iii) the shareholders of the Company approve (x) any
consolidation or merger of the Company in which the Company is
not the continuing or surviving corporation or pursuant to
which shares of Company stock would be converted into cash,
securities or other property, other than a merger of the
Company in which shareholders immediately prior to the merger
have the same proportionate ownership of stock of the
surviving corporation immediately after the merger; (y) any
sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all
of the assets of the Company; or (z) any plan of liquidation
or dissolution of the Company; or
(iv) the majority of the Continuing Directors
determine in their sole and absolute discretion that there has
been a change in control of the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "Company" shall mean CyberOptics Corporation, a Minnesota
corporation, and with respect to any reference to Employee's employer, any
subsidiary of CyberOptics Corporation.
(e) "Common Stock" shall mean the common stock, no par value,
of the Company.
(f) "Continuing Director" shall mean any person who is a
member of the Board of Directors of the Company, while such person is a member
of the Board of Directors, who is not an Acquiring Person (as defined below) or
an Affiliate or Associate (as defined below) of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate, and
who (x) was a member of the Board of Directors on the effective date of this
Option or (y) subsequently becomes a member of the Board of Directors, if such
person's initial nomination for election or initial election to the Board of
Directors is recommended or approved by a majority of the Continuing Directors.
For purposes of this subparagraph (ii), "Acquiring Person" shall mean any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
who beneficially owns (as defined in Rule 13d-3 of the Exchange Act), directly
or indirectly, securities of the Company representing 40% or more of the
combined voting power of the Company's then outstanding securities, but shall
not include the Company, any subsidiary of the Company or any employee benefit
plan of the Company or of any subsidiary of the Company or any entity holding
shares of Common Stock organized, appointed or established for, or pursuant to
the terms of, any such plan; and "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 promulgated under the
Exchange Act.
(g) "Disabled" or "Disability" shall have the meaning
attributed to it by Section 105(d)(4) of the Code or any successor section.
(h) "Option" shall mean the right to purchase Common Stock of
the Company represented by this Agreement.
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(i) "Resign" or "Resignation" shall mean the voluntary
termination by Employee of employment with the Company, unless the Company
agrees, through its Board of Directors, that such voluntary termination shall
not constitute a resignation for purposes of this Option.
2. Grant of Option
The Company hereby grants to Employee, on the date set forth
above and at the times and subject to the conditions set forth below, the right
and option to purchase all or any part of an aggregate of 100,000 shares of
Common Stock at the price of $19.50 per share on the terms and conditions set
forth herein. This Option is not intended to be an incentive stock option within
the meaning of Section 422 of the Code.
3. Duration and Exercisability
(a) Except as provided in paragraph 3(b) or 4(b) below, this
Option may not be exercised by Employee until the expiration of one (1) year
from the date that Employee commences full-time employment with the Company (the
"Commencement Date") and shall become exercisable on the first anniversary of
the Commencement Date with respect to 25% of the shares subject hereto and with
respect to an additional cumulative 25% of the shares subject to this Option on
the anniversary of the Commencement Date in each year thereafter until the
fourth anniversary of the Commencement Date when this Option shall be
exercisable in full. This Option shall terminate in all events five (5) years
after the date of grant.
(b) Notwithstanding Section 3(a), the exercisability of this
Option shall be accelerated, and this Option shall become exercisable with
respect to all of the shares subject to this Option, in the event of an Adverse
Change in Employee's employment after a Change In Control.
(c) During the lifetime of Employee, the Option shall be
exercisable only by Employee and shall not be assignable or transferable by
Employee, other than by will or the laws of descent and distribution.
4. Effect of Termination of Employment
(a) In the event that Employee (i) shall cease to be employed
by the Company after the Commencement Date and prior to a Change of Control for
any reason other than Employee's gross and willful misconduct or Employee's
death or Disability, or (ii) shall Resign after a Change of Control and prior to
an Adverse Change, then Employee shall have the right to exercise the Option at
any time within three months after such termination of employment or Resignation
to the extent of the full number of shares Employee was entitled to purchase
under the Option on the date of termination or resignation, subject to the
condition that no Option shall be exercisable after the expiration of the term
of the option.
(b) In the event that Employee employment with the Company is
terminated by the Company after the Commencement Date and within two years after
a Change of Control, Employee shall have the right to exercise the Option at any
time within three months after such termination of employment with respect to
the full number of shares subject to this Option.
(c) In the event that Employee shall cease after the
Commencement Date to be employed by the Company by reason of Employee's gross
and willful misconduct during the course of employment, including but not
limited to wrongful appropriation of the Company funds or the commission of a
gross misdemeanor or felony, the option shall be terminated as of the date of
the misconduct.
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(d) If Employee shall die while in the employ of the Company
or within three months after termination of employment for any reason other than
gross and willful misconduct or become Disabled while in the employ of the
Company and Employee shall not have fully exercised the option, such option may
be exercised at any time within twelve months after Employee's death or
Disability by the personal representatives or administrators, or if applicable
guardian, of Employee or by any person or persons to whom the option is
transferred by will or the applicable laws of descent and distribution, to the
extent of the full number of shares Employee was entitled to purchase under the
option on the date of death, Disability or termination of employment, if
earlier, and subject to the condition that no option shall be exercisable after
the expiration of the term of the option.
5. Manner of Exercise
(a) The option can be exercised only by Employee or other
proper party by delivering within the option period written notice to the
Company at its principal office. The notice shall state the number of shares as
to which the option is being exercised and be accompanied by payment in full of
the option price for all shares designated in the notice.
(b) Employee may pay the option price by check (bank check,
certified check or personal check) or with the approval of the Company by
delivering to the Company for cancellation Common Stock of the Company with a
fair market value equal to the option price; provided, however, that Employee
shall not be entitled to tender shares of the Common Stock pursuant to
successive, substantially simultaneous exercises of this Option or any other
stock option of the Company. For these purposes, the fair market value of the
Common Stock shall be as reasonably determined by the Company but shall not be
less than, if applicable, (i) the closing price of the stock as reported for
composite transactions, if the Common Stock is then traded on a national
securities exchange, (ii) the last sale price if the Common Stock is then quoted
on the NASDAQ National Market System or (iii) the average of the closing
representative bid and asked prices of the Common Stock as reported on NASDAQ on
the date as of which fair market value is being determined.
6. Miscellaneous
(a) This Agreement shall not confer on Employee any right with
respect to employment or continuance of employment by the Company, nor will it
interfere in any way with the right of the Company to terminate such employment
at any time. Employee shall have none of the rights of a shareholder with
respect to shares subject to this Option until such shares shall have been
issued to Employee upon exercise of this Option.
(b) The exercise of all or any parts of this Option shall only
be effective at such time that the sale of Common Stock pursuant to such
exercise will not violate any state or federal securities or other laws.
(c) If Employee exercises all or any portion of the Option
subsequent to any change in the number or character of the Common Stock (through
merger, consolidation, reorganization, recapitalization, stock dividend or
otherwise), Employee shall then receive for the aggregate price paid by Employee
on such exercise of the Option, the number and type of securities or other
consideration which Employee would have received if such Option had been
exercised prior to the event changing the number or character of outstanding
shares.
(d) The Company shall at all times during the term of the
Option reserve and keep available such number of shares as will be sufficient to
satisfy the requirements of this Agreement.
(e) In order to provide the Company with the opportunity to
claim the benefit of any
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income tax deduction which may be available to it upon the exercise of the
Option, and in order to comply with all applicable federal or state income tax
laws or regulations, the Company may take such action as it deems appropriate to
insure that, if necessary, all applicable federal or state payroll, withholding,
income or other taxes are withheld or collected from Employee. Employee may
elect to satisfy his federal and state income tax withholding obligations upon
exercise of the Option by (i)having the Company withhold a portion of its common
shares otherwise to be delivered upon exercise of the Option having a fair
market value equal to the amount of federal and state income tax required to be
withheld upon such exercise, or (ii)delivering to the Company shares of Common
Stock other than the shares issuable upon exercise of the Option with a fair
market value equal to such taxes.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above written.
CYBEROPTICS CORPORATION
By /s/ Xxxxxx X. Case
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Its Founder
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/s/ Xxxxxx X. Xxxxx
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Employee
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