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EXHIBIT 4.2
SKYMALL, INC.
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") made as of the ____ day of
__________, 1998, by and between SkyMall, Inc., a Nevada corporation (the
"Company"), and _________________________ ("Optionee").
RECITALS
The Company, through its Board of Directors (the "Board"), has determined
that in order to attract and retain key personnel for positions of substantial
responsibility, to provide additional incentive to employees of the Company and
to promote the success of the Company's business, it must offer a compensation
package that provides key employees of the Company a chance to participate
financially in the success of the Company by developing an equity interest in
it.
The Company has adopted the 1994 Stock Option Plan, as amended (the
"Plan").
By this Agreement, the Company and the Optionee desire to establish the
terms upon which the Company is willing to grant to the Optionee, and upon which
the Optionee is willing to accept from the Company an option to purchase shares
of the Company's $.001 par value common stock (the "Common Stock").
AGREEMENT
The parties agree as follows:
1. Grant of Option.
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Subject to the terms and conditions set forth herein, the Company grants to
Optionee an incentive stock option (the "Option") to purchase __________ shares
of its common stock (the "Option Shares") pursuant to the Plan. The grant date
(the "Grant Date") of the Option shall be the date of this Agreement. The Option
granted hereunder shall be an incentive stock option, as defined in Section 422
of the Internal Revenue Code.
2. Time of Exercise.
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The Option may be exercised as follows:
Elapsed Number of Cumulative Percentage of Shares Subject to
Years After Grant Date Option as to Which Option May be Exercised
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None None
One 33%
Two 66%
Three 100%
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3. Method of Exercise.
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The Option shall be exercised by delivery of the notice in the form
attached hereto as Exhibit A (the "Notice") to the Secretary of the Company
together with a check in payment of the Option price for the number of Option
Shares specified and including applicable federal and state withholding taxes.
Optionee may pay for the Option Shares through delivery of SkyMall, Inc. Common
Stock with a fair market value equal to the Exercise Price (as defined below)
including applicable federal and state withholding taxes. Options may be
exercised only with respect to whole shares.
4. Exercise Price.
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The price to be paid for the Option Shares (the "Exercise Price") shall be
$______ share, which was not less than the fair market value of the Option
Shares as determined by the Board or a committee of the Board (the "Committee")
on the Grant Date, or, in the case of an option granted to an employee who, on
the Grant Date, owns ten percent (10%) or more of the Common Stock, as such
amount is calculated under Section 422A(b)(6) of the Internal Revenue Code, as
amended ("Code"), not less than one hundred and ten percent (110%) of the fair
market value of the Option Stock.
5. Termination of Option.
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Except as provided in Section 9.2, the Option, to the extent not exercised,
shall terminate upon the first to occur of:
(a) termination of employment of the Optionee; provided, however, that the
Option, to the extent exercisable on the date of termination of employment, may
be exercised for a period of ninety days after termination of employment if the
termination is for any reason other than termination of employment by Company
for cause; or
(b) ten years from the date of this Agreement.
As used herein, "cause" shall mean that in the course of the Optionee's
employment, (i) Optionee engages in willful misconduct, dishonesty or reckless
disregard of Optionee's responsibilities, or (ii) Optionee is convicted of a
felony.
6. Reduction in Optioned Shares.
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The number of Option Shares to which an Optionee is entitled shall be
reduced by the number of Option Shares purchased by Optionee.
7. Non-Transferability of Option.
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This Option is not transferable by the Optionee, but in the event of
Optionee's death may be exercised for a period of ninety days from the date of
the Optionee's death by Optionee's personal representative to the extent it
would have been exercisable by Optionee.
8. Rights Prior to Exercise.
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The Optionee shall have no rights as a shareholder with respect to any
Option Shares until the date of issuance of a share certificate to the Optionee
for such Option Shares.
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9. Adjustments.
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9.1. In the event of any stock split, reverse stock split, stock divided,
combination or reclassification of shares of Common Stock or any other increase
or decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company, the number and kind of Option Shares
(including any Option outstanding after termination of employment or death) and
the Exercise Price per share shall be proportionately and appropriately adjusted
without any change in the aggregate Exercise Price to be paid therefor upon
exercise of the Option.
9.2. Upon the sale of all or substantially all of the assets of the
Company, or a merger pursuant to which (i) the Company is not the surviving
corporation (other than a merger that is only a change in form), or (ii)
substantially all of the officers of the Company immediately prior to the merger
do not continue to be officers immediately after the merger, all outstanding
Options shall be immediately exercisable without regard to the vesting
provisions of Section 2. Each Optionee shall be given written notice of a period
of no less than thirty days during which each Optionee may exercise the
outstanding Option. If an Option is not exercised within such period, the Option
shall terminate.
10. Notices.
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Any notice to be given under the terms of the Agreement ("Notice") shall be
addressed to the Company in care of its General Counsel at 0000 Xxxx Xxxx
Xxxxxx, Xxxxxxx, Xxxxxxx 00000, or at its then current corporate headquarters.
Notice to be given to the Optionee shall be addressed to him or her or at his or
her then current residential address as appearing on the payroll records.
Notice shall be deemed duly given when enclosed in a properly sealed
envelope and deposited by certified mail, return receipt requested, in a post
office or branch post office regularly maintained by the United States
Government.
11. Notification Of Disposition Of Shares.
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The Optionee hereby acknowledges that a disposition of shares of Common
Stock acquired upon the exercise of the Option within two (2) years from the
Grant Date or within one (1) year after the transfer of such shares of Common
Stock to him or her would result in detrimental income tax consequences to the
Optionee. The Optionee hereby agrees to promptly notify the Company of any
disposition of shares of Common Stock within either of the above time
limitations.
12. Modification Of Agreement.
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The Board or the Committee may at any time and from time to time direct
that the Agreement be modified in such respects deemed advisable in order that
the Option shall constitute an incentive stock option pursuant to Section 422A
of the Code.
13. Transferability of Option.
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The Option shall not be transferable by the Optionee otherwise than by the
will or the laws of descent and distribution, or to the extent permitted by Code
422 and may be exercised during the life of the Optionee only by the Optionee.
14. Not a Contract of Employment.
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Nothing contained in the Plan or in any Option Agreement executed pursuant
to the Plan shall be deemed to confer upon any individual to whom an Option may
be granted hereunder any right to remain in the employ or service of the Company
or a parent or subsidiary corporation of the Company.
15. Provisions Of Plan.
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The provisions of the Plan are expressly incorporated herein and made an
integral part hereof as though set forth herein. Capitalized terms not otherwise
defined herein shall have the same meaning as ascribed to them in the Plan.
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16. Execution.
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The parties hereto have executed this Agreement effective as of the date
first above written.
SkyMall, Inc., a Nevada corporation
By:
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Xxxxxx X. Xxxxxxx, President
OPTIONEE:
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EXHIBIT A
NOTICE OF EXERCISE
OF
STOCK OPTION
I hereby exercise the Option granted to me by SkyMall, Inc. ("Company")
under the 1994 Stock Option Plan, as amended (the "Plan") and notify you of my
desire to purchase ______ shares of Common Stock of the Company.
Enclosed is:
(a) my check in the amount of $____________ in full payment for such shares
and the federal and state withholding taxes due as a result of such purchase; or
(b) a certificate for, or my binding and irrevocable request that you
withhold from the shares to be delivered pursuant to this Notice, shares of
Common Stock of the Company having a fair market value on the date of exercise
equal to the full Exercise Price for the shares purchased under this Notice and
the federal and state withholding taxes due as a result of such purchase.
OPTIONEE:
DATE:
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