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Exhibit 4.5
ROCKFORD CORPORATION
INCENTIVE
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") made as of the day of , 1994, by
and between Rockford Corporation ("Corporation") and _____________ ("Optionee").
INTRODUCTION
Optionee is a valuable employee of the Corporation and the Corporation
considers it in its best interests that Optionee be given an inducement to
acquire a proprietary interest in the Corporation.
AGREEMENTS
The parties agree as follows:
1. Grant of Option.
The Corporation grants to Optionee the option to purchase 2,500 shares of
its common stock ("Stock") at a price of $6.50 per share, pursuant to the
Rockford Corporation 1994 Stock Option Plan ("Plan"). This Option is an
"incentive option" as that term is defined in Section 422 of the Internal
Revenue Code of 1986.
2. Time of Exercise.
The Option shall be exercisable on the Grant Date (as defined in the
Plan), as to 25% of the shares. Thereafter, an additional 25% of the original
number of shares subject to the Option may be purchased after the completion of
each additional one year of employment measured from the Grant Date. After three
years of employment from the Grant Date, the Option shall be fully exercisable.
Notwithstanding the preceding exercisability schedule, if at any time before the
Option becomes fully exercisable (a) the Corporation's shares become registered
under the Securities Act of 1933, the Option shall become fully exercisable upon
the effective date of the registration and (b) the Corporation enters into an
agreement to sell all or substantially all of the Corporation's shares or
assets, the Option shall become fully exercisable upon the date of Closing of
the agreement to sell. An agreement for merger or consolidation will be
considered an "agreement to sell" under this section if, after the merger,
Corporation's shareholders do not continue to hold a controlling interest in the
surviving corporation.
3. Method of Exercise.
The Option shall be exercised by delivery of the notice in the form
attached as Exhibit A to the Secretary of the Corporation together with a check
in payment of the Option price for the number of shares specified plus
applicable federal and state withholding taxes. At the discretion of the Board,
Optionee may pay for the Stock through delivery of Stock with a fair market
value equal to the Option price. Options may be exercised only with respect to
whole shares. Fair market value shall be determined in good faith by the Board
of Directors of the Corporation.
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4. Termination of Option.
The Option, to the extent not exercised, shall terminate upon the first to
occur of:
(a) termination of employment of Optionee; provided, however, that
the Option, to the extent exercisable on the date of termination of employment,
may be exercised by his or her personal representative for a period of ninety
days after termination of employment on account of death; or
(b) ten years from the date of this Agreement.
5. Non-Transferability of Option.
Except as provided in Section 4(a), the Option is not transferable by the
Optionee.
6. Rights Prior to Exercise.
The Optionee shall have no rights as a shareholder with respect to any
Stock issued to the Optionee as a result of the exercise of an Option under this
Agreement and any Stock owned by the Optionee as a result of Stock splits, Stock
dividends or otherwise on the Stock issued as a result of the exercise of an
Option under this Agreement until the date of issuance of a share certificate to
the Optionee for such Option Stock.
7. Restrictions on Stock.
Option Stock shall be subject to the following restrictions:
(a) During the period beginning with the Optionee's termination of
employment for any reason except death and ending six months thereafter, the
Corporation shall have the right to call any of the Option Stock from the then
current holder of the Option Stock at the purchase price equal to the fair
market value of the Stock as determined in good faith by the Board. If the
Optionee's employment is terminated by death, the Corporation's call option
shall expire nine months after the Optionee's death. If the Corporation calls
any of the Option Stock, the then current holder of the Option Stock shall
surrender such Stock, duly endorsed for transfer, upon payment of the purchase
price.
(b) Each Stock certificate issued for Option Stock shall bear a
legend evidencing the restrictions contained in this Section 7.
8. Repurchase in Certain Cases. If Optionee exercises any Options and
later terminates his or her employment and within one year thereafter engages in
any activities, directly or indirectly, either as a consultant, employee,
shareholder, partner or otherwise with any business that competes with the
Corporation, Optionee, upon demand of the Corporation at any time thereafter,
shall surrender to the Corporation for repurchase, all shares purchased on
exercise of Options under this Agreement. The repurchase price, payable in cash,
shall be the lesser of the price Optionee paid for the shares or the fair market
value of the shares, as determined by the Board in its discretion at the date of
repurchase.
9. Miscellaneous.
This Agreement is subject to all the provisions of the Rockford
Corporation 1994 Stock Option Plan as it may be amended from time to time.
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10. Execution.
The parties hereto have executed this Agreement on the dates show below.
ROCKFORD CORPORATION
By:
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President
OPTIONEE
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EXHIBIT A
NOTICE OF EXERCISE
OF
INCENTIVE STOCK OPTION
I hereby exercise the Option granted to me by Rockford Corporation
("Corporation") pursuant to the Stock Purchase Agreement and notify you of my
desire to purchase _________ shares of Stock of the Corporation.
Enclosed is:
(a) my check in the amount of $__________, in full payment
for such shares; 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 Stock of the Corporation having a fair market value on the date of
exercise equal to the full Option price for the shares purchased under this
notice and the federal and state withholding taxes due as a result of such
purchase.
I represent and warrant to the Corporation and agree as follows:
1. Information, Experience and Economic Ability. I have received a
copy of the Plan, and as an employee, I have access to information regarding the
Corporation and have been afforded the opportunity to ask questions and receive
additional information from the Corporation regarding the terms of an investment
in the Stock, and my requests for information have been satisfied. I have
business experience and knowledge adequate to evaluate the risks of an
investment in the Stock, and I can bear the economic risk of losing my entire
investment in the Stock and can afford to hold the Stock for an indefinite
period of time. I have adequate means of providing for my current needs and
personal contingencies and have no need for liquidity in the Stock for which I
am exercising the Option. My overall commitment to investments which are not
readily marketable is not disproportionate to my net worth, and my investment in
the Stock will not cause such overall commitments to become excessive. I
acknowledge that I have been advised to consult my tax and legal advisors
regarding my investment in the Stock.
2. Restrictions on Transfer. I acknowledge that there are substantial
restrictions on the transferability of the Stock under securities laws unless
they are registered or an exemption from such registration is available and
established to the satisfaction of the Corporation; that investors in the Stock
have no rights to require that the Stock be registered under federal or state
securities laws or to require the Corporation to make available the information
that would enable the Stock to be sold pursuant to Rule 144 under the Act; that
there may never be a public market for the Stock so that it may never be
possible for me to liquidate my investment in the Stock; and that the
certificates representing the Stock will bear a legend referring to the
foregoing transfer restrictions.
3. No Distribution. The Stock to be delivered pursuant to the exercise
of the Option is being acquired solely for my own account, and not with a view
to or for the resale, distribution, subdivision or fractionalization thereof.
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4. Accuracy of Representations. I understand that the Corporation will
have the right to reject this Notice of Exercise if it believes for any reason
that the undersigned is unsuitable to invest in the Stock under federal or state
securities laws; that the Corporation is relying upon the representations in
this notice in determining my suitability as an investor in the Stock; that I
would not be permitted to purchase the Stock if any representation or warranty
were known to be materially false; that a false representation may constitute a
violation of law; and that any person who suffers damage as a result of a false
representation may have a claim against me.
OPTIONEE
_______________________________
Dated _________________________
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ROCKFORD CORPORATION
NON-QUALIFIED
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") made as of the ____ day of
_________, 2000, by and between Rockford Corporation ("Corporation") and
_________________ ("Optionee").
INTRODUCTION
Optionee is a ___________ of the Corporation and the Corporation
considers it in its best interests that Optionee be given an inducement to
acquire a proprietary interest in the Corporation.
AGREEMENTS
The parties agree as follows:
1. Grant of Option.
The Corporation grants to Optionee the option to purchase ______ shares
of its common stock ("Stock") at a price of $10.50 per share, pursuant to the
Rockford Corporation 1994 Stock Option Plan ("Plan"). This Option is not an
"incentive option" as that term is defined in Section 422 of the Internal
Revenue Code of 1986.
2. Time of Exercise.
The Option shall be exercisable on the Grant Date (as defined in the
Plan), as to 25% of the shares. Thereafter, an additional 25% of the original
number of shares subject to the Option may be purchased after the completion of
each additional one year of employment measured from the Grant Date. After three
years of employment from the Grant Date, the Option shall be fully exercisable.
Notwithstanding the preceding exercisability schedule, if at any time before the
Option becomes fully exercisable (a) the Corporation's shares become registered
under the Securities Act of 1933, the Option shall become fully exercisable upon
the effective date of the registration and (b) the Corporation enters into an
agreement to sell all or substantially all of the Corporation's shares or
assets, the Option shall become fully exercisable upon the date of Closing of
the agreement to sell. An agreement for merger or consideration will be
considered an "agreement to sell" under this section if, after the merger,
Corporation's shareholders do not continue to hold a controlling interest in the
surviving corporation.
3. Method of Exercise.
The Option shall be exercised by delivery of the notice in the form
attached as Exhibit A to the Secretary of the Corporation together with a check
in payment of the Option price for the number of shares specified plus
applicable federal and state withholding taxes. At the discretion
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of the Board, Optionee may pay for the Stock through delivery of Stock with a
fair market value equal to the Option price, plus applicable federal and state
withholding taxes. Options may be exercised only with respect to whole shares.
Fair market value shall be determined in good faith by the Board of Directors of
the Corporation.
4. Termination of Option.
The Option, to the extent not exercised, shall terminate upon the
first to occur of:
(a) termination of the Optionee's services as a _________;
provided, however, that the Option, to the extent exercisable on the
date of termination of service as a _________, may be exercised by
Optionee or his or her personal representative for a period of ninety
days after termination on account of death; or
(b) ten years from the date of this Agreement.
5. Non-Transferability of Option.
Except as provided in Section 4(a), the Option is not transferable by
the Optionee.
6. Rights Prior to Exercise.
The Optionee shall have no rights as a shareholder with respect to any
Stock issued to the Optionee as a result of the exercise of an Option under this
Agreement and any Stock owned by the Optionee as a result of Stock splits, Stock
dividends or otherwise on the stock issued as a result of the exercises of an
Option under this Agreement ("Option Stock") until the date of issuance of a
share certificate to the Optionee for such Option Stock.
7. Restrictions on Stock.
Option Stock shall be subject to the following restrictions:
(a) During the period beginning with the termination of
service as a ________ for any reason except death and ending six months
thereafter, the Corporation shall have the right to call any of the
Option Stock from the then current holder of the Option Stock at the
purchase price equal to the fair market value of the Stock as
determined in good faith by the Board. If Optionee's service as a
________ is terminated by death, the Corporation's call option shall
expire nine months after the Optionee's death. If the corporation calls
any of the Option Stock, the then current holder of the Option Stock
shall surrender such Stock, duly endorsed for transfer, upon payment of
the purchase price.
(b) Each share certified issued for Option Stock shall bear a
legend evidencing the restrictions contained in this Section 7.
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8. Repurchase in Certain Cases. If Optionee exercises any Options and
later terminates his or her service as a ________ and within one year thereafter
engages in any activities, directly or indirectly, either as a consultant,
employee, shareholder, partner or otherwise with any business that competes with
the Corporation, Optionee, upon demand of the Corporation at any time
thereafter, shall surrender to the Corporation for repurchase, all shares
purchased on exercise of Options under this Agreement. The repurchase price,
payable in cash, shall be the lesser of the price Optionee paid for the shares
or the fair market value of the shares, as determined by the Board in its
discretion at the date of repurchase.
9. Miscellaneous.
This Agreement is subject to all the provisions of the Rockford
Corporation 1994 Stock Option Plan as it may be amended from time to time.
10. Execution.
The parties hereto have executed this Agreement on the date shown
below.
ROCKFORD CORPORATION
By:
_______________________
Chairman
OPTIONEE
By:
_______________________
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EXHIBIT A
NOTICE OF EXERCISE
OF
NON-QUALIFIED STOCK OPTION
I hereby exercise the Option granted to me by Rockford Corporation
("Corporation") pursuant to the Stock Option Agreement and notify you of my
desire to purchase _________ shares of Stock of the Corporation.
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 Stock of the Corporation having a fair market value on the date of
exercise equal to the full Option price for the shares purchased under this
notice and the federal and state withholding taxes due as a result of such
purchase.
I represent and warrant to the Corporation and agree as follows:
1. Information, Experience and Economic Ability. I have received a
copy of the Plan, and as a director, I have access to information regarding the
Corporation and have been afforded the opportunity to ask questions and receive
additional information from the Corporation regarding the terms of an investment
in the Stock, and my requests for information have been satisfied. I have
business experience and knowledge adequate to evaluate the risks of an
investment in the Stock, and I can bear the economic risk of losing my entire
investment in the Stock and can afford to hold the Stock for an indefinite
period of time. I have adequate means of providing for my current needs and
personal contingencies and have no need for liquidity in the Stock for which I
am exercising the Option. My overall commitment to investments which are not
readily marketable is not disproportionate to my net worth, and my investment in
the Stock will not cause such overall commitments to become excessive. I
acknowledge that I have been advised to consult my tax and legal advisors
regarding my investment in the Stock.
2. Restrictions on Transfer. I acknowledge that there are substantial
restrictions on the transferability of the Stock under securities laws unless
they are registered or an exemption from such registration is available and
established to the satisfaction of the Corporation; that investors in the Stock
have no rights to require that the Stock be registered under federal or state
securities laws or to require the Corporation to make available the information
that would enable the Stock to be sold pursuant to Rule 144 under the Act; that
there may never be a public market for the Stock so that it may never be
possible for me to liquidate my investment in the Stock; and that the
certificates representing the Stock will bear a legend referring to the
foregoing transfer restrictions.
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3. No Distribution. The Stock to be delivered pursuant to the exercise
of the Option is being acquired solely for my own account, and not with a view
to or for the resale, distribution, subdivision or fractionalization thereof.
4. Accuracy of Representations. I understand that the Corporation will
have the right to reject this Notice of Exercise if it believes for any reason
that the undersigned is unsuitable to invest in the Stock under federal or state
securities laws; that the Corporation is relying upon the representations in
this notice in determining my suitability as an investor in the Stock; that I
would not be permitted to purchase the Stock if any representation or warranty
were known to be materially false; that a false representation may constitute a
violation of law; and that any person who suffers damage as a result of a false
representation may have a claim against me.
OPTIONEE
__________________________________
Dated
____________________________
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