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EXHIBIT 99.2
ATM PRODUCTS, INC.
INCENTIVE STOCK OPTION AGREEMENT
1. GRANT OF OPTION. ATM PRODUCTS, INC., a Delaware corporation
(the "Company"), hereby grants to _____________ ("Optionee"), an option,
pursuant to the Company's 1996 Stock Plan (the "Plan"), to purchase an aggregate
of ______ shares of Common Stock, no par value per share ("Common Stock"), of
the Company at a price of $_____ per share, purchasable as set forth in and
subject to the terms and conditions of this option and the Plan. This option is
intended to qualify as an incentive stock option ("Incentive Stock Option")
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). The date of grant of this option is hereinafter referred
to as the "date of grant," and the date ending twelve months thereafter and each
subsequent successive twelve-month period is hereinafter referred to as the
"first anniversary date," "second anniversary date," "third anniversary date,"
etc.
2. EXERCISE OF OPTION AND PROVISIONS FOR TERMINATION.
(a) Except as otherwise provided herein and subject to the
right of cumulation provided herein, this option may be exercised, prior
to the tenth anniversary date, as to not more than the following number
of shares covered by this option during the respective periods set forth
below:
No shares from and after the date of grant and prior to the first
anniversary date;
- shares from and after the first anniversary date and prior
to the second anniversary date;
- shares from and after the second anniversary date and
prior to the third anniversary date;
- shares from and after the third anniversary date and prior
to the fourth anniversary date;
- shares from and after the fourth anniversary date.
The right of exercise provided herein shall be cumulative so that
if the option is not exercised to the maximum extent permissible during
any such period it shall be exercisable, in whole or in part, with
respect to all shares not so purchased at any time during any subsequent
period prior until the expiration or termination of this option. This
option may not be exercised at any time after the tenth anniversary
date.
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(b) Subject to the conditions hereof, this option shall be
exercisable by the Optionee giving written notice of exercise to the
Company, specifying the number of shares to be purchased and the
purchase price to be paid therefor and accompanied by payment in
accordance with Section 3 hereof. Such exercise shall be effective upon
receipt by the Treasurer of the Company of the written notice together
with the required payment. The Optionee shall be entitled to purchase
less than the number of shares covered hereby; provided that no partial
exercise of this option shall be for less than 10 whole shares.
(c) If the Optionee ceases to be employed by the Company
or one of its subsidiaries for any reason, including retirement but
other than death, this option shall immediately terminate; provided,
however, that any portion of this option which was otherwise exercisable
on the date of termination of the Optionee's employment may be exercised
within the three-month period following the date on which the Optionee
ceased to be so employed, but in no event after the tenth anniversary
date. Any such exercise may be made only to the extent of the number of
shares subject to this option which are purchasable upon the date of
such termination of employment. If the Optionee dies during such
three-month period, this option shall be exercisable by the Optionee's
personal representatives, heirs or legatees to the same extent and
during the same period that the Optionee could have exercised this
option on the date of his or her death.
(d) If the Optionee dies while an employee of the Company
or any subsidiary of the Company, this option shall be exercisable, by
the Optionee's personal representatives, heirs or legatees, to the same
extent that the Optionee could have exercised this option on the date of
his or her death. This option or any unexercised portion hereof shall
terminate unless so exercised prior to the earlier of the expiration of
six months from the date of such death or the tenth anniversary date.
(e) Notwithstanding any other provision hereof, this
option may not be exercised to the extent such an exercise would violate
Section 422(d)(1) of the Code, which provides that the aggregate fair
market value (determined at the time the option is granted) of the
Common Stock with respect to which incentive stock options are
exercisable for the first time by the Optionee during any calendar year
(under all of the plans of the Company, its parent, if any, or its
subsidiaries, if any) shall not exceed $100,000.
3. PAYMENT OF PURCHASE PRICE.
(a) Payment of the purchase price for shares purchased
upon exercise of this option shall be made by delivery to the Company of
cash or check payable to the order of the Company in an amount equal to
the purchase price of such shares, or, if the Optionee elects and the
Company permits, by delivery of shares of Common Stock of the Company
having a fair market value equal in amount to the purchase price of such
shares.
(b) For the purposes hereof, the fair market value of any
share of the
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Company's Common Stock to be delivered to the Company in exercise of
this option shall be determined in good faith by the Board of Directors
of the Company, in accordance with the terms of the Plan.
(c) If the Optionee elects to exercise options by delivery
of shares of Common Stock of the Company, the certificate or
certificates representing the shares of Common Stock of the Company to
be delivered shall be duly executed in blank by the Optionee or shall be
accompanied by a stock power duly executed in blank suitable for
purposes of transferring such shares to the Company. Fractional shares
of Common Stock of the Company will not be accepted in payment of the
purchase price of shares acquired upon exercise of this option.
4. DELIVERY OF SHARES. The Company shall, upon payment of the
purchase price for the number of shares purchased and paid for, make prompt
delivery of such shares to the Optionee; provided that if any law or regulation
requires the Company to take any action with respect to such shares before the
issuance thereof, then the date of delivery of such shares shall be extended for
the period necessary to complete such action. No shares shall be issued and
delivered upon exercise of any option unless and until, in the opinion of
counsel for the Company, any applicable registration requirements of the
Securities Act of 1933, any applicable listing requirements of any national
securities exchange on which stock of the same class is then listed, and any
other requirements of law or of any regulatory bodies having jurisdiction over
such issuance and delivery, shall have been fully complied with.
5. NON-TRANSFERABILITY OF OPTION. Except as provided in Section
2(c) and 2(d) hereof, this option is personal and no rights granted hereunder
shall be transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) nor shall any such rights be subject to
execution, attachment or similar process. Upon any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of this option or of such rights
contrary to the provisions hereof, or upon the levy of any attachment or similar
process upon this option or such rights, this option and such rights shall
become null and void.
6. NO SPECIAL EMPLOYMENT RIGHTS. Nothing contained in the Plan or
this Agreement shall be construed or deemed by any person under any
circumstances to bind the Company or any of its subsidiaries to continue the
employment of the Optionee for the period within which this option may be
exercised. However, during the period of the Optionee's employment, the Optionee
shall render diligently and faithfully the services which are assigned to the
Optionee from time to time by the Board of Directors or by the executive
officers of the Company and its subsidiaries and shall at no time take any
action which directly or indirectly would be inconsistent with the best
interests of the Company or of its subsidiaries.
7. RIGHTS AS A STOCKHOLDER. The Optionee shall have no rights as
a stockholder
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with respect to any shares which may be purchased by exercise of this option
unless and until a certificate or certificates representing such shares are duly
issued and delivered to the Optionee. 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 stock certificate is issued.
8. RECAPITALIZATION. In the event that dividends are payable in
shares of Common Stock or in the event there are splits, sub-divisions or
combinations of shares of Common Stock subsequent to the date of grant, the
number of shares subject to this option shall be increased or decreased
proportionately, as the case may be, and the number of shares deliverable upon
the exercise thereafter of this option shall be increased or decreased
proportionately, as the case may be, without change in the aggregate purchase
price.
9. REORGANIZATION. In case the Company is merged or consolidated
with another corporation and the Company is not the surviving corporation, or in
case the property or stock of the Company is acquired by any other corporation,
or in case of a reorganization or liquidation of the Company, prior to the
termination or expiration of this option, the Optionee shall, with respect to
this option or any unexercised portion thereof, be entitled to the rights and
benefits, and be subject to the limitations, set forth in Section 10 of the
Plan.
10. WITHHOLDING TAXES. Whenever shares are to be issued upon
exercise of this option, the Company shall have the right to require the
Optionee to remit to the Company an amount sufficient to satisfy any federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such shares.
11. QUALIFICATION UNDER SECTION 422. It is understood and
intended that the option granted hereunder shall qualify as an "incentive stock
option" as defined in Section 422 of the Code. Accordingly, the Optionee
understands that in order to obtain the benefits of an incentive stock option
under Section 421 of the Code, no sale or other disposition may be made of any
shares acquired upon exercise of the option within the one-year period beginning
on the day after the day of the transfer of such shares to him or her, nor
within the two-year period beginning on the day after the grant of the option.
If the Optionee intends to dispose or does dispose (whether by sale, exchange,
gift, transfer or otherwise) of any such shares within said periods, he or she
will notify the Company within 30 days after such disposition.
12. COMPANY'S RIGHTS OF FIRST REFUSAL. All shares purchased upon
exercise of this option shall be subject to the following rights of first
refusal until immediately prior to the consummation of the first public offering
by the Company of its Common Stock pursuant to an offering registered under the
Securities Act of 1933.
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The Optionee, including his or her heirs, assigns, executors, or
administrators, or recipient of shares by other than a sale subject to this
right of first refusal and his or her heirs, assigns, executors, or
administrators (collectively, the "Seller"), desiring to sell any shares shall
first offer such shares to the Company in the following manner: the Seller shall
notify the President of the Company in writing of the Seller's desire to sell
the shares, which notice shall contain the price and terms at which the Seller
is willing to sell and the name of the proposed purchaser. All such offers must
require payment in cash, and must allow the Company at least forty-five (45)
days from the receipt of such notification in which to consummate the purchase.
The Company shall have thirty (30) days after receipt of such notification by
the President either to accept or to reject the offer. The Company shall have
the right to purchase all, but not less than all, of the offered shares on the
terms offered. Failure of the Company either to accept or to reject the offer in
writing within the 30-day period shall constitute a rejection of the offer. An
acceptance by the Company shall be timely given if mailed by registered mail
within the 30-day period to the most recent address of the record holder of the
shares in the stock records of the Company.
In the event the Company rejects the offer, the Seller may, at
any time during the period of sixty (60) days following such rejection, dispose
of the offered shares upon the terms and conditions set forth in the notice to
the President, but may not otherwise or thereafter do so without again complying
with the foregoing rights of first refusal. In the event the Company accepts the
offer, but fails to perform according to the terms of the offer, the Seller's
sole remedy shall be that the offered shares shall no longer be subject to the
foregoing rights of first refusal.
No shares shall be transferred on the books of the Company unless
the foregoing provisions have been complied with, but the Company, with the
approval of the Board of Directors of the Company, may in any particular
instance or instances waive these provisions with respect to any present or
future sale, provided such waiver is in writing.
13. INVESTMENT REPRESENTATION, ETC.
(a) The Optionee represents that any shares purchased upon
exercise of this option shall be acquired by the Optionee for his or her
own account for investment and not with a view to, or for sale in
connection with, any distribution of such shares, nor with any present
intention of distributing or selling such shares. The Optionee further
represents that he or she has made detailed inquiry concerning the
Company, that the officers of the Company have made available to the
Optionee any and all written information which the Optionee has
requested, that the officers of the Company have answered to the
Optionee's satisfaction all inquiries made by the Optionee and that the
Optionee has such knowledge and experience in financial and business
matters that the Optionee is capable of evaluating the merits and risks
of an investment in the Company and able to bear the economic risk of
that investment. By making payment upon exercise of this option, the
Optionee shall be deemed to have reaffirmed, as of the date of such
payment, the representations made in this Section 13.
(b) Without limiting the Company's rights under Section 12
hereof, upon
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exercise of this option, the Company may, at its election, require the
Optionee to execute a stock restriction agreement, restricting the
Optionee from selling or transferring the shares so acquired without
first offering to sell such shares to the Company and the other
stockholders. Upon execution of such stock restriction agreement by the
Optionee, the Company shall have affixed to all stock certificates
representing shares of Common Stock issued to the Optionee upon exercise
of this option a legend evidencing such agreement.
(c) All stock certificates representing shares of Common
Stock issued to the Optionee upon exercise of this option shall, at the
election of the Company, have affixed thereto a legend substantially in
the following form:
"The shares of stock represented by this certificate (i) are
subject to the restrictions on transfer contained in an Incentive
Stock Option Agreement dated , 19 , between the Company and the
holder of this certificate (a copy of which is available without
charge from the Company), and (ii) have not been registered under
the Securities Act of 1933 and may not be transferred, sold or
otherwise disposed of in the absence of an effective registration
statement with respect to the shares evidenced by this
certificate, filed and made effective under the Securities Act of
1933, or an opinion of counsel satisfactory to the Company to the
effect that registration under such Act is not required."
14. MISCELLANEOUS.
(a) Except as provided herein, this Agreement may not be
amended or otherwise modified unless evidenced in writing and signed by
the Company and the Optionee.
(b) All notices under this Agreement shall be mailed or
delivered by hand to the parties at their respective addresses set forth
beneath their names below or at such other address as may be designated
in writing by either of the parties to one another.
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(c) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
Date of Grant: ATM PRODUCTS, INC.
By:
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Title: President
Address: 000 X. Xxxxxx Xxxxxxxxxx Xx.
Xxxxxxxxxxx, XX 00000
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OPTIONEE'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof.
OPTIONEE
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Signature
Address:
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