EXHIBIT 99.2
FORM OF STOCK OPTION AGREEMENT UNDER THE PLAN
INCENTIVE STOCK OPTION
To:
Date of Grant:
You are hereby granted an option, effective as of the date hereof, to
purchase shares of common stock, $.01 par value ("Common Stock"), of
XxxxxXxxx.Xxx, Inc., a Pennsylvania corporation (the "Company") at a price of
$_____ per share pursuant to the Company's 1997 Stock Option Plan (the "Plan").
Although your option is legally effective as of the date hereof, your right
to exercise your option does not become vested prior to your exercisability
dates described in the next succeeding paragraph.
Your option may first be exercised on and after one year from the date of
grant, but not before that time. On and after one year from the date of grant,
your option may be exercised for up to 25% of the total number of shares subject
to the option minus the number of shares previously purchased by exercise of the
option (as adjusted for any change in the outstanding shares of the Common Stock
of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Committee deems in its sole discretion to
be similar circumstances). Each succeeding year thereafter, your option may be
exercised for up to an additional 25% of the total number of shares subject to
the option minus the number of shares previously purchased by exercise of the
option (as adjusted for any change in the outstanding shares of the Common Stock
of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Committee deems in its sole discretion to
be similar circumstances). Thus, this option is fully exercisable on and after
four years after the date of grant, except if terminated earlier as provided
herein. No fractional shares shall be issued or delivered. This option shall
terminate and is not exercisable after ten years from the date of its grant (the
"Scheduled Termination Date"), except if terminated earlier as hereafter
provided.
In the event of a "Change of Control" (as defined below) of the Company,
your option may, notwithstanding the immediately preceding paragraph, be
exercised for up to 100% of the total number of shares then subject to the
option minus the number of shares previously purchased upon exercise of the
option (as adjusted for stock dividends, stock splits, combinations of shares
and what the Committee deems in its sole discretion to be
similar circumstances) and your vesting date may accelerate accordingly. A
"Change of Control" shall be deemed to have occurred upon the happening of any
of the following events:
1. A change in the constituency of the Company's Board of Directors with
the result that individuals (the "Incumbent Directors") who are
members of the Board on the date hereof cease to constitute at least a
majority of the Board of Directors, provided that any individual who
is elected or appointed to the Board of Directors after the date
hereof and whose nomination for election or appointment was
unanimously approved by the Incumbent Directors shall be considered an
Incumbent Director beginning on the date of his or her election to the
Board of Directors.
2. A person or group acting in concert as described in Section 13 (d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") acquires beneficial ownership within the meaning of Rule 13
(d)(3) promulgated under the Exchange Act of a number of voting shares
of the Company which constitutes more than fifty percent of the shares
which vote in the election of directors of the Company.
3. Any other event deemed to constitute a "Change of Control" by the
Committee.
You may exercise your option by giving written notice to the
Secretary of the Company on forms supplied by the Company at its then
principal executive office, accompanied by payment of the option price
for the total number of shares you specify that you wish to purchase.
The payment may be in any of the following forms: (a) cash, which may
be evidenced by a check and includes cash received from a stock
brokerage firm in a so-called "cashless exercise"; (b) (unless
prohibited by the Committee) certificates representing shares of
Common Stock of the Company, which will be valued by the Secretary of
the Company at the fair market value per share of the Company's Common
Stock (as determined in accordance with the Plan) on the date of
delivery of such certificates to the Company, accompanied by an
assignment of the stock to the Company; or (c) (unless prohibited by
the Committee) any combination of cash and Common Stock of the Company
valued as provided in clause (b). Any assignment of stock shall be in
a form and substance satisfactory to the Secretary of the Company,
including guarantees of signature(s) and payment of all transfer taxes
if the Secretary deems such guarantees necessary or desirable.
Your option will, to the extent not previously exercised by you,
terminate three months after the date on which your employment by the
Company or a Company subsidiary corporation is terminated (whether
such termination be voluntary or involuntary) other than by reason of
disability as defined in Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended (the "Code"), and the regulations thereunder, or
death, in which case your option will terminate one year from the date
of termination of employment due to disability or death (but in no
event later than the Scheduled Termination Date). After the date your
employment is terminated, as aforesaid, you may exercise this option
only for the number of
shares which you had a right to purchase and did not purchase on the
date your employment terminated. If you are employed by a Company
subsidiary corporation, your employment shall be deemed to have
terminated on the date your employer ceases to be a Company subsidiary
corporation, unless you are on that date transferred to the Company or
another Company subsidiary corporation. Your employment shall not be
deemed to have terminated if you are transferred from the Company to a
Company subsidiary corporation, or vice versa, or from one Company
subsidiary corporation to another Company subsidiary corporation.
If you die while employed by the Company or a Company subsidiary
corporation, your heirs, executor or administrator, as the case may
be, may, at any time within one year after the date of your death (but
in no event later than the Scheduled Termination Date), exercise the
option as to any shares which you had a right to purchase and did not
purchase during your lifetime. If your employment with the Company or
a Company parent or subsidiary corporation is terminated by reason of
your becoming disabled (within the meaning of Section 22(e)(3) of the
Code and the regulations thereunder), you or your legal guardian or
custodian may at any time within one year after the date of such
termination (but in no event later than the Scheduled Termination
Date), exercise the option as to any shares which you had a right to
purchase and did not purchase prior to such termination. Your
executor, administrator, guardian or custodian must present proof of
his authority satisfactory to the Company prior to being allowed to
exercise the option.
In the event of any change in the outstanding shares of the
Common Stock of the Company by reason of a stock dividend, stock
split, combination of shares, recapitalization, merger, consolidation,
transfer of assets, reorganization, conversion or what the Committee
deems in its sole discretion to be similar circumstances, the number
and kind of shares subject to this option and the option price of such
shares shall be appropriately adjusted in a manner to be determined in
the sole discretion of the Committee.
This option is not transferable otherwise than by will or the
laws of descent and distribution, and is exercisable during your
lifetime only by you, including, for this purpose, your legal guardian
or custodian in the event of disability. Until the option price has
been paid in full pursuant to due exercise of this option and the
purchased shares are delivered to you, you do not have any rights as a
shareholder of the Company. The Company reserves the right not to
deliver to you the shares purchased by virtue of the exercise of this
option during any period of time in which the Company deems, in its
sole discretion, that such delivery would violate a federal, state,
local or securities exchange rule, regulation or law.
Notwithstanding anything to the contrary contained herein, this
option is not exercisable until all the following events occur and
during the following periods of time:
(a) Until the Plan pursuant to which this option is granted
is approved by the shareholders of the Company in the
manner prescribed by the Code and the regulations
thereunder;
(b) Until this option and the optioned shares are approved
and/or registered with such federal, state and local
regulatory bodies or agencies and securities exchanges
as the Company may deem necessary or desirable; or
(c) During any period of time in which the Company deems
that the exercisability of this option, the offer to
sell the shares optioned hereunder, or the sale
thereof, may violate a federal, state, local or
securities exchange rule, regulation or law, or may
cause the Company to be legally obligated to issue or
sell more shares than the Company is legally entitled
to issue or sell.
(d) Until you have paid or made suitable arrangements to
pay (which may include payment through the surrender of
Common Stock, unless prohibited by the Committee) (i)
all federal, state and local income tax withholding
required to be withheld by the Company in connection
with the option exercise and (ii) the employee's
portion of other federal, state and local payroll and
other taxes due in connection with the option exercise.
The following two paragraphs shall be applicable if, on the date
of exercise of this option, the Common Stock to be purchased pursuant
to such exercise has not been registered under the Securities Act of
1933, as amended, and under applicable state securities laws, and
shall continue to be applicable for so long as such registration has
not occurred:
(a) The optionee hereby agrees, warrants and represents
that he will acquire the Common Stock to be issued
hereunder for his own account for investment purposes
only, and not with a view to, or in connection with,
any resale or other distribution of any of such shares,
except as hereafter permitted. The optionee further
agrees that he will not at any time make any offer,
sale, transfer, pledge or other disposition of such
Common Stock to be issued hereunder without an
effective registration statement under the Securities
Act of 1933, as amended, and under any applicable state
securities laws or an opinion of counsel acceptable to
the Company to the effect that the proposed transaction
will be exempt from such registration. The optionee
shall execute such instruments, representations,
acknowledgments and agreements as the Company may, in
its sole discretion, deem advisable to avoid any
violation of federal, state, local or securities
exchange rule, regulation or law.
(b) The certificates for Common Stock to be issued to the
optionee hereunder shall bear the following legend:
"The shares represented by this certificate have
not been registered under the Securities Act of
1933, as amended, or under applicable state
securities laws. The shares have been acquired
for investment and may not be offered, sold,
transferred, pledged or otherwise disposed of
without an effective registration statement under
the Securities Act of 1933, as amended, and under
any applicable state securities laws or an
opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such
registration."
The foregoing legend shall be removed upon registration
of the legended shares under the Securities Act of
1933, as amended, and under any applicable state laws
or upon receipt of any opinion of counsel acceptable
to the Company that said registration is no longer
required.
The sole purpose of the agreements, warranties, representations and legend
set forth in the two immediately preceding paragraphs is to prevent violations
of the Securities Act of 1933, as amended, and any applicable state securities
laws.
It is the intention of the Company and you that this option shall, if
possible, be an "incentive stock option" as that term is used in Section 422(b)
of the Code and the regulations thereunder. In the event this option is in any
way inconsistent with the legal requirements of the Code or the regulations
thereunder for an "incentive stock option," this option shall be deemed
automatically amended as of the date hereof to conform to such legal
requirements, if such conformity may be achieved by amendment.
NOTHING HEREIN SHALL MODIFY YOUR STATUS AS AN AT WILL EMPLOYEE OF THE
COMPANY. FURTHER, NOTHING HEREIN GUARANTEES YOU EMPLOYMENT FOR ANY SPECIFIED
PERIOD OF TIME. THIS MEANS THAT EITHER YOU OR THE COMPANY MAY TERMINATE YOUR
EMPLOYMENT AT ANY TIME FOR ANY REASON, OR NO REASON. YOU RECOGNIZE THAT, FOR
INSTANCE, YOU MAY TERMINATE YOUR EMPLOYMENT OR THE COMPANY MAY TERMINATE YOUR
EMPLOYMENT PRIOR TO THE DATE ON WHICH YOUR OPTION BECOMES VESTED.
Any dispute or disagreement between you and the Company with respect to any
portion of this option or its validity, construction, meaning, performance or
your rights hereunder shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association or its
successor, as amended from time to time. However, prior to submission to
arbitration you will attempt to resolve any disputes or disagreements with the
Company over this option amicably and informally, in good faith, for a period
not to exceed two weeks. Thereafter, the dispute or disagreement will be
submitted to arbitration. At any time prior to a decision from the arbitrator(s)
being rendered, you and the Company may resolve the dispute by settlement. You
and the Company shall equally share the costs charged by the American
Arbitration Association or
its successor, but you and the Company shall otherwise be solely
responsible for your own respective counsel fees and expenses. The decision of
the arbitrator(s) shall be made in writing, setting forth the award, the reasons
for the decision and award and shall be binding and conclusive on you and the
Company. Further, neither you nor the Company shall appeal any such award.
Judgment of a court of competent jurisdiction may be entered upon the award and
may be enforced as such in accordance with the provisions of the award.
This option shall be subject to the terms of the Plan in effect on the date
this option is granted, which terms are hereby incorporated herein by reference
and made a part hereof. In the event of any conflict between the terms of this
option and the terms of the Plan in effect on the date of this option, the terms
of the Plan shall govern. This option constitutes the entire understanding
between the Company and you with respect to the subject matter hereof and no
amendment, supplement or waiver of this option, in whole or in part, shall be
binding upon the Company unless in writing and signed by the Chairman of the
Company. This option and the performances of the parties hereunder shall be
construed in accordance with and governed by the laws of the State of
Pennsylvania.
Please sign the copy of this option and return it to the Company's
Secretary, thereby indicating your understanding of and agreement with its terms
and conditions.
XxxxxXxxx.Xxx, Inc.
By: _________________________
I hereby acknowledge receipt of a copy of the foregoing stock option and of
the Plan as of the date of grant set forth above, hereby acknowledge that this
stock option grant discharges a promise (either verbal or written) of the
Company made on or prior to the date of grant to give me a stock option, and,
having read it, hereby signify my understanding of, and my agreement with, its
terms and conditions. In consideration of the grant, I hereby release any claim
I may have against the Company with respect to any promise of a stock option
grant or other equity interest in the Company.
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Date
(Signature)
