Exhibit 10.2
XXXXXX CORPORATION
2005 EQUITY COMPENSATION PLAN
INCENTIVE STOCK OPTION AGREEMENT
Pursuant to the Xxxxxx Corporation 2005 Equity Compensation Plan (the
"Plan"), Xxxxxx Corporation (the "Company") hereby grants to
_____________________________ (the "Optionee"), an incentive stock option (the
"Stock Option") to purchase a maximum of __________ shares of capital stock of
the Company (the "Capital Stock") at the price of $_____ per share, subject to
the terms of this Agreement. The Stock Option is granted as of
_____________________ (the "Grant Date").
1. Timing of Exercise. Subject to Section 2 below, this Stock Option shall
become exercisable as follows:
__________________________________________________________; except that upon the
occurrence of a Sale Event (as defined in the Plan) or for the reasons stated in
Sections 2(a) or 2(b) below, this Stock Option shall become fully exercisable.
This Stock Option shall remain exercisable until it expires on the tenth
anniversary of the Grant Date, unless the Stock Option is sooner terminated as
provided herein.
2. Termination of Stock Option. If the Optionee's employment by the Company
and its Subsidiaries terminates for any reason, other than death, Disability, or
Retirement (as defined in the Plan and described below), the Stock Option may
thereafter be exercised, to the extent it was exercisable on the date of
termination of employment, for a period of three months from the date of
termination of employment or the tenth anniversary of the Grant Date, if
earlier.
(a) Termination by Reason of Death. If the Optionee's employment by
the Company and its Subsidiaries terminates by reason of death, the Stock
Option shall become immediately vested and exercisable in full and may
thereafter be exercised by the Optionee's beneficiary for a period of five
years from the date of death or until the tenth anniversary of the Grant
Date, if earlier.
(b) Termination by Reason of Disability or Retirement. If the
Optionee's employment by the Company and its Subsidiaries terminates by
reason of Disability (as defined in the Plan), the Stock Option shall
become immediately vested and exercisable in full and may thereafter be
exercised for a period of five years from the date of such termination of
employment or until the tenth anniversary of the Grant Date, if earlier. If
the Optionee's employment by the Company and its Subsidiaries terminates by
reason of Retirement (as defined in the Plan), the Stock Option shall
become immediately vested and exercisable in full and may thereafter be
exercised for a period of five years from the date of such termination of
employment or until the tenth anniversary of the Grant Date, if earlier.
3. Manner of Exercise. This Stock Option may be exercised in whole or in
part by giving written or electronic notice of exercise to the Company or the
Company's designee designated to accept such notices specifying the number of
shares to be purchased. Payment of the purchase price may be made by one or more
of the following methods:
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(a) In cash, by check, or by other instrument acceptable to the Company;
(b) In Capital Stock (either actually or by attestation) valued at its Fair
Market Value (as defined in the Plan) as of the date of exercise; or
(c) By a combination of (a) and (b).
The Optionee may also deliver to the Company or the Company's designee
a properly executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company cash, a check or other instrument
acceptable to the Company to pay the purchase price; provided that the Optionee
and the broker shall comply with such procedures and enter into such agreements
of indemnity and other agreements as the Company shall prescribe as a condition
of such payment. Payment instructions will be received subject to collection.
Ownership of shares of Capital Stock to be purchased pursuant to the
exercise of the Stock Option will be contingent upon receipt by the Company of
the full purchase price for such shares and the fulfillment of any other
requirements contained in the Plan, this Agreement and applicable provisions of
law. In the event the Optionee chooses to pay the purchase price by
previously-owned shares of Capital Stock through the attestation method, only
the net amount of shares shall be issued.
4. Stock Option Not Transferable. This Stock Option is not transferable
otherwise than by will or by the laws of descent and distribution, and this
Stock Option shall be exercisable during the Optionee's lifetime only by the
Optionee.
5. Stock Option Shares. The shares to be issued under the Plan are shares
of the Capital Stock of the Company as constituted as of the date of this
Agreement, subject to adjustment as provided in Section 3(b) of the Plan.
6. Sale Event. The occurrence of a Sale Event (as defined in the Plan)
shall cause this Stock Option to terminate, to the extent not then exercised,
unless any surviving entity agrees to assume this Stock Option.
7. Rights as a Shareholder. The Optionee shall have the rights of a
shareholder only as to shares of Capital Stock acquired upon exercise of the
Stock Option and not as to any shares of Capital Stock covered by unexercised
Stock Options. 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 shares are acquired.
8. Tax Withholding. The Optionee hereby agrees that the exercise of this
Stock Option or any installment thereof will not be effective, and no shares
will become transferable to the Optionee, until the Optionee makes appropriate
arrangements with the Company for such income and employment tax withholding as
may be required of the Company under applicable United States federal, state or
local law on account of such exercise. The Optionee may satisfy the
obligation(s), in whole or in part, by electing (i) to make a payment to the
Company in cash, by check or by other instrument acceptable to the Company, (ii)
subject to the general or specific approval of the Compensation and Organization
Committee of the Board of Directors of the Company (the "Committee"), to deliver
to the Company a number of already-owned shares of Capital Stock having a value
not greater than the amount required to be withheld (such number may be rounded
up to the next whole share), or (iii) by any combination of (i) and (ii) and/or
the procedures described in the following sentence. The Committee may also
permit, in its sole discretion and in accordance with such procedures as it
deems appropriate, the Optionee to have the Company withhold a number of shares
which would otherwise be issued pursuant to this Stock Option having a value not
greater than the amount required to be withheld (such number may be rounded up
to the next whole share). The value of shares to be withheld or delivered (if
permitted by the Committee) shall be based on the Fair Market Value of a share
of Capital Stock as of the date the amount of tax to be withheld is to be
determined.
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9. Tax Status. The Stock Option is intended to qualify as an incentive
stock option under Section 422 of the Internal Revenue Code of 1986, as amended,
but the Company does not represent or warrant that the Stock Option qualifies as
such. The Optionee understands that in order to obtain the benefits of an
incentive stock option under Section 422 of the Code, no sale or other
disposition may be made of any shares of Capital Stock acquired upon the
exercise of the Stock 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 Date. The Optionee further
understands that in order to obtain the benefits of an incentive stock option
under Section 422 of the Code, the Stock Option must be exercised within (a)
three months of the date of termination of employment in the case of termination
by reason other than the Optionee's death or Disability, or (b) one year from
the date of termination of employment in the case of termination by reason of
Disability.
If the Optionee intends to dispose or does dispose (whether by the
sale, gift, transfer or otherwise) of any such shares within said periods, he or
she will notify the Company or the Company's designee within 30 days after such
disposition. In addition, Stock Options granted under the Plan (and any other
plan maintained by the Company or any subsidiary or parent corporation)
representing no more than $100,000 of the aggregate Fair Market Value of shares
of Capital Stock (determined as of the time of grant) may become exercisable for
the first time by the Optionee during any calendar year and be treated as
incentive stock options under Section 422 of the Code.
In the event that the Stock Option, or any portion thereof, shall for
any reason fail to qualify as an incentive stock option under Section 422 of the
Code, it shall thereafter be treated, to the extent of such failure, as a
non-qualified stock option granted under the Plan.
10. The Plan. The Stock Option is subject in all respects to the terms,
conditions, limitations and definitions contained in the Plan. In the event of
any discrepancy or inconsistency between this Agreement and the Plan, the terms
and conditions of the Plan shall control. Capitalized terms in this Agreement
shall have the meaning specified in the Plan, unless a different meaning is
specified herein.
11. No Obligation to Exercise Stock Option. The grant and acceptance of the
Stock Option imposes no obligation on the Optionee to exercise it.
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12. No Obligation to Continue Employment. Neither the Company nor any
Subsidiary is obligated by or as a result of the Plan or this Agreement to
continue the Optionee in employment.
13. Notices. Notices hereunder shall be mailed or delivered to the Company
at its principal place of business and shall be mailed or delivered to the
Optionee at the address on file with the Company or, in either case, at such
other address as one party may subsequently furnish to the other party in
writing.
14. Purchase Only for Investment. To insure the Company's compliance with
the Securities Act of 1933, as amended, the Optionee agrees for himself or
herself, the Optionee's legal representatives and estate, or other persons who
acquire the right to exercise the Stock Option upon his or her death, that
shares will be purchased in the exercise of the Stock Option for investment
purposes only and not with a view to their distribution, as that term is used in
the Securities Act of 1933, as amended, unless in the opinion of counsel to the
Company such distribution is in compliance with or exempt from the registration
and prospectus requirements of that Act.
15. Governing Law. This Agreement and the Stock Option shall be governed by
the laws of the Commonwealth of Massachusetts, United States of America.
16. Beneficiary Designation. The Optionee hereby designates the following
person(s) as the Optionee's beneficiary(ies) to whom shall be transferred any
rights under the Stock Option which survive the Optionee's death. If the
Optionee names more than one primary beneficiary and one or more of such primary
beneficiaries die, the deceased primary beneficiary's interest will be
apportioned among any surviving primary beneficiaries before any contingent
beneficiary receives any amount, unless the Optionee indicates otherwise in a
signed and dated additional page. The same rule shall apply within the category
of contingent beneficiaries. Unless the Optionee has specified otherwise herein,
any rights which survive the Optionee's death will be divided equally among the
Optionee's primary beneficiaries or contingent beneficiaries, as the case may
be.
PRIMARY BENEFICIARY(IES)
Name % Address
(a) _____________________________ ____ _____________________
(b) _____________________________ ____ _____________________
(c) _____________________________ ____ _____________________
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CONTINGENT BENEFICIARY(IES)
Name % Address
(a) _____________________________ ____ _____________________
(b) _____________________________ ____ _____________________
(c) _____________________________ ____ _____________________
In the absence of an effective beneficiary designation, the Optionee
acknowledges that any rights under the Stock Option which survive the Optionee's
death shall be rights of his or her estate.
XXXXXX CORPORATION
By: _______________________________
Name:
Title:
The undersigned hereby acknowledges receipt of the foregoing Stock
Option and agrees to its terms and conditions:
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Optionee
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