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Exhibit 4.6
ROCKFORD CORPORATION
INCENTIVE
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") made as of the _________ day
of _____________ , 1997, 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 shares
of its common stock ("Stock") at a price of $ per share, pursuant to the
Rockford Corporation 1997 Stock Option Plan ("Plan"). The terms used herein
shall have the same meaning as those used in the Plan. This Option is an
"incentive option" as that term is defined in Section 422 of the Code.
2. Time of Exercise.
The Option shall be exercisable on the Grant Date 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 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
or the Committee, 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.
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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 1997 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 as of the date shown
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") is made as of the
________ day of ______________, 19___, by and between Rockford Corporation
("Corporation") and___________ ("Optionee").
INTRODUCTION
Optionee is a director 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 $18.00 per share, pursuant to
the Rockford Corporation 1997 Stock Option Plan ("Plan"). The terms used herein
have the meaning given in the Plan. This Option is not an "incentive option" as
that term is defined in the Code.
2. Time of Exercise.
The Option are exercisable on the Grant Date 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 service as a director measured from the Grant Date. After three years of
service as a director from the Grant Date, the Option shall be fully
exercisable. Notwithstanding the preceding exercisability schedule, if 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.
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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
or the Committee, 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.
4. Termination of Option.
The Option, to the extent not exercised, shall terminate upon the
first to occur of:
(a) termination of Optionee's service as a director;
provided, however, that the Option, to the extent exercisable on the date of
termination of service as a director, may be exercised by his or her personal
representative for a period of ninety days after termination of service as a
director 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 ("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 Optionee's termination of
service as a director 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
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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 service
as a director 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 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 service as a director 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 1997 Stock Option Plan as it may be amended from time to time.
10. Execution.
The parties hereto have executed this Agreement as of the date
shown above.
ROCKFORD CORPORATION
By:___________________________
President
OPTIONEE
______________________________
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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
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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.
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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