EXHIBIT 4.6
THIS OPTION AND THE SHARES UNDERLYING THIS OPTION HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1993 (ACT), AND
ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE
144 PROMULGATED UNDER THE ACT. THIS OPTION IS
NONTRANSFERABLE AND THE SHARES UNDERLYING THIS OPTION MAY
NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE ACT, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO
THE SATISFACTION OF THE COMPANY.
NOTHING CONTAINED IN THIS AGREEMENT IS INTENDED TO ALTER THE
AT-WILL EMPLOYMENT RELATIONSHIP BETWEEN OPTIONEE AND THE
COMPANY. EITHER PARTY MAY TERMINATE THE EMPLOYMENT
RELATIONSHIP AT ANY TIME, FOR ANY REASON, OR FOR NO REASON
AT ALL.
OPTIONEE SHOULD CONSULT HIS OR HER OWN TAX ADVISOR FOR A
DETERMINATION OF THE PROPER TAX TREATMENT OF THIS OPTION
UNDER FEDERAL AND STATE INCOME TAX LAWS.
XXXXXXX MEDICAL PRODUCTS
INCENTIVE STOCK OPTION AGREEMENT
(under 1996, 1995, 1994, 1993, 1992, and 1991
Incentive Stock Option Plans)
THIS AGREEMENT (the "Agreement") is made effective ----
-------------, by and between XXXXXXX MEDICAL PRODUCTS, a
corporation organized under the laws of the State of Utah
(the "Company"), and -----------------------------------, an
employee of the Company ("Optionee").
WHEREAS, Optionee is an employee of the Company, and
the Company desires to grant Optionee an option to purchase
shares of the Company's common stock (the "Stock"), in
accordance with one or more of six incentive stock option
plans of the Company;
NOW, THEREFORE, in consideration of the mutual
covenants and promises hereafter set forth, it is agreed by
and between the parties as follows:
1. GRANT OF OPTION.
(a) The Company hereby grants to Optionee the
right and option (the "Option") to purchase upon and subject
to the terms and conditions of the Applicable Plan or Plans
(as defined below), all or part of the following shares of
Stock at a purchase price of $----------- per share (the
"Option Price"), in the manner and subject to the terms and
conditions set forth herein:
Continued
Employment
Required (following
Option to Applicable Plan the effective date
Purchase of this
Agreement) for
-- shares under 1995 Plan 1 year
-- shares under 19-- Plan -- years
-- shares under 19-- Plan -- years
(b) The effective date of this grant by the
applicable Stock Option Committee of the Board of Directors
is the same as the effective date of this Agreement first
shown above.
(c) For all purposes of this Agreement, the term
"Applicable Plan" shall mean the incentive stock option plan
or plans under which Optionee is being granted an option to
purchase Stock, as identified in paragraph (a) above.
(d) The Option Price is not less than one hundred
percent (100%) of the fair market value of such stock as of
the effective date of action of the Stock Option Committee
granting this Option.
2. CONTINUED EMPLOYMENT REQUIREMENT. This Option may
be exercised, in whole or in part, at any time only after
Optionee has served as an employee of the Company following
the effective date of this Agreement for at least the period
shown in paragraph 1(a) above. However, the occurrence of
either of the following events will cause the Option to
become immediately and fully exercisable, notwithstanding
the above requirement:
(a) The death of Optionee; or
(b) The occurrence of a Business Combination (as
defined below) which is not approved by a two-thirds vote of
the Continuing Directors (as defined below).
For purposes of this Section, the following definitions
apply:
(c) "Acquiring Person" shall mean any individual,
corporation (other than this corporation or any of its
subsidiaries), partnership, other person or entity which,
together with its affiliates and associates (as defined in
the Exchange Act or rules and regulations promulgated
thereunder), and together with any other individual,
corporation (other than the Company or any of its
subsidiaries), partnership, person or entity with which it
or they have any agreement, arrangement, or understanding
with respect to acquiring, holding, voting, or disposing of
the Company's Stock, beneficially owns (within the meaning
of the Exchange Act or rules and regulations promulgated
thereunder) in the aggregate 10% or more of the outstanding
Voting Stock of the Company. "Acquiring Person" shall also
include any assignee of, or person or entity which has
succeeded to any shares of the Company's stock which were at
any time prior to the date of assignment or succession
beneficially owned by, a 10% Voting Stock owner, or an
affiliate or associate of a 10% Voting Stock owner, if such
assignment or succession shall have occurred in the course
of a transaction or series of transactions not involving a
public offering within the meaning of the Securities Act of
1933, as amended. A person or entity, its affiliates and
associates, assignees and successors, and all such other
persons or entities with whom they have any such agreement,
arrangement, or understanding shall be deemed a single
Acquiring Person for purposes of this paragraph. Also for
purposes of this paragraph, the Continuing Directors shall
by majority vote have the power to determine, on the basis
of information known to the Board, if and when there is an
Acquiring Person. Any such determination shall be
conclusive and binding for all purposes of this paragraph,
provided such determination is reasonable and made in
accordance with applicable law.
(d) "Business Combination" shall mean:
(i) any merger, consolidation, or share
exchange of the Company or a subsidiary of the Company with
or into an Acquiring Person;
(ii) any purchase for cash and/or securities
by an Acquiring Person of 20% or more of the Company's
outstanding shares of Voting Stock (including the
purchase(s) which cause(s) the purchaser to become an
Acquiring Person hereunder);
(iii) any sale, lease, exchange, transfer or
other disposition (including without limitation, a mortgage
or other security device) in a single transaction or related
series of transactions, of all or any Substantial Part (as
hereinafter defined) of the assets either of the Company
(including without limitation, any voting securities of a
subsidiary) or of a subsidiary of the Company to or with an
Acquiring Person;
(iv) any merger or consolidation of an
Acquiring Person with or into the Company or a subsidiary of
the Company;
(v) any sale, lease, exchange, transfer or
other disposition (including without limitation, a mortgage
or other security device) in a single transaction or related
series of transactions, of all or any Substantial Part of
the assets of an Acquiring Person to the Company or a
subsidiary of the Company;
(vi) the issuance or transfer of any
securities of the Company or a subsidiary of the Company to
an Acquiring Person;
(vii) the adoption of any plan or proposal for
the liquidation or dissolution of the Company proposed,
directly or indirectly, by or on behalf of, or pursuant to
any agreement, arrangement or understanding (whether or not
in writing) with an Acquiring Person;
(viii) any merger or consolidation of the
Company with a subsidiary of the Company proposed by or on
behalf of an Acquiring Person;
(ix) any reclassification of securities
(including without limitation, any stock split, stock
dividend, or other distribution of stock in respect of
stock, or any reverse stock split), or recapitalization of
the Company or any merger or consolidation of the Company
with any subsidiary of the Company, or any other transaction
(whether or not with or into, or otherwise involving the
Acquiring Person), proposed by, on behalf of, or pursuant to
any agreement, arrangement or understanding (whether or not
in writing) with the Acquiring Person or any affiliate or
associate of the Acquiring Person which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding shares of stock of the Company or
any subsidiary of the Company which is directly or
indirectly owned by the Acquiring Person, except as a result
of immaterial fractional share adjustments;
(x) any agreement, contract, or other
arrangement providing for any of the transactions described
in this definition of Business Combination; and
(xi) any other transaction with an Acquiring
Person which requires the approval of the Company's
stockholders under the Utah Revised Business Corporation
Act.
A person who is an Acquiring Person as of:
(xii) the time any definitive agreement
relating to a Business Combination is entered into;
(xiii) the record date for the determination of
stockholders entitled to notice of and to vote on a Business
Combination; or
(xiv) immediately prior to the consummation of
a Business Combination,
shall be an Acquiring Person for purposes of this
definition.
(e) "Continuing Director" shall mean any
director of the Company who was a director prior to the time
the Acquiring Person became such, and any other director
whose election or appointment as a director was recommended
or approved by a majority vote of the Continuing Directors.
A majority or two-thirds vote of the Continuing Directors
shall mean, respectively, a vote of the majority of the
Continuing Directors, a vote of or two-thirds of the
Continuing Directors, then in office, provided that at least
two Continuing Directors are then in office and participate
in such vote.
(f) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(g) "Substantial Part" shall mean an amount of
assets having an aggregate fair market value of at least
$500,000.
(h) "Voting Stock" shall mean Common Stock and
all other securities of the Company entitled to vote
generally for the election of directors.
3. TERMINATION OF OPTION. Notwithstanding contrary
provisions of this Agreement, the Option and any part
thereof, to the extent not theretofore exercised, will
terminate upon the first to occur of the following dates:
(a) The expiration of three (3) months after the
date on which Optionee's employment by the Company is
terminated (except if such termination is by reason of
permanent and total disability);
(b) The expiration of twelve (12) months after
the date on which Optionee's employment by the Company is
terminated, if such termination is by reason of Optionee's
permanent and total disability; or
(c) The expiration of seven (7) years from the
date hereof.
For purposes of this Agreement, the term "permanent and
total disability" shall mean that Optionee is unable to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which
can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less
than twelve months. Optionee acknowledges and agrees that
the Company will have no obligation to give Optionee any
notice or reminder of the expiration of any of the periods
described in the foregoing subparagraphs or similar periods
described in any previous Incentive Stock Option Agreements
executed by the Company and Optionee.
4. METHOD OF EXERCISE.
(a) This Option will be exercised by written
notice ("Notice") by Optionee sent to the Company's
Secretary (original Notice or via facsimile) at the
Company's principal place of business stating the number of
shares with respect to which this Option is being exercised.
Such Notice must be accompanied by:
(i) Cash or a check in payment of the Option
Price for the number of shares specified; or
(ii) If Optionee desires to use Company Stock
owned by Optionee as payment of all or part of the Option
Price, Stock certificates (duly endorsed for transfer)
representing said shares of Stock to be used as payment (the
"Exchange Shares"); or
(iii) Cash (or a check) and Exchange Shares;
or
(iv) In the event of a "cashless", broker-
assisted Option exercise, a copy of a letter (executed by
Optionee) to Optionee's broker instructing the broker to
deliver the exercise price to the Company.
For all purposes of this Agreement and the calculation
of applicable federal taxes, the date the Company Secretary
receives the Notice and the applicable required items set
forth in subparagraphs (i) through (iv) above shall be
deemed to be and treated by the parties (and is referred to
herein) as the "Exercise Date".
NOTWITHSTANDING the foregoing:
(v) Any attempted "cashless", broker-
assisted Option exercised by Optionee will be void and of no
effect unless the broker who so assists in such Option
exercise is on a list of "Approved Option Exercise Brokers"
to be maintained by the Company Secretary; and
(vi) If Optionee makes a "cashless", broker-
assisted Option exercise, then the Company must receive
payment in full of the Option Price in cash and/or
transferred funds no later than the earlier of fifteen (15)
business days following the Exercise Date or the first to
occur of the possible termination dates under Section 3
above. To the extent of shares with respect to which such
funds are not so received before said deadline the attempted
Option exercise will be void and of no effect hereunder.
(b) Upon Optionee's strict compliance with the
provisions hereof, including without limitation the
Company's receipt of cash or transferred funds and/or
sufficient Exchange Shares as payment in full of the Option
Price, then the Company will notify its transfer agent to
make immediate delivery of the shares of Stock covered by
such Option exercise. However, if any law or regulation
requires the Company to take any action with respect to the
shares specified in such Notice before the issuance thereof,
the delivery date of such shares may be extended for the
period necessary to take such action.
(c) If Exchange Shares are used as payment of all
or part of the Option Price, the Company will in good faith
determine the fair market value of the Exchange Shares used
as payment as of the date the Notice is received by the
Company's Secretary. Only whole Exchange Shares will be
used as any part of payment of the Option Price for purposes
of this Section. The Company will cancel the Stock
certificates of such Exchange Shares submitted and reissue
balance certificates for any remaining shares not needed to
complete the purchase.
(d) In any exercise of any part of this Option,
unless Optionee directs otherwise in Optionee's Notice to
the Company, the Option Price of any shares purchased will
be paid in the following order:
(i) First, from cash or other funds
transferred from Optionee to the Company; and
(ii) Second, from the Exchange Shares, the
certificate(s) for which shares are submitted along with the
Notice.
5. MINIMUM SHARES PURCHASED.
(a) No fewer than one hundred (100) shares may be
purchased at one time unless the number purchased is the
total number which may be purchased at said time under the
Option.
(b) No option or installment thereof shall be
exercisable except in respect of whole shares, and
fractional share interests shall be disregarded.
6. RECLASSIFICATION. If this Option is outstanding
when the total number of issued shares of the Stock is
increased or decreased by any:
(a) change in par value;
(b) split up, or reverse split;
(c) reclassification; or
(d) distribution of a dividend payable in stock;
then the number of shares subject to this Option and the
Option Price per share shall be proportionately adjusted.
7. RIGHTS PRIOR TO EXERCISE OF OPTION. This Option
is non-transferable by Optionee, other than by will or the
laws of descent and distribution in the event of Optionee's
death. During Optionee's lifetime, this Option is
exercisable only by Optionee or Optionee's guardian or legal
representative. Optionee has no rights as a shareholder
with respect to the Option shares until payment of the
Option Price and delivery to Optionee of such shares as
herein provided.
8. RESTRICTION ON DISPOSITION OF STOCK. All shares
acquired by Optionee pursuant to this Agreement are subject
to any restrictions on sale, encumbrance, or other
disposition now or hereafter contained in the Company's
Bylaws or Articles of Incorporation.
9. INCOME TAXES.
(a) Optionee has the sole responsibility to pay
federal and state income taxes with respect to his or her
exercise of the Option and sale of the Stock received by
such exercise. Optionee understands and acknowledges that
if Optionee disposes of the shares of Stock acquired by
Optionee pursuant to this Agreement within two (2) years
from the date of this Option or within one (1) year after
the transfer of such shares to Optionee, then this Option
may not qualify as an Incentive Stock Option and all of the
income realized by Optionee may constitute ordinary income.
(Such a disqualifying sale is referred to herein as a
"Disqualifying Disposition".) Upon such a Disqualifying
Disposition, Optionee agrees to promptly notify the Company
in writing of the number of shares sold, the selling price
per share, and the date of the sale.
(b) Optionee also understands and acknowledges
that his or her exercise of this Option may generate federal
alternative minimum taxable income and a resulting federal
tax owed thereon.
(c) If the Option is not qualified, at the time
it becomes exercisable hereunder for the first time, as an
Incentive Stock Option because of the application of
Internal Revenue Code Section 422(d), then for purposes of
calculating Optionee's taxable income as of the Exercise
Date, the fair market value of the Stock will be based upon
the closing price of Xxxxxxx'x Stock on the Exercise Date,
as published by the New York Stock Exchange or the Wall
Street Journal.
10. BINDING EFFECT. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective heirs, executors, administrators, successors and
assigns.
11. STOCK RESERVE.
(a) The Company shall, at all times during the
term of this Agreement, reserve and keep available
sufficient Stock to satisfy the requirements of this
Agreement.
(b) The Company will pay all fees and expenses
necessarily incurred by the Company in connection with the
exercise of the Option.
(c) Notwithstanding paragraph (b) above, Optionee
will pay all brokerage fees incurred by Optionee in the use
of any of the Exchange Shares as payment for the exercise of
this Option.
12. RESERVATION OF RIGHT TO TERMINATE EMPLOYMENT.
NOTHING CONTAINED IN THIS AGREEMENT RESTRICTS THE RIGHT OF
THE COMPANY TO TERMINATE THE EMPLOYMENT OF OPTIONEE AT ANY
TIME WITH OR WITHOUT CAUSE, OR TO REDUCE OPTIONEE'S
COMPENSATION AT ANY TIME. The parties acknowledge and agree
that a termination of Optionee's employment by the Company
without cause will not be deemed in any way to constitute a
violation of any duty of good faith and fair dealing owed by
the Company to Optionee.
13. PARTIES BOUND BY PLAN. Each determination,
interpretation, or other action taken by the Board of
Directors or the applicable Stock Option Committee pursuant
to the provisions of the Plan is final, binding, and
conclusive for all purposes of the Company and Optionee and
their respective successors in interest.
14. CONDITIONAL EXERCISE. If at any time the Board of
Directors of the Company determines that listing, additional
registration, or qualification of the shares of Stock upon
any securities exchange, or under any state or federal law
is necessary or desirable, this Option may not be exercised
unless and until such listing, registration, or
qualification of the shares has been effected upon
conditions acceptable to the Board of Directors of the
Company.
15. INTERPRETATION OF PLAN. Options granted pursuant
to the Plan are intended to be "Incentive Stock Options"
within the meaning of Section 422 of the Internal Revenue
Code (the "Code"), and the Applicable Plan and this
Agreement shall be construed to implement that interest. If
all or any part of this Option shall not be deemed an
"Incentive Stock Option" within the meaning of Section 422
of the Code, the Option shall nevertheless be valid and
carried into effect.
16. GOVERNING LAW. This Agreement shall be construed
in accordance with and governed by the laws of the State of
Utah.
17. PLACE OF SUIT. Any action at law, suit in equity
or judicial proceeding for the enforcement of this contract
or any provision thereof shall be instituted only in state
or federal courts located in Salt Lake County, Utah.
Optionee hereby submits himself or herself to the
jurisdiction of such courts located in Salt Lake County.
18. SEVERABILITY. If and to the extent that any court
of competent jurisdiction holds any provision or any part
thereof of this Agreement to be invalid or unenforceable,
such holding shall in no way affect the validity of the
remainder of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above
written.
XXXXXXX MEDICAL PRODUCTS
By: Xxxx X. Xxxxxxx, President
Optionee:
(Print name and address)
