Exhibit 4.5
VERSATILITY INC.
Incentive Stock Option Agreement
Versatility Inc., a Delaware corporation (the "Company"), hereby grants as
of the [day] day of [month, year] to [name of employee] (the "Employee"), an
option to purchase a maximum of [number not exceeding available share limit]
shares (the "Option Shares") of its Common Stock, $.01 par value ("Common
Stock"), at the price of $[price] per share, on the following terms and
conditions:
1. Grant Under 1996 Stock Plan. This option is granted pursuant to and is
governed by the Company's 1996 Stock Plan (the "Plan") and, unless the context
otherwise requires, terms used herein shall have the same meaning as in the
Plan. Determinations made in connection with this option pursuant to the Plan
shall be governed by the Plan as it exists on this date.
2. Grant as Incentive Stock Option; Other Options. This option is intended
to qualify as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). This option is in addition to any
other options heretofore or hereafter granted to the Employee by the Company or
any Related Corporation (as defined in the Plan), but a duplicate original of
this instrument shall not effect the grant of another option.
3. Vesting of Option if Employment Continues. If the Employee has
continued to be employed by the Company or any Related Corporation on the
following dates, the Employee may exercise this option for the number of shares
of Common Stock set opposite the applicable date:
Less than one year from - [number] shares
the date hereof
One year but less than - an additional
two years from the date hereof [number] shares
Two years but less than - an additional
three years from the date hereof [number] shares
Three years but less than - an additional
four years from the date hereof [number] shares
Four years or more from the - an additional
the date hereof [number] shares
Notwithstanding the foregoing, in accordance with and subject to the provisions
of the Plan, the Committee may, in its discretion, accelerate the date that any
installment of this Option becomes exercisable. The foregoing rights are
cumulative and (subject to Sections 4 or 5 hereof if the Employee ceases to be
employed by the Company and all Related Corporations) may be exercised on or
before the date which is ten years from the date this option is granted.
4. Termination of Employment.
(a) Termination Other Than for Cause: If the Employee ceases to be
employed by the Company and all Related Corporations, other than by reason of
death or disability as defined in Section 5 or termination for Cause as defined
in Section 4(c), no further installments of this option shall become
exercisable, and this option shall terminate (and may no longer be exercised)
after the passage of three months from the Employee's last day of employment,
but in no event later than the scheduled expiration date. In such a case, the
Employee's only rights hereunder shall be those which are properly exercised
before the termination of this option.
(b) Termination for Cause: If the employment of the Employee is
terminated for Cause (as defined in Section 4(c)), this option shall terminate
upon the Employee's receipt of written notice of such termination and shall
thereafter not be exercisable to any extent whatsoever.
(c) Definition of Cause: "Cause" shall mean conduct involving one
or more of the following: (i) the substantial and continuing failure of the
Employee, after notice thereof, to render services to the Company or Related
Corporation in accordance with the terms or requirements of his or her
employment; (ii) disloyalty, gross negligence, willful misconduct, dishonesty or
breach of fiduciary duty to the Company or Related Corporation; (iii) the
commission of an act of embezzlement or fraud; (iv) deliberate disregard of the
rules or policies of the Company or Related Corporation which results in direct
or indirect loss, damage or injury to the Company or Related Corporation; (v)
the unauthorized disclosure of any trade secret or confidential information of
the Company or Related Corporation; or (vi) the commission of an act which
constitutes unfair competition with the Company or Related Corporation or which
induces any customer or supplier to breach a contract with the Company or
Related Corporation.
5. Death; Disability.
(a) Death: If the Employee dies while in the employ of the Company
or any Related Corporation, this option may be exercised, to the extent
otherwise exercisable on the date of his or her death, by the Employee's estate,
personal representative or beneficiary to whom this option has been assigned
pursuant to Section 10, at any time within 180 days after the date of death, but
not later than the scheduled expiration date.
(b) Disability: If the Employee ceases to be employed by the
Company and all Related Corporations by reason of his or her disability (as
defined in the Plan), this option may be exercised, to the extent otherwise
exercisable on the date of the termination of his or her employment, at any time
within 180 days after such termination, but not later than the scheduled
expiration date.
(c) Effect of Termination: At the expiration of the 180-day period
provided in paragraph (a) or (b) of this Section 5 or the scheduled expiration
date, whichever is the earlier, this option shall terminate (and shall no longer
be exercisable) and the only rights hereunder shall be those as to which the
option was properly exercised before such termination.
6. Partial Exercise. This option may be exercised in part at any time and
from time to time within the above limits, except that this option may not be
exercised for a fraction of a share unless such exercise is with respect to the
final installment of stock subject to this option and cash in lieu of a
fractional share must be paid, in accordance with Paragraph 13(G) of the Plan,
to permit the Employee to exercise completely such final installment. Any
fractional share with respect to which an installment of this option cannot be
exercised because of the limitation contained in the preceding sentence shall
remain subject to this option and shall be available for later purchase by the
Employee in accordance with the terms hereof.
7. Payment of Price. (a) The option price shall be paid in the following
manner:
(i) in cash or by check;
(ii) subject to paragraph 7(b) below, by delivery of
previously-held shares of Common Stock or the
withholding from the shares of Common Stock otherwise
deliverable upon exercise of an Option shares having a
fair market value (as determined by the Committee) equal
as of the date of exercise to the option price;
(iii) by delivery of an assignment satisfactory in form and
substance to the Company of a sufficient amount of the
proceeds from the sale of the Option Shares and an
instruction to the broker or selling agent to pay that
amount to the Company; or
(iv) by any combination of the foregoing.
(b) Limitations on Payment by Delivery of Common Stock: If the
Employee delivers Common Stock held by the Employee ("Old Stock") to the Company
in full or partial payment of the option price, and the Old Stock so delivered
is subject to restrictions or limitations imposed by agreement between the
Employee and the Company, an equivalent number of Option Shares shall be subject
to all restrictions and limitations applicable to the Old Stock to the extent
that the Employee paid for the Option Shares by delivery of Old Stock, in
addition to any restrictions or limitations imposed by this Agreement.
Notwithstanding the foregoing, the Employee may not pay any part of the exercise
price hereof by transferring Common Stock to the Company unless such Common
Stock has been owned by the Employee free of any substantial risk of forfeiture
for at least six months.
(c) Permitted Payment by Recourse Note: In addition, if this
paragraph is initialed below by the person signing this Agreement on behalf of
the Company, the option price may be paid by delivery of the Employee's
personal recourse promissory note bearing interest payable not less than
annually at the applicable Federal rate, as defined in Section 1274(d) of the
Code.
----------
(initials)
8. Method of Exercising Option. Subject to the terms and conditions of
this Agreement, this option may be exercised by written notice to the Company at
its principal executive office, or to such transfer agent as the Company shall
designate. Such notice shall state the election to exercise this option and the
number of Option Shares for which it is being exercised and shall be signed by
the person or persons so exercising this option. Such notice shall be
accompanied by payment of the full purchase price of such shares, and the
Company shall deliver a certificate or certificates representing such shares as
soon as practicable after the notice shall be received. Such certificate or
certificates shall be registered in the name of the person or persons so
exercising this option (or, if this option shall be exercised by the Employee
and if the Employee shall so request in the notice exercising this option, shall
be registered in the name of the Employee and another person jointly, with right
of survivorship). In the event this option shall be exercised, pursuant to
Section 5 hereof, by any person or persons other than the Employee, such notice
shall be accompanied by appropriate proof of the right of such person or persons
to exercise this option.
9. Option Not Transferable. This option is not transferable or assignable
except by will or by the laws of descent and distribution. During the Employee's
lifetime only the Employee can exercise this option.
10. No Obligation to Exercise Option. The grant and acceptance of this
option imposes no obligation on the Employee to exercise it.
11. No Obligation to Continue Employment. Neither the Plan, this
Agreement, nor the grant of this option imposes any obligation on the Company or
any Related Corporation to continue the Employee in employment.
12. No Rights as Stockholder until Exercise. The Employee shall have no
rights as a stockholder with respect to the Option Shares until such time as the
Employee has exercised this option by delivering a notice of exercise and has
paid in full the purchase price for the shares so exercised in accordance with
Section 8. Except as is expressly provided in the Plan with respect to certain
changes in the capitalization of the Company, no adjustment shall be made for
dividends or similar rights for which the record date is prior to such date of
exercise.
13. Capital Changes and Business Successions. The Plan contains provisions
covering the treatment of options in a number of contingencies such as stock
splits and mergers. Provisions in the Plan for adjustment with respect to stock
subject to options and the related provisions with respect to successors to the
business of the Company are hereby made applicable hereunder and are
incorporated herein by reference.
14. Early Disposition. The Employee agrees to notify the Company in
writing immediately after the Employee transfers any Option Shares, if such
transfer occurs on or before the later of (a) the date two years after the date
of this Agreement or (b) the date one year after the date the Employee acquired
such Option Shares. The Employee also agrees to provide the Company with any
information concerning any such transfer required by the Company for tax
purposes.
15. Withholding Taxes. If the Company or any Related Corporation in its
discretion determines that it is obligated to withhold any tax in connection
with the exercise of this option, or in connection with the transfer of, or the
lapse of restrictions on, any Common Stock or other property acquired pursuant
to this option, the Employee hereby agrees that the Company or any Related
Corporation may withhold from the Employee's wages or other remuneration the
appropriate amount of tax. At the discretion of the Company or Related
Corporation, the amount required to be withheld may be withheld in cash from
such wages or other remuneration or in kind from the Common Stock or other
property otherwise deliverable to the Employee on exercise of this option. The
Employee further agrees that, if the Company or any Related Corporation does not
withhold an amount from the Employee's wages or other remuneration sufficient to
satisfy the withholding obligation of the Company or Related Corporation, the
Employee will make reimbursement on demand, in cash, for the amount
underwithheld.
16. Provision of Documentation to Employee. By signing this Agreement the
Employee acknowledges receipt of a copy of this Agreement and a copy of the
Plan.
17. Miscellaneous.
(a) Notices: All notices hereunder shall be in writing and shall
be deemed given when sent by certified or registered mail, postage prepaid,
return receipt requested, to the address set forth below. The addresses for such
notices may be changed from time to time by written notice given in the manner
provided for herein.
(b) Entire Agreement; Modification: This Agreement constitutes the
entire agreement between the parties relative to the subject matter hereof, and
supersedes all proposals, written or oral, and all other communications between
the parties relating to the subject matter of this Agreement. This Agreement may
be modified, amended or rescinded only by a written agreement executed by both
parties.
(c) Severability: The invalidity, illegality or unenforceability
of any provision of this Agreement shall in no way affect the validity, legality
or enforceability of any other provision.
(d) Successors and Assigns: This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, subject to the limitations set forth in Section 9 hereof.
(e) Governing Law: This Agreement shall be governed by and
interpreted in accordance with the laws of the [state], without giving effect to
the principles of the conflicts of laws thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company and the Employee have caused this
instrument to be executed as of the date first above written.
VERSATILITY INC.
00000 Xxx Xxxxxxx Xxxxxxxx Xxxxxxx
____________________________ Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
____________________________ By:________________________
Print Name of Employee [Name of officer]
---------------------------- ---------------------------
Street Address Title
----------------------------
City State Zip Code
